In this instructional video, Cody outlines four core metrics he uses to evaluate and grow investment real estate portfolios: cash flow, appreciation, depreciation, and debt reduction. He explains each metric’s definition, why it matters, and how it contributes to wealth building. Cash flow is presented as the monthly net income that fuels scaling; appreciation is tied to location and income generation, with a rule‑of‑thumb that a $100 rent increase can add roughly $15,000 to resale value per unit. Depreciation is described as a tax write‑off that can eliminate taxable income, allowing reinvestment. Debt reduction leverages tenant cash flow to pay down mortgages, eventually yielding a debt‑free portfolio. Cody highlights that cash flow and appreciation were the two metrics that enabled him to raise his first quarter‑million dollars at ages 19‑20, illustrating this with a case study of a 12‑unit property he bought under‑rented, raised rents to market, and increased its value by $300,000 in ten months. He also promotes a downloadable calculator (linked in the description) that helps viewers model deals and pitch investors. The video concludes with a call to action to comment, subscribe, and use the calculator to replicate his approach.
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Hey guys, what's going on? This is Cody, and today's video is all about the 4 key metrics that I use to invest and analyze investment real estate. And at the end of the video, I'm going to be sharing the 2 of these that allowed me to raise my first quarter million dollars just at age 19 and 20. And I'm going to be linking a calculator down below so that you can study and do the same. So with that, I'm going to share number 1. The holy grail of all finance is cash flow. Cash flow. Now, cash flow is the money you have at the end of every month that you just put in your pocket. You can spend on yourself, investing in yourself, investing into your business, and investing into your future. Cash flow is important because it's what allows you to scale, whether you're starting out with a single-family, you're doing a duplex, apartment building, or you're starting out much greater. The more cash flow you have coming in, the bigger the leaps you can take on your next deal. Number 2. One of the other really important metrics that I follow as a real estate investor is I'm looking for appreciation. Now, appreciation is values of properties going up over time. And with apartments, it's a little different. The space that I invest in, apartment appreciation, the value is based solely off of, one, the location, and two, how much money does it bring in after property expenses. Part of investing in, say, investment real estate is knowing who is going to be your buyer if you choose to sell this deal.. Now, with a single-family home, if it gets distressed, maybe a home flipper, maybe someone who's just trying to get some sweat equity. With fourplexes, it's going to be the newer investors. And once you start getting into the apartment space, whether it's eightplexes, twelveplexes, or bigger, your buyer is going to be an investor, someone who's looking for that return. And so if we can increase those returns, meaning we're increasing the money coming in, whether it's raising rent, lowering expenses, However we can increase those returns, that's how we're going to increase that property value. And that's one of the ways as a real estate investor that I have been able to grow my wealth so quickly. Number 3, super important and something that allowed me to legally pay zero in taxes last year is what's called depreciation. Now, depreciation is the government's way of saying there's wear and tear on rental properties. There is wear and tear, and with that, you get to write off a portion of the property value every single year on your tax bill. This is something that I have used on both of my properties that have allowed me to pay less in taxes, reduce that bill, and put more of that money towards investing into myself, investing into my real estate business so that one day in the future I can be more generous with my time and my money. And number 4, super important as well, is called debt reduction. Now with debt reduction, typically in the beginning of our real estate ventures, we have to leverage. We have to take out a loan to buy the property if we can't buy it in cash. Now, our tenants, being super nice people that they are, are going to compensate us for providing a great place to live, keeping the place up to date, and making sure that all their concerns are handled. So they're going to help us pay off our debts for us. So every single month, my mortgage balance on my rental property is a little bit lower than it was the month before that. Eventually, what this means is that we will have a free and clear portfolio with no debt debts, liabilities. Every single dollar that comes in with net operating income is pure profit to our pockets, whether we spend it on cars, whether we spend it on donations or building our business. That is free and clear money at one point in the future that you get to live off of. Now, the two most important pieces here that allowed me to raise my first quarter million dollars: number one, cash flow, and number two, appreciation. Now, with cash flow, I'm getting paid every single month. My cash accounts are going up every single month by a couple thousand dollars. I'm just saving that money. I'm getting paid to wait for my property values to go up with appreciation. Now, with apartments, your property value is based off number one, the location, and number two, how much money it brings in to an investor. On my very first deal, I was able to find a property that was under-rented. It was listed on the market for almost 2 years, and the rents were just too low. I got in. I didn't have to do any renovations. I did a home inspection for the whole property and found that there were a couple of things that needed to be replaced, like water heaters, but nothing that was keeping my rent down. So I was able to immediately bring that rent up to market and bring the property value up about $300,000 within a matter of about 10 months. Now, the reason this matters is solely because of the amount of scale that I had. I didn't start with a duplex where raising rent $100 would only increase my property value just the slightest. I started with 12 units, I had a lot more scale. And as a rule of thumb, for those of you guys who are watching, every $100 that you can increase rent is going to increase your property value on a resale by $15,000. Now that is a conservative number. However, that is a metric that I keep in my mind for when I'm looking at deals. If I can raise rent just $100 on an apartment deal, I'm increasing that property value by $15,000. Now, with 2 units, I can increase rent $100. Great, I made $30,000 on the resale. But when I have 10 units, that's instantly $150,000. And so I need to project that. How long is it going to take me to do that? And that is where the appreciation play comes in huge for growing your equity in the beginning. It's all about growing that equity piece so that one day you have enough to retire and live the lifestyle that you want to live. So with that, that is the end of the video. If you guys liked what you saw, please do let me know in the comments below. Subscribe if you'd like to follow the journey. And again, I did link the little calculator in the description below if you'd like to check it out. That is something that I have used to pitch investors on raising hundreds of thousands of dollars for my deals. And once you get fluent with the numbers, hopefully it's something that you can use and implement for yourself to do the same. With that, I'll see you guys next time. Have a great week.
