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BiggerPockets Podcast 554: 81 Units in 3 Years: All On-Market with NO Bank Loans w/Cody Davis

BiggerPockets Podcast 554: 81 Units in 3 Years: All On-Market with NO Bank Loans w/Cody Davis

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Profitable on-market properties are all around you, you just need to take the time to look. Oh, we hear what you’re saying, “all those on-market properties are bad deals!” While not all properties sitting on the MLS are home runs, today’s guest Cody Davis can confirm there are multiple cash flowing needles in the public housing market haystack.

Cody and his partner have been able to grow their portfolio to eighty-one units, all through seller financing and all found on-market. These deals not only cash flow but once paid off will allow Cody to retire not only himself but his mother as well. Did we mention that he’s twenty-one years old at the time of this recording? Another under-thirty-expert to add to our list of impressive guests!

While many investors give up after initial pushback over seller financing, Cody goes one step further by having the investor emotionally invest in his success. No tacky sales methods or pushy conversations—just honest work with a clear vision that a seller can relate to. Cody is top of his class in terms of managing properties, acquiring new ones, and working with sellers—a guest ANY investor can learn a lot from!

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Read the Transcript Here

David Greene:
This is the BiggerPockets Podcast show 554.

Cody Davis:
And the big thing that I see that people do is they will justify buying something that’s off brand for them because it made sense for someone else’s story. And so if your goal is to have 10 single-family houses, it doesn’t matter what Cody does buying apartment buildings. You don’t replicate that, you go buy your 10 houses. Stick to your goal, stick to who you are, because your story is worth more than any asset you’re ever going to buy. It allows you to start over if you need to.

David Greene:
What’s going on everyone. This is David Green, your host of the BiggerPockets Podcast. And you are here because life isn’t meant to be lived inside of a cubicle. At least that’s what we believe here at BiggerPockets, that real estate investing is the most efficient path to generational wealth, even if you are not starting with a ton of money. And we prove this by bringing on guests who show that it’s not only possible but inevitable. That if you get educated and take daily action, you too can be as successful as you’d like to be. I’m here today with my co-host, Henry Washington, H Wash, the Arkansas wonder. Henry, what is going on?

Henry Washington:
What’s up bud? It’s so good to be here, man. This is so much fun. What an amazing opportunity. Thanks for having me.

David Greene:
If you’re listening to this on YouTube, check out Henry’s shirt and hat, they’re branded with his name. I love this. He’s got an H and a W also in the shape of a house, which is super cool. If you look closely, the H is in black, the W is in white and it’s a house, which is the same way that my David Green team logo was created. It’s a D and a G, also made in the shape of a house. And I don’t know that that was a trend that other people were doing, I thought I was special. And then I saw Henry did it and I thought, well, I’m not special. But then I realized, well, Henry did it, so if we did the same thing, then I am special. And now I’m feeling good.

Henry Washington:
Yeah. I mean, now we’re basically brothers. Pretty much twins, so …

David Greene:
We get that a lot. People ask me all the time, if you and I are related.

Henry Washington:
Yeah. They’re like, “Is David your brother?” I’m like, “Yeah, totally. Totally.”

David Greene:
Well, we’ve got a great show for you today, with frankly a wunderkind and maybe wonder kid, because he’s so young. Today’s guest, Cody Davis, bought his first property right after turning 19. He was already a real estate broker and ended up buying several multifamily properties by the time he hit 21. So he’s got 81 units, I believe, now over eight deals that he’s done in about three years. And what’s better is they’re actually good solid deals that are going very well. This isn’t someone who just raised a bunch of money and threw it at a bunch of properties. Everything he’s bought, he’s bought directly from sellers without using bank financing and he’s buying them off of the MLS. So basically, Cody is that annoying person that every time we say it can’t be done, there’s not deals out there, you can’t find seller financing, there’s no way to make this deal work, Cody then goes and does it. And he’s half of our age, so it makes it even worse.

David Greene:
But you don’t want to miss today’s show. So Cody talks about one aspect of buying real estate, that he will only do it if it would support he and his mom once it was paid off. If it doesn’t fit that buy box, he won’t buy that deal. He also talks about a very important concept that we call relationship marketing. I think Henry might have been the one who actually labeled it that, but it’s a unique way of getting in front of sellers that doesn’t have them hang up on the phone because you’re not doing what every other wholesale does. Henry, what was your favorite part of our show today?

Henry Washington:
Oh, man. My favorite part of the show was honestly just his approach to life and his business. He just is a genuine individual and he’s out finding deals by being genuine. And he doesn’t take no for an answer, or his obstacles, he figures out ways around those. And I just, I love that about our conversation, man. The kid is doing big things.

David Greene:
Yeah. And he’s giving very practical steps of how you can get over it. It’s annoying when I hear people say, well, don’t take no for an answer, just keep going. Okay, I’ve been told that before. It’s like saying yeah, just go to the gym. I know I’m supposed to eat vegetables and go to the gym. That’s not the problem. It’s, how do I actually do it? And I think he gives some really, really good insight into how he did it and how he’s continuing to do it. So this show is fantastic. All right, before we get into our interview with Cody, we’re going to take a brief moment for our quick tip.

Henry Washington:
Quick tip.

David Greene:
Today’s quick tip is very easy and very practical, just like today’s show. If you’re trying to figure out what you can expect for rent on a property that you are analyzing, BiggerPockets has your back. Go to the BiggerPockets website, hover over tools, and then click on rent estimator. Now, you may be confused as to why it’s named the rent estimator, but it’s actually because it will estimate rent for you. All you have to do is type in the address of the property that you’re curious about, and it will look up all the comparable properties around there and tell you what you can expect for rent and how certain it is. Whether it’s somewhat certain or it’s very clearly certain on what you can expect. Makes the job of real estate investing so much easier. So go check that out and check out that tool section to see what else BiggerPockets is offering you. Henry, anything you want to add before we get into this thing?

Henry Washington:
I just want to say, man, what a great example of somebody who is investing in an expensive market, because I tell you, you can’t do that. He’s buying multifamily to start out. He didn’t start with single-family. They tell you, you can’t do that. He’s using owner financing to get his deals done. They tell you, you can’t do that. And then he’s borrowing the down payments, and they tell you that’s hard to do. And so he’s blowing these myths out of the water. And oh, also he’s investing at 20, 21 years old. They tell you, you shouldn’t do that either. And so if you’re wanting to get started and you’re feeling like maybe this is a little too difficult, man, listen to this show. This guy is going to give you the motivation you need to get it done.

David Greene:
I love that. Great job, Henry. All right. Let’s bring in Cody. Cody Davis, welcome to the BiggerPockets Podcast. How are you today?

Cody Davis:
I’m doing good. How are you doing? Thanks for having me.

David Greene:
I’m doing pretty good. Thanks for asking that. I don’t get asked that as often by our guests. So tell us, where is your real estate business at currently? And then we’re going to backtrack a little and see how you got there.

Cody Davis:
Yeah. So today I’ve got 81 rental apartment units comprised of solely commercial, residential real estate. And going on year three of my investment journey.

David Greene:
And how old are you today?

Cody Davis:
21.

David Greene:
All right. So you got started at 18 buying property?

Cody Davis:
It was right after I turned 19, so I was 19 years old. And I’m turning 22 this week, actually.

Henry Washington:
Oh, so you’re a salty dog then. I don’t know what I was thinking of, you’re a vet now. Happy birthday.

David Greene:
There we go.

Cody Davis:
Thank you.

David Greene:
Okay. So tell us how you bought your first property at 19.

Cody Davis:
Yeah. So I was 19 years old and I didn’t have any income. I didn’t have a job. I’ve actually never had a real W2. And so I bought my first rental property. It was owner contract, so the seller ended up financing that purchase. And that was a 12-plex apartment complex in my home state of Washington.

David Greene:
All right. And what made you think like, I want to get started buying an apartment complex?

Cody Davis:
Well, at the time I wasn’t really in the mindset of buying anything. I was a new real estate agent and I wasn’t really a very good one. I wasn’t selling a whole lot of stuff and I wasn’t making a lot of money. That said, there was this deal that popped up on the other side of the state. I’m based just out of Seattle, so this was a three-hour drive over the mountains.

David Greene:
Was this Eastern Washington?

Cody Davis:
Eastern Washington. Yeah. And so it was a three-hour drive. And the way it came up is, there was another broker in the office who had this transaction for someone else. They were doing 22 units, it was seller financed. Buyer backed out and the head of the brokerage I was working at at the time just said, “Hey, why don’t you go buy this? We’ll just go raise the money. You could buy it, build cash flow and you’ll have your first rental.” That was 22 units. I tried to do that and the seller said no, because he had been strung along for a long period of time. And so he said, I’m not going to give you the one week extension we need.

Cody Davis:
That kind of crushed me. And by kind of, I mean it crushed me. And so I looked on the MLS and I put in seller financing. Because I was an agent, I had access to the MLS. And popped up this 12-plex that had been on the market for 560 days and it never went off the market once. So what did I do? I call them up, said, how do you want this written? I wrote it up, then I bought it.

David Greene:
Okay. So it sounds like you were an agent, so you were exposed to real estate. That’s one thing we should talk about here. And a deal came up in the office that didn’t work out, but it whet your appetite and you were like, oh, I wanted that. And instead of just giving up and saying, oh, I guess it wasn’t in the cards because life didn’t make it easy for me, you went out and did a little bit of research and you just realized, well, I can’t get a loan right now because I’m not making a ton of money as I’m not a very good agent. And you found a deal where they put seller finance in the MLS and that led to you getting that thing under contract. Is that more or less how it worked out?

Cody Davis:
That’s exactly how it happened.

David Greene:
Couple of things we can take out of that, because everyone is listening to this wondering, how did you do this at 19? A, are you putting yourself around real estate? I hear this all the time. People say, hey, should I be an appraiser? Should I be an inspector? Should I be a handyman? I really want to own real estate. But is that a bad mistake? I say, no, you need to get in the world. You need to get comfortable with what it’s like to be in that space. You don’t have to know exactly where you’re going to go. So Cody is a perfect representation of someone who just got in that field because you were interested in it. And then the next thing would be, when the deal didn’t work out, you didn’t just say, I guess it wasn’t in the cards. That one drives me nuts.

David Greene:
I hear so many clients say, well, I guess God doesn’t want me to have this property, when something comes back that they weren’t expecting. As opposed to, maybe God wants me to work through this problem. Maybe this is an opportunity for me to get stronger or to grow. They look at it not working out as a sign they should quit, which is ridiculous. Because no one ever lifts a weight and says, I guess God doesn’t want me to work out because this weight feels heavy. I guess fate didn’t mean for me to go to work today because my car didn’t start or I got a flat tire. But for some reason with real estate, we do it. So I just love that we’re starting off with the right attitude that led to where you eventually ended up.

Henry Washington:
100%.

Cody Davis:
Attitude matters a lot. People get stuck on the nitty-gritty. The information is less important than the application 100% of the time.

Henry Washington:
Yeah, man. As you were telling your story, it reminded me of a very similar situation. So David talked about putting yourself around people who are involved in the thing you want to be involved in. That’s huge. But the other thing you did was you were also around other agents who understood investments and investment properties, which led to you finding an opportunity. Although you didn’t close on that opportunity, you got to analyze it, make the offer. You got your foot in the door and that’s where your appetite to go and look for more … I have an eight-unit apartment building. I found it because my agent who is also an investor, similar to you, he was in the office. The other agent that was selling it was talking about it was going to fall out of contract and whoa, what are we going to do?

Henry Washington:
And he immediately ran the numbers, called me up and said, “Hey, this is about to fall out of contract literally today. If you come in at this number, I think we can lock it up.” And that’s how I got my eight-unit deal. And so I always tell my students, you need to be in and around other investors as much as possible. And if there’s investors in your market having a conversation and you’re new, you need to be in those rooms, virtually, in person. Because that’s where you’re going to meet some of the connections you want to meet, contractors, lenders and you’re going to find deals that way. Professional athletes do it. Who do professional basketball players hang out with? Other professional basketball players, because they get competitive advantages that way. And it’s the same thing with real estate.

David Greene:
Well, that’s the same way that you come up with turnovers in sports. If you are around the person with the ball when the ball comes out, you’re more likely to jump on that fumble. It’s easy to say, ah, well, somebody else will get it. And majority of the time somebody else will get it. But if you are there consistently when the opportunity comes, you jump on it. And it already sounds like Cody just right out the gate. I can tell that’s a trait you’ve got. That you’re willing to put yourself in the game. You probably don’t have a huge ego. You are humble and you want to learn. And all of a sudden what looks like luck is actually just being in the right place at the right time. So why don’t you tell me, what was it about that deal that made you think, I want to buy that Property?

Cody Davis:
Well, I looked at every single deal that I own today and I backtracked then, because all my principles today are the same as they were then, for the most part. If I paid that off, and by me I mean my tenants, then it would retire me and it’d allow me to retire my mom. It made enough money. 12 units was enough in Washington state. The rents are high enough to where I could take care of my mom and I could take care of myself. And so I looked at properties like that and when I had no money … I had $3,000 to my name just from saving up because I used to coach gymnastics part-time.

Cody Davis:
I had to find something that would cash flow and I couldn’t figure it out with duplex, triplex, fourplex. I couldn’t figure it out with sixes, I couldn’t figure it out with eights. And I found a 10 … not a 10, a 12 and it cash flowed day one with $0 out of pocket, $1000 in change a month. I was like, this makes sense to me, it makes enough income to warrant the long-term risk of owning that asset.

Henry Washington:
So my next question is, so you find this deal, because most new investors have trouble finding deals, but even sometimes they find themselves in front of a deal. The next hurdle they say is, well, how can I get the money for it? And so, talk a little bit about how you funded that and how you came up with the money you needed to buy that deal.

Cody Davis:
Well, yeah. I mean, there’s debt and equity. So the first question I always ask after I pick out a deal is, where am I going to get my debt from? And being 19, even being 21 today, almost 22, I still don’t qualify for a lot of traditional products. I can’t go by FHA, I can’t do the house hack right now. I just, I don’t qualify. And so I had to figure out, okay, where is my debt going to come from? And I went to the seller finance street. So I got the seller to finance 90% of the purchase. If I round numbers a little bit, it’s 1,000,001 purchase. It’s 1,000,125. But my down payment total was $112,500.

Cody Davis:
And so what I had to figure out in my mind was, how do I come up with a buck 25 that I can slap in a second lean against the property to fund the seller financed note so that I have a little bit of equity in reserves. Granted, it’s nowhere close to as much as I should have had for that, but I made it and I was able to get the deal, which is senior to everything else at that point in time for 19-year-old Cody.

David Greene:
How did you come up with that 125?.

Cody Davis:
I was going around and asking everybody for help in the office. It’s like, “Who has a client that is liquid $125,000?” I don’t need to be the one man show, so I’m asking for help. I got a lot of help, not just with connecting with people. A lot of people I connected with, I botched the meeting on. I get in front of the meeting and I ask them what I was backing it with, how the numbers worked. 19-year-old, oops, messed up. And not so much the age, but just the experience level. I hadn’t been through it before. So I’ve botched a few meetings. I had my mentor at the time in the room and he was like, “Okay, how much do you want?” Because I’d completely forgot how much I was asking for.

Cody Davis:
But through enough repetition, practice and cycles, got that funded with a lot of help from my original mentor. And yeah, closed that deal out. That said, I had a lot of help. I still had to do the steps. I still had to put in the reps, I still had to botch the meetings and make the presentation, make the pitch.

David Greene:
Now, how did you convince the seller to give a million dollar note to a 19-year-old with no experience investing in real estate?

Cody Davis:
I called him up. I called the broker up, and I didn’t really like working with this broker. But I called him up, said, “Hey, saw you at this deal, it’s listed. I had a 22-unit complex just fall out of contract.” Which wasn’t untrue. I wasn’t the one on the contract, but it did fall out of contract. And I just said, “Hey, I had this deal fall apart. It was also seller financed. I want to write this up.” And they said, “Okay, this is what we want. We want 20% down.” I said, “No, can’t do. I’ll do 15%.” We got through negotiations after we were under contract and had a sticking point. Said, “Okay, I’ll give you guys your price if you do 10% down and I get a 30-year note, no balloons.” And they went for it. So I have no balloon on that seller financed note.

David Greene:
This is really cool news. So Henry, why don’t you go ahead.

Henry Washington:
No, I was just going to say, that’s amazing. Because a lot of these tactics are things that experienced investors deploy, and you did it just starting out on essentially your first deal. And I love the attitude of, this is going to work or it’s going to work, I’m going to get this done. And as you ran into roadblocks, you didn’t see them as opportunities to quit, you saw them as opportunities to adjust your approach and either learn from that situation. I love what you said about botching the meetings, because that is something we all have done. Because it’s one thing to think about what you’re going to say when you get in front of somebody who you’re asking a bunch of money from and it’s another thing when you’re actually in that meeting.

Henry Washington:
And a lot of people, they do it with cold calls, they do it with finance meetings. As they get in there, the conversation actually starts happening, you start sweating, you don’t know what to say. And then you get embarrassed and you don’t want to do it anymore. But you used that as an opportunity to grow and I love that, man. That’s the mindset that really leads to success.

Cody Davis:
I appreciate you saying that. It’s a lot of work, but you stick with it long enough, it’ll happen for folks. I truly believe that.

David Greene:
If you look at this from the seller’s perspective … And what I want to basically get at is, what pain was the seller in? Because there had to be a pain point for them to do this. They’re giving up a cash flowing property and they’re not … I would do that if I wanted to get into the equity of it so I could buy something else. But that would mean seller financing wouldn’t be an option if I wanted to get the cash. So they were willing to hold a note for 30 years and trust a younger person with this deal. What was it about that property that they were trying to escape that caused you to be the answer for their problems?

Cody Davis:
So what I found is that that is a typical mode of operation, what people think when they’re buying and selling properties on contracts. And I’ve flipped that model. Every single property I’ve ever purchased, all 81 units are on seller financed notes. And I found the textbook answer is people do it for tax benefits. But that’s not why people are giving me the owner contracts. I found a method that’s worked very well for myself and then a couple of my buddies that I’ve shared it with. And instead of trying to sell an idea, I want people to buy into who I am. And so what I’ve come to grips with and how I operate my business today is that everything that I do, I got to get to the table first. And I do that by being relatable, I have to have a relatable story to people. I got to be somewhat relatable to get in the room and get people talking to me. Then those same people, whether it’s a seller, whether it’s a buyer, if I’m the broker, whether it is just an investor, they will work with me if I have targets.

Cody Davis:
But I don’t want to just sell everybody on my idea. I don’t want to sell people on seller financing. I don’t like that and people don’t like being sold. Instead, I need to loop all that together with the significance, so why it’s so important, and people will just buy into what I’m doing. So instead of me trying to sell, hey, let’s do this. Why would they do it for them? They’re doing it to pass the torch. That’s the only reason some of these guys are doing it. And they want to buy into building up the brand and building up the story of someone that’s getting into the game, because there’s a point in their life where they got more money than they have life left. And not all of them are old, some of them are in their 30s. The people that sold that 30-year contract are in their 30s. But they’re doing it to build me up. They’re already set. So that’s how I’m doing what I’m doing with that. It’s not the textbook answer.

Henry Washington:
No, I love that. I found that a lot with people who have sold deals to me now. I haven’t done a deal as large as that one, but the owner finance deals that I have were the exact same situation. They were bought into who I was and who my business partner was on some of those deals. And we were younger than them and they wanted to be a part of our journey almost. And I totally get that. Absolutely.

David Greene:
I think that just goes to show that, like we keep saying, real estate is a relationship business and the people who try to treat it just transaction based don’t last very long in this world. Because oftentimes, decisions get made for things that have nothing to do with numbers. And when we’re buying a property, we tend to focus a lot on the numbers. That’s how we’re thinking, so it’s easy to project that onto the seller. But Cody, that was a great answer. They wanted to feel like they did a good thing. They wanted to feel like they were a good person that was helping somebody else out and they didn’t need the numbers to work out. And that only works if you can relate to that person. Your character is actually what is building your wealth right now in that sense.

Cody Davis:
Right. And that’s exactly it. And you can be relatable and get to the table, but you have to have targets and significance to find those targets for them to actually buy in, is what I found. It’s the why. People that I do business with know me, they know what I’m doing, why I’m doing it. I have to share all of that with them. And that all comes from the first contact. I don’t call anybody anymore just to buy their property. That was the first property I ever did, never did it again. I called to book a meeting to learn how they did what they did, and nobody is doing that today. All the wholesalers are calling, hey, I’d like to give you X on your property. I found that’s such a big turnoff today. It didn’t necessarily use to be, but today more so than ever, people just hate it. And so I just book a meeting with them. I learned that people that own real estate know other people that own real estate. And it was this magical circle, that they’re just connecting with everybody. And so it’s this natural lift up.

Henry Washington:
Yeah. I like that because, so I learned a similar strategy from a storage unit investor, who’s a good friend of mine. But he put me onto that relationship marketing. And so instead of marketing to facilities as a means to say, hey, I want to buy your facility, he markets to them to say, hey, I’d like to meet you and sit down and have lunch with you. I’m also a storage unit investor in the area. And so he markets to the storage owners, but based on building a relationship. And so then he meets these people, he has lunch with them. They talk shop, they talk real estate. And they may or may not be willing to sell at the time, but when they are, he is who they think about. And usually some of these owners, especially these mom-and-pop owners, they know who’s buying and who’s selling. So they know old Jim down the street is looking to sell his 12-unit apartment building. And so he’s bought tons of assets by marketing for relationships. So I think that’s brilliant, man.

David Greene:
Cody, you’re smiling. What do you have to say about that?

Cody Davis:
No, I just like listening to Henry’s story. I like listening when other people connect.

David Greene:
See, Henry, he’s doing it to you. You’re being relationship marketed right now.

Henry Washington:
Right.

David Greene:
And it’s working.

Henry Washington:
Right.

David Greene:
Just look how much Henry is smiling.

Henry Washington:
I’ve got a deal to sell you.

David Greene:
All right. So that’s how you got your first deal. What did you do? Did you have to stabilize that property? Was it already pretty much running well?

Cody Davis:
The property is beautiful. It’s right next to Microsoft. There’s a lot of data centers over in central Washington. So this place is next to Microsoft, it’s next to a school, it’s got a little yard. I mean, it’s a beautiful property that was running great. So that’s just been on the autopilot for the last two years. And for the next property though, I bought another 12-plex. I wanted to double down that first 22-unit portfolio that I mentioned. There was a 12-plex, a six-plex and a fourplex. And since going back to that, I brokered the fourplex and bought the other two buildings. So my second deal that I ever bought was that 12-plex. It was in that portfolio that originally got me interested in buying. And I just called him up. I’d been calling him up even while I was trying to buy my first place, just trying to build that relationship.

Cody Davis:
I would drive three hours to go meet with him for 30, 40 minutes and then I’d drive three hours back. And that paid off very, very well. But nine months after my first purchase, I ended up … it was end of June 2020, I bought my second 12-plex, also in Central Washington. And I bought that. That was a much worse off property. That was more of a flip property. I still own it today. I’m under contract to sell it. I don’t think it’ll sell, so I’ll probably keep it. But I bought it for 680, which was great. He also didn’t need top dollar. It was probably worth closer to 80 at the time. He was just happy to help me out. He wanted 120 grand down, so I did the same exact thing that I did on the first deal. Raised 125 as debt, collateralized it and bought the building with a signature.

David Greene:
Tell us more about what kind of building that was.

Cody Davis:
That was a 12-plex. It was two side by side six plexes, single level, ’50s build. It was concrete blocks, stucco exterior, older rambler style apartment. But it cash flowed really well. And today it makes about 75, 70, $600 a month. My mortgage payment is 3,300 bucks. So it did really well for a zero down investment and it’s close to the water. That’s over in a little area called Moses Lake, if you’re pretty familiar with that area.

Henry Washington:
I know very little about that area, but I know it’s beautiful.

Cody Davis:
Most people think of it as an old tourist town, which it used to be, they’re accurate. But today there’s a lot more than meets the eye for folks that drive through.

Henry Washington:
So talking about those two deals. So both of those deals, owner financed the majority and then had to bring 10 to 15% for a down payment. And then you raised that, you said, by talking to other people who had the capital. And then you turned that into a second mortgage, like a second note against the property. Can you talk a little bit about how you structured those seconds? What the interest rate was and how you’re paying that back?

Cody Davis:
Yeah. So I paid 12% interest only on those, which some people would say is absurd, and they’re right. It’s a lot of interest. And there was a point where I was at half a million dollars and 12% money, which was very expensive and I don’t recommend it. However, I got out of that. So basically, 12% interest, I pay 1% on whatever I borrow a month. And so on my first two deals, I borrowed a quarter million dollars and I was paying $2,500 a month in interest. And most people would say that’s ridiculous, that it costs so much money. I’d argue that it costs a lot more money not to get started. And both assets cash flowed $1000 a month or more day one, net of everything. Out of all the mortgages, net of all the debt … not debts, operating expenses.

Cody Davis:
And so it’s a lot of interest, but I saw it as an opportunity to get in. Originally, they are one year notes, one year balloons, not very smart. I don’t recommend that either. But I don’t do that anymore, but it’s a learning lesson. And there was a time where it had to extend. It gets expensive, but it’s always cheaper to do that than it is to not get started.

David Greene:
Yeah. Assuming that we’re not talking about a one year balloon payment, we’re talking about a significant period of time, 20, 30, 40-year loan, people get very hung up on interest rates. So there’s people exactly, like you said, Cody, that will say 12%, too expensive, not going to do it, better not to do the deal at all. They’re not even asking the question of, well, is it still going to make money? Is there a value add here? What if you broke even at 12% but you were able to add $400,000 of equity over a two-year period of time, is that still expensive? And the second comment I’d make about that, because now that I have a mortgage company, this type of stuff comes up all the time. Debt is really like, it works in a sense where whatever you get in at, if it’s for a fixed rate term, that’s the worst it could ever be.

David Greene:
It can only stay the same or get better. You can refinance into a lower amount as the property gains equity options start to open up. Like you could have found somebody with a bunch of money in the bank that would’ve said, I’ll give you a loan for 7% for a million dollars. And you could have paid it off at 12 and now you’ve cut it almost in half. When you got older and you got the chance you could get a loan, you could have went and got three and a half percent. It doesn’t have to stay at 12% for the whole time. And I think that’s something that even experienced investors, I see get really hung up on the rate and they’re ready to blow up a whole deal because they can’t get the rate that they expected. Do you want to comment on what your experience with that was?

Cody Davis:
The cost of not doing is more important than the cost of doing. 12%, some people say that’s ridiculous. My parents said that’s really expensive. And I was like, you’re right, it’s really expensive. But my tenants are really nice people and they’re going to pay for it because I’m going to provide them a great place to live. I don’t have to pay for it.

Henry Washington:
Right. You looked at the net cash flow. So you said yeah, but even paying 12%, I’m putting $1000 in my pocket every month. So my tenants are paying my interest. Just got to think about the deal and think about what you’re looking to do. And like David said, there’s always options for getting into better financing down the road. You don’t have to pay 12% for 30 years, you can get into a more favorable situation down the road. But don’t miss out on quality opportunities because you’re hung up on a number that really isn’t that big of a deal when you break down your goals. And your goals are, what am I going to put in my pocket every month?

Cody Davis:
Also, really important to qualify who you’re getting advice from. When I first started out, I was 18 right before I became a broker and there was a guy leading a flip conference. And come to find out, just earlier this year he did his first flip. I’m like, go. There’s probably not a qualified person to get advice from. So I notice a lot of the people that talk about rates being the most important cap rates, being the most important thing, debt structures being the most important, they don’t own a lot of real estate. Just go do, application is more important. The cap rate thing, I don’t even care about cap rates. And I want them to go down. If we’re in a stable environment, it’s okay. And if they go up, it’s okay too. I don’t have to sell. People focus on the wrong things, is what I’ve found to be true. Or they get too hung up on little things.

Henry Washington:
Yeah. You have to think about, what is my investment strategy? What is it that’s important to me in my financial situation that I’m currently in? And what’s important to my goals? And that strategy may be great for you, but somebody like me or David might look at that and be like, that’s not how I would do that deal because I am set up differently. And that’s the beauty of real estate, is that it’s so flexible. Different numbers can be more important to you than they will be to somebody else. You said you don’t like to look at cap rates, there are people all across the world who are going to cringe when you say that cap rate doesn’t important to you.

Cody Davis:
Oh yeah.

Henry Washington:
But that doesn’t mean that that doesn’t work for you.

Cody Davis:
Oh, absolutely. And it goes a little deeper with apartments. I don’t know that we want to jump into that right now.

David Greene:
Well, let’s just briefly describe what we’re talking about with cap rate. Cody, why don’t you go ahead and explain what a cap rate is and why it matters when they’re valuing multifamily.

Cody Davis:
Yeah. So multifamily, when you’re talking five plus units, is valued on a capitalization rate. If you paid cash for something, what’s your cash on cash return? It’s the simplest way that I found it. It’s more so of an apples to apples comparison among asset classes to establish what a return on your equity is going to be. Now, the reason I don’t really mind whether they’re high or whether they’re low is, if you equate it to a piece of pie, if you control the pie and you think about a percentage going out, if you sell on a low rate, you give up less to the next person, you keep more. Whether there are low cap rates, I make more money for every dollar it generates. And if it’s a high return, then I can get more cash flow and less equity. It’s a sliding scale.

David Greene:
Now, like you said, a cap rate is basically, if I paid cash for this, what would my return be on it? But none of us are paying cash for this. So right off the bat, that uses of cap rate is largely useless. It just doesn’t matter, because we’re not doing it that way. The other time that cap rate really comes into play is when you’re trying to decide what is the property worth. So that’s when you’re going to take your net operating income, you divide it by the cap rate, or maybe it’s vice versa. But the lower the cap rate is, the lower number you’re dividing your net operating income by, so the bigger number that you get when the property is valued. But again, that’s also only applicable if you’re looking to exit. Now, the reason that you hear so many people hammering cap rate is because of the syndications that are happening, where properties have to be exited to pay back investors.

David Greene:
So they’re playing this game of musical chairs and they know the music will stop at some point. And they’re very concerned about where that cap rate is when the music stops, because there’s more risk. They got to pay people back. Syndications do own real estate, but they’re not in control of that asset. Like if one of us buys real estate and it’s ours, and we can choose when we get in, when we get out, when we refinance. Syndications are different, and that’s why cap rate becomes very, very critical and talked about so much. If you’re listening to us and you’re hearing it and you heard Cody say, I don’t care. Understand that what he’s saying is, I’m not playing by those rules, the music doesn’t stop for me. I choose when I’m going to sit down and I choose if I keep circling these chairs, because you own … at least my understanding is, Cody, you own the properties. Is that right?

Cody Davis:
Oh yeah. They’re mine. I don’t syndicate. I haven’t syndicated a deal yet. May get there someday.

David Greene:
So to Henry’s point about why real estate is awesome, because you find this same principle. Like I mentioned with interest rates, they can’t go up if it’s a fixed rate, but they could go down. You could get more favorable financing, but if you don’t find it, at minimum, you get to stay with what you were okay with. A lot of other things in real estate work that way too, rents just rarely ever go down. It’s very hard for me to imagine a time where they would go down, unless we were in like a deflationary environment or something like that. But even then, if the rents go down in that environment, the money that you’re getting paid, even though it’s less, is worth more. So still, you might not be losing in that. But rents do frequently go up. So if it cash flows on day one, the odds of it getting worse for you are very small, the odds of it get better for you are very big. That makes it a safer play.

David Greene:
When it comes to, well, what if the property values go down? Like Cody said, I don’t care. I’ll just keep it and collect rent. I’m not forced to exit when the values go down. Well, what if the values go up? Well, then I get to look at if I want to sell it and go buy something else. There’s so many ways in real estate where your floor is covered, but your ceiling is limitless. You just can’t often explode in one move. It’s not like buying a cryptocurrency that 1000 Xes over a week or something. It happens in increments, but it is still so geared towards benefiting the people who are owning it if you have the long timeframe. And it’s scary to think about how someone like you, Cody, who got started at 19, how much time you have ahead of you for this to work in your favor. I mean, do you just lay at night thinking about that sometimes?

Cody Davis:
I fall asleep pretty dang quick, because I’m running all day long. But maybe one day I’ll have that luxury. We’ll do it.

David Greene:
We often talk about getting the property, how we find the deal. And that is very important. You make your money when you buy. That’s the most important part, I think. But right behind it is actually operating and managing that thing. And I found … I don’t have kids, but I know that there’s a lot of people I know that were like, I got to have kids. Having kids consumed their thoughts. And then they finally had kids and they were like, oh my God, what did I do? These things are just running me to the ground. You don’t think about the work of being a parent when you just want to have a kid, just like you don’t think about the work of being a landlord when you want to buy a property. What can you share about what your experience has been like? How you’ve navigated those waters? How you’ve kept it from making you hate real estate?

Cody Davis:
Well, that comes down … your last point about not hating the real estate. I had to buy something that was big enough to support my mission, to support the why. It could retire my mom and retire myself if it was paid off. I kept that in my mind. I go back to that every single time I look at buying something. But for the management piece, I started out managing it myself. I had systems in place which were helpful. Have your software to keep track of rent collection and 24/7 maintenance reports, keep track. We have books coming in, we have QuickBooks. And so I had systems in place that were helping me out. But when it came to making phone calls to tenants, they’d put in their maintenance request at whatever time. I’d give them a call up and say, “Hey, this is Cody, I’m going to be working on this right now.”

Cody Davis:
And in the beginning I was doing everything myself. So on the non-urgent stuff, I would drive over there and I’d get it fixed, which was not a very good use of time. I recommend people just pay, do times worth more than you think. Then I just started hiring everything out. And so now I have a system where rents come in online through their online portal, tenants can put an online maintenance request if something comes up. I’ve got a full-time employee, which goes through all the tasks I had to do. But in the beginning, I was there taking care of every little item. If circuits blew, I FaceTimed a family friend who had done electrical before, like, do I put this wire here? It was that. And I’ve been shocked before, I got electrocuted. I wasn’t being smart.

Cody Davis:
I was trying to take shortcuts. Don’t do that either. Turn off the breaker. But I had to learn the hard way that there’s a lot of work that goes into it. And your property is essentially your baby, and you can let it die and then you become what’s called a slumlord. And I didn’t really want that to happen to me. So as I started accumulating cash reserves, I would just expense it to make everything better than when I bought it. And so now I don’t have to worry about a lot of those maintenance items.

Henry Washington:
Okay. So a question on that. Do you now have a property manager that you’ve hired?

Cody Davis:
Yeah. So I started my own PM company and that’s rather new. I’m not a designated broker, so I’m hanging that license with PMW property advisors out of Lakewood, just out of Seattle. But I met with another local investor who runs the show there and in the investment space, meeting of the minds. And I don’t have to go do everything myself. So I was like, okay, he’s already got his DB, what if I just merge? And now I have another level of support from someone who’s been in the business for a while. And then we got our first time full-time employee who’s also a co-owner in the PM company and so she’s on payroll. And so I’m building out a team now. But in the beginning, I was out in the property doing everything. And I’d recommend people do that for their first 10 units and then outsource it. Learn what you need to learn so that you can better manage your managers. But other than that, you’re not buying real estate to have a job. Most people aren’t. If you are, then do it. But that wasn’t my thing.

David Greene:
Henry, what’s your experience been like with that?

Henry Washington:
I agree wholeheartedly. So I have a mix. So I have 81 units, but I self-manage about a third of them and then I 50/50 manage another third. And then I have the third, third is managed professionally. And there’s pros and cons to each. And I say me, my wife is handling property management for us. And so it’s similar to you, which is what I was going to touch on, is there’s a difference between self-manage and property management. You need a different skill set to make sure that things are going in a way that’s going to be financially beneficial to you. But I love the option of really what you’re doing is you’re in-housing it. You’re hiring, you’ve become your own property management company, so you’ve in-housed your property management. Because what I find is, what makes hiring property management difficult is because we as investors have our own way of doing things, we have our own ways of operating.

Henry Washington:
A lot of us want to be super integrity focused or maybe you’re more people focused. Your way of operating isn’t always the same way a company is going to operate. And sometimes that can be difficult when you’re managing your manager, because they might not handle a situation the same way as you. Because whereas a situation, they’re going to try to fix something in the most cost effective way, and that might not be how I want to handle that situation. And so when you in-house management, I like that because you get that mix of professional management, but you get it done based on the way you would operate business. And it’s a great mix.

Cody Davis:
Best practices, I don’t really want to focus on the money over the person.

David Greene:
That’s very similar to how I’ve done things with my businesses. Is they’re all, well, I’m referring my friends out to other agents and those agents are doing a good job, I’ll get my license. And then, I can’t help all these people, I got to hire other people and train them, so I’ll start a real estate team. And then, I’m tired of the lender not answering the questions or me coming up with a solution and giving it to the lender, so I’m just going to start a loan company. And then, the property management and construction will be the next two things that are on my plate. If you’re listening, I’m looking to start a business in California. Because I get tired of having the whole, who’s the contractor going to be? Can I get a detailed scope of work? Can they answer their phone? It’s so frustrating that eventually you just go start your own thing. So I love that you’re doing that, Cody, because the world needs the people that actually run the asset to train the person how to do it.

David Greene:
So that when someone else buys an apartment in that area, they know they’re getting a good property manager that’s been trained in the way you want it done instead of a person that bought a franchise and doesn’t know how this whole thing works and does the bare minimum and gives real estate everywhere a bad name. Slumlord is the word, but it’s often poor property managers not doing a good job for either party. They don’t do a good job for the owner because they just want to spend all your money, because that’s the fastest way to get the thing solved. They’re like, yeah, you spend three grand on this thing. And then I look into it and we can do it for $400. Now I don’t trust them, so I don’t use them. And then on the same side, they just blow the tenants off who have legit concerns because they don’t want to talk to us. So that is such a crucial component, the relationship of real estate between the tenants and the landlords.

Cody Davis:
I 100% agree.

Henry Washington:
Are you looking to manage other people’s properties through your property management company or are you just keeping it to yours?

Cody Davis:
We’ll go third party. We launched for third party for one, it was a mid-sized multifamily. It was above 10 units. And the way that that was put together, I didn’t see any of the due diligence. We came on after they closed. They totally botched it. I mean, it’s no fault of the buyer. It was, their representation did not do due diligence. And so we’re not actively taking on new third party until we fix this situation for the buyer, because they are in a mess. We were told when we first onboarded and we’re talking with them that, hey, we’ve got great units, they’re rentable. First time we walk in, there is standing water on the floor. Oh, that’s less than ideal. Not really habitable. So we need to build up our systems first a little bit more before we really scale that out because we’re finding that we can depend on dependable information. It’s just hard to get that sometimes.

David Greene:
So I got one last question before we move to the Deal Deep Dive. What do you see, Cody, in your future? Where are you headed towards?

Cody Davis:
Yeah. So I’ve got one business partner, his name is Christian. And we started buying together. He’s a buddy of mine, we’ve known each other for about a year. And he and I lived in the seller finance stuff. We connected last year and since then he went from zero to 55 units. And now we’re just trying to scale together. But long term, what we really want to do is we want to get to 100 units paid off so we have a foundation together and then scale up independently. And the reason behind that is, my family has a lot of health issues that they’ve had to overcome. And I know there’s a lot of other families in the world that have to go through the same thing where a sister gets type one diabetes at a very young age and that becomes financially a burden for the family.

Cody Davis:
And I know there’s other families that have financial struggles like that. You make good money, but it all goes out because something pops up for better for worse, but you got to do it because it’s family. And so I want to build up a portfolio that allows me to not only take care of my family, but show other people how to take care of theirs. And give other people the opportunities where if I have a free and clear portfolio, I can do an owner contract for someone. Give them an opportunity when they have no money. Because it won’t matter for me, I’ll have more money than I have, like I mentioned earlier. So that is where this goes for me. And that’s why I’m able to push so hard.

Henry Washington:
I love that answer.

David Greene:
All right, we will move this along to the next segment of the show, the Deal Deep Dive. All right, Cody, this is the segment of the show where we are going to dive deep into a specific deal that you have done. First question, what kind of property is it?

Cody Davis:
This was a 38-unit apartment complex.

Henry Washington:
Awesome. Next question. How’d you find it?

Cody Davis:
It was on the market

David Greene:
Like LoopNet?

Cody Davis:
No, it was just on the MLS.

David Greene:
Okay. On the MLS. Awesome. And did you find it yourself or did you have an agent that looked it up for you?

Cody Davis:
I found it.

David Greene:
Okay. How much was it listed for and how much did you buy it for?

Cody Davis:
$2 million and $2 million. I don’t fight on price.

Henry Washington:
So how did you fund that deal?

Cody Davis:
It was also seller financed. And so the seller ended up funding 1,000,007 for me on a contract, 4% interest. And the 300,000 came from equity. I actually bought that with three capital partners on which I had buyer agreements for. But they fronted the 300, I’m fronting the renovation cost with my buddy, Christian. We went and bought that together. And upon stabilization, we’re going to refund, cash out the other investors and we’ll have an asset to ourself.

David Greene:
All right. How did you negotiate the price? It sounds like you didn’t negotiate the price. How did you negotiate the terms?

Cody Davis:
Yeah. When it came to the terms, I just needed to figure out what they wanted. The couple who was selling, I believe is in their 90s. Early 90s, late 80s. They said they need $10,000 a month, but they only wanted 4% interest. And so I saw 4% interest loans is $8,100 a month. So I worked the terms to where the majority of my monthly payments go to principle, which starts whacking down that loan amount. So I get them what they want. It’s a little bit more cash flow intensive on the front end where it’s going to eat up a little bit of the cash flow. However, I’m getting a massive equity bump over the course of five years. And so I just focused on, okay, what do they really need? They’re old, they just need monthly consistent income.

Cody Davis:
But the problem was that half the tenants weren’t paying when I bought it. And so I can’t afford $10,000 a month, negative. And so what I did is I negotiated down to a $7,000 a month mortgage for the first half year for six months and then it goes up to the $10,000 a month. And all the extra is principle pay down, in addition to what’s already being paid down.

Henry Washington:
So what did you do with the property? Flip, rent, buy?

Cody Davis:
I’m going to keep that forever. So I’m going to get that place stabilized. The rents on there have never been raised since 1991. We got people that are paying 380, 450, 500, 700, and then there’s some people paying 900. So I’m like, okay, we could probably get rents to 900. But let’s say, I can’t, let’s say that was a fluke because it was only two of them. And so I get rents to $700. Well, 700 bucks, the property is worth $3.2 million and I bought it for two. Everyone told me I was over paying for it because it needs a lot of work. I was like, I have a million two in upside here and it’s going to cash flow. And so I’m going to get it up to where I need it to be. I’m in the middle of the process right now.

Cody Davis:
I am renovating to granite countertops, new everything. I’m gutting all the units. And I want this to be the nicest complex in that area. And it’s definitely got one of the best street corner. I buy for the location more so than just what it looks like. So I’m renovating that. I think stabilized, it’s worth four and a half million dollars. But if I can get it just to 3.2, I can go get 75% loan on that. I can go start cashing people out and have a little bit of equity left over to keep the asset forever.

Henry Washington:
Absolutely.

David Greene:
That’s awesome. You focus on all the right things and you avoided worrying about all the wrong things. That’s such a good story. Last question. What lessons did you learn from this deal?

Cody Davis:
Lessons I learned is that the cost to rehab those units was a lot more than I thought it was going to be. I thought it was going to be 10,000 and I’m dropping 25 a door.

David Greene:
Part of that could be at the time you were looking at it, that was closer to what it might have been, but things change over time. And so that’s a very real problem a lot of people are having right now.

Cody Davis:
Yeah. Well, learning lessons.

Henry Washington:
This guy is having that problem right now.

David Greene:
All right. That was the Deal Deep Dive. Let’s head over to the-

Speaker 5:
It’s time for the fire round.

David Greene:
All right, Cody, this is the segment of the show where Henry and I will fire questions at you that come directly out of the BiggerPockets forums. Henry, why don’t you start?

Henry Washington:
All right. Question number one. Are there any risks to using non-bank financing? If so, what are they?

Cody Davis:
There’s risk to using financing in general. There’s lots of ways to structure it. If you could do a land contract, that could get a little bit messier than if you just do a standard promissory note and deed of trust. If you don’t structure it the right way, you can find problems if people pass, or there’s lots of little minute details. But as long as you have an attorney to draft up your notes and your deeds, everything is controllable. You just have to make sure that all the right parties sign off on everything you need signed off on.

David Greene:
Wonderful. Next question. What are some of your steps for identifying an investor or a mentor?

Cody Davis:
I need to see what they’ve done and I need to see who they are. I don’t really care if they’re super flashy, I don’t care if they’re behind the books, I want to know what they do when times are great and I want to know what they do when times are tough. Some people say that you really find out who someone is when times are tough. I’ll flip that and say, you find out who people are when times are good, because they’re going to be amplified by the money they have. So I want to look at them in both down times and up times because people change when they get money. For better, for worse, they do. And I want to know who that person is, because I know I’m going to make it. And if I’m associating it with them, I have to know that they’re going to be the same person when we have $200 million each and when we have 200,000.

David Greene:
Such a good point.

Cody Davis:
Or 2000.

David Greene:
I heard a quote one time that said something like, one out of every 10 people can make it through adversity. But out of that one, only one out of every 10 people that can handle that can make it through prosperity. It is much more difficult to carry the weight of prosperity than it is adversity. And I would say, what I’ve found in life, that’s absolutely true. It’s one of the reasons why you just have to date when you’re getting to know somebody. As a business partner, you can’t just jump in and say, hey, you want to buy a deal, I want to buy a deal, let’s just go do it. Because the person they were at the time that you did the deal is not the person they’re going to be if the deal goes well or if the deal goes sour. And so it’s a very difficult way.

David Greene:
Cody, you’re very wise, especially for your age to be looking at that. That’s one of the reasons that I don’t partner a ton. Because I’ve got a lot of people that I’m considering as partners, but I know, like you said, if you get with me, you’re going to be successful. Otherwise, that means I failed us and I’m not going to let that happen. So when that happens, am I going to like you or am I going to hate you? Am I going to be dealing with someone coming back to renegotiate and say, I want a bigger piece than what we agreed on, because now they got a taste of money and they want more? Or are they going to have the same character at that point that they did in the beginning?

Cody Davis:
Absolutely.

Henry Washington:
Awesome, man. Number three. So the question is, how are you picking the markets that you invest in currently? If you’re just investing where you are, then maybe talk about how are you picking the locations within your market you’re investing in.

Cody Davis:
Yeah. So I’m in two markets, I’m over in Central Washington and then I’m in Tukwila. Tukwila is just south of Seattle. I’ve got a small apartment complex there. That was also the owner contract. But the way I pick my markets is, I just want to know if people are happy there and I want to know if people are moving. It’s one thing to see that people are moving there, but if they’re actually happy. Like I go to Seattle, I don’t see any happy people. I just don’t. I see tents everywhere and you can’t move the tents. I know investors there that are just, they’re mad, to say the least, because of what’s going on in that environment. So I don’t want to buy somewhere that’s like that. I’m going to go to a city or go to a town.

Cody Davis:
I’m going to drive the streets. I want to know if the streets are taken care of. I want to see if people are smiling, if they’re going to wave at you. I want to look at job growth. I want to look at who is actually there employing the people that are going to live. Who’s going to be my typical tenant. And more so than just that, when I go to a neighborhood perspective, if I wouldn’t live there, why would my tenants? So I want to make sure that I’m buying in specific neighborhoods where I would feel comfortable or a significant other would be comfortable at night just walking up to the door, put down the groceries and unlocking the door and walking in by herself or himself. I don’t want my tenants to be uncomfortable at a location. So I’m not going to buy in a location like that.

Henry Washington:
Yeah, I love that. That is great advice. And I’ve never heard anybody say that, buy not just where people live, but where people are happy. I like that perspective because you’re right. There are cities across the country where they may be populated and there may be jobs, but are people moving? Are people living there and wanting to stay there? I think that’s a great perspective.

Cody Davis:
Appreciate that.

David Greene:
All right. Last question of the fire around. What should I look for in a property manager that isn’t common knowledge?

Cody Davis:
When you’re looking at a property manager, I want to see someone where everybody in the company owns real estate. I don’t know if that’s common knowledge or not. I haven’t researched just the whole bunch. But I want every single person in the company to own real estate, because they’re going to know better than anybody else how to take care of somebody. It’s not just a $400 expense that could be handled on Thursday, it’s a person’s home and we need to take care of it today. And no one is going to relate to that better than someone that actually owns real estate, whether it’s a home. They might relate to it even better than someone who just owns a duplex.

Cody Davis:
But I want everybody in that company to own real estate. And so that is something that I have set for my PM company. Every single person in the company owns real estate. Some people have done ground up development for huge factories, some people just own a home. And then Christian and I have the apartment complexes. But everybody in the company owns real estate for that reason, because I want people that I’m working with to know that I will treat their families the same way that they would treat their families.

David Greene:
Really good. All right. That leads us to the last section of our show.

Speaker 6:
Famous four.

David Greene:
All right, Cody, these are the same four questions that we ask every single guest every week with one bonus question at the end. Question number one. What is your favorite real estate book?

Cody Davis:
Does Rich Dad Poor Dad count as a real estate book?

David Greene:
Yeah. Seeing it said by 80% of people shoot with that one, we’ll let you shoot with that one too.

Cody Davis:
Okay. That got me started. If not, I can put in How to Create Wealth Investing in Real Estate by Grant Cardone.

Henry Washington:
Awesome.

Cody Davis:
That’s a bonus.

Henry Washington:
Question number two. What is your favorite business book?

Cody Davis:
[inaudible 00:56:46].

Henry Washington:
Grand Cardone fan. Got it.

Cody Davis:
Yeah. I am.

Henry Washington:
Question number three. What are your hobbies?

Cody Davis:
So I’ve been doing parkour for 11 years now, going on 12 years shortly. I like jumping off a building, doing flips. I was a gymnast for a handful of years, so I’m into acrobatics.

David Greene:
Cody, did you ever watch The Office, or you’re too young to know that was a TV show?

Cody Davis:
Parkour.

David Greene:
Parkour. Yes, let’s jump into the box. That is a hilarious intro where they just go running through screaming parkour every time that they jump from an office chair to the desk or something. That’s what it means to do it, is just to yell parkour. I thought that was hilarious.

Cody Davis:
Afraid of ways, A to B.

David Greene:
Yep. And I also wonder, when they filmed that, how many scenes did they have to do before they actually got stuff that would be good? What ridiculous. I’d love to see the outtakes of what they were trying to do when they were making that intro. All right. My last question, then Henry’s got one more for you. What sets apart successful investors from those who give up, fail or never get started?

Cody Davis:
A, still buy their first deal. You just have to buy your first property that aligns with your long-term goal. And the big thing that I see that people do is they will justify buying something that’s off brand for them because it made sense for someone else’s story. And so if your goal is to have 10 single-family houses, it doesn’t matter what Cody does buying apartment buildings. You don’t replicate that, you go buy your 10 houses. Stick to your goal, stick to who you are, because your story is worth more than any asset you’re ever going to buy. It allows you to start over if you need to.

Henry Washington:
What a great quote, your story is worth more than any asset you buy. I love that. Last question. Tell us where people can find out more about you.

Cody Davis:
I’m on Instagram, if people use that. It’s codyd2020. And Christian and I are on YouTube together. That’s a very small platform, but maybe one day it’ll grow. That’s Cody and Christian multifamily strategy. That’s about it for where we are. And we’re on LinkedIn, but-

David Greene:
Not TikTok. Huh?

Cody Davis:
I’m on TikTok because someone told me I had to be on TikTok. That said, I don’t know if I’m happy that I’m on it.

Henry Washington:
Hey man, I’m on TikTok.

David Greene:
Are you happy that you’re on it? Are you happy with that decision, Wash?

Henry Washington:
We get apartment on TikTok, man.

David Greene:
Okay. I’ve been warned by Brandon, stay far away from it. That it is addictive, it’s a gateway drug to other things. So I, myself am not on there, but we are going to be making one for the David Green team. And I’m going to have one of the younger people on the team actually run the TikTok account. What you won’t see from me is that ridiculous dance where they point at the bubbles and they do this thing. Can that thing die fast enough?

Cody Davis:
I noticed a lot of the TikTok people that are super huge in the real estate space don’t actually do a lot of real estate stuff. So it’s just, I haven’t found my way into that.

David Greene:
Unfortunately, in our world, if you’re huge at all, you probably don’t do much of what we’re actually talking about here. You don’t get huge by being really good at real estate investing, you get huge by being very attractive or very inspiring or very controversial or very anything other than practical. So Cody is the person that people should be listening to, but you’re not going to get nearly as many YouTube video watches as somebody who just has a really good production and they have a very fun personality that everyone goes to. It’s one of the worst parts of our space, but it’s also one of the best, because it allows a podcast like this that actually brings true value to stand out amongst the others that just don’t go deep. Cody, I want to thank you for actually giving details about what you’re doing, how you bought it.

David Greene:
You gave a very clear blueprint that anybody can follow. Don’t hit people up and say, I’ll give you this much for your house, which is what they’re used to getting, or your property. Say, I’d love to hear your story. Tell me about why you bought it, when you bought it, what it was like owning it, what you learned from it. What was the best? What was the worst? Get them talking and then build a bond through that story, and then see if they’re interested in selling it to you, if they’re interested in connecting you to somebody else that might. I don’t think you can fail with a strategy like that. So thank you very much for sharing that. Henry, I’m going to leave you with the last word. And you too, Cody.

Henry Washington:
Yeah, man. Thank you so much, Cody. I love your perspective on life, I love your perspective on business, and I love how you don’t see obstacles as a means to stop, but as a means to grow and as a means to find a way around them so that you can hit your goals, man. And I love that you’re looking to keep your why in perspective so that you can take care of your family, man. We need more people like you out there investing, man. Thank you.

Cody Davis:
I appreciate you guys. Thanks so much for having me on.

David Greene:
Thank you, Cody. Yeah, guys, go follow Cody on social media. This is an up and coming superstar in the real estate world, as well as maybe a parkour Olympian at some point, who knows. But you heard him on BiggerPockets first. This is David Green for Henry Washington, signing off.

 

 

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