441: Turning $5,000 Into 50+ Doors and a 7-Figure Net Worth Before the Age of 30 w/Cody Caswell

My name is Ashley Kerr. Welcome to the Real Estate Rookie podcast where every week, three times a week, we bring you the inspiration, motivation and stories you need to kickstart your real estate investing journey. For this episode, we have something special for our listeners. We have an awesome YouTube series hosted by Biggerpocket's own Noah Bacon and it's all about how real estate investors got started and the details of their very first deal. Today we're going to share Cody Caswell's story. Cody Caswell has been investing in real estate since he was just 16 years old. Seriously. And he wasn't given some multi million dollar inheritance to do this. Within 10 years, Cody went from buying some beat up mobile homes to 50 unit apartment complexes. All thanks to the moves he made when he was in high school. So how did he do it? That's what we're going to find out today. And if you're someone starting without a lot of cash or experience, how do you repeat Cody's incredible investing moves? You can listen to it here or you can check it out@YouTube.com eaterookie okay, let's get into it.

Cody, how are you doing today?

Fantastic. It's an honor to be here with bigger pockets again. I appreciate you guys having me on so I could shed some light on my story and maybe help somebody else along the way.

Well, it's amazing to have you here. Cody is on a really crazy journey. Like I said, getting started at 16 and actually hitting seven figures of net worth at the age of 24. Cody, I know it's a little bit of a journey here. If you can pull it back a little bit 10 years ago, can you tell us what you were doing at the age of 16 and what got you thinking about getting started in real estate?

So I grew up in a real estate investing family. My grandpa was a real estate investor. He ended up with about 10 doors by the end of his career. It was a combination of single family homes, mobile homes, really whatever he could afford with the jobs that he had through his career. My dad came in and started real estate investing in his early 30s, buying single family homes one by one, renovating himself, totally DIY managing himself. And from the time I was probably 13 years old, I was, you know, kicked out of bed on Saturdays, brought to these homes. It was funny, right before school let out, every summer my dad would buy a house for me, him and my brother to fix up. So Saturdays weren't sleeping in, they were brought in these nasty homes to clean them out, you know, touch up, paint do whatever a 13 year old could do. But more than anything, it was teaching me work ethic and it was giving me the principles of real estate. Now, you know, a 13, 14, 15 year old kid, there's not much that I really wanted to learn about real estate investing in construction at the time. It wasn't my ideal situation to actually be in those houses. But even then I was, you know, getting poured into by my dad to teach us, hey, you work once, you get paid forever. Just really basic principles of real estate investing. And the idea of working once and getting paid forever made sense. You know, you've got to make income. You don't necessarily, necessarily need cash in this world, you need income. So Whenever I was 16, I was faced with the idea like I had to make money. I was in high school, you know, I was going to do things with friends, I needed some money to live. I thought, well, why don't I do real estate investing? You know, just like I've been learning my whole life. The only thing that a 16 year old can buy is a mobile home. So, you know, manufactured homes go into your name the same way that a car does or that a trailer does. You know, you just buy it, put it in your name and hold title. So that's all I could afford. I had about five grand saved up from working, odd job, my dad, my grandpa, and whoever else I could find. And I found a deal. There was a mobile home park about five minutes away from my high school. I passed it every day going home. We had some friends that owned mobile homes in there and I decided I was going to try to buy one. I went to the mailbox, you know, the big mailbox at the entrance. I dropped a note in every single slot that said, hey, I'm interested in buying a mobile home. If you're interested in selling yours, please give me a call at my phone number. About a week later, I get a call. One of the mobile home owners had a mobile home next door to his that he had always intended on fixing up and renting out himself. But he decided, I'm going to be the first person to help you on your real estate journey. He sold it to me for $3,500 cash. I put the title in my name and I spent that summer fixing it up with friends that I would hire for $50 a day. I had 1500 bucks left to renovate it. We went in, painted, did the floors, made it about as nice as I could for the money that I had. And I rented out for $665 a month. My lot rent was $165 and my insurance was about $100 a month. So I ended up cash flowing right about $400 a month. And I was 16 years old and I worked once, got paid forever on that deal. So that's what got me started in my real estate investment journey.

That's an absolutely amazing, amazing start. And it's, it's, it's amazing because it really shows the power of leveraging the small assets that you had at the time. I mean, what can I get myself into? I know that I've seen success with my grandfather doing it, I' with my father doing it, essentially been a contractor. How do I get on the other side of things here and own some real estate? And at 16, you said I have a couple thousand dollars and we're going to cash flow with this money. So it's very relatable. A lot of people with that amount of money right now can, can still do this today. So very, very inspiring story. So obviously it sounds like you went into the buy and hold strategy. Sounds like that's what your grandfather was doing and your father was doing and showing you guys the ropes kind of. Can you tell me why that strategy has been so successful for you and why you picked buy and hold? Why you didn't look to do a flip with your potential contracting experience as a 16 year old?

First of all, I didn't have the money love to flip a house and make 30, $40,000 on it, but I didn't have the money to do that. I had five grand. So really at the time I was just doing the thing that I could. You know, I was limited on funds, I was limited on time. I was a regular high school kid in sports and I was limited in knowledge as well. You know, at the time, biggerpockets wasn't around. This is 10 years ago, maybe it was around, but I didn't hear of it. So I didn't have anybody else to ask advice from really, aside from my grandpa, my dad, and that's what they were doing. So I just kind of, you know, went into what I already knew. I think it was the best strateg for me because at the time I wouldn't have had the skills necessary that would have required to actually go in and successfully complete a flip or anything like that. I just didn't have the skills. But I did have the skills to go in and just, you know, fix up an old mama home. It was, you know, fairly easy. It was a simple thing for me to do. It was simple to find the deal. I think a lot of people over complicate finding deals. Like I found it dropping letters in a, in a mailbox. You know, it was simple and it just kind of all worked as I took actions and as soon as I did get the funds, I did start flipping. I started doing other assets as well. But just at the time buying and holding a mobile home was, you know, what I had the money to do and what I had the skills and experience to do.

It's funny because I think we very commonly see the meme of oh, I wish I could buy a house in 2008 when the crash was happening, but I was in second grade. It sounds like you were in second grade actually investing in real estate, which is ironically funny with that meme floating around.

Okay, so we're going to take a quick break.

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All right, guys, welcome back.

So, yes, like I want to get into here. You've found success on your first deal. Couple hundred dollars of cash flow. That's nothing to shake. Obviously, as a, as a teenager, amazing to have money coming in. What was that money doing? Were you putting it into your next investment property? Were you putting it into your lifestyle? Can you tell me how you. You scaled from property one to two with. With that first investment?

So I was doing it all wrong. I managed it myself. I took cash from the tenant, I drove to the door every month to collect it and I spent every dollar of it. So, you know, I was still a 16 year old kid. I spent it on, you know, lunch with my friends or I spent it, you know, just anything and everything that I might buy with it. I didn't put any of the money towards a savings account. Like I should have to buy my next deal. The way that I got into my next deal kind of happened from me telling everybody what I wanted to do as I was graduating. I'm 18. At the time, there was a deal that my cousin, he had one rental house and he didn't want it anymore. He had a really successful business and this house is more of a headache for him than anything. We were hanging out, I was talking to him about what I wanted to do and he said, would you like to buy mine? He's like, I'm trying to get rid of it. I do not want it anymore. And I said, well, I don't know how we're going to do this, but sure, you know, we agreed on a price that we thought was fair. It was $30,000. I know that's crazy to think, but this is a small town in southwest Louisiana so, you know, that's still possible to buy that house today in that town. But we agreed on price. It was 30,000 dol. And on my 18th birthday, I went in and applied for a loan for it. It was a construction loan. I got $15,000 for the construction and I did the Brrrr method. I bought it for $30,000, I put $15,000 into it and when I refinanced it, it appraised it 65,000. And I got my money back out of the deal and that's how I kind of got started in the snowball.

That's amazing. So tell us a little bit more here. You're obviously finding great success with owning bigger properties, looking to burr them. Are you following that strategy in the next steps of your portfolio or are you looking to find some other avenues now?

So finding that strategy more or less using just what kind of fell into my lap. So I bought that house, it was successful. I rented it out, covered my note, covered my insurance, made a couple hundred bucks of cash flow and I got all my money back, right? So I had a little bit of cash saved up from working more odd jobs. It really wasn't from the real estate, it was from just working with friends, family, you know, just whoever I could find jobs from. I was 19 at the time. I had two houses in a neighboring town that my aunt and uncle, they had four or five houses that they had rented out and they knew, you know, we were real estate investing family. They decided they wanted to get out of the rental game. We had created a deal where we were going to sell or finance the homes. I took two, my brother took two and my dad took one. It was five homes total. And we seller financed it from them with no money down. They wanted the income, they didn't want the cash, they just didn't want to handle the tenants anymore. So we sell a finance these houses for an agreed upon price is $45,000 per house. Seller financed them, I rented them out for $700 a month and I managed the 10. And that time I took all of my cash flow and I started paying down these properties. So all of the cash flow that I received, I used it to pay down these loans. I forget the interest rate now. It was a, you know, fairly low interest rate. It was an aunt and uncle deal. So over the course of about a year, you know, we fixed them up here and there, just with what little money we got. They needed repairs anyway. So we went in and fixed them up and we got them reappraised in a year and put a line of credit on them. So they appraised for, I want to say it was $120,000 for both of them. So $60,000 a house and we pulled a line of credit on those. So with the equity that remained, I got a line of Credit. And that's how I got started with a actual large enough sum of money to start flipping houses.

A lot of people, when they first get started, their first thought is, let me flip a house, let me wholesale, let me get in the transactional stage. So you found success in the buy and hold. You've paid down the loans, now you're getting helocs to go into the transactional stage. Can you tell us any of that transition you had going into flipping? Were there any headaches going into it? Did you have really an easy transition from your experience, you know, in the summers growing up, being a contractor, I know what a project can look like to start, to, to finish. Were there any growing pains going into the transactional stage then?

There were some growing pains, I would say more or less. It was trying to learn what a deal looked like. So up until this point, I kind of had these deals that we creatively worked to make them work in our favor. They were slow. It wasn't like flipping houses where you get a deal, you have to make a decision in a few days. And it's like all about speed, right? That's how flipping houses is. These deals took a little bit longer. We had time to work through them and, you know, they're with family, so we had an opportunity to make a win, win situation for everybody. Whereas flipping, it's a lot faster, it's a lot more transactional. You don't know the buyer, the wholesaler's trying to make his fee. So whenever I first got started flipping and you start telling everybody, all the wholesalers, hey, I want to see your deals, I want to see your deals. Well, my inbox gets flooded with deals and I have to start to learn, like, what does a deal actually look like and what the parameters need to be set at in order for me to flip it. So I realized that I also couldn't do all of the work myself. So at first I was doing most of the work myself. Realized that in the flipping game, at least people that I knew that were doing it, my mentors at the time, they weren't doing all the work themselves. And I decided I didn't want to do all the work myself either. I had to learn what does a deal look like. I had to learn how to calculate rps and I had to learn how to calculate rehab costs. So I'll bet in my first year that I decided I was going to start flipping properties. I probably walked 200 houses. I would walk my friends houses, my mentor's houses, just to get the experience of walking into a house and trying to figure out what stuff cost, how long is it going to take? What's the ARV here? I just walked deal after deal after deal just to try to learn, okay, before I pull the trigger, am I making the right decision here? So there was definitely a lot of challenges. I mean, I looked at a lot of deals that I thought I might buy and end up backing out. And, you know, I just wasn't sure of myself before I pulled the trigger. And, you know, the realistic reason is I just didn't have enough confidence to pull the trigger. So what did I do? I went out and built the confidence. I walked, you know, hundreds of properties. I would run numbers on deals every single day for hours a day just to try to get a feel for exactly what a deal was.

It sounds like you really were able to flex your muscles, tell people, hey, I'm a real estate investor. I've gone direct to seller, worked on a lot of, you know, buy and hold properties. Now I need to build this team. I want to scale and then get into bigger projects. And that's what you've done.

Okay, so we're going to take a quick break.

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All right guys, welcome back.

Let's fast forward a little bit to today. I know you're still under 30 years old and you're still doing amazing things. So can you tell us a little bit about what you've done in more recent in your portfolio? What are you chasing? Are you still doing flips? You've built the team here, now are you still using that same team to acquire flips or what's your strategy here today?

Throughout the course of the past 10 years of real estate investing, we started with manufactured homes, then we went into single family and then we burned a small apartment complex and then we bought a large apartment complex. So we burned a 56 unit apartment complex. As a 40% partner on my idea behind it was I'm going to spend the first half of my 20s doing everything that real estate investing has to offer. I want to do every single piece that I can in that timeframe so that I can find out what parts am I good at, what parts do I enjoy, what parts do I see as a long term strategy to build wealth. So in the process of that, you know, we built some wealth for sure, but nothing that is, you know, even remotely close to our goals in this. Right now we're turned a chapter in our portfolio. We are flipping about 15 properties a year. So our flipping business is not based on scale, it's based on quality. We got to a point where we were doing seven, eight, nine projects at a time when we were flipping homes and we figured out that just saying yes to a deal in order to keep crews busy and to keep, you know, the juices moving. We're not making any more money than if we were to do half the deals, but they were much higher quality. So we transformed our flipping strategy from doing volume to do equality. So we're doing about 15 properties a year in our flipping. We still have a large apartment complex that we're invested into. And as far as investing goes, our goal and our strategy is ground up construction and heavy rehab. So I figured out that I am very good at the construction part of real estate investing. I'm very good at the operations, not very good at finding the deals. I'm definitely not a sales agent to sell the deal. So I kind of dove into my part and said, okay, we're good at the management right now and this is the part that we're going to stay in is we're going to stay in the operations role. So right now we have a 56 unit apartment complex and we're flipping about 15 homes a year and we're about to start ground up construction on new construction rentals. We have a large goal that we're trying to hit here in the next 13 years. We're going to take a big swing and see what happens. So we're working on ground up new construction, single family rentals for our buy and hold properties. And then our flipping business will keep flipping, you know, 15 to 20 homes a year, quality homes a year. Our team is very set to do that and we have an interior design business where we design properties for investors all across the country. So that's the three aspects of our business. The buy and hold side and the two active income sides.

Well, it sounds like you're very vertically integrated here where you can furnish these buy and holds. If you want to do a potential medium or short term rental in the future, or if you want to, you know, keep flipping and furnish them, you have that resource there. So you have a really great team. It sounds like you've had amazing success throughout this journey. But not only just one path. You've gone into buy and hold right away. I've gone into transactional. Now I'm going into much bigger projects here with boring apartment complex. It's something very unique for somebody at your age to be doing. But it shows that 10 years of this journey is how you got here. And that was at 17 and now 27. So why not start now? A lot of people around our age and even a little bit older than us are probably thinking, all right, how the heck can I get started? Cody's had a freaking amazing journey. What would you give somebody advice today that was in a very similar position to you financially at the time? I have five to ten thousand dollars I'm really interested in. I know the stock market's going to take forever for me to hit financial freedom. Crypto is a very scary asset. What would you give somebody advice that's potentially in your shoes right now?

Ten years ago, I think that the best thing to do is to save up a nest egg that makes you feel comfortable enough in order to go risk your money. So if it's your last five to $10,000, don't go put it in real estate, put that in a savings account and keep working at whatever you're working, increase your active income, go make more money, you know, put some more money aside and get yourself, you know, $50,000 to invest. @ that point, first thing I would do is I would go and flip a house. I would go walk a Thousand projects. While I'm trying to save up enough cash to do my first deal. I would attend all of the real estate meetups. I would get on bigger pockets. I would ask advice, I would annoy people with how much advice I asked for and I would go walk so many projects and just go learn. What does a rehab look like? What does it look like when you're rehabbing a deal? How do you find deals? How do you sell deals? Who's our good seller's agents? You know, how much does rehab cost? I would go learn everything, try to connect with hard money lenders. I try to make as many connections as possible. That way whenever you do get to the point where you can invest in a deal, you have enough experience to actually do one successfully. So don't go dive into something that you know nothing about. Be like me and go take a year and just learn, learn, learn, learn, learn. I spent hours and hours in the BiggerPockets forums before I pulled the trigger on a flip because I didn't want to lose money and I knew the potential to lose was there, which is like every other real estate investment, the potential to lose is there. As far as strategies go, I would flip a house. Honestly, flipping is the best way to generate a lot of cash. The buy and hold strategy takes time. I didn't start really generating any cash in my business until I was six years in just because I was doing the slow buy and holds. And it just takes time for you to pay down the debt, build up the equity, you know, actually do the refinances successfully. It takes the right deals. It takes a lot of time. If I were myself at 16, I probably would have saved that $5,000, kept saving up money as long as I could until I was, you know, probably 18 or so. And I would have started flipping because one successful flip can double your cash. So if you have $40,000 to invest, you can easily make $40,000 in a single flip. Now you've doubled your cash. Now you can go do another one and you can make it again and make it again. And in the period of a year, you know, if you're to do three or four deals like very successful flips, you can make $120,000. And if you're a 19 year old kid with $120,000 in your hand, you know, you can really gain a lot of traction. It happens so much faster than the way it happened for me. That's why I would say, like, spend your time saving up some money and go learn. I Wouldn't go partner with somebody and borrow private money until you had the experience of doing a deal yourself. I wouldn't go borrow, you know, grandma's money to flip the house. When you don't have any experience flipping a house yourself, I would wait and put your own money in a deal, see how it goes, get yourself invested. Like, dive into this game and go figure it out. Because I was just having a conversation today that real estate is so forgiving. If you give yourself enough time, you just have to learn enough to be able to work through any deal that comes your way. Real estate is so creative. You can put yourself in so many situations to win. And I think that the idea is like, learn enough to do that. Put yourself invested in one and go figure it out. Go see how it.

Is. It's amazing advice. And hearing it, somebody who's not even providing hypotheticals. We know you've done buy and hold. We know you've done flips. And one of the most common things we hear is time in the market, not timing the market. And you have had multiple years in the market, and it's no surprise that you have the success that you have today due to that. So, Cody, I know it's going to be very easy to see you on Instagram, you know, running through houses, doing things every single day. I know where to find you. But where can our audience learn a little bit more about what you're doing on the day to day? Where can we go and find you outside of this.

Video? Yeah, go find us on Instagram @ivoryhome co. That's our page where we're going to be sharing all of our flips. You're going to be able to walk through our projects, give us tips and tricks and strategies, the different things that we do in our projects and what we look for in a flip, what we don't look for in a flip. Buy and hold, things like that. That would be the best place. Go find us there. We're super responsive. Send us a message. If you're in Austin, Texas, find us the meetups. We go to almost every meetup, but that's the best place to find us is on Instagram @ivoryhome.

Go. Cody. It was really great having you on the show today and I really can't thank you enough for sharing your story from getting started at 16 years old to where you are.

Today. Thank you so much for listening to this special episode of the Real Estate Rookie podcast. As always, make sure that you like and subscribe to us on YouTube @RealEstate Rookie and make sure to check us out on Facebook and the Real Estate Rookie Facebook Group. Group I'm Ashley Kerr and we'll see you next time on the Real Estate Rookie.

Podcast. This Bigger Pockets podcast is produced by Daniel Zarate, edited by Exodus Media.

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Hey rookies, if you're watching this, we want you to apply to be a guest on the Real Estate Rookie Podcast. That's right. Ashley and I are looking for amazing stories just like yours to be a part of our Real Estate Rookie Podcast. Now look, you don't need to be an expert. You don't need to have done thousands of deals. Even if you've done one deal, your story could help inspire the next.

Listener as a rookie investor. Especially if you just got your first deal. It is all fresh in your minds and you are the best person to tell your story. Give your experience on how you got it done to help someone else get their first.

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