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- $25M at 23… A Less-Known Real Estate Strategy!!
$25M at 23… A Less-Known Real Estate Strategy!!
What’s the Secret?!
Millionaire Syrup
January 26, 2024
$25M at 23… A Less-Known Real Estate Strategy!!
What’s the Secret?!
Introduction
Cody Davis got started in Real Estate at the age of 19 as a College Dropout. Since then, he had bought 30 apartments by the age of 21. Cody Davis ended up working with Christian who at that time also worked in the Real Estate field.
They’ve bought more than $25 million worth of property, generating a gross revenue of nearly $300,000 a month.
How To Start With No Money
Cody started investing with absolutely no money. He says to do this, it starts with a lot of debt.
You can either buy real estate with two types of money, debt or equity.
Equity - Cash
Debt - Borrowed Cash
If you don't have any money that you can contribute, you have to borrow it. He got the seller to finance as much as possible, which was around a million dollars, and he still needed another $125,000. He ended up borrowing the rest of the money needed from an investor, which was basically a hard money lender at the time because they lent him money at 12% from his down payment.
How To Convince Investors
In this example, the investors were banking off the fact that he probably wouldn't make it work.
If it went well, the investors would earn their 12% and get paid off. If it didn’t go well, he would sign over the ownership in the LLC if he could not pay them back, and the investors would get a stellar asset.
The Three Things Investors Care About
Where's the money going?
How's the stability of what's backing it?
How do they get paid back?
If you map out those three things to the investor, they will give you the money.
Tip #1
Real money comes from holding Real Estate. Keep the cash in the deal to increase your cash flow over time. People that can buy Real Estate and pay it off are the ones who make the real money because they minimize their obligations.
What Type Of Real Estate
They recommend starting with commercial residential, apartments, because it is the most stable asset class. This is because there are more investors that are buying commercial residentials. The ideal starting range is 6-20 rentals.
Successful Real Estate Investors
Successful Real Estate investors buy several deals.
Cody and Christian say that after an investor buys that first deal, almost every time it's one or two months till the next deal they do.
They mention that good Real Estate Investors are the ones that show up and ask the questions.
Negotiation
In negotiation, just because you can, doesn't mean you should.
Keep everything in the negotiation super simple and if you’re unwilling to move on something, shut it down.
Have an open discussion and try to figure out how do you get what the other person wants.