Cody met with the Robin Hood Village Resort owner and created a one-page financial snapshot of his real estate, businesses, and cash. It exposed a $1 million liquidity gap and misaligned ratios, prompting him to pull equity out, add a board and finance lead, and diversify into wedding venues and precious metals.
Chapters
Hey YouTube, it's Cody. Episode number 3 at the Robin Hood Village Resort. I haven't been here this week. I've been here for a whopping 1 day. And so this is going to be a much shorter video. But hopefully it's going to be very impactful for you. Because today I'm talking about the takeaway I got from my meeting last night. And I want to put some importance on this for you. While I haven't been here for looking at the projects that have gone on in the last 7 days, I was here and I had a meeting with the owner last night. And this is why we say the relationship is senior to the real estate. The relationship is way more valuable than any real estate you can ever buy. Sat down last night, it was a little over an hour-long conversation last evening, and we were talking about going to the next level. What does it actually look like to go to the next level? Because whatever gets you to where you're at today, regardless of whether you own 100 rentals, 1,000 rentals, or zero. Is not necessarily what will take you the next step up on the journey that you want to go on. And so I was sitting down last night and he encouraged me to finish a project which I had been putting off, and I finished it last night. I sat down in my car and I mapped out my story. Now I've mapped out my story and my personal situation with the circle drill before, but I'd never done it in this type of one-page format. And so I sat down, Excel spreadsheet, I got it boxed out for a single page and I mapped out all the real estate, all the companies, the cash positions, the ratios, the cash flow, the cash management, like all the different partners that I have. And I mapped it all on one page so that if I gave it to somebody, they could clearly and concisely understand exactly what I've built and what I've done. And the thought process was map it out, give it to someone who's smarter than you, And then find next steps to take you to that next level. And what I've gotten out of mapping out mine is, number one, I don't have enough liquidity. I was able to play the game to just shy of $20 million in real estate without keeping a lot of personal liquidity. However, out of that conversation, my ratios are out of whack. And so if I want to go to that next higher up level, I can keep doing the seller financing game and probably get to $100 million real estate. But if I want to go to a billion, I have to start building out my board of directors, and part of that board of directors is a great finance guy or gal. Finding someone who can place and objectively look at the debt stack that you've got on the portfolio if you're playing this game with debt. Part of that requires cash. There's 4 main sectors of wealth that the owner quantified for me. You've got real estate, business, Cash and gold. And those are the 4 main sectors. And really, it's the precious metal sector. And you should divide out— once you've built something worth protecting, you can start diversifying and dividing out your wealth into those sectors. And so the way that I've been doing it is I was all in in real estate, and that got me to 105 rentals. It got me to buying the Robin Hood and a couple other ventures that we're going to close out. And then take it next step— buying the Robin Hood also comes with the wedding venue business. And so now I'm starting to diversify into that second sector of the wedding business. I'm actually building out businesses in addition to the ones I currently own, diversifying a little bit of the net worth into that piece. And he gave me an idea that I hadn't really quantified before. In the beginning, the cash flow is the most important ratio when you're building out, but once you build something worth protecting, your cash position to net worth ratio actually becomes a little more important because that's your insurance in case something goes wrong in business. Money doesn't solve all your problems, but in business it can actually solve quite a few of them. And so I looked at my cash compared to my net worth position, and it's a lot lower than it should be based on how we're running our numbers. And so that is the number one goal that I set out based on just looking at my one-pager. And eventually, again, the precious metals, but I'm not interested in those right now. So As you're building out your business, you're building the real estate portfolio, think about quantifying everything that you're building and what you've built, just your personal situation on one page. And then figure out the metrics that you want to look at, the ratios you want to look at, your cash to net worth, your cash flow to net worth, your percentages that you've got in real estate, in business if you're in business. You may not start with real estate, you may start with a business. But quantifying on one page, and then you can take a good hard look at, okay, let's give this to someone who's really smart, who's steps ahead of me, and see what they would do with the pieces that I've got. I'd never done that before. I've done the circle drill and I've used that to communicate with people, but I had never mapped it out this simply before. And when I looked at it, I was like, I know exactly what I need to do. And now Christian and I are readjusting the equity in the portfolio without a bank to pull out close to $1 million so that we can get liquid, we can get those back in check as far as the cash-to-net-worth ratio. And that's going to further solidify that second question. How do you buy it is number one. That's great. You go buy 100 rentals, 1,000 rentals, cool. But if you lose it, you go in jeopardy of losing it, what was it for? Was it for the story? I mean, there's a lot of stories already about people losing it. So this is going to solidify that how do you never lose it piece by readjusting the cash versus the equity position in the real estate. We're going to pull out some of the equity so that the ratios get more in balance. And we've got equity in the real estate, we've got liquid cash to protect ourselves when something goes wrong, because stuff does go wrong in business and real estate. And we're going to keep building up the business. And eventually, once we get to a level where we're happy, we'll diversify into precious metals. But I wanted to share this with you just as a learning lesson. This isn't really a project video, didn't do a lot of projects. This is the backyard. Again, if you want to come check out the Robin Hood, so RobinHoodVillageResort.com, come book a stay, hang out. But as far as learning lessons from the week, it's been really from my conversation with the owner that I just needed to simply map it out on one page, quantify where everything is at, and then make little adjustments. And the pieces that I've got so I can get my ratios in check, get the liquidity on the personal side up, not the business, so that I have sleep at night money. I'm more comfortable. And that in itself, just from last night, has changed the way that I'm looking at my real estate, the way I'm looking at the business. And I'm moving around pieces so that all my ratios are in check and I can truly answer that question: how do you never lose it? So hope you found this helpful. If you'd like to see something specific, if you want to go on a little walk on the trails let me know. I can get some videos for that in the coming week because I will be here all week. But hope you have a fantastic weekend, and I'll see you on Monday.
