An owner with a book of $35,000 to $50,000 a month sat across from me and Nathan Brown, who runs ACRE Agency operations, on a call in August. We had been talking about what an operating partnership would look like for him. He listened for a while and then asked the question most owners are thinking.
Why don't you just buy my book of business and write me a check like me personally.
It is a fair question, and it has a number attached. It also has two other answers, and this piece puts all three next to each other on the four things that decide it: how much of the company you keep, what cash you see at the start, what your month looks like afterward, and what happens in a slow quarter.
Door one: sell now
Under $300,000 in revenue, what you are selling is a list rather than earnings. The M&A advisor who ran a sell-side audit for one agency in the group in August put the range at 45 to 60 cents of revenue, and the last comparable shop went at 40. On a $300,000 book that is $120,000 to $180,000 before the structure of the deal, and the structure is where the price and the payout part ways.
Above that size the multiple appears. One active buyer pays about 2.83 times earnings, and he runs twelve cold callers at four dollars an hour to find the owners having a bad quarter. The Consolidation Wave covers why that price is rational and why the call comes when it does.
Ownership kept: none. Cash at close: the number above, less whatever is held back. Monthly workload: whatever the buyer's agreement says, and for a solo operator Matt Giesow's line still holds, that "selling would mean you just go to work for somebody." Slow quarter: if you sell during one, the trailing months set the price, which is the whole point of the cold callers' timing.
Door two: keep going alone
This is the default, and it is getting harder in the middle. AI editing at 43 cents an image is a subscription any shop with a laptop can buy, so the quality that used to separate you does not. The platforms you book through cost the same in December as in June. The Squeeze on the Middle is the long version.
The near-term version is the winter. Our own forecast for ACRE Seattle is a fall to half of a busy month in November and possibly 30% in December. That is a forecast, and it is for one market, but every owner reading this has their own version of it. It is the reason so many owners will not hire the people they know they need.
