Relationships and Rentals with Cody Davis

On the show today we talk… Relationships and Rentals with Cody Davis!

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Show Links:

• Last podcast with Cody – 24 Doors by 20 Years Old https://seattleinvestorsclub.com/24-doors-by-20-years-old-with-cody-davis-ep-129/
• Instagram – https://instagram.com/CodyD2020 
• YouTube – Cody and Christian Multi Family Strategy https://www.youtube.com/channel/UCkoxbEU_hoEpH8T-QUHR4nw 

Relationships and Rentals with Cody Davis!

The Vantastic Life is…
– is in Steamboat Springs CO!

Cody has been super busy with his real estate since we talked to him a few years ago. 

How has paid off all his hard money.  

Funding

Everything has been seller financing and low money down. 

For the 38-Plex he structured something interesting with a buy out. 

The first few buildings had really good cash flow.  

The first few deals were structured as debt, and the last few were structured as equity. 

22 year old college drop out, that decided to get into real estate.  A random person told him to get is real estate license.  He’s the only one in family to own anything other than a house.

What’s Your Why

He wants to retire his mom.  He’s not be as aggressive right now.  He want a foundation of owned in cash properties.  And he will never have to do that again. 

Expanded why

Wants to be a resource for the next generation that grew up in a split household that hasn’t had as much success. 

Vision

500 units in about 8 years. With quite a few owned outright.  

Not giving handout but can finance 99%, and can help a lot of people.  

Is that how people have been lifting you up?

I just want people to know that It’s possible.  There’s not enough of that out there today. 

Where have deals come from

Bought all properties with no bank loans, and most of them bing on the market. 

How to get the opportunity in the first place – Relationship marketing – Communicating

He prioritizes the relationship over everything else. Example of a real estate agent story out of Texas. 

Always ask for the lift up

Always ask for it, or it won’t happen.  With owners my intention is to figure out how they got there.  People find a lot of joy in sharing their stories.  They get happy about talking about what they did and didn’t do. 

Asking how they did it

Too many people are just sending offers right now. At the end you can only make so much money.  So, I’m asking them to share what they did. 

Where have deals come from with this relationship strategy

I keep in touch with these people whenever I’m in town.  At the end of the day I’m not going to buy properties from all of them.  I’m meeting with people to gain confidence.  Then I win with on-market deals. 

Are brokers getting in your way? 

No, I have to work with brokers.  Or I’m finding things off market. I’ve helped FHA and VA buy 8-plex and more.  But I still let other brokers write up my stuff. 

Cody’s first deal

It had been on the market for 560 days, and he paid the list price. 

Why would nobody else buy the property?  

I learned why they didn’t sell.  It never went pending.  Maybe people didn’t like Quincy.  People tried to buy it but they had trouble working with the broker.

How did you get through the broker 

I asked how they wanted it written up, and they accepted it. 

How do we buy it and how do we never lose it

Longterm notes with significant cash flow. This is how I quantify everything that I buy.  And it allows me to do it again and again and again. 

How do you determine what’s good enough cash flow?

I’ve never had a real job.  I always look for a positive cash flow of $1000 a month.  Because I didn’t have a job I needed cash flow coming in. 

He doesn’t really look at the percentage of cash flow.  It has to cash flow four figures and there has to be an upside. 

Making improvement to the units

Are you still looking for $1000 a month? 

His 2nd deal was another $1000 cash flow a month. 

Today I can get more creative that has more upside, because I have cash flow and more reserves. 

Does your deal make sense?

If it makes sense for you… buy it.  Nothing will last that long if it’s a good deal.  It could be a duplex or a four-plex. 

Cap rate doesn’t matter

Does the deal work for you… 

What do you think if the minimum cash flow that you should accept

Yeah, but if it’s a smaller deal, you’re not going to get that. 

Debt service around 1.4-1.6. 

How do you present your equity position partners

Get your confidence up by simplifying the situation.  What do you want to be known for? 

Prioritize being the best at just a couple things and don’t worry about everything. 

Know your message at the end of the day.  

I know what I’m doing and why I’m doing it. I think more about how I’m saying things than what I’m saying. How are things I’m saying being perceived.  Most people are gathering too much into, but they don’t know how it works. 

How do you present deals to people

He tells a story.  If I don’t help people they go straight to their numbers.  That’s to transactional for Cody.  He tells a story about the property.  

I can fix a property, I can’t fix a location. 

12-Plex haunted house

It will be one of the nicest places in Mosses Lake when I’m done with it. 

Get rid of all the downs so there aren’t any ups.  It brings all the properties around up! 

What if someone isn’t 19 or 22 years old?  Should you find your own story? 

He does recommend that.  The circle and square’s.  More of a connection circle.  It’s how you connect with anyone at the highest level.  People will buy into who you are.  The older you are, the more stories that you have. 

Find people to meet that can relate to you and buy into who you are. 

The biggest issue

If he can’t convey why he’s doing what he’s doing.  That’s when he gets stuck. 

Don’t just know your story, but know how to present it!  Connect with people. 

Don’t be in such a rush, just start meeting with people. 

What has been your top 2 or 3 things you’ve learned in the last 1.5 years? 

When he got started… the person connected him with people to pitch to.  That person said they would be an equity partner.  Not all partnerships go well, and intentions change, and values don’t align.  This led me to a lot of debt, and partnerships can be expensive.  I imagine it’s a lot like a marriage if you’re doing bigger deals. 

He needs to be big enough that partnerships don’t effect him. 

Everything could go wrong but even if it does… a big loss won’t effect us when they are done. 

Partnership agreements

He’s started using his own attorney, which he didn’t do at the start. 

Maybe don’t start with a partner…

If you can get loans on your own… maybe you should. He still can’t qualify for loans by himself with all the units he has. 

Audit contractors

He had a wild experience where a contractor took advantage of him.  You just have to watch that.  You can’t get laid back if you have money coming in. 

Just cause it makes money doesn’t mean it makes sense

He has friends that are making money in other investments, but they don’t align with their goals.  It’s doesn’t mean that it make sense for your goals. 

What does Cody need right now

Loan to values of 60-65% for the majority.  Issue is that he doesn’t have income.  Everything gets rolled back into buildings. 

Cody needs help with conventional 30 year debt. 

Where is Cody looking for deals

Looking at a few different options right now.  To 1031, or something else.  Trying to stay focused for now, then start venturing outwards.