Buy a profitable app with a 10-year loan and pay it back from the app's profit

Steve Young… with a grain of salt, but my math is, look, you can buy an app. So let's say you can buy an app, Joseph, that's making 10 keep math easy, $10,000 a month profit, organically. Let's say you buy it for $300,000, or let's say 350, just to keep the math easy. 350, so you take out a loan for 350, long as you're doing well, that loan you have to pay back in 10 years for five, and the loan is about 5,000, just keep the math easy, $5,000 a year a month.

Steve YoungSo my math says, okay, I just paid you 350 for your app that's doing $10,000 a month. I have to pay back my loan for 5,000. I'm technically profiting $5,000 a month, right? And I know I will make back my money, if it everything holds, in 3 years, but I have an additional 7 years, cuz it's a 10-year loan, to figure the rest out, or I can just pay it back free. So I think that's an interesting model for those who are just trying to come in, but the the elements of a like successful acquisition has always been distribution is embedded in it. If it's not in there, and I prefer organic, I talked to other acquisition folks that I'm like, okay, they do look for the same thing, because then I can add on to something else, right?

Steve YoungIf you fully If it's paid, then it's like it's a money-eating machine. [laughter] Like, I'm like, "Oh, isn't it, right? I got to keep paid going, otherwise the sales go down." So if there's organic already in there, great. And so now we're trying to build more apps using the same exact strategy, and I'm trying not to be lazy anymore, Joseph. I'm like, "Eff it. I know these keywords exist. I'm not going to be lazy anymore. I'm going to find a …

Joseph ChoiIt feels like real estate. [laughter] You're like buying buying a house, and with the tenants like a pipeline of tenants like already paying you the MRR, and you you just profit instantly. Uh, that's that's a interesting model. Do you know other app acquirers? Like do do people tend to do the loan method, or is there like seller financing?

Steve Young… US, so why? Why do that, especially if the economics makes sense for you to do it? So obviously, there's a bit of embedded risk, but there's embedded risk in everything you do. So I think for most people, they either get VC funding or they either just use their own money. But for me, it's like I could have used my own money, but why? Let's do it this way. Even when I purchased Indie App Santa, it was only like it was not that much, and I was just like, I could have paid for it, but I was like, [snaps fingers] doing the same math, I was like, "Well, I know it makes this much money. You know, if I took out a loan, I don't have to pay this much. Wait, so I'm making money regardless, right?" So instead of just giving a full lump sum and just being like, "Ow, this much money," I was like, "Let's just take the loan and we'll still make money and I don't have to use my own money to do it."

Joseph ChoiOkay. One last tactical thing on that acquisition, so you turned around like the ASO, or you kind of like increased the ASO within a couple of months. Is that just about adding keywords to the title? Like if they're already doing really well in a keyword, are you just tackling almost a different demographic slash like different intent from a category by putting like the other keyword in parentheses or like something like that within the title?