The Matt Walsh Show - Ep. 1862 - How Private Equity Is Ruining HVAC

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00:00:53.180 Whether you've noticed it or not, and you probably have noticed it, it's virtually guaranteed that your home repair bills, especially involving HVAC and plumbing, have increased dramatically in the past few years.

00:01:03.540 And when I say dramatically, I'm talking about a rate that exceeds inflation by more than 25%, probably more like 40%.

00:01:10.880 By one estimate, average repair revenue per job in the HVAC industry jumped more than $818 in

00:01:17.200 2021 to more than $1,200 in 2025. Even as the average repair costs for HVAC contractors fell

00:01:24.600 by around 26% in the fourth quarter of 2025 compared to late 2023, average ticket prices,

00:01:30.520 the amount customers have to pay, continue to increase. And you can't shop around to beat

00:01:37.240 these prices. Odds are, when you try to find a better deal, you're finding that everyone is

00:01:41.800 charging the same rate. It's yet another ongoing, ever-increasing maintenance cost that's destroying

00:01:47.320 the finances of homeowners. And for millions of young people, it's yet another reason to avoid

00:01:51.860 buying a place, a home, in the first place. Now, to understand what's going on here, I need to begin

00:01:56.920 with this footage, shot by Inside Edition a couple years ago in New Jersey. They exposed an HVAC

00:02:01.620 company called Gold Metal Service, which sent a technician to their decoy house and tried to

00:02:07.440 charge more than $1,000 for a non-existent leak in their air conditioner. So this is basically

00:02:13.500 To Catch a Predator HVAC edition, and here's how that went. Watch. Next, we had them create a simple

00:02:20.520 problem where none previously existed. So all I did was I just disconnected the low-voltage

00:02:25.780 circuit. So when the thermostat calls for air conditioning now, the outside unit won't come on.

00:02:30.320 To fix it, they say all you have to do is simply reattach these contact wires, and the unit will power right back on.

00:02:39.180 A technician should recognize this within five minutes. Very, very, very simple fix.

00:02:43.480 Even a novice HVAC technician can figure that out within five minutes.

00:02:47.360 There was one in the bunch who spoiled a perfect record.

00:02:51.300 This technician from a company called Gold Medal Service examined the unit, and when he returned, he had some bad news.

00:02:59.280 It's not cooling efficiently, and you're losing it, okay? So there's a leak in the system.

00:03:04.780 Okay, so there's a leak in the refrigerant.

00:03:07.400 Yes, it's a microscopic leak.

00:03:08.780 He's trying to tell there's a microscopic leak somewhere. Is that true?

00:03:12.260 No, it's not. It's not true.

00:03:13.880 His price to fix that non-existent leak?

00:03:17.000 We're looking at about $1,736.

00:03:19.680 $1,736? That's really expensive.

00:03:24.060 Time to reveal who I really am.

00:03:26.560 So Thor, I'm not really the homeowner, I'm Lisa Guerrero with Inside Edition, and we

00:03:33.240 know that that air conditioning unit does not need all the repairs that you just told

00:03:38.600 me it needed.

00:03:39.860 All you needed to do was to connect two wires that weren't connected.

00:03:43.880 Were you trying to upsell me?

00:03:45.980 He packed up his gear and drove off.

00:03:49.120 He took off in such a hurry, he left this tool bag behind.

00:03:53.160 I'm happy to say that three of the four companies nailed it.

00:03:56.120 They found it right away.

00:03:57.160 We only had one bad apple of the bunch.

00:03:59.180 We reached out to Gold Medal Services several times for comment, but did not hear back.

00:04:04.680 So Gold Medal Service couldn't even bring themselves to respond to this report.

00:04:09.000 Apparently, after this report aired, they put out a post suggesting it was misleading in some way,

00:04:13.640 although it doesn't seem to have been.

00:04:16.620 Their technician just runs out of the home and flees in his van, leaving his tools behind.

00:04:21.880 Really, the only thing about this segment that could have been improved is having the police wait outside to arrest the guy.

00:04:28.640 You know, that was a feature of To Catch a Predator, and they should have brought it back for stings like this.

00:04:32.720 But the really amazing thing about this report is not that an HVAC technician was caught trying to rip off a customer.

00:04:39.320 That comes with the territory often.

00:04:41.880 The really extraordinary thing is that gold medal service was not actually impacted by this report in any significant way.

00:04:49.500 believe it or not, they're still in business. And they have some very strong financial backing

00:04:54.240 from a private equity-backed portfolio company called StrikePoint Group Holdings. On their

00:05:00.420 website, this private equity-backed company boasts that gold metal service was founded in 1994

00:05:05.740 and that, quote, gold metal technicians are known for getting the job done right every time and are

00:05:11.340 the most trusted when it comes to heating, cooling, plumbing, and electrical services.

00:05:16.460 The slogan says they've been trusted for generations.

00:05:20.540 Doesn't seem like it could possibly be real, but it is.

00:05:23.100 This company was exposed in front of an audience of millions of people.

00:05:26.320 They tried to scam a reporter who caught them dead to rights on camera.

00:05:31.620 And despite that, they're still in business and still enjoying the backing of a large private equity firm.

00:05:37.420 And not only that, they're pretending as if they have a sterling reputation for getting the job done right every time. 0.98

00:05:46.280 So the private equity firm is trading on this firm's reputation from 1994, before it was owned by private equity, and before they scammed the news reporter, even though today this company is obviously complete trash. 0.84

00:06:01.180 So brazen does not even begin to describe what's going on here.

00:06:04.560 But the important lesson to draw is that Inside Edition did not simply expose one bad HVAC company.

00:06:11.380 They actually exposed a much larger scam, which is almost certainly affecting you because it's spread all over the country across the vast majority of suburbs and virtually every city.

00:06:21.400 So understand what's going on here and how to find a way to reverse the trend.

00:06:24.580 We need to begin with a demonstration.

00:06:27.160 So imagine you're living in the Detroit, Ann Arbor area.

00:06:30.120 Your air conditioning just went out. You want to go with a locally owned and operated, reliable

00:06:35.460 HVAC company with a good reputation. So online, you find a company called Flame and you set up a

00:06:40.800 service appointment and the van shows up outside your house. And as you can see, it's a nice,

00:06:47.060 bright red van and looks like a professionally maintained sort of thing. Plaster on every side

00:06:53.540 of the truck. You'll see the words since 1949, letting you know that these people have been on

00:06:58.460 the job for a very long time. And so they must be reliable. And indeed, that was a big part of the

00:07:03.520 reason you selected these people in the first place. All over their website, they advertise

00:07:08.740 that they've been in business since the 1940s. They say, quote, since 1949, flame, heating,

00:07:14.400 cooling, plumbing, and electrical offers residential and commercial services throughout

00:07:17.760 the Detroit metro area, including Maycomb, Oakland, St. Clair, Lane, and Washtenaw counties.

00:07:24.560 Above all, we believe in delivering excellent and reliable service to our customers.

00:07:28.780 We have more than 135 employees and 95 vehicles on the road to adequately meet the needs of our community.

00:07:36.280 You know, so that sounds like a good option.

00:07:37.820 It's a big fleet, lots of employees, and, you know, they have tons of experience.

00:07:42.140 Pretty much since the end of the Second World War, they've been repairing air conditioning units in your neighborhood.

00:07:47.480 And, of course, no one stays in business that long unless they do a pretty good job at what they do.

00:07:53.020 plus they have a reputation to protect. So it stands to reason that you can trust them. That's

00:07:57.440 a rational conclusion to draw. And on top of that, on your TV, you've noticed that Flame even puts on,

00:08:03.460 puts out really, really quirky ads highlighting their individuality and their irreverent sense

00:08:08.100 of humor. Nothing corporate about these guys. Watch. Sounds like a pterodactyl.

00:08:23.020 Sounds like that.

00:08:25.220 Hello, flame.

00:08:26.360 So it's great stuff.

00:08:27.540 And as a technician gets to work on your air conditioning, you feel confident that you've selected a quality local company to fix your AC.

00:08:35.400 And then you notice another van pull up to your neighbor's house across the street, and it looks like this one.

00:08:41.360 It belongs to a company called Randazzo Heating, Cooling and Electrical.

00:08:46.040 Emblazoned on their van, you'll find the slogan, Go With The Name You Know.

00:08:50.580 And you start to wonder if maybe you shouldn't have gone with Randazzo, since apparently it's the people you know.

00:08:57.280 You pull out your iPhone, you go to Randazzo's website, and this is what you see on their About Us page.

00:09:04.000 So, and here's what it says when you look at it.

00:09:06.320 Quote, Randazzo Heating, Cooling, and Electrical is a Michigan-based company keeping Michigan residents comfortable since 1988.

00:09:12.180 Our team believes in setting the highest heating and cooling industry standards, leading with innovation, integrity, and breaking all barriers.

00:09:18.240 Our team is a large family. Together, through Christ, all things are possible.

00:09:23.880 This is obviously kind of a different message from the one you saw on Flame's website.

00:09:27.740 At Flame, they're bragging about how they've been around since the 1940s.

00:09:31.080 They've got a ton of vehicles and employees.

00:09:34.140 Randazzo, though, is not talking about that.

00:09:36.760 They've only been around since the 80s.

00:09:38.840 But they care about their Christian faith and how, with God's help,

00:09:43.300 they can innovate and meet high standards. And through the power of Christ, they might even fix

00:09:49.840 your air conditioning unit. So let's say you're a Christian. This message might appeal to you for

00:09:53.900 obvious reasons. It would appeal to me in a lot of ways. And then right as you're having these

00:09:58.420 thoughts, because apparently everyone's AC just broke, yet another van pulls up to a neighbor's

00:10:04.180 house. And you could see it right there. This van belongs to the Robin Air service company.

00:10:09.660 They do the same kind of work, HVAC, plumbing, electrical, and so on.

00:10:13.000 Their van's a little more plain than the others.

00:10:14.580 There's no slogan or anything.

00:10:15.700 But on some level, you can kind of appreciate that.

00:10:20.360 After reading all this marketing language, you're in the mood for an HVAC company that doesn't stand on ceremony.

00:10:26.640 So you go on their website and you come across this.

00:10:29.880 It's a nice big Robin Ayer team photo with everyone looking like they're in good spirits.

00:10:34.820 The website goes on to talk about all the community services that Robin Ayer does.

00:10:38.380 quote, it has always been a priority to give back and help others in need, which is why we

00:10:42.660 participate in various community activities. We are a proud partner of Lennox's Feel the Love

00:10:46.800 program, which brings heating and cooling equipment to deserving families who need a helping hand.

00:10:52.940 So that's a unique perk of going with Robinair. Unlike the other companies, they give back to

00:10:57.180 the community. You have so many choices. They all seem like great options. And right then your

00:11:03.020 technician from flame emerges from your backyard with a grim expression on his face. He says,

00:11:08.720 I'm sorry, but you're looking at a major repair here, at least $2,000. You might be interested

00:11:15.080 in buying a new unit altogether to save on future costs. And you're crushed to hear that. You don't

00:11:20.700 have the money. And frankly, you don't necessarily trust the guy. After all, he's every incentive to

00:11:25.180 upsell you on an expensive repair or replacement that you don't need. So you tell the repairman

00:11:31.060 to come back another day. Then you set up two more appointments, one with Randazzo and one with

00:11:35.620 Robin Ayer. It seems like a smart way to scope out the market. Maybe the Christian warriors at

00:11:40.940 Randazzo heating, cooling, and electrical can find a way to do the repair for cheaper. Maybe 1.00

00:11:45.740 the public servants at Robin Ayer could come through for you. But as these technicians from

00:11:50.440 the other two companies show up in this hypothetical scenario, they all tell you the same thing. You're

00:11:56.080 looking at a $2,000 bill minimum. So then at that point, reluctantly, you agree to it. You really

00:12:01.800 don't see any other option. You compared all your options, three different companies, and they all

00:12:07.780 said the same thing. So the market has spoken. You have no other choice. Except in this hypothetical

00:12:12.480 case, the market did not, in fact, say anything. And that's because all three of these companies,

00:12:19.660 which are real companies that all work in the same area in Michigan, are owned by the same

00:12:24.260 gigantic private equity-backed institution called Heartland Home Services. Heartland is specifically

00:12:29.860 backed by a private equity firm called the Jordan Company, which manages tens of billions of dollars

00:12:34.680 in assets. And to be clear, the private equity firm acquired all of these HVAC companies recently,

00:12:39.920 within the last decade. They acquired Flame and Robinair in 2021, Randazzo in 2017. So in other

00:12:47.380 words, a large private equity company swooped in and acquired all of these HVAC companies in the

00:12:53.220 same area and dozens of others, which serve the exact same region. But the private equity company

00:12:58.900 did not unify the branding of these companies or do anything to indicate that they were

00:13:04.080 fundamentally the same company. Instead, the whole point of the deal was to purchase the reputation

00:13:09.740 of these individual companies while also eliminating competition in the market,

00:13:14.640 all while giving customers the illusion of choice. And to do that, they try to make each

00:13:21.100 company look distinct on their vans, on their websites, etc. Each company kind of hits a

00:13:26.820 different note. This is all very coordinated, but in reality, they all have the same owner.

00:13:34.900 So if hypothetically you shopped around at all three of these companies, you're really talking

00:13:40.420 ultimately to the same people. We've reached the point where ordinary household objects require

00:13:45.800 more supervision than the children. Charge this, update that, download an app so you can

00:13:49.980 use something that worked perfectly well before someone made it smart.

00:13:54.180 Firearm storage is one area where I can appreciate fewer complications.

00:13:59.120 Owning a firearm comes with responsibilities and deciding how to store it should not be an afterthought.

00:14:04.180 That's what I appreciate most about the approach behind Stopbox.

00:14:07.760 The Stopbox Pro is completely mechanical.

00:14:10.420 No keys, no app, none of that.

00:14:12.540 It's five-button interface is designed for muscle memory,

00:14:16.040 helping you maintain control over access to your firearm without adding another electronic device to manage.

00:14:22.000 A straightforward design with a clear purpose, quick and secure access to your home defense when you need it most.

00:14:27.800 It's also made right here in the USA, supporting American workers.

00:14:30.620 And for those who need more room, the new Stopbox UCAN uses the same mechanical locking system

00:14:35.960 with additional capacity for firearms, ammunition, and other equipment.

00:14:39.840 For a limited time, our listeners get 10% off at Stopbox when you use code WALSH10 at checkout.

00:14:45.640 Head to stopboxusa.com, use code Walsh10 for 10% off your entire order.

00:14:50.620 After you purchase, they will ask you where you heard about them.

00:14:53.280 Please support our show and tell them that our show sent you.

00:14:57.240 There are very few purchases in life where you can agree to buy something without knowing what it costs

00:15:03.160 and then discover the price several weeks later.

00:15:05.960 Healthcare is one of them.

00:15:06.900 You go to the hospital, you receive whatever care you need,

00:15:09.560 and then eventually a bill arrives that may cause you to require additional medical attention

00:15:14.000 just because the bill's so steep.

00:15:16.080 This is the system we've created.

00:15:17.780 And with marketplace health insurance costs

00:15:19.720 expected to rise by as much as 15% next year,

00:15:23.380 Christians looking for another option

00:15:24.860 should know about Christian Healthcare Ministries.

00:15:27.900 CHM is a health cost-sharing ministry.

00:15:31.180 Members make monthly contributions

00:15:32.460 and those contributions are used

00:15:33.840 to share eligible medical bills among fellow Christians.

00:15:37.080 Programs start at just $115 per person per month

00:15:40.140 with added security available

00:15:41.980 for catastrophic medical events.

00:15:43.540 Unlike the rising costs everywhere else, well, CHM isn't raising its prices in 2027.

00:15:49.420 It's a very old idea applied to a very modern problem. 0.73

00:15:52.740 Christians helping carry one another's burdens.

00:15:55.480 Learn more at chministries.org slash Walsh. 0.53

00:15:57.820 Again, chministries.org slash Walsh.

00:16:02.180 Almost no other industry works like this.

00:16:05.280 You know, I guess it's common in the glasses industry where Luxottica basically owns all

00:16:11.160 these smaller brands that pose as independent entities like Ray-Ban, Oakley, and so on.

00:16:17.220 And it's common with funeral homes also, believe it or not. But for the most part,

00:16:23.240 this is not how it works. When Apple buys a smaller company, like they did with Siri,

00:16:28.900 for example, everyone understood that Apple had taken over the brand. When Amazon bought Whole

00:16:35.500 Foods, they didn't really try to hide it. They actually started including Amazon return stations

00:16:39.900 in every store. When Sirius bought XM Radio, they kept their name Sirius and on and on.

00:16:46.740 Generally, when one company acquires another, they don't go out of their way to hide their

00:16:51.080 connection to the company they purchased. They might keep the existing brand, sure,

00:16:56.220 that happens all the time, like Disney with Lucasfilm, for example, but private equity

00:17:00.740 is doing something very different with these HVAC companies. They're keeping these smaller

00:17:05.880 companies around and pretending that they're still independent. Now, Heartland is just one

00:17:12.340 example of a private equity-backed firm doing this, but it should be mentioned that they're

00:17:16.800 a massive operation. They own 24 brands across seven states, including Illinois, Indiana, Kentucky,

00:17:22.940 Michigan, Missouri, Ohio, and Wisconsin, according to their website. And again, this is just one

00:17:28.040 private equity-backed firm. The same exact scenario is playing out thousands of times

00:17:33.160 all over the country every year, and it's accelerating. According to the outlet PitchBook,

00:17:38.920 private equity investors have, quote, purchased nearly 800 HVAC plumbing and electrical companies

00:17:43.280 since 2022. Adam Hanover, who serves as chairman of a private equity-backed company called Redwood

00:17:50.380 Services, told the Wall Street Journal that, quote, everybody and their uncle owns an HVAC

00:17:54.740 business in the private equity space today. Okay, now, to be clear, you know, I'm not against

00:18:01.500 capitalism. I don't oppose the idea in principle of bigger companies buying smaller ones. I don't

00:18:08.540 even think private equity is always a bad thing in every context. Often it can be, but they saved

00:18:14.960 Arby's, which is the best fast food restaurant in the world. Never let anyone tell you otherwise.

00:18:19.440 And yes, there are some benefits to having one big, well-funded company take over and manage

00:18:24.500 a bunch of independent operations. When private equity takes over the HVAC companies, they tend

00:18:29.600 to get better scheduling systems, better technology. Technicians tend to get a better

00:18:33.940 deal on their health insurance. And along the same lines, back-end costs tend to get cheaper

00:18:38.920 due to economies of scale, as it's called. It's expensive for a small mom-and-pop operation to

00:18:44.720 have an accounting department, for example. But if Heartland adds one more HVAC business to their

00:18:50.080 portfolio, it doesn't really increase their middle management costs at all. Their existing accounting

00:18:54.660 department can take care of it. And in theory, those savings could be passed on to the customers.

00:19:02.480 In theory. The problem is that in reality, savings are not being passed on to the customers,

00:19:07.980 quite the opposite. As private equity has moved in and taken over the HVAC industry,

00:19:13.760 competition has disappeared and costs have spiraled out of control. One of the main ways

00:19:19.800 that private equity companies have increased their margins of these HVAC companies is by

00:19:24.200 pressuring customers into paying for more expensive installations or repairs than they

00:19:28.580 need. You know, they want you to pay to replace your entire unit rather than get a repair because

00:19:35.140 it'll dramatically improve their margins. They also push customers to sign up for regular service

00:19:41.220 plans and warranty visits because for investors, one of the single most important metrics is

00:19:45.540 recurring revenue. If they can convince you to pay them for basically doing nothing,

00:19:50.620 just coming out and taking a look at your equipment when it's running fine already,

00:19:54.200 then they'll do it. Because many of their customers are old and generally try to be

00:19:58.780 agreeable people, these sales pitches are very often successful. And given the quality of these

00:20:04.940 installations that these private equity-backed companies are performing, the warranty is actually

00:20:09.000 a smart investment. According to some HVAC engineers, private equity companies will

00:20:13.240 encourage their employees to complete as many installs as possible, even if they're so shoddy

00:20:18.620 that they'll require follow-up service appointments. This is reporting from the American Prospect.

00:20:23.860 It's about Jeff Howard, who works as an HVAC engineer in Indiana.

00:20:28.040 It says, quote, Howard was optimistic when he moved to Williams Comfort Air, a regional

00:20:32.260 firm he had long admired, but it was soon acquired by the Wrench Group, a private equity

00:20:36.820 owned roll-up of home service companies.

00:20:39.640 You saw this big shift and focus to just replace more boxes and not care about the clients,

00:20:44.220 not care about the employees.

00:20:45.980 Howard told the prospect after leaving earlier this year, there was a mass exodus of talent

00:20:50.200 and technicians.

00:20:50.720 When Wrench took over, it was, hey, we now have all these companies, all these problems from installs we're just throwing in, he said.

00:20:57.660 He estimated that warranty calls doubled.

00:20:59.820 He ended up in a spat with leadership, he said, after going on several warranty calls for equipment that had been badly installed.

00:21:06.640 They upsized the equipment, oversold it, said it was going to take care of all their problems, ended up going in, ripping it all out.

00:21:12.540 He said, they didn't like that at all, so that's when they started trying to demote me.

00:21:16.660 Ultimately, he left, he said, with multiple other employees fed up with new management.

00:21:20.720 of the private equity management, he said, they abuse the people that actually know how to do

00:21:26.300 things and fix things. I saw a similar experience on the HVAC subreddit, which read, quote,

00:21:33.540 month before Apex, a private equity-backed company, took over, we had full systems going for $6K to

00:21:39.260 $13K. Right after they took over, the price book changed. Full systems were going for $16K to $23K.

00:21:46.340 Dual caps went from $220 to $384, plus it's all about financing a next-day install.

00:21:52.240 Got to put the pressure on and don't let them figure out the whole price.

00:21:56.800 So they go out of their way to close a sale, whether or not the customer actually needs the install,

00:22:01.740 which costs a lot more money than it ever did before.

00:22:05.140 And as we covered earlier, if you want to fire these people and find another company, well, good luck.

00:22:11.520 Odds are the next company you find will be the same company.

00:22:15.160 they'll be owned by the same private equity firm. Now, to be fair, there are some other factors at

00:22:20.860 play here, especially when it comes to the cost of HVAC repairs. For one thing, HVAC equipment

00:22:25.800 prices have jumped by more than 60% over the past six years, compared to 31% for general consumer

00:22:32.560 prices. And while you might hear a regulatory explanation for this, an EPA rule restricted

00:22:39.240 the use of high global warming potential refrigerants, which raise costs, for example.

00:22:44.980 The truth is, that rule only took effect after the biggest price increases in HVAC equipment

00:22:51.120 were already recorded. Other contributing factors included the expiration of a tax credit for heat

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00:25:59.580 The other point that needs to be made, of course, is even before private equity swooped in to dominate the HVAC industry, there were plenty of repairmen who were already con artists in the first place.

00:26:13.380 I'm not saying that private equity invented the concept of a corrupt repairman.

00:26:18.340 What you should probably do if you're getting any kind of expensive repair done, no matter who's doing it,

00:26:23.560 is make sure you have cameras documenting everything that happens.

00:26:27.220 As CBS Los Angeles found, you might catch your repairman just walking past your AC unit,

00:26:33.440 staring at it occasionally, and then claiming that it's broken. Watch.

00:26:37.140 But before we called in the technicians, we called in an expert.

00:26:42.700 PRESSURES WERE GREAT.

00:26:43.980 GABRIEL CHIAFFI TEACHES AIR

00:26:45.880 CONDITIONING REPAIR AT L.A.

00:26:47.740 TRADE TECHNICAL COLLEGE.

00:26:49.500 HE CHECKED OUT OUR UNIT.

00:26:50.980 IT'S WORKING PROPERLY?

00:26:51.980 IT'S WORKING PROPERLY.

00:26:53.580 IT WAS WORKING PROPERLY UNTIL

00:26:55.820 WE HAD HIM DISCONNECT THESE TWO

00:26:57.580 WIRES, CUTTING THE POWER TO THE 0.52

00:26:59.980 FAN.

00:27:01.420 HE SAYS IT SHOULD BE NO MORE

00:27:03.580 THAN A $200 REPAIR JOB.

00:27:05.060 SHOULD A QUALIFIED TECHNICIAN

00:27:06.420 CATCH WHAT YOU DID THERE WITH

00:27:07.860 THOSE TWO WIRES?

00:27:08.820 ABSOLUTELY.

00:27:10.020 IT SHOULD BE VERY EASY TO

00:27:11.220 I DON'T WANT TO DO IT.

00:27:13.220 I DON'T WANT TO DO IT.

00:27:15.220 I DON'T WANT TO DO IT.

00:27:17.220 I DON'T WANT TO DO IT.

00:27:19.220 LET'S SEE.

00:27:21.220 FIRST UP WERE RON AND ZIB 0.79

00:27:23.220 WITH EXCEL HEATING, VENTILATION

00:27:25.220 AND AIR CONDITIONING.

00:27:27.220 THEIR WEBSITE CLAIMS THEY ARE

00:27:29.220 RELIABLE PROFESSIONALS.

00:27:31.220 NO, JUST HOT OR WARM AIR.

00:27:33.220 RON LEFT WITH HIS TOOLS SAYING

00:27:35.220 HE WAS GOING TO CHECK THE UNIT

00:27:37.220 OUTSIDE, BUT OUR HIDDEN CAMERA

00:27:39.220 IT'S A PART OF THE WIRING AND

00:27:41.320 THE CONTROLLER AND GAVE US A

00:27:42.360 PRICE.

00:27:44.360 THE SIMPLE FIX IS WE'RE

00:27:46.360 TALKING ABOUT $500 AND HE'S

00:27:48.360 GOING TO REWIRE IT AND MAKE

00:27:50.560 SURE IT'S WORKING.

00:27:53.160 HEY, RON, DAVID GOLDSTEIN

00:27:54.340 WITH CBS 2 NEWS.

00:27:56.600 HOW ARE YOU?

00:27:59.340 RON COULDN'T EXPLAIN WHY HE

00:28:01.340 DIDN'T FIND THE TWO DISCONNECTED

00:28:02.340 PS2 News. How are you? Ron couldn't explain why he didn't find the two disconnected wires.

00:28:07.720 Why is it $500 and have to rewire from inside to outside? The price is not me, my friend.

00:28:14.000 This is not my company. Now, that particular outfit, as best I can tell, has no connection

00:28:19.740 to private equity. Neither does this guy, although he's easily the single most shameless HVAC scammer

00:28:25.940 ever recorded on camera. This is a next level performance that you're about to witness. Watch.

00:28:31.680 Thank you.

00:28:32.600 Next was Vlad, who responded after we called American West Appliance Repair.

00:28:37.520 Their website touts experienced technicians with factory training.

00:28:41.680 He actually went outside and checked our unit, doing some work that we couldn't see.

00:28:47.440 Then he came back with his findings of what was broken.

00:28:50.520 Electrical contactor.

00:28:52.280 Electrical contactor.

00:28:53.700 And the price?

00:28:54.620 But not cheap.

00:28:55.960 Not cheap?

00:28:57.320 Oh.

00:28:57.960 Parts tax labor and total.

00:29:00.040 EVERYTHING IS WORKING FINE.

00:29:04.040 YOU ARE JUST TRYING TO RIP US 0.87

00:29:06.040 OFF AND YOU ARE TRYING TO JACK

00:29:07.040 UP THE PRICE, RIGHT?

00:29:09.040 MAYBE, YEAH.

00:29:10.040 MAYBE YOU ARE.

00:29:11.040 YOU ADMIT YOU ARE.

00:29:13.040 THAT IS VERY NOBLE OF YOU TO BE

00:29:14.040 HONEST.

00:29:15.040 AND I APPRECIATE THAT.

00:29:17.040 YOU ARE WELCOME.

00:29:18.040 BUT WHEN VLADI LEFT, WE

00:29:20.040 CONNECTED THE WIRES TO TEST THE

00:29:21.040 UNIT.

00:29:22.040 IT DIDN'T WORK.

00:29:23.040 HOLD ON HERE. 1.00

00:29:25.040 CHIAFI FOUND THIS PIECE OF 0.95

00:29:26.040 SOMETHING. 0.86

00:29:27.040 HE TOOK THIS PHOTO SHOWING IT

00:29:29.040 it was wedged in between the two metal contactors, which prevented the unit from starting.

00:29:34.760 You ever seen something like this?

00:29:35.980 No, I've never seen that one before.

00:29:38.240 That's a first.

00:29:39.580 Well, at least he's honest.

00:29:40.600 And to give him some credit, he at least put in the work to go down there and break the

00:29:45.500 AC unit completely.

00:29:47.400 The other guys couldn't even be bothered to do that.

00:29:49.260 They just glanced at it from a safe distance.

00:29:51.480 But this particular HVAC scammer apparently sabotaged the equipment going above and beyond

00:29:57.760 the call of duty.

00:29:59.040 and he fully admitted that that's what he was doing on camera. The only thing that's questionable

00:30:04.060 here is that he went through all this trouble for, what, $320? That's only about $120 more

00:30:11.520 than the amount he should have charged, according to this news station. And that doesn't really

00:30:15.860 make any sense, frankly. I mean, if you're going to go through the trouble of sabotaging an AC unit,

00:30:20.720 committing a crime, you might as well say they need to do a total replacement for $2,000 or

00:30:25.600 something, why would you commit a felony for 120 bucks? Kind of an amateur mistake, if we're being

00:30:32.260 honest. And it's precisely the kind of mistake that private equity can fix. Private equity-backed

00:30:36.620 HVAC companies would not miss this opportunity. There's just no way. They would milk that fake

00:30:42.480 broken AC for all it was worth, and much more than that. Now, at this point, I do have to

00:30:48.760 acknowledge that judging by the comment section from our earlier show on air conditioning in

00:30:52.980 Europe. I do have a lot of listeners who work in the HVAC industry. And I am a big fan of HVAC

00:30:58.940 units in general, in particular air conditioning, as I've made it very clear. I'm broadly supportive

00:31:05.500 of the industry as a whole. And you can see some of the comments there on that show we did last

00:31:12.480 week. Never been prouder to be an HVAC guy, one person wrote in response to the show.

00:31:16.480 and all the replies are glowing. HVAC guys are my heroes, someone responds. I love my HVAC guys,

00:31:24.180 says another. So I feel a little bit like I'm doing a show bashing Santa Claus right after

00:31:28.740 my entire audience just told me how, you know, Santa Claus is their hero. So just to be clear,

00:31:33.840 before you get the pitchforks out, I obviously don't mean to suggest that all HVAC guys

00:31:39.900 or most of them are like this. I don't mean to smear the good name of the entire HVAC industry

00:31:47.100 Plenty of people have good experiences with it.

00:31:50.200 Plenty of very good people in the industry, of course.

00:31:53.200 And I should also acknowledge that with all the money flowing into the industry, HVAC

00:31:57.820 now offers a great opportunity for young people to earn a living without incurring massive

00:32:02.480 college debt.

00:32:03.940 This is from the Wall Street Journal article I mentioned earlier.

00:32:06.680 It focuses on a 43-year-old man named Aaron Rice.

00:32:09.220 Quote, Aaron Rice has two logos tattooed on his left leg, one from the plumbing business

00:32:13.460 he co-founded more than a decade ago, another from the private equity-backed company that he

00:32:17.760 recently bought it. In Rice's case, he struggled with addiction and had spent five years in prison

00:32:22.560 for selling meth before co-founding his plumbing business in 2012 with his business partner,

00:32:27.180 Mike Nagel. It specialized in sewer inspections and repair. At the time, they had sold the company

00:32:33.460 and had 18 employees, was bringing about $3 million in revenue a year. Rice continues to

00:32:38.760 work as a sewer department manager at Rightway and plans to stay with the company until he

00:32:43.060 retires in seven years at age 50, something he's looking forward to. His co-founder has remained

00:32:48.020 with the company too. I want to hunt fish, drink beer, and cook meat, Rice says, adding that selling

00:32:52.940 his company has given him greater peace of mind for his family. Well, you can't fault Aaron Rice's

00:32:59.340 ambitions there. He's got it figured out. And look, we've done so many shows on how college is a scam,

00:33:05.280 and it very often is, and how students are graduating with $150,000 in debt with a useless

00:33:11.300 English degree or whatever. It's important to mention that an alternate career path is available.

00:33:17.300 You know, we could talk about the problems with the industry and how private equity is making it

00:33:20.740 worse while also acknowledging that employees in this field are now making more money than they

00:33:25.960 used to. And you can have a very lucrative career beginning at a relatively young age

00:33:30.540 if you choose to pursue it. You can become an entrepreneur. You can start your own company,

00:33:35.140 as this guy Aaron Rice did. He evidently made mistakes in his life. He was addicted to drugs

00:33:39.740 and spent five years in prison for dealing meth,

00:33:41.540 but he was able to become wealthy in large part

00:33:43.860 because of the massive infusion of capital

00:33:46.480 into the HVAC industry.

00:33:48.440 The article continues, quote,

00:33:49.940 the workers benefit financially too,

00:33:51.700 says Graham Weaver, founder of private equity firm

00:33:54.060 Alpine Investors, based in San Francisco.

00:33:56.360 Alpine, an early investor in HVAC companies,

00:33:58.740 says technicians at the HVAC business it acquires

00:34:01.240 get a 20% pay bump in the first year

00:34:04.200 after a company is sold,

00:34:05.520 mostly through a combination of higher wages,

00:34:07.340 bonuses, and commission.

00:34:08.840 The company has rolled up more than 200 companies across 43 states into a larger service platform, Apex, which did a combined $2.2 billion in business in the past year.

00:34:20.560 Still, some workers say that when private equity buys up their companies, they wind up pushing new systems on customers rather than simply fixing what's not working.

00:34:29.000 The pressure to make sales is less satisfying than doing real repair work, some sounding off an online forum say.

00:34:35.640 So this is the trade-off that a lot of HVAC technicians are facing right now. The job pays

00:34:41.300 more, but it's less interesting and rewarding. It feels like you're a salesman rather than a

00:34:47.620 technician fixing things. And on the bright side, there are more opportunities to start a business

00:34:52.080 and sell it. But on the other hand, if you do that, then your company will almost certainly

00:34:56.140 turn into a husk of its former self, trading on your reputation while it scams customers for

00:35:02.320 every dime they're worth. And then you'll spend the rest of your life hunting, fishing, drinking

00:35:07.220 beer, and cooking meat, just like air and rice, which might get boring after a while, although

00:35:13.500 it does sound appealing. And in the meantime, as you pass the decades with fish and meat and Bud

00:35:19.380 Light, you might find yourself asking, what if I hadn't sold? What if I had built the world's

00:35:24.360 biggest HVAC company instead without giving it away to private equity? What if we created a

00:35:29.000 reliable, honest, efficient, low-cost repair company with a stellar reputation across all

00:35:33.720 50 states without ever defrauding a single customer. This is a novel business model in

00:35:38.800 the industry, admittedly, but it's worth a try. And now that everyone's aware of what private

00:35:43.780 equity is doing, now that it's clear they're secretly running many of the HVAC companies

00:35:47.800 in the country, there's a real market opportunity for a company to buck the trend.

00:35:53.420 For the first HVAC company owner who's willing to put down the beer in the smoker and to suspend

00:35:58.100 retirement and really take on private equity, the market is clearly there for the taking.

00:36:05.720 And every homeowner, myself included, will be lining up to hire them.

00:36:10.720 We'll run their ads on every show. They'll be offering a service that's desperately needed

00:36:15.280 and one that private equity vultures, it seems, are unwilling to provide.

00:36:23.060 That'll do it for the show today. Thanks for watching. Thanks for listening.

00:36:25.160 Talk to you tomorrow. Have a great day. Godspeed.

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The Matt Walsh Show - October 26, 2026

Ep. 1862 - How Private Equity Is Ruining HVAC

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Transcript