How Chase bought an 85-year-old steel company with no manufacturing background

Happy Monday, friends!

Today you’re going to hear a story about Chase.

He was the head of operations at a remote tech company who wanted to build wealth outside his W2 without leaving it.

After multiple deals fell through, he and his brother closed on an 85-year-old steel fabrication and welding company (including the real estate) for $1.85M, despite never having touched a welding torch.

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Troy structured a creative $600K doggy daycare deal with $0 down using seller financing and a hard money loan.

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Before the Deal

Chase had been searching for over a year, getting deals under contract and watching them fall apart for various reasons.

By the time the right deal appeared, he knew exactly what he was looking for:

• A business at least 25 years old

• A GM already running day-to-day operations

• And solid fundamentals that didn’t require him to become an industry expert overnight

He also brought his brother on as a partner, for someone with complementary skills, shared vision, and someone to split the workload with.

Finding the Deal

The deal came up on BizBuySell, which Chase almost dismissed (most of what he’d seen there was either overpriced or overrun with competing offers), and this one had multiple offers above asking price.

But Chase went all-in anyway.

He’d learned from previous failed deals what mattered most: building genuine rapport with the broker and the sellers.

That relationship ended up being the difference between winning the deal and losing it to a higher bidder.

It also led to an unexpected financial win:

The broker flagged a Huntington Bank program that allowed a 25-year amortization at 6.99% fixed interest because real estate represented more than 51% of the purchase price.

Compared to what a standard SBA structure would have looked like, that rate saved them an estimated $70-80K per year in debt service.

(Inside Acquisition Ace, members learn how to build the kind of broker relationships that open doors like this, before and after a deal is under contract. To learn more about the Acquisition Ace community, and see if it's a good fit for you, book a call with our team here.)

The Deal Breakdown

Original asking price: $2.75M ($1.2M real estate + $1.55M business)

Final purchase price: $1.85M ($1.2M real estate + $650K business)

Reason for reduction: Inventory true-up at year-end revealed a $200K discrepancy, dropping SDE and the corresponding multiple

Included: ~$1M in inventory, 3 acres, 28,000 sq ft of workshop space, vehicles and equipment

Financing: 5% down, 5% seller note (2-year standby), 90% SBA loan at 6.99% fixed, 25-year amortization

Projected SDE: ~$400K annually

Projected cash-on-cash return: 200%+ in year one

What They’re Doing Now

Chase and his brother hired an accounting and administrative specialist to absorb the outgoing seller’s duties from day one, meaning the business was operationally covered before they even walked in the door.

The GM has been with the company for 27 years, and the office manager for 38.

Chase’s approach from day one was radical transparency:

• No sweeping changes

• Open one-on-ones with every employee

• And a structured feedback process to understand what the team actually needed

By the end of the first week, the GM pulled Chase aside and told him it was probably the best thing that had ever happened to the company.

Chase is currently spending a couple of days a week on-site, not because he has to, but because he wants to.

The Key Lesson

“At worst, you might get 100% return on your investment this year. Most likely, it could be 200 to 300%. When I tell people that, they say my numbers are wrong. They’re not.”

Chase bought this company because the fundamentals were right, the team was in place, and the structure made sense - not because he was a steel fabrication expert.

The industry knowledge came with the GM, which is often what buying the right business actually looks like.

Ready to find and close your first acquisition?

Join the Acquisition Ace community with 2,000+ members who are learning to find, finance, and close deals just like Chase.

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