Cody Davis: Relationships as the #1 Key to Success in Real Estate
- Cody Davis: Relationships as the #1 Key to Success in Real Estate Screw The Stock Market 47:30
Recap of the show
[00:00:25]
This episode with Cody Davis is awesome. It is great, very actionable, and direct. Cody talks about his journey and his steps, which resonates well with basically what the Screw the Stock Market Podcast does. To sum it up in something more succinct, he essentially talks about how he went from being a broke college student and a recent college graduate to owning a resort and $5 million in real Estate.
About the Guest
[00:05:03]
Cody had $3,000 saved up, a mix of working as a gymnastics coach but stopped when he got into real estate. He graduated high school in 2018, jumped straight into Tacoma Community College, and didn’t want a bunch of student loans or any debts. He got his real estate license shortly and posted on a Facebook real estate group that he was looking for a mentor. Someone invited him to the real estate brokerage; all he needed was a license. After nine months of trying, he got his first seller Finance through an old gymnastics buddy. Fast forward three years, he had bought his first 12 plex, and today he has 108 rental units in a resort without a bank loan.
How He Bought His First Property
[00:08:11]
Cody worked as a real estate agent in Seattle, Washington, and became interested in Investing in real estate after a deal fell through. Using the multiple listing service, he found a 12-unit apartment complex that had been on the market for a long time and negotiated a purchase with seller financing. However, the purchase required a down payment of approximately $125,000, which proved to be a challenge for Davis as a young person with little income or assets. To obtain the necessary funds, he had to consider options such as seeking a partner or investors, taking out a loan, using credit, or negotiating a longer term for the seller financing. He ultimately had to choose the best approach based on his specific financial situation and the terms of the deal.
How Cody Financed His Deals
[00:16:29]
Due to his age and financial history, Cody had limited options when it came to financial products that he could qualify for. He could not secure financing through FHA loans, and many traditional funding sources were unwilling to lend to him due to his limited financial resources. In light of these challenges, he decided to explore the option of seller financing as a way to fund his real estate purchases. Despite his lack of financial resources and real estate experience, he successfully used this kind of financing to fund all eight of his real estate purchases.
[00:17:41]
Cody says that trust is everything. When you get a takeaway from somebody, you apply it, and then you let them know that you applied it, and it worked. That is how you build trust at the highest level. He learned from his dad that your reputation is worth more than anything. However, it is worth considering how he was able to secure seller financing in the first place, given that sellers typically want to be sure they will be paid back just as a bank would. Lending to an inexperienced and financially limited investor may seem risky.
What is Seller Financing?
[00:21:05]
Seller financing is a type of financing in which the seller of a property or business extends a loan to the purchaser. Instead of the purchaser obtaining a mortgage or other loan from a traditional lender, such as a bank, the seller agrees to take on the role of the lender and provide the financing for the purchase. Seller financing can be an attractive option for both buyers and sellers. Still, it is important to review and understand the terms of the loan carefully and to consider the risks and responsibilities of acting as a lender.
Number of Times Cody has Done Seller Finance Deals
[00:22:34]
He has done it 13 times and helped three clients do it on their acquisitions, from duplexes up to 8 plex, some in Central Washington and some in places like Kitsap County. So that’d be 16 times in the last 35 months, but it is repeatable if you keep it simple.
Cody’s Seller Finance Conversations
[00:25:32]
The key to success in real estate investing is cultivating strong relationships. Those who excel in this field understand that it is a business centered on connections, and they work to develop their networks and approach opportunities with a mutually beneficial mindset. Rather than solely relying on data and self-promotion, the most successful investors know how to persuade others with compelling narratives and visions.
Instead of trying to sell an idea, Cody wants people to buy into who he is. To do this, he believes that everything he does must begin with building a relatable story and being relatable. This allows him to get in the room and start conversations with people. From there, Cody believes that these same people, whether sellers, buyers, brokers, or investors, will work with him if he has clear targets and goals.
What Made Cody Start Down this Path
[00:38:26]
Cody agrees that he rented his audacity because he didn’t own the confidence to do any of this. It was borrowed from shared authority and people who had done it before. “When you meet someone who’s done something you want to do, you get to talk with them personally, and they tell you it is possible. And this is how you should do it. Your confidence goes up, and mine did anyways.” He met with all these rental property owners, and his confidence increased. He didn’t know how to communicate and didn’t understand how the conversations worked, the pacing, phrasing, but he learned it through meeting these owners. They gave him confidence in real estate, and he learned how to communicate.
Cody’s Education Platform
[00:40:59]
Check out his YouTube channel, Cody And Christian – Multifamily Strategy, for the great information. Together with Christian, they have a course for which you can pay $349 a month, which comes with three months of actual consulting. Meetings are held three times a week: Monday, Tuesday, and Thursday. Monday is live Q&A, open forum; Tuesday’s deal is a deep-dive into people’s deals and structuring debts because people need a little encouragement to push the terms. Thursdays is an actual lesson about asset management and building a team that structures private equity. This can all be found at https://themultifamilystrategy.com/.
Reaching Out to Sellers
[00:49:52]
Everybody’s phone number is on Google! Find the big roofs on Google, and then go to the tax assessor website to figure out who owns it. If it’s an LLC, you can take the LLC, put it on open corporates, and you can see who owns that LLC. Also, you can plug in that person and open corporates to see every LLC they own and see if they’re a real player. If they’re super famous, if you put in their name, the city they live in, and then the phone number, it’ll give you the first six digits; then you have to copy the six digits, take out the phone number, and put in the six and then it’ll give you the last three.
Connect with Cody Davis:
LinkedIn: LinkedIn
YouTube: YouTube
Multifamily-Strategy Website: https://themultifamilystrategy.com/
