I've been looking for these types of deals for a few months now. It seems like they all had some big years during covid. Is there a good way to measure which business will have lasting growth in this sector as opposed to some good years? What are some multiples everyone is seeing out there in the marketplace? I'm seeing anywhere from 2-3X multiples here in the midwest.
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On the commercial side if you're going after multifamily renovation companies watch out because the funds are running low after 3 years now of anemic transactions on the commercial market and lack luster rent growth.
Covid bumps should be done after###-###-#### I would look at year over year sales compared to the same time last year to see if they are on a similar trajectory or not and then push to understand their pipeline. This may be project work, but it typically has a long tail if you are dealing with architects drawing up the renovations, then applying for permits, you can start to come up with year end projections at this point pretty easily.
2) Both Residential and commercial sectors have pluses and minuses. Be careful of interest sensitive residential business models. The ones where you collect up=front deposits are good.
Commercial sector often has customer concentration, strong relationship, new vs old, etc. but loyalty is high and hence repeat customers,