Podcast Summary
Stay true to your investing goals and strategy: Success comes from determination, authenticity, and unique approach to relationship marketing. Stay focused on objectives and maintain a persistent, authentic approach to investing.
It's essential to stay true to your investing goals and strategy, regardless of what others may be doing. Cody Davis, a young and successful real estate investor, bought his first property at 19 and built a portfolio of 81 units without relying on external financing or following the crowd. His success lies in his determination, authenticity, and unique approach to relationship marketing. Instead of being discouraged by rejections or obstacles, Cody finds ways to overcome them. Henry Washington, the co-host, admired Cody's genuine attitude towards life and business. The key lesson is to stay focused on your objectives and maintain a persistent, authentic approach to your investing journey.
Creative Financing and Starting Young in Expensive Real Estate Markets: Successful real estate investing in expensive markets involves creative financing methods, starting young, and utilizing tools like BiggerPockets' rent estimator and DealMachine's skip tracing. Alternatively, investing in a private real estate fund provides passive income without property management hassles.
Real estate investing is possible even in expensive markets, using creative financing methods and starting young. Cody, a successful investor, shares his experience in buying multifamily properties using owner financing, borrowing down payments, and investing at a young age. Additionally, tools like BiggerPockets' rent estimator and DealMachine's skip tracing can make the process easier. Another alternative for passive income is investing in a private real estate fund, such as PPR Capital Management, which offers monthly income without the hassle of property management. Remember, real estate investing requires creativity, determination, and the right resources.
Starting young in real estate investing: A story of creativity and persistence: Young adults can start investing in real estate by putting themselves in the industry, staying informed, and being open to unconventional opportunities
Getting started in real estate investing at a young age is possible, even without significant income or a traditional job. Cody Davis, who began investing at 19, shared his story of buying a 12-unit apartment complex using seller financing after a deal he was working on fell through. Davis was an agent at the time and used his access to the MLS to find the opportunity. This experience demonstrates the importance of being exposed to real estate and staying persistent in the pursuit of investment opportunities. Additionally, it highlights the creativity and resourcefulness that can be necessary in securing a deal. For those looking to get started in real estate investing, it's essential to put yourself in the industry, stay informed, and be open to unconventional opportunities.
Stay positive and surround yourself with the right people: Maintain a positive attitude and learn from others to increase chances of success in real estate investing
Having the right attitude and being around the right people can lead to success in real estate investing. Cody's story is a great example of this. He remained persistent despite a deal not working out and saw it as an opportunity to grow rather than a sign to quit. Additionally, being around other agents and investors helped him find new opportunities. As David mentioned, it's important to surround yourself with like-minded individuals in your industry. Cody's willingness to put himself in the game and learn from others ultimately led him to find a profitable investment. So, stay positive, keep learning, and surround yourself with the right people to increase your chances of success in real estate investing.
Overcoming financial obstacles with determination and creativity: Determined young investors can secure deals with unconventional financing methods, seek help from mentors and colleagues, and close deals through negotiation skills.
Determination and creativity can help young real estate investors overcome financial obstacles and secure their first deals, even without traditional financing options. The speaker, Cody, shares his experience of using seller financing to purchase a property worth $1,000,001 with a down payment of only $112,500 at the age of 19. He explains how he asked for help from colleagues and mentors to secure the remaining funds and convince the seller to finance the deal. Despite his lack of experience and age, Cody's persistence and negotiation skills paid off, allowing him to close the deal and begin his real estate investing journey. This story highlights the importance of staying focused on goals, seeking assistance when needed, and being adaptable in the face of challenges.
Building relationships with sellers: Success in real estate goes beyond numbers, focus on building relatable stories and relationships with sellers, they may not always be motivated by tax benefits but a desire to pass the torch
Successful real estate transactions go beyond just numbers and involve building meaningful relationships with sellers. The speaker shares his experience of being in uncomfortable situations during meetings but using them as opportunities to grow. He also emphasizes that sellers are not always motivated by tax benefits when offering owner financing, but rather by a desire to pass the torch and be a part of someone else's journey. The speaker's approach is to focus on building relatable stories and relationships, rather than just selling an idea or a financing method. Ultimately, decisions in real estate are often based on more than just numbers, and understanding this can lead to greater success in the industry.
Focus on building genuine connections in real estate: Building successful business relationships in real estate starts by understanding the 'why' behind people's actions and focusing on genuine connections, leading to more successful transactions and a win-win situation for all parties involved.
Building successful business relationships in real estate starts with being relatable and understanding the "why" behind people's actions. Henry shares his experience of moving beyond transactional interactions and instead focusing on building genuine connections. He learned this strategy from a storage unit investor and applied it to his own business, leading to a natural lift-up effect where he was introduced to new opportunities through his network. This approach contrasts with the common practice of wholesalers who only focus on buying properties. By marketing for relationships, investors can build trust, learn from each other, and eventually be considered when sellers are ready to make a deal. This strategy not only leads to more successful transactions but also creates a win-win situation for all parties involved. Additionally, partnering with trusted companies like BAM Capital or investing with groups like Integra Development Group can provide stability, cash flow, and long-term appreciation in the ever-changing real estate market.
Simplifying vacation home ownership with Vacasa: Vacasa helps homeowners maximize revenue from their vacation properties through professional property management, a hospitality-driven booking platform, and around-the-clock support.
Vacasa, a full-service vacation home management company, simplifies the process of owning a vacation home and increases revenue for homeowners. With professional property maintenance, a hospitality-driven booking platform, and around-the-clock support, Vacasa helps turn the dream of owning a vacation home into a profitable reality. The speaker, a real estate investor, shared his experience of buying two properties using owner financing and second mortgages. In his first deal, he bought a property next to Microsoft with no money down and it has been cash flowing well for the last two years. In his second deal, he bought a worse-off property for a discount and raised capital from others to turn it into a second mortgage. He paid 12% interest only on these second mortgages and paid 1% of whatever he borrowed each month. Although the interest rate was high, the investor argues that it was worth it to get started in real estate investing. Both properties cash flowed over $1,000 a month from day one, net of expenses.
Interest rates should not be the sole factor in real estate investing: Evaluate net cash flow, consider financing options, seek advice, and focus on investment strategy and financial goals to make informed real estate investment decisions.
While interest rates are an important consideration in real estate investing, they should not be the sole determining factor. The cost of not doing a deal, such as missing out on potential equity growth or providing a desirable living space for tenants, can outweigh the initial expense. It's crucial to evaluate the net cash flow and consider financing options for the future. Additionally, it's essential to seek advice from experienced and qualified investors or professionals. As one investor mentioned, focusing too much on small details like interest rates or cap rates can distract from the bigger picture and hinder potential opportunities. Instead, consider your investment strategy and financial goals to determine the best approach for each unique situation.
Different financial metrics matter to various real estate investors: Investors can prioritize cap rates, cash flow, equity, and personal financial goals in real estate investing, depending on their investment strategy and preferences.
In real estate, different financial metrics hold more importance for various investors. Cap rates, for instance, are a common method to evaluate returns on multifamily properties. However, an investor who prefers control over their assets and doesn't participate in syndications may not prioritize cap rates as much. Instead, they might focus on cash flow, equity, and their personal financial goals. Real estate's flexibility is a significant advantage, as it allows investors to adapt to changing financial environments and market conditions. Additionally, rents typically increase over time, providing a hedge against inflation and economic uncertainty. Overall, real estate offers investors a stable and flexible investment opportunity with numerous ways to generate returns.
Managing a Real Estate Portfolio Requires Attention and Care: Effective real estate investing involves proper management, including systems for rent collection and maintenance requests, and potentially hiring help as your portfolio grows.
Real estate investing offers potential for significant long-term gains but requires dedication and proper management. You make your money when you buy, but operating and maintaining the property is crucial. Initially, you may handle everything yourself, but as your portfolio grows, delegating tasks becomes essential. Neglecting maintenance can lead to negative consequences. Start with systems in place, such as online rent collection and maintenance requests, and consider hiring help as your portfolio expands. Remember, your property is an investment that requires attention and care to thrive.
Benefits of Self-Managing vs Outsourcing Property Management: Self-managing offers control and alignment, but requires skills and time. Outsourcing saves time but may lead to misalignment and communication challenges. Find a balance based on resources, expertise, and preferences.
Self-managing your properties or in-house property management can provide benefits such as maintaining control over operations and ensuring alignment with your unique business practices. However, it requires a different skill set and can be time-consuming. Outsourcing property management may save time but could lead to misalignment in business practices and communication challenges. It's essential to find a balance between self-management, in-house management, and professional property management based on your resources, expertise, and preferences. Ultimately, becoming your own property management company allows you to train and develop capable property managers who can uphold your business standards, contributing positively to the real estate industry.
Lesson from a costly mistake: Thoroughly check a property's condition before buying: Investing in real estate requires due diligence. Neglecting to check a property's condition before buying can lead to costly repairs and delays, hindering future acquisitions.
Due diligence is crucial when investing in real estate. Cody shared an experience where he and his business partner bought a 38-unit apartment complex without thoroughly checking its condition beforehand. They discovered significant issues after closing the deal, which led them to put new acquisitions on hold until they could address the problems for the current buyer. Cody emphasized the importance of having reliable information and systems in place before scaling up investments. Regarding Cody's future plans, he and his partner aim to build a portfolio of 100 units to provide financial stability for their families and help others in need. They have already acquired 55 units through seller financing and plan to scale up together. Cody's long-term goal is to have a free and clear portfolio to offer opportunities to those who lack the financial resources to invest in real estate. During the Deal Deep Dive segment, Cody discussed a specific deal where they bought a 38-unit apartment complex for $2,000,000, with the seller financing $1,007,000 and the partners providing $300,000 in equity. Cody negotiated the terms to focus on principal payments, ensuring the sellers received their desired monthly income while allowing him to build significant equity over five years.
Navigating Tenant Challenges and Renovations: Negotiate lower mortgage payments during tough times, increase rents and renovate for value, carefully plan and involve attorneys with non-bank financing, evaluate potential partners during good and bad economic conditions
Successful real estate investing often requires negotiation and adaptability. The speaker in this discussion faced a challenge with tenants not paying rent when they bought a property, but they were able to negotiate a lower mortgage payment for the first half year to keep the property cash flowing. They also recognized the potential for increasing rents and renovating the property to increase its value. However, they learned that the cost to rehab the units was more than expected and emphasized the importance of careful planning and attorney involvement when using non-bank financing. When looking for investors or mentors, the speaker advised considering their actions during both good and tough times to ensure a consistent and trustworthy partnership.
Assessing Partner Character and Market Happiness: Assess potential partners' character and reliability, invest in markets with moving and happy populations, and ensure property management teams own real estate for commitment and understanding.
Building a successful business partnership requires careful consideration and compatibility beyond just the initial deal. Cody wisely noted that people change, and their character during a successful or unsuccessful deal may not be the same as in the future. Therefore, it's crucial to assess potential partners' character and reliability. Another key takeaway is the importance of investing in markets where people are not only moving but also happy. The speaker shared his personal approach to picking markets by observing the community's overall mood, job growth, and neighborhood safety. Lastly, when selecting a property management company, the speaker emphasized the importance of every team member owning real estate. This perspective ensures that the property manager understands the significance of maintaining a property as if it were their own home.
Stay true to your goals and invest in properties that align with them: Successful real estate investors focus on their unique goals and invest in properties that align with them, rather than following others' paths. Prioritize practical knowledge over popularity.
Successful real estate investors stay true to their goals and don't get swayed by others' stories or successes. They focus on buying properties that align with their long-term objectives, rather than replicating someone else's path. Cody, a guest on the show, emphasized this by sharing his belief that "your story is worth more than any asset you buy." This allows investors to start over if needed and maintain control of their unique journey. Cody also shared that he and his partner, Christian, have a multifamily strategy and can be found on Instagram (@codyd2020) and YouTube (Cody and Christian multifamily strategy). They are also starting a TikTok account for their team. While they may not be as popular on TikTok as some other real estate influencers, they prioritize practical knowledge over attractiveness or controversy.
Effective real estate investing through genuine connections and storytelling: Building bonds by showing interest in sellers' backgrounds and experiences increases chances of successful sales and positively impacts the real estate community. Staying focused on goals and perspectives despite obstacles is crucial for success.
Building genuine connections through sharing stories and experiences can be an effective strategy in real estate investing. Cody's approach of showing genuine interest in a seller's background and experiences with a property sets him apart from others and builds a bond. This strategy not only increases the chances of a successful sale but also creates a positive impact on the real estate community. Furthermore, the importance of staying focused on one's goals and perspectives, even in the face of obstacles, was emphasized as a crucial aspect of success in real estate investing. Overall, the podcast highlights the importance of authenticity, storytelling, and perseverance in the real estate industry.