Forget Snack Machines. This One Refills Itself Transcript, AI Summary & Key Points

00:00 15 20k. >> Wow. A month. >> Yes. $500 to $1,000 you can get a small ice machine. You're talking about like 7 to10 cents for the bag and then all in 105 cents. >> Jeez. So it's like 90% margins. >> We're leasing this for 550 a month. The first week we did somewhere between 1,000 and 1,500 on Saturday. >> Wow. >> The first week. >> Would you believe that this boring business right here is a cash cow?

00:23 Especially if you have them in the right locations. Today we're going to talk to CJ here in Fort Worth, [music] Texas. He just has a few of these things about a mile apart from each other. He has zero employees. He didn't know anything about this industry. And most importantly, he's going to tell us how to find the best deals for pennies on the dollar, how to find the best locations, and how to scale this business semi-passively with no employees.

00:43 Let's dive in. How I personally got ice business was I used to own DFW Pool Services. We were spending like a couple grand a month on ice and water. So we had seven trucks and three vans just for our our little crew our little business and crew >> just keep them hydrated. >> Yeah. So keeping uh filling up their igloos on a daily basis and then every every guy in the back of their truck had their tie down cooler.

01:05 They were getting ice and putting water, Red Bulls, Celsiuses, whatever they were doing. Yeah. Probably a couple grand a month just Yeah. So seven different trucks and three vans. >> Okay. So you're like, man, how do we turn this cost center into a profit center? >> Yeah. How can I get involved in this ice business? The employees are always tough. So, like with this, we manage it oursself.

01:25 You know, I'm here doing this obviously with help. Like Bobb's here today. We've got one tech that's really important, but um no employees. We're maintenancing it. We'll get jams, you know, things get dirty, the doors break or crack. Most of the stuff's pretty we can do oursel. One of the most important things again is location. So, I think that's the first step to getting an ice machine is trying to get the location.

01:44 You can start networking with other owners, which is really how to get into this business is network with the owners of Everest or water stations from cooler is >> like individual local owners. >> Individual local owners, so hyper localized. >> Get with those owners. Most people like you reach out to me are pretty cool. We're small business owners. Get with them and ask them how they started, how did they get into the business, how much and a lot of them are selling their machines.

02:08 They're older older guys, older women, guys. So, they're selling their machines. Um, and a lot of times they're just trying to get out of the business. Um, one of the ones we're trying to buy down the street, the guy kind of has just let it go. It's like distressed real estate. It's a distressed water station and ice business and um, we're hoping to pick it up for way less than we paid down there.

02:26 Um, but like a buddy of mine that actually bought my first location Everest machine. He got one for $500. >> Wow. >> So, the owner was like, "Hey, he only owned one. You're looking for owners with one ice machine or one one vending water station >> still. They're they're max stressed out." Yeah. So, like something goes wrong, they're like, it's of course on a Saturday and they're with their family or whatever they're doing.

02:44 He was like, "Hey, just take it. It's kind of beat up and broken right now. It just needed a few parts." He probably >> What's it worth in that condition? >> I think 10 to 15K easy, easy, easy. And he put that little bit of money and moved it to another location. He's actually selling that machine right now because he's getting a bigger machine. He's probably I think he's going to sell it for 15 or 20K.

03:01 The biggest thing obviously is location and accessessibility. So, how many cars like you're seeing a ton of cars go by here. So, we get about 30 35,000 cars a day going by here.gov. Yeah, you can look at.gov, see traffic counts. Like standing here right now, you can just see there's just a ton of volume. Um, the other thing most importantly is is is from location to parking and then being able to pull in with a trailer.

03:24 >> Yeah. >> So, you're going to get like uh yard guys, electrical guys, pool guys. >> Do you even survive without them? >> Is that like your core business? >> I think so. Yeah. Guys with that's learning from the pool company. So, they're getting ice almost every day if not every day. like every guy's Monday through Friday, we're doing the pool routes.

03:39 They're filling up a cooler, waters, their Red Bulls, their little lunch, um different snacks. >> And they're coming here cuz it's cheaper than the gas station to the grocery store. >> Yeah. Way way more realistic. Um some of the CVS's you're talking about almost $4 for £7. So right here we're 10 lb for $2 and and 20 lb for 350. So you're getting almost three times the amount of ice.

03:58 >> Margins on that. Still good, man. >> Yeah, really good. The most expensive thing is the ice. So I'm sorry, is the bag, excuse me, is the bag. You're talking about like 7 to 10 cents for the bag and then you know maybe all in maybe a quarter maybe 10 10 15 cents for the ice you know max if you're selling good volume >> and then what do you sell for $150?

04:15 You said >> the ice we're selling 10 pounds for $2. >> Okay. Jeez. >> And then 20 for 350. >> Jeez. >> And you're at CVS, Walgreens, you're probably talking about seven pounds almost $4. >> Yeah. So it's like 90% margins. >> Yeah. Huge margin. I mean they're still I mean they're making a ton of margin at that and they're just selling to a different clientele.

04:32 >> Yeah. But like you're at 90% margin even charging a$150 or three. What's one thing that takes two seconds and means a lot to me? Just hitting subscribe. You think you're subscribed because you see my videos in your feed, but you're not. Just hit subscribe and it would mean the world to me. >> What I'm curious about is do you own the real estate or are you leasing the real estate?

04:49 You just own the the hardware or what? >> So we lease all of ours at our first location. The thing we do over there is we actually do a revenue share. So you can normally revenue share from about 20 to 32%. the owner over there. It's a really really busy self-s serving car wash. Okay, >> so that's our busiest location. We get about 40 to 50,000 cars a day.

05:07 So we do a revenue share there at about 30%. So it's great for us in the sense of it's our only location there in the seven years we've been doing this almost. We got broken into one time and it happened to be that location. So we were down for a couple months. >> They drilled through the machine. So we had to get some things welded and fixed. But the good thing about that location is we're revenue sharing.

05:26 So if we're down, we're both taking the ride together for that 30%. What is your revenue at that location? >> Yeah. So, on average, you'll say, you know, between two and three on a really busy time, we can get up to four or 5K a month. >> Wow. So, let's say 3,000. You're giving about a,000 of that to your landlord. >> Yep. Right. >> Which isn't a bad deal because on the slower months, December, January, February, you know, we may only be doing three or 400 a month.

05:49 >> So, 2,000 left. How much of that goes to electricity, bags, and water? >> Yeah. So, that's the other thing to factor is at this location, this is probably our best bang for our buck. We're leasing this for 550 a month. >> Okay. >> Not revenue share at all. We make and we have this and this and we might even have a food truck come and rent this space.

06:08 So then they would pay we're probably going to charge them like 500 a month. >> Yeah. >> You know, we'd basically be at 100% profit besides utility and water. And so on this it doesn't take as much. So we're looking at around say five 500 a month for >> water and utilities. On the high season probably up to 700. >> Okay. >> Down there we're renting for about 900 to,000.

06:28 It goes up soon. and we just took over that other property, but now the bills are much higher and we have a way, way bigger machine. It's three times as big. >> Okay, >> that machine holds 6,500 lb in ice. This holds about 1,500. And then the old machine that we were down there, the Everest, is 550 lb. So obviously >> the vending machine stuff. >> Yep.

06:45 The vending. So those are obviously all each as you go up the bills cost more. >> Okay. So if you have a $3,000 month over there that you're left with two, most of that's profit. >> Yeah. Besides the rent. >> Well, and some like occasional maintenance and stuff. >> Yeah. >> Right. which is the other biggest factor. >> Yeah. So, >> so across how many locations total right now?

07:04 >> Four. >> Four. What's your total average monthly revenue and profit across all four? >> That one's brand new. That's why it's hard to say. So, we just got that one, but we're going to be looking probably hopefully 15 20k. >> Wow. A month. >> Yes. >> In profit? >> In revenue? >> In revenue. >> Yeah. So, then probably say 5K a month with everything.

07:20 So, like you saw Bobby out here cleaning >> down there. We have a guy that it's about 600 a month. So, he's going to be coming by checking jams, tweaking any parts, and that's the biggest thing is to stay on top of it. And that's why the guys with one machine, they're trying to do it all themselves. So, we have a guy that comes around to all the machines.

07:37 Like I said, it's about 600 a month, depending on how busy he is, maybe up to a,000. >> So, normally when I come in here, I just open it up, hit the light, and then so you can kind of see. So, all these are electronically kept. Everything runs from our phone. So, like say someone gets a jam, their call or text me, >> we can run these off our app and like dispense free water vins.

07:56 >> Oh, that's cool. >> A lot of times reset the machines. Now, if there's a coin jam, that's like is what it is. You got to physical do it. That's why you still got to come out here and be hands- on somewhat. >> But if it's just like coin that needs to process through or just like a computer, I mean, every once in a while you got to reset your phone computer.

08:09 We can reset it all from our phone. Have these machines. I mean, we have counters on them all as we stick in money. I mean, this one in the last month, you know, 2500, 1,900, you know, I can't see that one, but I mean, the these things get a ton of volume and then we reset them normally like every month or every quarter depending on where we're at and just timing.

08:28 >> So, we come in here, grab grab the coins. So, what I normally do is grab all the coins first and then grab the cash. And so, these being street front facing, these two machines get are a little busier just because she just facing the front. I'll grab the cash and then I just test it. I'm dropping a quarter in. And so, okay. Uh, that one's good to go.

08:49 So, there's no jam. >> So, your first location you built from scratch. You wouldn't end up doing that again? >> I don't think so. Um, I think we've gotten wellworked from meeting people on Facebook to all the other owners around this little niche area. So, we're going to keep trying to buy locations. >> Was this your second or was that your second? >> Yeah.

09:06 So, this is the newest location that we just got starting as of May 1st. >> So, this is going to be the cash cow >> hopefully. Yeah, that's the goal. I mean, this could do the revenue of your others combined >> probably combined. And then our goal is to get another big twice the ice which is on the other side of other side of seminary and 35, you know, like we were talking earlier about business.

09:20 Just jump in and go. You don't have to know everything. Try to find the best location you can or there's different location services. So, like if you can get in with someone on on Facebook or reaching out, every owner's phone numbers are on the machines. I mean, if you could go to the machines in your area and just call the owners and finally catch one.

09:35 I mean, I have other people call me. how I reached the other owner on the other side of 35 was I literally went to the machine and called him, >> texted him, called him. But yeah, just find doing networking through any of those things. And then a lot of times like the first machine we bought that's off West Long Avenue in Fort Worth, some of the actual businesses, so Everest, Cooler Ice, or even Twice the Ice, if you're going to buy a brand new machine, they'll help you find a location.

09:57 >> And like Twice the Ice is like anything like McDonald's or Chick-fil-A, they won't allow you to have a machine within a mile or two of each other. >> Yeah. So the other Twice the Ice is a couple miles down that way. and and then the other one is, you know, a little further down that way. So, they're all close. >> Can you get the machines financed?

10:11 >> You can. So, we haven't financed any. I would highly recommend not most of the machines that we've picked up. We've had some other machines, too, that we've ended up selling like this one was financed and the other machine we've boughten was financed. And so, what we've seen is during the slow times, especially the unique time during COVID, some of them were really busy and some of them were slower.

10:28 And so the people that had financing or something go wrong with the machine, especially owner two, they're starting to get these big bills and maybe some of the frustration of having to keep paying water and utilities and and the monthly thing like anything and they're not bringing in more so. So they're losing money. So they're willing to sell. So um >> I don't know.

10:43 I recommend starting small getting one and building it up and you know within a year or two depending on the location maybe two to three I think you can make 100% of your money back and be all profit. >> Yeah. How in Fort Worth proper how many machines would you say there are? Like how big is the market just in Fort Worth proper? >> Great question. I actually don't know the answer.

11:01 How many? There's there's a lot. Yeah, >> there's a ton. I mean, obviously we have a water and ice machine right there that you can see. >> Talking hundreds, tens. >> Yeah, hundreds. >> Really? >> For sure. >> So, you're doing call it 25 grand a month with just a tiny sliver of just Fort Worth's market. Yeah, >> that's a huge industry. >> I think less than 1%.

11:19 >> Wow. That's crazy. So, if you really wanted to scale, like I know you do a lot of real estate. That's probably where your real money is made. But if you said for whatever reason, I'm just going to go all in on ice. I'm going to call every owner only in Fort Worth. This could be a 10 plus million dollar business. >> I think so. Definitely. >> I think some people are avoid this industry because they assume you have to own the real estate and they're they're pushed away by that.

11:38 But that's not that's probably pretty rare, I would imagine. >> Yeah, we would love to own We've tried to buy that real estate multiple times. He bought it right before CO for like 50k and now it's worth a couple hundred probably and he's right by that gas station. Most most >> I think a lot of people know they think most people are leasing though. >> Yeah.

11:54 Hundreds per month. Low thousands. >> Yeah. I think most people are leasing from 500 to 1,500. >> Yeah. >> At that really good location by by our house in in Fly Mount Highland Village. He's leasing for probably closer to 12-500. But it's a phenomenal location. Insane location. It has everything. We call it Legacy location. >> He's by the lake right by 35.

12:11 Multiple entry points. You can enter with a trailer in two different areas. >> Super busy area driving into all the construction areas. in Argal and Lantana >> and the Weekenders with the boats. >> Weekenders are going the other way from from the other side where we are to the lake. It's in a liquor store parking lot. >> Oh man. What do you think he does a month?

12:31 >> Yeah. So that's the guy. He's probably he could get up to 15 to 20k a month, I think. Especially during the six months of busy season, which is May to September. >> Yeah. Now, do people buy these on multiples? Like if you were to go start texting owners, are they going to want to sell at three times profit or are they looking at the value of the actual machine or Yeah.

12:47 Yeah, I think great your question to go backwards earlier. That's probably the biggest thing that people are worried about is is having to think they have to buy the land. >> Mhm. >> And then also a lot of the owners are selling in two to three multiple two to three times multiples. So say this makes like a 100k a year, he could have easily sold this for somewhere around 300k and then like the owner that we've been trying to talk to that's trying to sell for four and 500.

13:09 I mean he's doing about 15,000 >> a month. So he's selling for over three and a half time, you know, 3.25. >> And is that normal? Yeah, I would say two to three times is pretty normal. >> Annual profits. >> Yeah. Okay. >> So, annual profit slashcloser revenue, >> but I imagine you can get some for just total steal of a deal. >> Yeah. And I think that's where networking in the community, the Facebook calling the other owners.

13:28 Like, I mean, we're hoping to pick these other machines up down here for, you know, way less. So, hopefully one for one, but a lot of them also are going to require maybe 10, 15, maybe even 30k in work. Yeah. So, that's what I think will scare people off from buying a current >> buying a current location is is that they're going to require work or just the unknown.

13:47 But the other thing you pick up from buying like a current location, this has been here since roughly 2008. So, we already have a clientele built up that's using it every day. Like within the first week, that Saturday I told you about we did somewhere between a,000 and,500 on Saturday. >> Wow. >> The first week of owning this this machine. >> It feels I feel like people start this from scratch because they're they don't want to call.

14:07 they don't want to do like the hard work, but they're going to pay a ton more >> if they started from scratch. Like you're better off texting, calling, driving around, and you'll get a much better deal. >> So, that's I think the other biggest thing that people are worried about when you're if you're buying a brand new machine, and even we were worried about it, is first off, we bought the machine before we had a location.

14:25 >> And then you also on depending on which machine you get, like on these bigger ones, you have to go through get city permitting. You may have to build uh brick around it. You have to stay in city code. You could not be up and running. I mean, best case, maybe 60 to 90 days, but you could not be up and running for maybe 6 7 8 9 months. >> Yeah. >> On top of that, you're going to have to follow city code, get inspected, >> you have no idea how it'll even do.

14:44 It's a total gamble. >> And you don't even know if the location is is good enough. These are really hard to move. Though, the cooler ices are a little more realistic to move. Like, if we sell that machine, because this one's doing so well because we could just get all the people down here and keep selling water over down the street. Those are maybe a thousand bucks to move and they're pretty easy.

15:01 You just unhook them. But these >> these are like moving a house. Yeah, >> you can move >> realistic that I mean that's why they're called Ice House America. >> I mean these are basically houses. >> Yeah. >> I mean these range buying them from maybe 150 to 500K. >> So how much money do you think someone needs to get involved with this business if you know at the at a bare basic level?

15:23 >> Yeah, I think from 500 to a,000 maybe to 2500. If you can reach out to other owners like myself, I would love to steer you into networking or meeting other people online to buy. You can really have machines delivered from the Everest to the cooler for, you know, maybe a couple hundred dollars from, especially if you're in Texas. Anywhere in Texas to uh anywhere in the country, people are selling machines online.

15:44 >> Yeah. So, just drive around, look for machines, text the owners, call the owners, try to work a deal. That's the best way to get >> one maybe that's used or just needs a little bit of repair. Maybe $500 to $1,000. I think you can get a small ice machine. >> Yeah. What about you? Like, where can we find you? >> Yeah. If people want to learn more about your business or your real estate or your channel, whatever.

16:00 Appreciate it. Don't want to plug too much, but on YouTube we're Lovevice Realy DFW and then on Instagram and Facebook, we're the Lovest Realy team and or Lovest Realy team. Give me a call anytime if you're looking to get into the ice business or real estate. >> Awesome. Thank you. >> Thanks, man. Thanks, Chris. Nice to meet you, man. Likewise. They liked you.