How to Buy a Roofing Business and Grow It Smartly

The most sustainable way to get leads is through strong word-of-mouth referrals. As Nick Riley shared, building strategic partnerships with local real estate agents, insurance agents, and property managers, combined with community involvement, drives consistent, high-quality

leads that convert better than paid ads. Custom home builders can generate more leads by combining strong local SEO, educational social media content, and a clear, communicative sales process that encourages referrals. When referrals slow down, paid ads on Google or Meta can fill

the gap, but they work best when layered on top of a solid reputation rather than used as a

primary strategy.

While digital ads can generate volume and consistency, local networking is a way to establishes trust in your local market. Sponsoring local events and supporting other small businesses builds immense goodwill and establishes your company as a trusted, community-focused brand, which is crucial for long-term growth.

Educating customers builds trust. When you take the time to explain the "why" behind your recommendations, pricing, and materials, customers feel empowered. This educational approach, which Driftwood Builders uses effectively, makes clients more likely to choose your services over a competitor who simply provides a basic quote.

Independent contractors can use their long-term focus as a major competitive advantage. Private equity firms often prioritize short-term growth, which can lead to pushing expensive replacements over simple repairs. Independent businesses can win by emphasizing their commitment to honest, long-term customer relationships and doing the right thing for the homeowner today.

Jesse Sampley (00:31)

All right, so today on the Meridian Pursuit Builders podcast, I'm talking with Nick Riley, CEO of Driftwood Builders Nick, welcome to the show. Why don't you tell our audience a little bit about you guys and where you're based and what kind of customers you guys serve.

Nick Riley (00:47)

Awesome. Yeah. Well, Jesse, thank you so much for having me. I'm a huge, huge fan of the podcast has been incredibly helpful and insightful. to be on it is an awesome opportunity. So first off, thank you so much for having me. And yeah, so I'm the CEO of Driftwood Builders Roofing. We've been in Austin for over 20 years now. We've served over 3,600 happy customers at that time. And yeah, it's been a ton of fun. we specialize in roofing. We recently became a James Hardy certified siding contractor. so we're doing siding now as well, but yeah, we've been

served in the local Austin community for over 20 years and it's been a ton of super excited about the future.

Jesse Sampley (01:22)

Wow. Now I saw from the website, looks got a founder from little conversation from earlier, took over the business about four months ago. Why don't you tell me a little bit about that.

Nick Riley (01:33)

I love to so it's actually a long story.

I grew up in Montana in a small town in my dad owned a landscape construction business. And actually, let me backtrack a second. So this is my great grandfather, Nicholas Lepino, who I was named after. Yeah, he came to New York when he was nine years old from Italy. And he was a plumber in New York City. And when he first came to New York, he was so poor, he couldn't afford car he bought. So he had this giant of Heather Satchel with all his

Jesse Sampley (01:48)

well.

Amazing.

Nick Riley (02:04)

like

plumbing tools and you walk around New York City to do plumbing jobs. But yes anyway so that's my great-grandfather and then growing up my dad owned a landscape construction company in Whitefish, Montana and my uncle hasten re company in Myfish, Montana and so since I was eight years Oh yeah it's beautiful yeah it's so nice there.

Jesse Sampley (02:09)

my gosh.

wonderful. I've been to Whitefish. love it. What a cool town too. we, yeah,

we did some mountain there was a guide that was up there that, he was actually in video production and shot for the BBC and would climb Everest. And he climbed Everest like four times. He lived in Whitefish. We met him, long story, but we had met him and then he took us to Mount Rainier over in Seattle. we climbed a

Mount Rainier over in Seattle. So we spent a little time in whitefish. Beautiful, beautiful side of the country. Yeah. Sorry to distract you there, but you don't hear a whitefish too often.

Nick Riley (02:48)

Yeah, that's awesome. it's awesome there. No, no, no. Yeah. Yeah, definitely. Yeah, so I grew

up, know, do landscaping for my dad every single summer and then doing a masonry from my uncle every single winter.

And they worked me so hard that they inspired me to go to college and get really, really good grades. So I remember like, I used to be really chunky and I was an offensive lineman in college. I used to weigh 310 pounds and actually ate so much food that everyone on the team called me num nums. And I was in college, my like unofficial job for my uncle's crew was like, if there was a giant rock that the tractor couldn't get to.

then the crew would let me know and I would go pick up this giant rock. I was like, I need to get good grades and get a white collar job. and so that's what I did. So I graduated from the University of Montana in 2017 with two degrees, one in management information systems, one in accounting and also licensed CPA, graduated with high honors.

Jesse Sampley (03:35)

Uh-uh.

Nick Riley (03:50)

And I started my career with KPMG and then upgraded to Deloitte doing strategy consulting. And I did that for nine years and it was a great start to my career. I learned a lot. I got to work with some super cool, really smart people. But to be honest, after a while, like it just kind of, you I knew this wasn't my long-term trajectory.

And like the number one thing I was like surprised by is like I've always loved business. I grew up my parents were, business owners and like in my free time and like to read business books and listen to business podcasts and like watch business shows, which is super nerdy, but like that's just who I am.

And honestly, I mean, as a strategy consultant, like we would do a lot of research for some, super high profile clients. And then we come up with a strategy, here's what you should do. And we hand it off to them in the form of a fancy PowerPoint slide.

Jesse Sampley (04:40)

And this is like a full business

strategy, marketing strategy, or what was, what was you're delivering.

Nick Riley (04:43)

Yeah, was in strategy

for Deloitte. it kind of like depends on the clients, my big clients like Meta and Google, worked a lot of technology. I also worked for a lot of, Fortune 100, life sciences companies as well. But yeah, I mean, it was a great start. it kind of made me fall out of love with

business, so because we do so much research, come up with ideas, and it off the client, and then we go on to the next client. And it's like our ideas might have been the smartest thing ever, they might have been the dumbest thing ever. Most likely, it was like a mix in between. But we never had to roll up our sleeves and actually do the work and be accountable for our strategic recommendations.

And it's always been my opinion, the best way to learn is not only to come up with the ideas, but have to roll up your sleeves, be in the thick of things and actually do stuff. Yeah, exactly. And so, about four years ago, I found out about this thing of acquiring existing businesses.

Jesse Sampley (05:30)

and live with the decisions that you put out there. Yeah.

Nick Riley (05:42)

And I was like, okay, this is really interesting. So we had a friend in Montana who bought a fencing company that were really successful with it. And my dad owned a great landscaping company. And, when he came time to retire, none of us wanted to take that over. And so he just, kind of like closed it down and, never sold it. And then I also had a friend who lived in Orange County and he bought an existing solar energy company, like 40 years ago. And then he became like a multi-multi-faceted

with a hundred millionaire, they like six beach houses there. So I was like, okay, this is interesting. And so for three years, I just read a bunch of books.

I listen to every single episode of this podcast called the acquiring minds podcast, which is a podcast about buying businesses. And then most importantly, I joined this great acquired invest happy hour in Austin, just a community where we, help each other out, talk about buying businesses. It's a very, very serious, very tough thing to do. So I was just involved in that community for three years, just learning and saving as much money as I could.

Jesse Sampley (06:43)

Yeah.

Nick Riley (06:49)

And then last year I was like, all right, it's time to go for it. I'm 30 now, I just got promoted up. I did get a promoter that Deloitte, which was great, but it meant like, more responsibilities and I would have less time to search for business. So I was all right, this is it. I'm doing it. And so, I launched an LLC. I called it Ponderosa Capital because it's the Ponderosa tree, it's the official tree of Montana, the Ponderosa pine.

And I found this great investor, Darren Brown. He's lived in Austin for 17 years. He's owned a bunch of businesses in Austin. Really great guy. friend of mine always gives me great advice. And, when I think about who I want to be in 20 years, that's definitely him. And so, I brought him on as investor and I looked at 2000 deals over six months. I signed an NDA and reviewed probably 400 SIMs, which in the business.

Jesse Sampley (07:33)

my goodness.

Was there a platform

that you were looking at? Correct, sir,

Nick Riley (07:41)

Yes.

Yeah, so there's 30 different websites. ⁓ The platform I found this on was BizBuySell, which is the main one. But yeah, it's super interesting because I mean, I used to buy, like a real estate investor.

Jesse Sampley (07:49)

My wife loves that

Nick Riley (07:55)

And real estate, know, it's very regulated, the house has to be inspected. There's all these different things, but the business buying community is a jungle. Like I would find so many, deals are really good. Like the private equity firms own the business. Some are great. And some it's just like, my goodness. I don't know is this.

Jesse Sampley (07:57)

Right.

Man. Okay, so you're

on BizBiz sale. You go through 2,000 different deals and you find the one.

Nick Riley (08:18)

Yeah,

yeah, So I found this great roofing company first sale in Austin and was posted on BizBuySell and five days later, the broker took down the listing because I got 12 offers for full price or over.

And so I was very fortunate to be one of the top four buyers that the seller met with. And so I go and I meet with the seller, Todd Munziger, and I just really liked him as a person. He was a really hardworking, really smart, really high quality guy. growing up in home services and working for my dad who owns a landscaping company, my uncle who owns a masonry company, I kind of like recognize the type. Work hard.

really honest family guy, and I could kind of tell that, that's exactly what Todd was. And so that really attracted me to his business. And I didn't have a ton of experience in roofing, but I had a ton of experience in home services. And for me, it made a ton of sense. And yeah, we closed four months ago.

Jesse Sampley (09:20)

Wow, man, congratulations on that and what a story.

Nick Riley (09:23)

Yeah, yeah, that's crazy

Jesse Sampley (09:25)

man, did he tell you how your offer came in compared to the other 11?

Nick Riley (09:30)

no, he never did. He wasn't selling, he wasn't looking to sell for the highest price. He was just looking, to sell with the person who was the best fit. And he thought that was very fortunate there.

Jesse Sampley (09:32)

I'm sure he saw something in you though.

Yeah.

What were you looking at as far as, yes, you're looking at numbers and all of that, but what were some of your other real high categories? What was your criteria that you were really looking for?

Nick Riley (09:51)

Yeah, great question. I get the criteria one, I wanted to buy a business from a retiring paybee boomer. a lot of times,

see a business for sale and the seller is like 45, in the prime of their business career and they're selling a business to do something else. And it's like, okay, this is sketchy. Like this doesn't make any sense. And so I was, looking for, a retiring baby boomer. I thought that would be a great fit. I was looking for a business, that had been around for a long time and had an amazing reputation.

Jesse Sampley (10:11)

you

Nick Riley (10:22)

And then third, Marsa Bartley, I was looking for a seller I really connected with and really trusted because like, if the seller is a great guy, then that means they've treated their customers really well over the last 20 years. They've treated the partners really well over the last 20 years. They treat their employees really well over the last 20 years. And so, it's a really smooth transition, but if the seller is not a good person, then there's a lot of bad stuff to step into. So, I mean, I'm a licensee.

Jesse Sampley (10:34)

Mm-hmm.

Nick Riley (10:49)

I love to get into Excel, crunch the numbers, run a cost benefit analysis. In my Excel, when I built the model, I had 30 tabs, like an investment banker, private equity person would do. But honestly, when buying a business this small, you want to be as quantitative as possible, I what's more important is assessing the qualitative character of the seller.

Jesse Sampley (10:53)

Yeah.

for sure. And just real quick, just so we have a good kind of 30,000 foot level of the business. When you came in four months ago, Legion, marketing, all of that kind of stuff, what did it look like then versus what it is now?

Nick Riley (11:26)

Yeah, so

that's a great question. it's, essentially pretty much the same except I've worked a lot more.

So I kind of, historically, most of our revenue comes from, so referrals, it's like previous clients are like, Hey, like your neighbor, said you guys did a great job on our roof. And that's like by far, the most majority of our business where it comes from. then kind of our main marketing spend is postcards, which work really, really well. And so, we've been, continuing to do that. Obviously we continue to do great work. we get the referrals. We've been continuing to send postcards.

Jesse Sampley (11:52)

Really?

Nick Riley (12:00)

And then on top of that, I try and go to at least two to three networking events a week, trying to become friends with real estate agents, insurance agents, property managers, other home service company owners, and things like that.

Jesse Sampley (12:14)

Man, well, it sounds like you're set up for such success. It sounds like there's a great foundation there and you're really paying attention towards the most important things instead of being like, okay, how are we just churning and burning through some of these leads? It's like, no, let's like really get integrated with the community, set that good foundation so that we can continue this referral. And then as we need to on a need by need basis, then we can fill in with these different paid ads.

Nick Riley (12:17)

Yeah, I'm excited. Yeah.

Jesse Sampley (12:40)

you know, and have that formula of, what's our cost per lead? And maybe we average it out with the referrals that are coming in. We've got couple of roofing clients and it's the same. like, it's so much better when you have that reputation and like, you're just a good company first, because then every time you do spend a dollar, then, it generates so much more because it generates a referral. generates.

Nick Riley (12:46)

Yes.

Yeah.

Jesse Sampley (13:03)

like so much happens based off of that one really good experience that that person had. It's not just a transaction of like, this one person, here's my cost per lead. Here's my cost per acquisition. it's more than that. ⁓ if you're thinking long-term and you're trying to build a real business.

Nick Riley (13:13)

Yeah.

Oh yeah, 100 % agree. that's the number one thing I've learned early on as a business owner. So I'll give an example of like last week this happened. how can we get more leads? And I was going into Excel and I looked at these 10 different opportunities like meta, Google, cold calling, and I'm trying to run calculations. Like what's the estimated cost per lead? What's my expected value of this? And I'm going through all this and I'm wait a minute, we just sold this really nice tire repair to this prominent attorney who lives

five minutes away, I should just shut my laptop, go to his roof, do a really good job. And he's a good, honest guy. He's going to tell all of his prominent, friends that we did a good job and then I'm going to get so much referrals and I'm going to be free too. So I'm just like, yeah. I mean, that's stuff that I've learned, but I think just community involved is so.

Jesse Sampley (13:58)

love that.

Yes. Yes.

Nick Riley (14:10)

So, important. I grew up in a small town in Montana and

You know, since 2000s, a lot of people from other states have been coming into the small towns of Montana. Have ever seen that show, Yellowstone? And so I've definitely grown up around that. And so, when I think more about it, I would so much rather pay $500 to sponsor an event for a local real estate agent. And that way I'm supporting another small business rather than paying $500 for a good

Jesse Sampley (14:23)

Yeah.

Mm-hmm.

Nick Riley (14:43)

Google

ads and supporting a big tech company. I have ton of friends who work at Meta and Google when I was a strategist for Deloitte. were my clients. I love those companies. not trying to bash them or anything, but I would so much rather support the local community than pay for ads. And I think it makes sense for our business since we've been here 20 years. I think it makes sense to invest locally.

Jesse Sampley (14:46)

Yeah.

When you do go to these different local events, how are you positioning yourself as far as a roofing authority? Are you putting out things of like, this is what homeowners need to watch out for if they have a roof? Is there much education that you're doing just to, some that you would see some of this verbiage that would be like, biggest mistakes that homeowners make with their...

roofing mistakes, things like that. That's like, Hey, I'm throwing out an issue here that everybody has. And then I'm going to answer this myself, just as kind of building that authority for yourself.

Nick Riley (15:45)

Oh yeah, 100%. So when I first took up his business, I'm like, how do I identify this business's top straights? What's our competitive advantage? So what I did is I ran this algorithm online that took every single review we've ever gotten online.

and it downloaded every single review and then it looked for what are the top keywords customers say about you guys? And for us, the number one thing, so is the education. Like the old owner Todd Hunsager, he's talked about now that he's retired, he might be a teacher part-time because he's very smart and that's educating people. And so that culture he's established of the education, that's very, engraved in Driftwood.

Jesse Sampley (16:18)

Ha ha

Nick Riley (16:27)

And it's 100 % going to stay the same for the next 20 years I run this company. And so, yeah, we're very educational. And that was the top keyword that customers said about us in our reviews. And so when we sit down with customers, think a big advantage for us isn't just say, all right, your roof's 20,000. Be like, this is your 20,000. This is why these are the costs. And we absolutely love to educate customers as much as we can. And one thing I'm trying

Jesse Sampley (16:47)

Mm-hmm.

Nick Riley (16:53)

to do is I, use GP to find like the top 67 questions people look for in the roof. And then we create a customized box to answer every single one of those questions we posted on our website. But I think one thing we're trying to do is we want to take a YouTube video, for every single question, like answer it ourselves. so the team has been doing that we have a video contest on my bot gift cards for a steakhouse in Austin, the teams are in a video contest.

Jesse Sampley (16:58)

Mm-hmm.

Nice.

Nick Riley (17:20)

right now is in first place but yeah so the team's having a fun video contest and that's been great.

Jesse Sampley (17:26)

That's awesome. one thing that we do is we'll do an interview with the client. We'll take that interview and then break that into social posts, a blog post. It becomes short form video, becomes a long form video. But then we've got a custom GPT that then we upload the transcripts to it. And then the full transcript is also going to the blog so that it's just embedded with all of these like amazing keywords.

Nick Riley (17:39)

Yeah.

Jesse Sampley (17:51)

And then just the tone of it just helps all of the copy that you end up writing. It starts sounding like them because it's these are real interviews. So once we started stacking all of this over and over, then, all of the content that we're putting out is just, what they already said is just reformatted for an email, for a blog, for a social post and all this stuff. and then you did with, with, a research side, then it starts answering these questions because then again, on a SEO side,

Nick Riley (18:00)

Yeah.

Jesse Sampley (18:19)

You know, people are searching questions. hey, how, why is this? How do I need to do this? do I need to do such and such? And when you start writing in that question and answer way, then, Google just sees that as, these people have all the answers. Yeah. Well, it's by design.

Nick Riley (18:32)

Yeah, definitely. One

thing we actually started doing this week is every time we get a customer review on Google.

we like reply to it in an SEO friendly way. So we just say hey, we would, love doing your full roof replacement in West Lake for an asphalt shingle roof. We're glad that every time someone searches roofing near me, they're able to get us and not being too spammy with it, but yeah, just simple things like that. hopefully help, guess we'll see.

Jesse Sampley (18:42)

Yep.

What side of your business is replacement versus just doing a simple repair?

Nick Riley (19:04)

that's a great question. So it's % replacements and about 30 % repairs. so the roofing industry is actually very unique because at a high level, we do three things. One is free roof inspections, two is repairs and three is replacements. And so on the free roof inspections, we lose money on those. On the repairs, like we barely make any money, but we make 95 % for profit on the full roof replacements.

Jesse Sampley (19:30)

Mm.

Nick Riley (19:30)

And so I think we have a huge competitive advantage there kind of for two reasons. And one is the advantage that Driftwood Builders has is having a long-term focus. when in roofing, there's like an ethical dilemma a lot of times when a customer calls and they just need a repair, but you want to sell them a full roof replacement and it happens all the time.

Jesse Sampley (19:54)

Yeah.

Nick Riley (19:55)

And so

in the roofing industry at a high level, there's three different types of roofing companies. The first is Chuck and Chuck storm chasers, who are just temporarily they're the general contractors who also do roofing.

they're not going last. statistically speaking, most roofing companies fail. like 80 % of them fail within the first couple of years. it's a very tough business. they won't be around in a couple of years. And then the second type of roofing company, which has been huge recently, is roofing companies owned by private equity backed firms. So over the last year, so many private equity firms have bought these mom and pop shops. they've sold out.

Jesse Sampley (20:26)

Mm-hmm.

Nick Riley (20:33)

the old owner was approached by a private equity firm, but he said no and took less money to sell to someone like me rather than maybe a not so nice private equity firm. And yeah, with private equity firms, I have a lot of friends who work in private equity. Most of them are good people, but how their business model works is you buy a business, grow it for five years, and then sell it. so a lot of times when a private equity firm will go in,

and inspect a roof, they're in like year four out of five of the hold. And so they're like, all right, we only have one more year on this. we're going to sell the full roof replacement instead of the repair.

Jesse Sampley (21:14)

the community side, they don't realize it because it's the same branding. And my dad, when I were just having this conversation because someone locally where he lives, I said, did you know that they've been bought out by private equity? He's like, no, I don't think that's true. Like I still hear the guy radio ads and, see him around. I'm like, he's in the golden handcuffs. he's in this certain amount of time to where,

Nick Riley (21:17)

Yeah, I just had an accident.

Yeah.

Yeah.

Jesse Sampley (21:33)

For it's only the bottom dollar that matters. So you're at a conflict of interest with your own business model because you're trying to maximize the dollar for your investors versus a local person. like going to lose money on a free roof inspection because you've got the long-term play that's in your business model. It is not in theirs, but a homeowner doesn't know the difference. Sometimes if the branding is the same, how are you communicating that in

Nick Riley (21:37)

Yeah.

Yeah

Jesse Sampley (22:00)

not so daunting way of just like, us versus them way.

Nick Riley (22:00)

Yeah, yeah.

Yes, yes. So,

there's a local who's coming to Austin, our biggest competitor, Jamar. it was owned by a guy who started it, for years, was friends with our owner.

And then he recently sold to private equity last year. so right now I'm bidding against them. but so before I answer your question, I guess like to piggyback off like the repair versus replacement, when a truck and a truck goes in that situation, they sell the full roof replacement. When private equity does, they sell the full roof replacement. But for us, since we're going to be around for the next 20 years, we can only sell like the repair, do the right thing. And then, we know that, seven years from

now when that home

needs a full replacement, they're going to come back to us and they're going to go tell all their friends and family and everyone in the community like Driftwood did a great job and only so many repair and then from a long term perspective that will help us. But yeah, I think you just asked the most important question ever. it's very, hard to communicate that to customers and like in the contracting community, what I've realized is a lot of contractors bash each other and love to talk shit about each other and like love to like bring each

other down and I really don't like doing that I if I want to I I just don't like talking behind people's backs if I have something to say you want to say it to your face I mean it is hard but I could the same time like we also want to tell our customers like the truth like hey just so you know they're owned by private equity and they're probably gonna sell but you might not know

Jesse Sampley (23:29)

Yeah.

Nick Riley (23:29)

And

so yeah, kind of some things we've been doing, is just, telling our customers, the truth, like, hey, just so you know, they're owned by private equity firms, I don't know what they're going to be around in a couple years. And then yeah, stuff like going on these podcasts, which I hope that's a lot of

Jesse Sampley (23:43)

yeah,

it goes back into the education side too, is, what, and this is a good question for you even too, is, what do people need to look at, hey, a homeowner says, Nick, okay, you're telling me, you versus this, private equity firm. Okay, great. But what is the difference? what do I need even to be looking a roofing contractor? Because am I not just looking at

Nick Riley (23:46)

Yeah,

Jesse Sampley (24:02)

the bottom dollar, is that not the most important thing to me as a homeowner is just trying to save as much as I can? The floor is yours.

Nick Riley (24:08)

Yeah, yeah. That's that's the number one question that so

the number one thing want to explain to homeowners is first of all, with I think 70 % of homeowners, the vast majority of their

Home equity is in their home value and the roof protects the house and so we see a lot of times someone has a $700,000 house and they say okay. Well your bed was 15,000 and the other guys was 14,000 why should I not go with them? And it's like you wouldn't spend a thousand dollars more to protect a $700,000 house like to me that's crazy. But I think the number one thing is that you know kind of what I wish homeowners understood is that buying a

Jesse Sampley (24:35)

Mm-hmm.

Nick Riley (24:48)

isn't just buying a roof in the short term, it's also buying ⁓ long-term protection for the next 20 years and having someone you can call for the next 20 years. So for example, let's say homeowner gets a bed.

it's Nick Riley who comes in at 20,000. Chuck and the truck comes in at 18,000. a firm like J-Mart owned by private equity comes in at 19,000. So the homeowner is like, all right, well, you're the highest bid. Why should we go with you? And the reason is, because let's just say in five years from now, a really bad hail or windstorm comes and you need someone to climb on your roof and look at it for free. You can call Chuck and the truck. They're not going to be here. That phone number.

Jesse Sampley (25:31)

Yeah.

Nick Riley (25:31)

number,

it's probably a burner phone number, right? You can call, J-Mar or other, roofing companies in Austin owned by private equity firms, most likely they will sold to someone else and they say, hey, like, we don't care. Or, in five years from now, you have my personal cell phone, I'm the owner, I will drive out to your house at 11pm and look at your roof for free because I'm going to be here for the next 20 years in there.

Jesse Sampley (25:44)

Yeah.

There's also that accuracy, which is, okay, well, their, estimate that they're giving you, is that 99 % accuracy or when they peel your roof off, are they going to he haul you around a little bit and say, Oh, this is what we found. What are we going to do now? I guess we are adding, an extra 3 % to the original estimate, because we have to, I'm sure that never happens.

Nick Riley (26:12)

Yeah, yes. ⁓

yeah. yeah. How'd you have a quick story to tell? That's okay. Yeah, so two weeks ago, I met this real estate agent, and she says to me hey, I'm selling these condos. I need the roof of base. Could you do a bit? And the condo is an hour away. And so what 90 % of roofers do is they plug in the address.

Jesse Sampley (26:19)

Yeah.

Nick Riley (26:33)

the numbers, you'll get the price and then they email the bid. It takes, five, 10 minutes to do. And so at Driftwood Builders, we're the quality guy. And so I go into Google and I look at the address and I noticed that the roof was a clay tile roof and they're replacing it with asphalt shingle roof. And that's very rare in roofing like 95 % of the time you replace asphalt shingles with asphalt shingles, metal with metal, et cetera.

And so I'm like, damn, okay, this is interesting. I've never done this. And so I talked to the old owner and he's yeah, we should go drive out there. So we drove an hour out and kind of jumped on the roof and lucked that I kind of felt the tiles and how heavy they are.

And we're like, okay, this is gonna be a lot more work for a crew. And then so the next day, I called our crew leader, Jose, who's been with us for over 10 years. And we talked about like, this is gonna be a lot more work for you to replace these heavy ass shingles, what's a fair price, to charge as customer. And so we went back and forth and agreed $8,000 more was gonna be a fair price. And so I emailed the customer the bid, and I also sent her

my Excel sheet and I was like, here's my calculations, go through it. And also center screenshots of my text conversation with Jose and I was like, here's how I got to the extra 8,000. And I'm like, Hey, if you have any questions, you know, please ask me. And then she comes back to me. The first question she had was, yeah, I got three other estimates. Yours was $8,000 higher. Why is that? And so, yeah. I mean, I guess I'm not trying to bash other contractors, and

situation I'm sure what happened is the contractor gets the address looks at it says okay it's 24,000 and submits the bid and so they probably started on working on that roof last week and as soon as they start working on that roof they're gonna quickly realize like ⁓ shoot these clay tiles are way heavier than asphalt shingles this is a lot of work

And so the unfortunate thing is three things gonna happen there. One is they're gonna eat the cost and lose money, which hopefully, you they don't, but sometimes it happens.

Two, is they're going to make the crew eat the cost. And by that, I mean, they're going to pay the crew, the cost to replace the asphalt shingles, but the crew is going to have to work way, way harder and way longer since the tile is way heavier. And we would never do that to our crew because they've been with us for over 10 years. I do know some other roofing companies, sometimes go to Home Depot and pick up a crew and every us, but the crew might eat the cost. Or thirdly, and what will most likely happen, and like you mentioned, is they're going to

to

back to that real estate agent and gonna say, hey, we didn't realize that the tile was heavier. And so it's gonna be another $8,000. But yeah, mean, so it happens actually frequently. we, only lose bids on price, so that's what a quality guy and customers that were all the cheaper person. And then a couple of years down the road, they call us and they ask them, hey, were on Joe Schmo and he made a mistake. Like, can you come fix it? And it's like, yeah, that's.

Jesse Sampley (29:32)

Yeah.

Nick Riley (29:33)

Yeah, it's frustrating.

Jesse Sampley (29:34)

Which goes back to the importance of the reputation is that, at every aspect of the business, you're building that reputation, even, even down to the type of estimate that you're sending and you're, and you're protecting your integrity by charging more because that's how you protect your guys that are working for you. That's how you're protecting the customer at the end of the day, all of it. and then, when people hear, when people see, and people hear from other people,

Nick Riley (29:42)

percent.

Yeah.

Jesse Sampley (29:58)

that this is why you do things, then, it just builds that, reputation that you're, that you're really after, and protecting that reputation really, because it sounds like you already have it. It's just now you're trying to main, you're trying to maintain it.

Nick Riley (30:09)

Yeah, yeah, 100 % Yeah,

yeah, definitely

Jesse Sampley (30:13)

Do you do any work with builders or do any new construction roofs?

Nick Riley (30:18)

No, we don't do any new construction roofs. The margins for those are super slim, so we don't go there. ⁓

Jesse Sampley (30:23)

No commercial,

just all strictly risk.

Nick Riley (30:25)

Yeah,

mean, the long-term plan is to expand to commercial. We actually got invited to, bid on a multifamily project, which is really big. So super, super excited for that. Hopefully our first window as well. But like that's a long-term plan to expand the commercial through more siding work, some of our windows. But yeah, for the last 20 years, bread and butter has just been roof replacements.

Jesse Sampley (30:35)

Nice.

All right, so Nick, I wanna do a couple heavy hitters. are real quick, mix things up a little bit. So these are gonna be real quick answers, ⁓ just to see how well you know the Austin market a bit. Why do you think homeowners, what do you think homeowners should know before filing an insurance claim?

Nick Riley (30:49)

Yeah.

Yeah.

Yeah, let's do it.

great question. I guess so before I find insurance claim for hell specifically or just insurance claim in general.

Jesse Sampley (31:14)

Let's do both.

Nick Riley (31:15)

Yeah, so I guess for insurance claim, I guess they should know who their insurance carrier is, obviously, but number two, most importantly, they should know what deductible is. And they should know.

details about their policy, like how long their coverage is. And then specifically for hail, obviously the deductible is big. But specifically for hail, two things you need to keep in mind is one, how much hail damage is there on the roof? And so typically when you look at hail damage, it's around an inch. if it's 0.75 inches to 1.25 inches, then the probability that it gets approved on insurance is like 50-50.

50, if it's less than 0.75, then it's a 25 % chance. And then if it's 1.25 inches or above, then the probability that it gets approved is around 75%. So for a homeowner to know how much health damage they have on their house is huge. And then secondly, with the hail damage, they should know specifically where it is. So when we go on a roof, we look at the health damage in a 10 by 10 circle. And so every insurance company has a different

like us, tendered, but for most insurance companies, it's like they have to see ⁓ usually six to eight hell spots in that 10 by 10 circle. So in some situations, you could have a roof that only has eight hail spots, but if they're all in that circle, probability that it gets approved is very, very high. But in other situations, you could have 30 hail spots that could be scattered everywhere.

Well, the probably but if they're not in that 10 by 10 circle, they're probably like it's approved with less. And then the third thing was hail is some insurance companies like to see hail on different, sides of the roof. I mean, some insurance companies will say, as long as we have hail damage on one side, then we're good to go. others, like, no, we need to see hail on every different, on four sides. worked with all the insurance companies and we know this standard site every single one. So

Yeah, I guess that was a long-winded answer, but I just sum it up.

Jesse Sampley (33:15)

No, but that's good. if

someone's in that position, they're kind of forced to pay for it whether they they want to or not. So, he lock versus, financing. I'm sure you guys offer financing through someone.

Nick Riley (33:26)

yes, we offer financing through, the Acorn platform and the ServiceNow platform. honestly, our experience is that HELOC tends to be cheaper. So usually for most homeowners, everyone's pushing financing, financing, financing, but the interest rates on a HELOC are typically significantly lower than financing.

So we do offer both options, but we always tell customers try and get a HELOC. If you can, awesome. Then if not, then we can help you with financing.

Jesse Sampley (33:54)

And then for someone, a storm goes through, what's that first thing that that homeowner should do?

Nick Riley (33:59)

Yeah, the first thing the homeowner should do is call drift roofing for a free roof inspection to see whether or not there's hail damage. So after hail hits for 90 % of insurance companies, you usually have a period of one year to file a claim. And so the timing is actually really big because if you don't file like within that year, you don't get a free roof. And so the cost benefit for homeowners is such a good decision for them because it doesn't cost them a penny to have

Someone like me go check out the roof But if we do find hail damage then we might be able to save them 30,000 dollars on a new roof and I think it's that definitely worth trying kind of some of the saddest things we see is like a neighborhood will get hit by hail and 90 % of the homeowners will get insurance to pay for the roofs and then that 10 % doesn't and then a couple years later they need to get a new roof and they have to pay out of pocket and it's like

Jesse Sampley (34:38)

Yeah.

Man,

Nick Riley (34:54)

I wish we could help too, yeah.

Jesse Sampley (34:55)

man. And then heavy hitter question here would be, wish that homeowners knew better about roofing contractors or maybe just roofing in general?

Nick Riley (35:04)

Yeah, so I wish homeowners knew better about roofing contractors is that in Texas, there are no barriers to entry whatsoever to be a roofer. So it's crazy. I used to be a licensed CPA.

Jesse Sampley (35:11)

Hahaha

Nick Riley (35:15)

And to become that, I need to go to college for five years, take four really difficult exams, take an ethnic exam and take continuing education. And, back in the day, you had to, pass tests to be a roofing contractor, but now in Texas, there are no barriers to entry. So you could start a roofing company in Texas tomorrow or actually right after this podcast. And so, yeah, yeah. Yeah. so, And so because there's no barriers to entry, home

Jesse Sampley (35:35)

think I might. Thanks for the idea.

Nick Riley (35:40)

homeowners should do a lot of thorough due to telegen's on who their roofing contractor is, how long they've been in business for, read a lot of their reviews and do thorough due to telegen's because like

Paying for roof is not cheap and do as much work as possible to thoroughly research your roofing contractors. Also, what you should do is, invite them out to your house and then grill them. ask them 30 super tough questions, try and catch them in a lie. You should fact check everything they say, But yeah, absolutely grill them, them to the metal.

Jesse Sampley (36:11)

But

because also they're they're probably not going to be up the ladder to looking themselves. I mean, there is ⁓ a massive amount of trust to when someone's up that ladder, what they're actually seeing and what, should be done about that. That's a lot within, I'm picking up the phone, I'm calling, three or four different people. maybe I've heard about, this company from someone else. Maybe I haven't.

But you're trying to do a whole lot in a really fast amount of time. And that's something on a marketing side, we always building strategically is we're getting people familiar with the company, the company values, so that that first point of contact, we're trying to increase the highest probability that you have heard about us in some way, or

and hopefully that's through reputation, but also not just like, yeah, these people do great. But to your point a little while ago is we want to know why, and you said that you kind of the why the way you guys are positioned in the market is, you're known for your education, which what a better holistic foundation to have, which is like, they didn't just tell me the right thing to do, but they told me why and that,

Nick Riley (37:11)

Yeah.

Jesse Sampley (37:17)

gave me amount of trust because they were telling me what I should and should not do even when it didn't benefit them at the end of the day. So all of those things stacked up, just kind of proof that, these guys are looking out for me. They're not just looking out for their bank account at the end of the day.

Nick Riley (37:35)

percent.

Jesse Sampley (37:35)

that goes to any business too. a lot of these are just core foundations that if you're running any kind of a business, don't overthink it. love the, what you said shut your laptop. Sometimes it's just real common sense stuff. I was like, Hey, let me just do a really good job. Let me just make sure this person has a really great experience. because that's going to pay dividends and you could say, that's some kind of big strategy, but at the end of the day, it is some of just.

Nick Riley (37:39)

Yeah.

Yeah, yeah.

Yeah, yeah

Yeah, I Yeah,

Jesse Sampley (37:59)

basic human golden rule type stuff, is, ⁓ do a great job, be honest, ⁓ look out for people. Nothing wild, nothing no one's ever heard before, but sometimes you get a little distracted and just the real big, ⁓ yeah.

Nick Riley (38:02)

Yes, Yeah, definitely. Yeah, definitely.

Oh yeah, yeah, 100%. Yeah.

I feel out there is a customer service business that also does, like Amazon's a customer service business that does online shipping. We're a customer service business that does roofing. if your local doctor's a customer service business, that also helps with your health. But yeah, I think every business at a high level is a customer service business first.

Jesse Sampley (38:33)

Is there anybody or any company that you look to for inspiration? companies that you admire really well. You said there was another guy locally that, you kind of aspire to be in the next 20 years, but anything that kind of feeds you throughout the week or throughout the day.

Nick Riley (38:47)

Yeah, so there's a lot of great companies. I guess the number one thing...

for motivation for us is to be more like ABC Home and Commercial. So we've had a strategic partnership with them for the last 18 years. They're this phenomenal home services business in Austin and throughout all of Texas and in Austin we've been their exclusive roofer for 18 years because they do everything besides roofing and we only do roofing and so we've got such a great partnership with them. we kind of you know sometimes like they feel it's like cousins it's like they're not your siblings but like you know they're

close enough. Employees at ABC, feel like our cousins kind of, yeah. And so their owner, Bobby Jenkins, is a phenomenal guy, obviously very successful businessman, but more importantly, he does the right thing. And so he's entering me, he's been giving me advice. He took me to lunch, a couple of months ago, he just gave me a long talk about, doing the right thing, treating people well and being very, very involved in the community. I mean, he really drove

be straight and that's definitely what we inspire to be like just doing a really good job for customers be very community involved ⁓ and give back they do a lot of giving back too and so do we just signed up to a place to move for this old blind lady in East Austin and so it's gonna cost us a lot of money not gonna make a penny off of it but it's simply doing the right thing and giving back to the community so we're very excited to do that.

Jesse Sampley (40:00)

well.

and I love that perspective. I wish more people thought like that. They will. More people are exposed to it, they'll start feeling bad.

Nick Riley (40:11)

Yeah. Yeah.

Yeah.

Jesse Sampley (40:16)

Man, we've covered a lot of ground. We've covered a lot of ground, man. is really take me next 10, 15 years, what's the company look like? Have you expanded into anything other than commercial, other areas potentially franchising?

Nick Riley (40:18)

Yeah.

Yeah, I mean,

yeah, I guess we'll see. mean, we became a certified James Hardy contractor.

So I think that'll be a really big opportunity for us. I would love to expand into commercial and, we are going down to San Antonio for ABC referrals only, but for no one love, strategy, working as a strategy consultant and like as a business strategist. And it's so fun to think of like, what's my future look like five, 10, 15 years from now and just vision. and that's like what I was doing before I bought this company.

But honestly, after I bought this company, I just need to, really focus on like the day to day and do a really good job in the day to day. And then that long term, that will take care of the long term situation itself. I sound like the laptop I can now just maybe sleep in your laptop and just go do a good job. And yeah, I think, expanding to commercial could be an opportunity, being a James Hardy certified siding contractor and, doing, more of the home exteriors could be a big opportunity for us. for now,

Jesse Sampley (41:16)

Yeah.

Nick Riley (41:28)

we're just thinking it day by day and trying involved in the community and we're trying to develop as many strategic partnerships as we possibly can. So every time we make a relationship with an insurance agent or real estate agent and we help them and they help us, it's a win-win. We're trying to develop as many of those as we possibly can.

Jesse Sampley (41:34)

Yeah.

Do you have any software that you use that you found helpful just to help customers or project management software or anything like that?

Nick Riley (41:57)

Yeah, so we use Go High Level. That's super good for us for leads tracking in our customer ⁓ database.

Jesse Sampley (42:02)

Wonderful. We use the same.

It's amazing. Yeah.

Nick Riley (42:04)

Oh, nice. Awesome.

have a speed to lead system called Lead Truffle. And that's been amazing. The CEO, Brian Schenckman is from Austin. He's a friend of mine, great guy. And yeah, like every time I need help, I get on a call with Brian, and he solves that for me. Like he's there, he's a part of it, which is, very, very rare, kind of piggybacking what I said, like he's a customer service business that also has an AI speed to lead. But yeah, so Lead Truffle has been amazing. We love

Jesse Sampley (42:22)

Ha

Yeah.

Nick Riley (42:32)

of Lee Truffle, go high level is great. And then recently ⁓ I started shopping for an AI note taker. I bought the company four months ago and the old owners told me so much stuff and I just kind of take notes on my phone. And then last week I'm at the real estate agent and he's like, dude, there's like, have you heard of AI? Like, I was like, yeah. My guess is like this cool AI like watches, I record everything and then they stop.

Jesse Sampley (42:51)

You

Nice.

Nick Riley (42:57)

Yeah, so I recently downloaded that and I think that's gonna be Yeah, yeah is it is ⁓ Okay, how is it?

Jesse Sampley (43:00)

Is it called B? I got the same one. I use it all the time.

It's really good. I'm not sure if I have the automation set correctly to where it automatically starts recording when a conversation starts. So here lately I've had to just manually start and stop it.

But for some of these like off the fly conversations I'll have with a customer, I'll let them know I'm like, Hey, I am recording this, but it's just because I can't retain all of this in my brain. So it's been extremely helpful to, you've got a 45, 50 minute conversation with someone. And then, you only remember the last thing, that was said. So it's just nice to go back and be like, yeah, we did talk about that. It's, been extremely helpful. I've even used it in my personal life sometimes.

Nick Riley (43:19)

Yeah.

Yeah.

Yeah, yeah.

⁓ damn, okay.

Jesse Sampley (43:45)

was like, hey, monitor,

like, how am I talking to my kids, in the morning? And it will sometimes give me some harsh, harsh truths, but yeah. ⁓

Nick Riley (43:50)

Damn.

Yeah, that's good to know. Yeah, and then we also

we use chat GPT plus that's been super helpful like, just paste an email in that audit this email just cleans it up really quick.

And it's funny, we met with this James Hardy siding contractor and he said they use ChatGPT Plus and they just go to a customer's house, take a picture of it, and then tell ChatGPT put brand new James Hardy siding contract on this. And then they show the customers man, that's what it would look like? Okay, sign me up. And so we're gonna start trying that and I'll show you how it works.

Jesse Sampley (44:15)

Yeah.

Yeah,

we just got our countertops redone and the stone company that came out did the exact same thing that you're talking about. They said, we already picked out our courts, he took a picture of our kitchen and he said they're getting such and such courts. He put it in and then within 45 seconds he said, this is what your kitchen would look like.

I signed off on it, said, okay, these are the correct materials that we're gonna use. And it just on a customer side, being able to visualize, being able to make that really quick decision, it helped us just go through so much more quickly than having to go back to the office and him, either putting it into some sort of a render or no render. And I'm, I'm left to just try to visualize like this.

this little six by six piece of stone, having to visualize that in my entire it's just a world of difference to be like, hey, option one, two or three, and now you can visualize it. And I'm here right now, we're doing this in real time and you're not having to wait. Just on a customer it made them look so good. And I was like, this is amazing. I can't wait to see other

Nick Riley (45:23)

Yeah.

Jesse Sampley (45:27)

practical people are using this the construction space.

Nick Riley (45:30)

Yeah, definitely.

Jesse Sampley (45:30)

Well, Nick, thanks so much for joining me on the show. This has been incredible. I think people are going to get a lot out of this, especially on the, just change of hands on the acquisition side, but I can't wait to follow along and see where you guys go.

Nick Riley (45:43)

Yeah, definitely. Well, Jesse, thanks so much for having me. This was super, super fun. like I said, I've been a big fan of your podcast for a while. So to be invited on was awesome. Yeah. Thank you so much. I really appreciate it. I learned a lot today and hopefully your listeners did too. And yeah, we'll definitely stay in touch.

Jesse Sampley (46:00)

Absolutely. Well, real quick, just tell me can people follow along if they want to look you guys up and get in contact and follow along with how you're running your business?

Nick Riley (46:09)

Yeah, great question. So you could go to our Instagram at Driftwood Pilters Roofing or you could go to our website DriftwoodPiltersRoofing.com. So you also have, Twitter, Facebook, LinkedIn, all the social media platforms. So yeah, that was a great way to follow. All right, awesome. Thank you so much, Jesse. Have a great

Jesse Sampley (46:26)

Good deal, man. Thanks a lot.