Tomorrow’s Fortune

Welcome to the action-packed newsletter designed to help you navigate the world of business and investing. If you missed last week’s post, check it out here. 😎 

Today’s Digest: 

• Fund Your Next Deal Using BNPL: Instead of using Buy Now, Pay Later to buy a TV or Mattress, why not buy a cash flowing business making millions?

• What’s Happening in the Markets? Trump Hits EU with 50% Tariffs, April Home Sales Slow, Cuts to SNAP Benefits and YouTube’s New AI Ad Engine

• Wanna Buy a Business? We found a high-profit Tiny Homes Development Business ($700K of Cash Flow). Click HERE for the listing

TOP STORY

Using BNPL to Buy a Cash Flowing Business

Forget Klarna. The real BNPL magic? Buying an entire cash-flowing business—with someone else’s money.

Most people associate “Buy Now, Pay Later” with shopping sprees and sneakers.

But in private equity and small business acquisition, BNPL takes on a whole new meaning: Seller Financing. And when done right, it can be the most powerful—and overlooked—tool in the acquisition playbook.

Imagine this: You acquire a business generating $500K in annual cash flow. You put zero money down. The seller finances 100% of the purchase price. The business pays for itself.

Sound impossible? It’s not. You just have to understand how—and when—it works.

Let’s break down the mechanics, the mindset, and the opportunity.

Why Seller Financing Exists

Seller financing is when the seller acts as the bank. Instead of the buyer wiring the full purchase price upfront, the seller agrees to get paid over time—usually in the form of a promissory note backed by the business’s future cash flows.

This isn’t charity. It’s deal-making psychology.

Sellers agree to financing terms because:

• They want to retire and are more focused on continuity than top-dollar price.

• Their business is under-marketed or under-valued and has failed to attract institutional buyers.

• They like the buyer and want to help someone succeed.

• They know the business cash flows can cover the payments—and prefer the steady income stream over a lump sum.

For buyers, it means low (or no) equity out of pocket, while still acquiring a proven asset with built-in cash flow.

When 100% Seller Financing Becomes Possible

Not every deal is a candidate for full seller financing. But when it is on the table, it usually checks at least three boxes:

Distressed or Aging Seller – The owner is retiring, burned out, or ready to move on—urgently. The longer they wait, the more risk they bear. This gives buyers leverage.

Low-Bid Market – The business hasn’t attracted strategic or institutional buyers. Maybe it’s a niche, under-the-radar opportunity without a sophisticated CIM (confidential information memo). That creates a vacuum you can fill—with creative structuring.

Steady Cash Flows – The business doesn’t need major reinvestment or turnaround. It throws off reliable EBITDA and has sticky customers—making repayment of a seller note low risk.

Take a $1.1M painting and sandblasting contractor in Arizona generating $500K in cash flow. With minimal buyer competition and a seller looking to retire, you could negotiate 100% seller financing with $100K/year repayments over 11 years.

That’s BNPL for builders.

What the Smart Money Negotiates

Seller financing isn't a blank check. Here’s how top investors structure it:

Negotiating the right terms is about creating alignment: the seller gets peace of mind and income, and the buyer gets control with limited capital at risk.

Diligence Still Matters

Seller financing doesn’t mean skipping diligence. In fact, it makes it more important.

You’re using the business’s own earnings to pay for itself. That means:

• Cash Flow Quality is everything. Are earnings recurring, or project-based?

• Customer Relationships must survive the transition. If the owner leaves and revenue walks, so does your ability to repay.

• Operational Team must stay intact. No one wants to buy a cash cow only to realize the farmer left.

Even with zero capital upfront, you’re on the hook for execution. It’s a low-risk entry, not a no-risk one.

Why This Is the Smartest BNPL Strategy Around

When done right, seller financing is the ultimate leverage:

• You buy a business without risking your life savings.

• You control the asset immediately.

• You use cash flow—not equity—to pay for it.

• You can recapitalize, refinance, or resell for a gain.

So while everyone else is using BNPL for furniture or phones, you’re using it to acquire a six-figure income stream and build long-term wealth.

In the deal review later this newsletter, we’ll look at how a specific $500K cash flow painting and sandblasting business might be a candidate for this kind of structure.

Because the smartest deals? Don’t always cost you money upfront.

They just cost you courage, creativity, and conviction.

I Found 3 Examples of Great BNPL Deals in this Video…

Find other cool videos on my channel HERE (👈 Click)

WHAT’S HAPPENING IN THE MARKETS?

• Trump Pushes for 50% EU Tariff Starting June 1

  President Trump has formally recommended a 50% blanket tariff on all goods imported from the European Union, effective June 1, citing persistent trade imbalances and what he deems unfair industrial subsidies by the bloc. The recommendation follows a pattern of escalating protectionist policies targeting U.S. trading partners, but the EU move is especially significant given the volume of bilateral trade—nearly $830 billion annually, per U.S. Census data. Notably, the White House did not exclude autos, pharmaceuticals, or energy—sectors often carved out in prior trade conflicts—raising the risk of widespread retaliatory tariffs. European Commission officials warned that such a move would "worsen global fragmentation" and have "serious consequences" for transatlantic trade. The announcement adds another layer of volatility for U.S. multinationals with European exposure and could complicate rate policy if retaliatory measures impact inflation and supply chains.

• Home Sales Decline Again in April, Inventory Up Slightly

  Existing home sales fell 1.9% month-over-month in April, according to the National Association of Realtors, marking the second consecutive monthly decline as mortgage rates hover above 7%. On an annualized basis, sales were down 2% year-over-year. While inventory has increased slightly to 1.21 million units—up 9% from a year ago—it remains tight compared to historical norms. Median home prices rose 5.7% from April 2024 to $407,600, suggesting that affordability continues to deteriorate. The combination of higher borrowing costs and elevated prices is throttling transaction volume, particularly among first-time buyers. Regionally, the South saw the sharpest decline in sales (-3.4%), while the West posted a 1.3% increase. Investors should note that low turnover and tight inventory may support pricing, but volume-dependent sectors—title insurance, mortgage origination, and home improvement—remain under pressure.

• Food Stamp Cuts Advance Under GOP Tax Bill

  The latest GOP tax proposal includes deep cuts to SNAP (Supplemental Nutrition Assistance Program) benefits, aiming to offset a broader package of corporate tax breaks and middle-income rate relief. The proposed legislation would tighten work requirements, reduce benefit levels for certain recipients, and limit automatic eligibility expansion tied to other welfare programs. Analysts estimate up to 10 million recipients could see reductions if the bill passes in its current form. The move is controversial, drawing opposition from Democrats and anti-hunger advocates, but is being framed by Republicans as part of a fiscal rebalancing effort. While the bill faces a tough path in the Senate, its advancement signals renewed momentum around deficit-focused tax policy. If implemented, reduced government transfer payments could affect Q3–Q4 retail and grocery consumption patterns—especially in lower-income zip codes—adding another variable to consumer discretionary forecasts.

• YouTube to Use Gemini AI to Target Ads by Engagement Levels

  YouTube has begun deploying Google’s Gemini AI to analyze user engagement in real time and target ads at moments when viewers are most likely to be paying attention. According to Google, this capability—rolling out first on mobile—uses behavioral signals like video replays, pausing, volume adjustments, and even gaze estimation (where permission is granted) to predict high-attention windows. Advertisers can now opt to have their content served during these moments via YouTube Select campaigns, potentially commanding premium CPMs. Early pilots suggest 30–40% lifts in brand recall and ad effectiveness when served at peak attention intervals. The rollout is part of a broader trend of AI-enhanced monetization across Alphabet's ad ecosystem and could further insulate YouTube from general ad market softness by boosting performance-driven demand. Hedge fund readers should watch for revenue impact in Q2 results and implications for broader AI-driven ad stack adoption across the industry.

SO YOU WANT TO BUY A BUSINESS… 🏦

Deal of the Week: Tiny Home Construction Business in Lindale, TX – Asking $2,100,000

Opportunity Overview

This East Texas-based tiny home design and build firm offers an entry point into a structurally growing segment of the residential market: affordable, downsized living. Founded in 2022 and reportedly generating $2.1M in annual revenue with $700K in seller’s discretionary earnings (~33% margins), the business serves a mix of individual homeowners and investor clients, delivering finished units from its onsite workshop. The company operates on a fully owned 3.5-acre property with a 3,000+ sq. ft. residential home, three storage units, and a dedicated delivery vehicle—all included in the sale.

The business is positioned as a lifestyle brand and a manufacturing operation. With Texas and other southern states seeing persistent housing affordability challenges and zoning reforms that favor accessory dwelling units (ADUs), this asset sits at the intersection of consumer trend and regulatory tailwind. The real question is whether this early-stage, high-margin operation is scalable—or simply a well-run microbusiness ready for its next act.

Cash Flow and Profitability

The listing reports $700K in SDE on $2.1M in revenue—implying a ~33% margin, which is on the high end for small-batch modular construction. That suggests disciplined material sourcing, lean labor cost, and pricing power in a market with relatively few local competitors. With only two employees, the cost structure is extremely tight, though it likely means the owner is directly involved in multiple functions (sales, design, estimating, maybe even hands-on fabrication). CapEx appears minimal beyond the included delivery truck and storage infrastructure, but buyers should expect meaningful reinvestment if production is to scale beyond current volumes. The inclusion of owned land and a residential facility provides operational flexibility and some downside protection, but it also creates ambiguity around personal vs. business use of assets—a diligence item that must be clarified.

What We Like

Demographic and Policy Tailwinds for Tiny Living
Tiny homes benefit from two major macro trends: (1) housing affordability concerns among younger and lower-income buyers, and (2) ADU-friendly zoning reforms spreading across cities and counties. This business sits at the intersection of both, giving it a natural growth backdrop even without aggressive expansion.

Efficient Production Model with Strong Unit Economics
A 33% cash flow margin implies either strong per-unit pricing or extremely lean overhead—or both. With labor markets tight and materials inflation still sticky, this performance signals a tightly managed production model with clear pricing discipline.

Asset-Backed Transaction with Strategic Land
The 3.5-acre lot and residential home provide both asset security and operational leverage. The land could be used to expand manufacturing, serve as a model home showroom, or support an on-site rental stream. Additionally, the inclusion of three storage units and delivery vehicle implies self-contained logistics—a plus for lead times and margin control.

Low-Cost Acquisition Multiple for a Fast-Growing Category
At 3x SDE ($2.1M asking price / $700K cash flow), this business trades well below the high-single-digit multiples seen for larger prefab housing manufacturers. For a buyer with industry experience or distribution relationships, this may be a rare low-entry multiple play in a category with explosive long-term potential.

What We Don’t Like

Owner Dependency Across Multiple Functions
With only two employees and no mention of a broader operational team, this is likely a founder-centric business. If the owner handles sales, estimating, scheduling, or fabrication oversight, transition risk is significant. A first-order priority will be documenting tribal knowledge and transitioning responsibilities to a reliable bench.

Early-Stage Operating History
The company was founded in 2022, meaning it lacks a long operating track record through cycles or scaling phases. Buyers must test whether the current SDE is sustainable, repeatable, and built on healthy backlog—not just opportunistic 1–2 high-ticket clients or custom orders.

No Mention of Sales Infrastructure or Channel Strategy
All signs point to a referral- or inbound-driven business, likely without CRM, paid acquisition, or lead nurturing infrastructure. That creates opportunity—but also means growth may be gated by owner hustle rather than a scalable system.

Real Estate Blurring Between Residential and Commercial Use
The listing includes a 5-bedroom home, which may serve as both HQ and owner’s residence. It’s unclear how that asset supports business operations. Buyers need to isolate what portion of the real estate is truly income-generating or operationally essential to value it accurately.

Key Questions for Diligence

• What is the mix of customer types?
  Are sales primarily to homeowners, real estate investors, or institutional buyers (e.g., campgrounds, tiny home communities)? Customer type directly informs repeatability and order size.

• How repeatable are unit economics—what is average revenue per unit, gross margin, and build time?
  Investors need clarity on production throughput, pricing tiers, and cost per square foot to evaluate scalability and forecast future cash flow.

• Is there a backlog or pipeline of committed builds?
  Understanding forward visibility is critical. Does the business have signed contracts or deposits in place? What’s the lead time to deliver?

• What permits or inspections are required to deliver and install homes, and who handles them?
  Compliance risk can quickly derail operations if not properly managed. Buyers should understand local permitting processes and responsibility handoffs.

• What role does the current owner play in design, estimating, or permitting—and how is that knowledge being transferred?
  If the owner is the sole point of contact for custom builds or project feasibility, institutionalizing that knowledge will be critical for post-close continuity.

Bottom Line

This is a young, asset-backed, and highly profitable operation in a category with real tailwinds. For a buyer with construction ops experience, design/build chops, or a vision for vertical integration in ADUs or affordable housing, this is an intriguing platform. But it’s early-stage, founder-driven, and potentially underbuilt operationally. The upside is real—but so is the work required to scale it responsibly. If diligence confirms repeatable unit economics and a transferable go-to-market model, this could be one of the most capital-efficient entries into the housing market available today.

This newsletter is for informational purposes only and does not constitute investment advice. The content is based on publicly available information, and the author makes no representations about its accuracy or completeness. Readers should conduct their own research before making any investment decisions.