Navigating Financial Strategies and Business Transitions: Insights from Adam Koós

Recently on a REsimpli Podcast episode, Sharad Mehta interviewed seasoned Columbus, Ohio financial expert Adam Koós. Adam’s career veered mostly toward success as a financial consultant, from a pre-med degree intended to be a trauma surgeon. Running a Registered Investment Advisory (RIA) company now, his areas of competence include financial planning for couples and individuals as well as business owner preparation for sale and enhancement of enterprise value.

Besides other degrees, Adam is a Certified Financial Planner (CFP), Chartered Market Technician (CMT), Chartered Exit Planning Advisor (CEPA), and Certified Financial Technician. His advising profession depends much on these qualifications as they will enable him to provide effective advice on challenging financial and investment issues.

Adam provides really important risk management guidance for real estate investors. He underlines especially for fix-and-switch projects the need for early tax management and a well-defined methodology with a margin of error to prevent fines and cash flow problems. Investing revenue into like-minded real estate lets him use the 1031 exchange to delay taxes. Adam also talks about the Delaware Statutory Trust (DST), a passive investment choice meant to help offset capital gains taxes and spare the difficulties of keeping actual properties. DST invests a range of real estate assets and postpones taxes until liquidation or investor death, when the basis becomes favorable for heirs.

Adam also manages companies either selling less than market value or barely profitable. Typical issues include health issues, postponed retirement, poor management or continuity plans. Businesses may sell for less due to too involved owners, insufficient retention policies for important workers, client concentration problems, and improperly kept financial records. Good sales calls for accurate financial records, a varied client base, and strong management practices. Owners also have to be ready emotionally and financially for the change.

Apart from his daily life, Adam likes football and beach volleyball as well as nature—especially storms. About personal development, he suggests The Four Agreements; for ideas on money, Think and Grow Rich. Under Jet Li, he would spend a day with his father for Martial Arts instruction given the opportunity. Adam suggests Libertas Wealth and Elevate and Exit for further financial guidance or company transition preparation.

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Transcript:

Sharad Mehta  0:05  

Cool. All right, let’s go. All right. Hey guys. This is Sharad with REsimpli, host of the REsimpli podcast, bringing you another very special guest, Adam Kosh on this podcast. Adam, welcome to the show. How are you? Oh,

Adam Koós  0:21  

thanks so much for having me. This is gonna be fun. Yeah, absolutely.

Sharad Mehta  0:24  

Adam, yeah. Tell us a little bit about yourself, where you’re joining in from, and you know, what is it that you do? Sure, yeah. No, I,

Adam Koós  0:33  

I’m coming for hailing from Columbus, Ohio. Grew up in Cleveland, went to Ohio State University and stuck here, like a lot of people do when they moved to Columbus and go to school here. So I went to school. Technically, I went to school for to go to pre med, to go to med school. I wanted to be a trauma surgeon, so I was pre med until my senior year, and then kind of had, you know, a big, kind of life altering moment where I just decided I didn’t want to go to school for seven more years. And I called my dad, who was an optometrist, and I thought he was going to kill me. I thought that, you know, I told him I’m going to drop out of the program. And turns out, he says, you know, well, you know, what are you going to do instead? And I’m like, I don’t know what I’m going to do. And he says, Well, what about being a financial advisor? I’m thinking, Dad, you got to be kidding me. Like, I don’t, I don’t know anything about econ. You know me, and I took one econ class. He says, Yeah, but you know you’re good. With people, and you’re a smart guy, and you’ve got that virtual Stock Exchange account you’re always messing around with. So he’s like, I’m sure, you know you’d be really good at and he introduced me to his financial advisor, and then still wasn’t so sure. Guy told me to come down to Columbus and go to a seminar, and basically, you know, tell him if I was interested, and they would go through the hiring process. And if not, just not call him. So, long story short, I went to this seminar. I found out that my biggest concerns about this industry with the ethics or lack thereof, I should say that the firm that was hiring me was basically going to let me work from home for nine months or so until I was able to be profitable, after which they would put me in an office and I wouldn’t have, you know, like a sales floor, so to speak. You know, of people that are, you know, you see, you think the, think of the movies like Wall Street Wolf, of Wall Street boiler room, you know, movies like that. I just did that’s that was my image of the industry. And so being able to kind of start in an somewhat monogamous, autonomous office environment, and then I ended up starting my company in 2004 November 4, oh four, just because I wanted to get away from all the conflicts of interest that exist in this industry in this world. So, so yeah, so I’ve been running an RIA Ra, registered investment advisory firm where fee only fiduciaries, and we pretty much help two groups of people. One would be individuals and couples, typically working professionals. And I was just telling somebody yesterday, I don’t have a single wealthy client that doesn’t own some real estate. So I’m sure that rings true with you as well. And then the other group of people we work with are business owners, where we help them, you know, increase their enterprise value, increase profits efficiency, get them out of the business to a certain extent de risk, create continuity, and then essentially get their business ready for sales, for sale at some point, and then manage the assets thereafter. So that’s kind of in a nutshell what we do. So we’re basically an investment management, financial planning firm that works with owners and and working professionals. Yeah?

Sharad Mehta  3:14  

Awesome. First of all, amazing dad, super supportive. Dad there, yeah, just say, like, Hey, I’m going to drop you lucky, huh? Yeah, no, that that’s amazing. And, yeah, I come from an accounting background. I used to be an accountant, so at one point when I was at my accounting shop, I wanted to be a CFP, which was certified financial planner. What are the other two certifications you have? CMT and CEPA? Well,

Adam Koós  3:38  

they’re not all on there, actually, because I think that it starts to it starts to look pretty silly. You almost start to look like you have a complex if you put too many designations after your name, the most important ones, yeah, the ones that are most recognizable anyway. So this the CFP. Most people know what that is. The CMT is a chartered market technician designation. It’s the sister designation to the CFA. So this Chartered Financial Analyst designation is all about fundamentals, the CMT, chartered market technician designation is all about technical so it’s technical analysis, momentum, trend, volume, things like that. So technical indicators. And then the SEPA is the chartered Exit Planning advisor. So this kind of goes along with our work we do with business owners, helping them grow sell. You know, transition doesn’t have to be selling, but just helping them grow and get more efficient. So that’s the SIPA. And then there’s the Certified Financial technician one, which, again, I don’t list it because it’s kind of like the SEPA. So the kind of little, little redundancy there,

Sharad Mehta  4:35  

yeah? But overachiever, you want you to get

Adam Koós  4:38  

that too, just, to have a complex, right? Yeah, yeah, that’s,

Sharad Mehta  4:41  

that’s the first person I’ve seen. I’ve seen, you know, like CFP is the most common one, the CMT, CP and the CFD. Yeah, you’re the first person. So, yeah, congratulations on all that. Oh, thank

Adam Koós  4:51  

you. Yeah, I just like to learn, yeah, no, that’s great.

Sharad Mehta  4:54  

So you said pretty much all high net worth individual that you. Work with own real estate,

Adam Koós  5:01  

right? Most of them, I wouldn’t say all, because that’s a very big number, but most, yeah, yeah, most people want to diversify into real estate, okay?

Sharad Mehta  5:07  

And then, you know, we have a lot of listeners that are doing fix and flip, wholesaling properties and own rental properties, right? What? What? What is some advice that you like to give to real estate investors because, you know, you don’t need any credentials to become a real estate investor, right? You see someone doing well, it’s there’s very low barrier to entry, and people don’t always think about their taxes, their finances once they get into the business, right? You’re not doing so, what are some of the first of all, what are some of the biggest mistakes you see investors make with their financial planning? If

Adam Koós  5:48  

we start with real estate, I got a whole list of things that people make mistakes with with financial planning. But if we just stick to real estate, for starters, I would think the first would be just to always manage risk. In fact, that’s something we do when it comes to portfolio management and technical analysis. It’s like it should be the same in real estate investing, you know, if it doesn’t feel good, don’t do it. You know, you have to start with managing risk. You know, start, I don’t want to say with an exit strategy, but you really have to manage risk from the start, because you can blow yourself up. I’m sure you’ve heard your own share fair share of stories of people just going in, too hard, too much, too leveraged, and it just doesn’t work out for fix and flips, you know, where the budget gets out of hand. You know, you got to be. There’s always a certain level, I think, of uncertainty when it comes to, you know, how much is this going to cost? Well, how long is it going to take? But I think we all know that oftentimes it’s, it doesn’t, it doesn’t usually happen faster and for less, right? It’s usually slower and for more. So I think the first thing is just managing risk, you know, making sure you go in there with a good plan. Have a spreadsheet built out. Know exactly what your numbers look like and what your margin of error is, and you know how much wiggle room you have, or guardrails, as we like to say, you know, you got to have some room to, you know, screw up. You know, had to have a call it like a sink, a sunk fund, you know, a line on the spreadsheet that’s literally for, what if this doesn’t work out right, like we think it will. So that would be probably the first one, and then the second one, you already hit it actually, and this is huge, is people just not not getting their taxes handled early on, and that can turn into quite a mess. And it’s not, it’s not unlike credit card debt, where, you know, you get behind on credit card debt, and all of a sudden you find yourself having a hard time getting out of that hole, let alone getting to a point where you’re in the black and saving and and really making forward progress in your financial life. So I think the other big one when it comes to real estate investors specifically, would be, you know, get those, get those quarterly estimates done early, stay on top of your tax situation, because it’s really enticing to want to take that profit, you know, that cash flow, and spend it. Or, you know, if you’re really, you might even consider yourself to be really responsible. And you say, you know, I’m gonna, I’m not even spending the money. I’m just reinvesting in another property, and that’s fine, but if you’re not paying the taxes, you know, the IRS doesn’t like people who don’t pay their taxes. Yeah,

Sharad Mehta  7:56  

that’s something to be honest. Adam, I’ve, I’ve struggled it for long time. This is, I think, the first year where I made my quarterly tax payments. It definitely hits your cash flow. But it feels so good to just know that, okay, I’ve set my taxes aside and I don’t have to worry about it. Otherwise, it’s a pretty big you know, if you’re not paying your especially as a business owner, if you’re not paying your quarterly tax. It’s a pretty big hit at the end of the year when you do your tax return, yeah, and then, plus the interest and penalty, not to speak of that. And then, I don’t know, it just my theory, then it raises a red flag with IRS that you’re not paying your taxes, quarterly taxes, so you may raise an order five, but that’s just my theory, and maybe I just tell myself, just to force myself to pay those quarterly taxes. But one question I have is, so I own about 60 rental units, right? Well over 60, most of them are paid for free and clear. That’s awesome. Congrats, by the way. Oh, thank you. I own a property management company and flib houses, plus I own the software company for specific to real estate. You know, we have investors listening that own rental properties, and what is their long term exit that you see is that, that, let’s say, if I have 30 residential properties, right, is the best option for me down the road, if my, if my kids, don’t want to be landlords. You know, if you don’t want to, if they don’t want to do anything with the real estate is my best option down the road is to individually sell them. And if that’s the case, like, how do you help people manage that? I guide them to make sure they’re being as efficient, you know, getting the most bang for the buck. Yeah,

Adam Koós  9:38  

sure. That’s a great question. Probably the most. And by the way, it doesn’t matter if you have one property three properties of 30, it’s the same. Regardless. It’s just a matter of how complex we want to get when it turns to, when it comes to, you know, what we buy and how much we buy, or how many. But a very, not so well known. Strategy that’s out there available to anybody who is a residential or commercial real estate investor, is everybody, everybody serve a 1031, right? I mean, most people know what that is, buy a light kind property, avoid the capital gains tax. But that’s the problem, is the capital gains tax most people who have been successful in real estate. And obviously this compounds over time. So eventually you find yourself with all this low basis and these appreciated properties and then taxable income on top of that, which, you know what? I don’t think we care too much about the taxable income, but it’s the appreciation that’s the problem. You know? It’s sometimes even if you have a property management company handling all the property management for you, are, in your case, you own a property management company. I think it can still start to feel at a certain point, when you’re done working, if you have another job, like a full time job, I think it can start to feel like you’re never retired. There’s there’s hassles. They say that, you know the terrible teas, right? Toilets, tenants, trash. And eventually, maybe you just aren’t interested in owning these properties anymore. You just, you’d rather take the profit Redis, you know, redistribute it into another kind of portfolio, or diversified portfolio, elsewhere in a different way. Non qualified call it brokerage account, whatever. Or maybe your kids don’t want it, like you said. Maybe you’re getting older and you’re to a point where, like, Man, I’m thinking about my estate planning. But again, I don’t want to sell these because I don’t want to pay the tax the trick or the secret that’s out there that’s not so well known as something called a 1031 into a DST, which stands for Delaware statutory trust. The way these DSTS work is, unlike owning real estate, whether you have a property management company or not, where you’re managing the real estate. I call that active real estate ownership. So in other words, as an active and real estate investor, you own physical property. You can drive up, touch the wall. You know it’s yours. You own it. You deal with the tenants, and so on and so forth. Passive real estate investing would be, it’s not that you can’t go touch it, but what you would do, let’s just say, hypothetically, you’ve got 30 properties, you start selling these properties off, and then you use the 1031, rules to your advantage to buy a passive piece of real estate managed by another company, where you just benefit from the yield. So we’ll call it three to 4% per year, and plus the appreciation on top of that. But you don’t have to pay taxes on it, and you don’t have to hire a property management firm, because it’s already taken. Because it’s already taken care of. So examples, these could be multifamily, it could be warehouses, it could be storage units, it could be medical facilities. So you’re basically a fractional owner. You become a fractional owner of that real estate, and thereby avoiding the capital gains. Now, usually these things do liquidate. You know, at a certain point, you know whether that be five years, seven years, 10 years, they end up liquidating. It’s time to sell, and when they decide it’s time to sell, you’re going to sell. And so the next question usually is, well, when they sell, don’t I have to pay the cap gains then? And the answer is yes, unless you 1031 and again. So you can continue 1030 wanting these DSTS over and over again until you pass and when you pass away, it steps up in basis. So now all of a sudden it’s tax free to the kids or charities, for that matter, which obviously charities don’t pay tax but, but that’s essentially in a nutshell how it works, how the strategy works. It’s obviously a lot more complicated than that, but you know, that’s why we use, you know, third party administrators to help with the third 1031, process, escrowing things of that nature, and make sure we’re doing it legally and in a way that’s not going to cause us any problems on the back end, but, but you go from owning real estate property management company, or not active real estate, having your hands on the on the job, to essentially owning a private real estate investment where you’re just collecting a paycheck, and then you continue deferring The taxes out in the future indefinitely.

Sharad Mehta  13:42  

So it would have to be as a 1031 but my first question is, can I do 1031 of like, if I have 30 properties, can I do each one separately, or does it have to be a package? So that’s good

Adam Koós  13:56  

question. Yeah. I mean, if you think about it, like, if somebody has one property, they can just do one property, that’s all they have. If they have if they have three properties, where it gets where, I think that your question comes into play is, in your case, if you’ve got 30 properties, I mean, there’s no way we’re going to sell 30 properties and buy one DST. I mean, you’re going to have to buy a few. I mean, not to say that you couldn’t, you know, be the majority owner of a hospital system, you know, hospital in here in Dublin, Ohio, let’s just say, but chances are, you’re probably going to have a few properties, if not several, that you’re fractional owner of.

Sharad Mehta  14:28  

Okay? And then for 1031 just for anyone that’s not familiar with it, if you can just give a bit, you know, background on kind of how that works, you sell a property that you have to own for a minimum of one year. Is that the requirement, right? And then you sell it, and then it’s within six months if you invest the funds in another real estate, real estate, yeah, like kind real estate. So in this case, you take the money and you put it in a DST, right? And then. Through that. DST, you’re investing in other properties, yep,

Adam Koós  15:03  

real estate, whether it be residential or commercial.

Sharad Mehta  15:07  

And for me, could I do, could I do lending out of it? Or it has to be, like a piece of property that I have to own through this? Or is it somebody creating, because you

Adam Koós  15:18  

1031, in the Tennessee, like mezzanine debt. Is that what you’re asking, like, as an example,

Sharad Mehta  15:22  

yeah, exactly. Is something creative I can do to get a little bit higher gear. You know, I have I save investors that sometime would come to me and say, Hey, can I, can you lend on this property, for example?

Adam Koós  15:33  

Yeah. I mean, I have to check on that. I’ve never been asked that question before. I mean, I do know that there’s investments out there where you’re literally investing in debt. The yield is higher. I just don’t think we can 1031 into it, because it technically wouldn’t be real estate. It would be debt on real estate. Higher risk, obviously, which is why you get the higher reward. But there’s also other I mentioned three to 4% because I’m trying to be conservative and reasonable and, you know, set good expectations here. But you know, there’s lots of different options out there that. And you know, some pay higher reals than others. Just depends on the type of property, where it is, you know, the old location, location, location thing, but yeah, and

Sharad Mehta  16:07  

then are you paying? So I’d say, I do. I sell by property, I put it in a DST and invest in, let’s say, a hospital, and I’m getting, let’s say, four or 5% return on that. I’m paying taxes on that four, 5% return, or is that also so I’m just paying taxes on the active income that’s coming in, but not on the appreciation. So I basically, once I do 1031, I’ve stepped up my base on that correct

Adam Koós  16:34  

31 you still, you still retain the old basis. So the old exists, the the tax savings comes at the end, when you’re gone. It’d be exactly the same as if you held the 30 properties until you passed away. All of those would step up in basis as well. The downside is either a you might not want to own 30 properties and manage 30 properties until you’re 85 or 90 or worse. I don’t know that your beneficiaries, whether that’s kids, sisters, brothers, whoever want to manage 30 properties and deal with that when you’re gone. So that’s where I think that’s usually a bigger issue,

Sharad Mehta  17:07  

right? Okay, that makes sense, yeah. And one question I want to ask you is, because this is something I’m going through literally right now. This point, I was looking at some Vanguard funds to invest in. What do you recommend for real estate investors, especially, or business owners. You know, typically what happens is, as a business owner, you get so optimistic about your business that you almost, like, put all your eggs in that one basket, right? You don’t think about diversification as, again, my network, and I think I have like, 90% of that in real estate, and I was thinking, well, I need to, like, diversify, put it in some funds. Is there, like, you know, ideal asset allocation that you’d recommend business owners or real estate investors to follow?

Adam Koós  17:50  

I mean, it’s, I don’t know that there’s any, you know, Magic Pie Chart, if you will. I think that when you’re somebody who has done very well for yourself. It doesn’t matter if you’re a business owner or not, but business owners would typically be included there, assuming their business is successful, of course. But I think that when you do well for yourself, and you save well and you’re responsible, I think that earns you the right to own and diversify into things like real estate, not to diminish what you know investing, you know, through stocks, bonds, commodities, currencies, whatever, not to diminish all that. But, I mean, it’s pretty easy to buy a stock, right? I mean, you go online, you open up an account, you hit Buy 100 shares of Nvidia, and you’ve got 100 shares of Nvidia. Pretty easy, right? If you don’t want to do it anymore, you want to sell it, then you hit the sell button, you transfer the money your account. You’re done. Real Estate’s a whole lot different, right? I mean, there’s a bigger commitment, you know, you got to be more careful. It’s not as liquid. You know, you’re not going to go on your 30th investment property. You’re not going to go selling the master bedroom to free up some cash for yourself. You can’t exactly do that. So whereas in a traditional, you know, portfolio of stocks, bonds, real estate, commodities and so on. You can just hit the sell button. So I think that as you as you become more and more successful, you earn the right to invest in things like real estate, hard real estate, you know, hard assets and then, but, but otherwise, I mean, for the statistics go like this, average business owner has 80% of their net worth tied up in their company, and that’s typical. So I don’t think we should feel bad about that, because usually our most valuable asset is the baby that we’re we’re growing right? The trick there is to make sure that that baby’s growing efficiently, and that that’s going to provide you with what you need so you can quit someday, and, as I like to say, Make Work optional, not that you have to quit, but to have the choice to quit, and to have a plan in place to make sure that when buyers look at your business, that they’re looking at it from from a place where, okay, this is a business I’d want to buy. This is something I’d pay top dollar for, because it’s ready to sell. And the the sad truth is that most businesses just aren’t ready to sell. In fact, more than 80% of businesses never sell. They dissolve. They go. Lot of business, and then 75% of those 20% that do sell, those sell for less than market value. So it’s pretty sad in statistics.

Sharad Mehta  20:07  

But why do you see, like, what are some of the reasons you see that the business owners are not able to get to that point of 25% off the 20%

Adam Koós  20:17  

I’m so glad that you asked that question. So the ones that don’t sell and the ones that sell for the below market value, the answers are almost the same for the ones that don’t sell at all. It’s because, number one, they will, business owners will wait and wait and wait and wait. It’ll be 75 years old, and you’re saying, hey, when you gonna retire? Like, oh, I’m gonna probably next year, year after and they just don’t, and then they end up passing away. And whoever the spouse is or the kids. They don’t have the acumen or the experience to run the business, so they have to liquidate. There’s nothing to do with it just goes under. Another reason is disabilities. You know, if people get disabled, they can’t run it anymore. Another would be, you know, cancer, dementia, Parkinson’s. So, you know, different types of diseases come into play. Word gets out, you know that, hey, so and so, you know, has is looking to sell their business. It’s like, oh, by the way, now they’ve got cancer, by the way, just so, you know, it’s like, all of a sudden it becomes a buyer sale, if it sells at all. And then when it comes to the very large number of businesses that sell for below market value, there’s a number of reasons why they sell for below market value. One of them is not having any kind of retention set up with management and directors, so people who are key employees not having an you know, if the if there’s no, I don’t call it golden handcuffs, but if, if there’s not some kind of retention in place, whether that be through bonuses, salaries, contracts, and the buyer comes in and all the management leaves. I mean, they’re going to know that before they buy. That’s the first thing. Second would be customer concentration. So a business that has, let’s just say, I don’t know, 35% of their business, of their revenue, is their top five clients. That would be bad, you know, it’s still money, and maybe they’re, they’re good clients, but that would lead into that maybe those top five clients might have a great relationship with the owner, and when the owner’s gone, now, maybe those clients still stick around as much if they if they stick around at all. And then that leads me to, you know, running a business where the owner’s not so involved. And unfortunately, as owners, we love our businesses, you know, we love our, you know, growing this baby so, you know, we don’t want to be uninvolved. But in order to build a scalable, profitable, efficient business. You have to run a company where you’re not the main focus, you know, you’re not the show, you’re not on stage. So another, another reason is the owner’s too involved. There’s no like I mentioned, continuity, customer concentration is big. Bad books, you know, people, you and I, both we own businesses, and we pay for a lot of things through the business, whether that be, you know, meals and entertainment, maybe a car, things like that. And those things don’t exist in the buyer’s eyes. And you have to do this practice called recasting to get those things out of the business and get it ready for sale and make sure the books look good. And most people don’t do that. They don’t they don’t do that. They don’t, they don’t think about it. They don’t even know they’re supposed

Sharad Mehta  23:03  

to say, Well, I would have not guessed. Those would be some of the reasons why, and the number would be so high, when do you how do you know that you know you help businesses with exiting, like, how do you know the business it’s the right time for an owner to sell.

Adam Koós  23:22  

I think a lot of whether or not the business is ready to sell has to do with the owner and whether or not the owner’s ready to sell. That’s probably the first thing. I mean, it’s a very emotional thing to start and grow a business and then find yourself, you know, on the other side of the equation, going, now what am I going to do? You know I was working 5060, hours a week on this thing? And now, now what you know? So you really, I think it’s really key to have a plan for what life looks like after the business, or I always call it life after football, because I’m sure you’ve seen the statistics about professional athletes and how once they’re done at, say, 28 years of age, or 26 years of age, they’re like, Oh my God. You know, I’ve got another 50, 6070, years left to live, and I don’t know what to do with my life, and they get depressed, and, you know, that becomes a problem. So it’s similar with business owners. They’ve got to be emotionally ready. And I think that’s where the financial planning comes in. Where you were asking earlier about mistakes people make with financial planning is a financial plan, a written, comprehensive financial plan, has to be part of the equation here. In fact, when we do our business transition planning, it’s step three and four of our 12 step process is doing a plan for the owner and the spouse, because that plan is going to tell us, you know, what do you need to have? Where do you need to be? You know, what’s your number at the age at which you’d like to have the choice to make work optional, and we need to make the assets you own, whether that be real estate, stocks, bonds, the business itself, it needs to be worth whatever that number is, conservatively, otherwise it’s not going to happen. So, you know, we often have to pull levers, make changes, diversify, as you were putting it earlier. You know, if somebody’s really, really real estate heavy, I think it makes a lot of sense to have a portion of their assets invested in other things. Because, you know, as goes the market, when I say the market, I’ll say the markets plural. There’s. Times when real estate does great and traditional stocks don’t, and there’s other times when stocks do great and real estate doesn’t, so you don’t want to have all your money on one train track. And then I think that when you’re looking at owners and planning for later, the other half of the equation, aside from them being emotionally ready to sell, is having all those things in place, both having their books tight, having their customer concentration taken care of, having continuity put in place, business continuity for the owner that’s buy, sell, agreements in place, retention bonuses set up for the managers or key employees. And all of these things can help grow your company today, make it more efficient, reduce the risk to a potential buyer and yourself, by the way, but it can also make work a whole lot more fun. You know, you feel so much more free, and you won’t feel like you’re tied to the business all the time. Because I think we all go through a period from time to time where it’s fun most of the time, but then there’s some moments where, like, Man, I just can’t get out from under this pile, you know, and that’s because we’re probably too involved, yeah,

Sharad Mehta  26:01  

and I feel like, I know it’s been a challenge with me, kind of that something resonates with you. Like, as a business owner, your identity gets attached to your business. I think that’s where, like, a lot of business owners struggle with, is, hey, this is who I am. This is what people know me for. You know as this guy or that guy, like, I’m gonna lose my identity if I sell the business. So, yeah, I can’t, like, I haven’t sold any business, but I can totally imagine what a painful process it would be to go through emotional,

Adam Koós  26:32  

yeah, and being told by somebody like me that there’s problems with your business. Like a friend of mine wrote a book he called your baby’s ugly. Is the name of the book. It’s all about it’s all about this. And it’s like, nobody wants to be told that their baby’s ugly, right?

Sharad Mehta  26:45  

Absolutely. Yeah, no. It’s funny that when I started REsimpli, you know, it’s a software product, I sat on it for about couple of years before I open it up for other people, just because of exactly the same thing, I didn’t want people to criticize and say it’s a, you know, piece of crap. I love it. At some point, you just have to have that courage to say, All right, let’s just take it out in the open. If people say babies ugly, you know, then, you know, figure out what do we need to do at that point. But I totally understand it would such a painful process.

Adam Koós  27:16  

Tell me once that when you do something different, you know, when you, when you basically become a trendsetter, or you or you innovate, and you stick your head above the crowd, you better be ready to catch some tomatoes to the face. Oh, that’s just kind of how it goes, right? 100%

Sharad Mehta  27:30  

Yeah, you just something. You have to like it. Just, just this past week, and we released an update, which it just, you know, it’s taking a product moving forward. People are so used to how, you know, our product worked previously, and now, like, oh, you know, I don’t like how it works, you know. And just something like, Yeah, this is something you have to get used to. Another business I started my property manager the other day. So we have two people that we serve, the tenant and the owners. I think it’s only one of the businesses that I can think of like both people that you’re serving are always unhappy with what you’re doing. Just the tenants are never happy. The owners are never happy. Just the kind of business that property management is, yeah, but with the with exiting the business, you know, I 100% agree that having a plan of what you want to do after retirement or after selling your business. It’s, it’s so great, even when someone is like, you know, working in a job, and then they retire, if you don’t have a plan afterwards, you know, a financial plan and an emotional plan, like, what are you going to do with your time? It’s such a struggle. Like, it sounds very exciting. I’m just going to go sit at the beach, but it’s not like, what are you going to do at the beach, you know? How long can you just sit at the beach and watch the waves come in and go back out? I don’t know.

Adam Koós  28:52  

Yeah, no, you’re right. We had somebody who was when we were going through the planning process, he said, What are you going to do after you’re done, you know? And what’s going to keep you busy and keep you stimulated? Like this thing’s been keeping you stimulated for 5060, hours a week, you know, for what, 35 years. And he says, Well, you know, we’ve been really looking at building this, this, this our dream home, our dream vacation home down in Scottsdale. So, you know that that’s weren’t, you know, that’s, that’s the plan. I’m like, What are you going to do there? And he goes, Well, you know, hang out at the home in Scottsdale. But what are you going I mean, What hobbies do you have? You know, what are you gonna spend your time on? You can’t go from 60 to zero and then, you know, we can only sleep so much. And I think most of us entrepreneurs don’t sleep that much to begin with. I know, I know. I put in about six hours a night, and I’m good to go. But yeah, nothing to do. I wanna say. Nothing to do. All that. You have to have something to do. Oh,

Sharad Mehta  29:39  

100% yeah, I’ve started playing pickleball lately. That’s

Adam Koós  29:43  

the new rage, right?

Sharad Mehta  29:44  

That’s the new rage. Everybody’s talking about that. Yeah, I love it. I kind of hooked to it. I have a leak that sounds Yeah, yeah. Speaking of pickleball and how fun it is, that’s our segue,

Adam Koós  29:56  

our pickle. Pickleball is our segue. I.

Sharad Mehta  30:00  

Okay, let’s go. What do you do for fun? Oh, wow.

Adam Koós  30:05  

Well, God, I play. My wife and I have been playing sand volleyball year round. There’s an indoor sand volleyball place near us. Oh, really. And for 18 years, every Thursday night we play. We’re like the, you know, our the average age of our team now is like 45 or 46 so okay, we keep joking. We’re to change our team name to everything hurts because everybody else is so much younger and faster than us. But we do that. I love I love football, so I’m a big Browns fan, Ohio State Buckeyes, you know football fan.

Sharad Mehta  30:33  

You have to be living in Columbus, I

Adam Koós  30:35  

guess. Oh yeah, for sure. Yeah, it’s kind of a religion here. And then I don’t know, it’s like, yesterday’s a perfect day. This doesn’t happen enough here. And I know enough here, and I know in San Diego, it doesn’t happen either, for different reasons. But just yesterday, just, you know, a storm came through, and temperature dropped, and it starts pouring and thunder and lightning. And I love going outside, sitting in a chair, and just sitting and enjoying the nature you

Sharad Mehta  30:58  

and me. I love that. I miss that so much. I used to live in Canada and Chicago, and I miss so much like that, those storms about Chicago and Canada, I love that’s probably

Adam Koós  31:11  

one of my favorite things in the world. But in San Diego, all you guys get is the marine layer that everybody complains about, right? Oh, the marine layer. You know, what are we going to do? The marine layer is coming. But, yeah, but it’s beautiful. I mean,

Sharad Mehta  31:23  

it is jealous, yeah, I’m looking out my window. There’s not even one cloud clear blue sky. Yeah, it’s

Adam Koós  31:30  

not even a Simpsons commercial, right? The Simpsons with big, puffy, white clouds, you don’t even have

Sharad Mehta  31:34  

that, even that, not even that, right? Adam, what’s the one book that has had the biggest impact in your life? It could be a business book, it could be a personal book, or it could be one of each.

Adam Koós  31:44  

I would say, I’ll give you two. The one that made the biggest impact in my business life was Think and Grow Rich Napoleon Hill, okay, yep. And the one that made the biggest impact in my personal life and business, but I’ll say both is the Four Agreements. It’s a very, very, very short book. I listen to books. I don’t read them. I don’t know why it is. I can’t read and pay attention, but I can listen and pay attention. But the Four Agreements is very short. If you listen to it, it’s a four and a half hour book. I literally read it once a year, and it’s just all about how to be a better person. You know, it’s the added it’s not literally, about the attitude quote, where you know 90% of life is how you react to things, 10% how you know what happens to you. But it’s you know, essentially, things like you know. First of all, don’t, don’t ever assume anything about anything or anyone you know. Don’t make any assumptions. That’s one of the, one of the Four Agreements, and it’s just, it’s a life changing book. It’s really, really cool. What

Sharad Mehta  32:44  

agreements? I’ll definitely check it out. Yeah, yeah, I’m the same way. I prefer listening to books because I can just be in my car, you know, listen to Audible. It’s just so convenient, and you get through much faster

Adam Koós  32:55  

that way. I agree. Yeah, take notes too. You can take notes.

Sharad Mehta  32:59  

Yeah, absolutely. All right. Final question, if you could spend a day with someone dead or alive, who would you want to spend the day with and why? Wow,

Adam Koós  33:12  

I feel like I should have a better answer than I’m going to give you. But for whatever reason, my whole my whole life, I’ve always loved, not my whole life, my whole adult life. I’ve always loved Jet Li. You know the martial artist? Okay, yeah, that’s I was. I was on the taekwondo team at Ohio State for years back in college, and he was like my hero in the martial arts world. So I’ll give you two then I’ll if I would say Jet Li would be, it would just be amazing to hear his story. He’s such. He’s just a wise person, you know, good Buddhist person. And then the other person would be my dad. I mean, I see him. I see him a lot, but I’d like to see him more. So I’d spend all day with my dad. All day. Great

Sharad Mehta  33:53  

answers. Great answer. Alright, Adam, if someone wants to connect with you, learn more about your services. What’s the best way for them to do that? Yeah,

Adam Koós  34:01  

best two places to go, if you’re if you’re an individual or a couple, you know, I guess, or a business owner looking for knowledge, free advice. You know, the good, good education. You can check out libertaswealth.com you’ll find not only all kinds of stuff in there, from articles to screencast, but we also have a podcast called The retirement fiduciary, which I believe, Sharad, you’re going to be on here in the not too distant future. So you’re going to, we’re going to be doing a home and home here. I’m on yours this time. You’re on my next time, looking forward the other one for business owners only. So if you’re a business owner and you’re interested, or at least intrigued about this whole exit planning, business transition planning thing that we’ve been talking about today, then check out, elevate and exit.com. That’s our second company that I own. It’s all about transition planning. In fact, we’re doing a pot a webinar on tomorrow. It’s tomorrow, doing a webinar tomorrow with Greg Smith, who works at 1031 IPX, which is an intermediary for 1030 ones. And we’re talking. In tomorrow for an hour about DSTS and 1030 ones, and then we’re doing a podcast, which will be coming out shortly thereafter too. So elevate and exit.com and then Libertas wealth.com probably the best two places. We’ll

Sharad Mehta  35:10  

put both of those links in the show notes.

Adam Koós  35:13  

Sure that’d be great.

Sharad Mehta  35:14  

Adam, thank you so much for coming on the podcast. It’s been absolutely a blast. Thank you

Adam Koós  35:18  

Now same here. Sharad, thank you so much for having me on

Unknown Speaker  35:20  

thanks sure you.