Live from Disneyland

Just done an 8-plex on Friday, super proud of them. But we are going to do a live Whiteboard Wednesday. This will be a short one, and I don't know how many questions we'll be able to get through on here. So, we got some recorded questions to go through from the actual channel. But if you want to see your questions live every single week, make sure you put them in the comment section so that we can get to those next week.

But huge celebration today because again, they just closed on a 10, and now they closed another 8. They're at 18 units. You guys have one more in contract, don't you?

You have another 10 units.

And when does that close?

Do you think?

By the end of the month.

All right. So they'll be at 28 rentals. We had them on the channel a little while ago. They closed out the first 10, closed out the 8. Now they're going to close another 10 and working on a couple of their deals. But Christian, what is our first question for Whiteboard Wednesday?

First question today is, so if they— and this is an owner meeting. So if they ask you if you want to buy their property during your lunch meeting, what should you say? I don't want them to think I don't care about the relationship.

Okay, what do you guys say?

I say if you're at the end of lunch and it's something you want to pursue, then just go for it. But keep going through the lunch. As I said, the relationship's the most important. But if that transaction's still apparent at the end of the conversation, the end of the meeting, then it could be an interesting topic to pursue.

And make sure that you stay true to what you actually want to go accomplish. If you're going in and you actually want to buy the real estate, well then you can talk about that. But that's not our goal. Our goal is to learn how people got to where they're at. There's a point in every relationship where you can do a transaction, but the goal is not to just do transactions, it's actually to build a relationship. Mm-hmm.

That is everything. So if they jump right into the deal and you booked this meeting because you want to learn their story, acknowledge, oh, that could be interesting. What I really wanted to hear about is how you got here, and you can readdress that deal if that's appropriate in that call, but don't sacrifice the relationship early on because that could be just a screen to see if you want to buy something. That's a good way to shut down the deal if you do that too early.

Yeah. Do we have any other questions? Oh, yes, we do. Okay.

All right. We'll see if you remember this. This is from a Zero Down Real Estate 2020. It's one of our earlier videos. Is someone able to better explain what Cody is talking about with the 80/20 split in seller financing? The 80% makes sense. What's actually done with the 20%? I can't connect the dots. Do you know what that's in reference to off the top of your head?

Not off the top of my head. However, if you're buying a piece of real estate and you have to buy it with zero down, That means you need 100% debt or you need a partial bit of equity. So if you got 100% of a purchase price and the seller finances 80%, you need to come up with the other 20. And that 20 refers to the down payment that could be in the form of debt or equity, meaning it could be a loan that you borrow or it could be cash that you bring to the table or bringing a partner on. That's about as simple as it gets.

Yep.

All right. Oh, this is a good one. This is really good. Okay. There's two questions in here. The first one is from Alex Hawk. How come the other guys on YouTube don't make it sound This easy. This is on our recent video with Brandon and myself explaining all the steps to buying real estate. If you guys haven't seen that video yet, I'll do a really quick recap. But once you find the deal, which we cover all over this channel, you have the purchase and sale agreement. We don't do letters of intent. We have a relationship and a conversation beforehand. So you start with the purchase and sale agreement. You're going to do a feasibility period, which is where you see the property, do the inspection, make sure that they didn't lie on their numbers.

People lie all the time.

Mm-hmm. If you're doing a partnership, you're going to file your LLC in this time, open a bank account in this time. And if you have to raise money, if this is a creative finance deal where you're bringing in someone else's capital, you raise the money. If you're going through a bank, you go through underwriting your lending process. Once you're there, you go to final signing.

And I'd like to point out that if you can't explain things simply, you don't fully understand it. And even if you're the smartest person in the game, we're not the smartest people out there. But we've put a lot of time and effort into learning how to effectively communicate what we're working on. Most people know their craft if they're in the space, but they don't always know how to best communicate it, just like their story. And so if you can learn how to keep things super simple and then how to get other people to receive that information, that's the most important piece. Doesn't matter what you say, it matters what you can get the other party to receive. Then it becomes really simple. Most people on YouTube can't do that effectively, especially in short-form content. Where they don't edit.

Now for Caleb and Chuck, step on up here to the camera.

Step on up.

Or we'll bring the camera to you. When you guys started, how long did it take you between meeting us and getting all the way to your first deal?

Closing it? Yeah.

So all the way to—

9 months. 9 months.

Okay. Was this simple for the first 9 months? At first, no.

At first it took a while to understand exactly. But once you get it down, it becomes incredibly simple. A lot of people overcomplicate it.

How long did you go from the close of sale 1 to sale 2?

Less than a month, 2 weeks.

Why did it take 2 weeks?

I understood what I was doing after learning. I just kept it as simple as possible.

Don't overcomplicate this game. Everybody's going to tell you it's super complicated, and it's not that complicated. If 19-year-olds with absolutely no money, where their, uh, their fees for consulting bounced more times than they went through, can actually go buy $1.5 million of real estate that cash flows net-net $5,500 a month day one, Literally anybody can do it, but you got to keep it simple.

All right, there's a second part to this question. He goes, anyway, I'm looking at properties trying to find the owner, but there's a lot of these where the— it's either the agent's name or a corporation or their lawyer. Hard to find the actual owner's name on larger properties. How do you guys get around that?

I mean, you just have to go on to the different sites. If you need to find someone that actually owns the LLC, you can go on to the Secretary of State website, or you can throw it in Open Corporate figure out who actually owns the LLC, and sometimes it's another LLC and you got to keep digging until you find the info. But for the most part, it's public info.

And a lot of times the registered agent, that first contact you're seeing with a phone number, is going to be the lawyer. It is going to be a title agent. It's going to be someone else. They can also be listed as governors, as other members, depending on how the LLC is structured. It's the other names on there, and if they don't have a phone number, you just follow the names. Chuck them right back into Google with the LLC name and the word phone number. You eventually will find it if you just keep Googling every hint you get.

Sweet. Someone said they love your shirt, Christian.

Yes, uh, word to the wise, don't wear this shirt in Disneyland because no one gets the reference and everyone thinks your name is in fact Cody. Unless you're Cody Reb, in which case you can wear the shirt.

Also, Cody Yoder, who we met here in California at VPCon, said glad to see Caleb's using his real name. What was your fake name?

Oh, I was Slobodan— I can't even remember how to say the last name.

I was—

yeah, Todorovich. I was not Caleb Pomelo at BPCon.

Hey, Currently said hi. They said I'm behind you. Oh, Currently, I'm behind you. Hi. Well, come say hi if you're in Disneyland. Y'all are the best out there. We appreciate you. Hope you're enjoying Disneyland, Dory. I'm excited to be back. I'll say hi on Friday if you're at the resort. By the way, if you want to visit the resort, we are rocking and rolling on that. So RobinhoodVillageResort.com. Dory said, Christian, where can I get one of those t-shirts?

Oh shoot. I usually put a link in the description. However, we're in Disneyland, so not doing a lot of editing today. Go to any of our other Creative Finance Lives. I include a link there so you can get your very own Cody Things shirt.

Yeah. Come join the Cody Squad.

It's just an Amazon thing. We don't make them.

Also from Benjamin B. Hey guys, I'm interested in your course. I live in Hawaii though. Do you think your course can help me with the Oahu Hawaiian market? What do you guys think?

Works wherever.

Yeah.

In-state investing, out-of-state investing, doesn't matter. Works anywhere. We did an 8-unit with a guy in Alabama.

I mean, doesn't matter where you're at. Yeah. Alabama, Texas. You guys bought a couple deals in Texas now. Yeah. We did it in Seattle. And most people are like, oh, you can't do it in an expensive market. So we bought in Tequila, which is rather expensive. But this thing's doable anywhere. And apologies if it's super shaky and bad audio because I've never done it like this before. All right, from Boomflix. I had the meeting with the seller Monday and it went well, but the area is really tough and my chat went away. Magic. And my mentor told me not to touch it. Yeah, I wouldn't buy in a really tough area. It's easy to fix a property, a little less easy to fix a location. Do we have any other questions?

I have nothing else in the chat other than, uh, we covered this last time, but we have more comments regarding how the heck do you arrive at a negative cap rate? It's not possible. We'll look at this one more time.

Okay, algebra. Yeah, simple math. If you have a negative NOI Oh yeah, we're getting income.

Yeah.

And we went on the Millennium Falcon VM. They're talking about the rides.

Facts.

If you have a property that actually loses money, it's fun to live in pro forma land and say that everything makes money day one, but that's just not true. There's a lot of properties out there that actually have a negative net income, meaning that your gross income, what you actually have scheduled to come in on an annual basis, less your operating expenses, that can be negative. It's fun to live in pro forma land with all the real estate agents, but most of those real estate agents don't own a whole lot of real estate if they're living in the pro forma space. So you got to make sure that you're buying real estate that makes sense today. You can buy negative cap rates. A negative number divided by a positive number is in fact a negative outcome. And some people on the channel keep stating that, and that's not true, but it's like, well, look, it is true. And it's algebra. So make sure you're doing your math right, 'cause negative cash flow sucks. All right, from Simon, find the owner's number on OpenCorporates, keep consistent action by calling and getting those meetings, people. Let's get wealthy together. Well, Simon, take over the Moses Lake market with me. From GX Cody, just wondering, to get into consulting, would you recommend me getting your multifamily course too? I happen to be from Texas, also 20 years old, working from construction. Well, before you do that, You should message these guys. Yeah, you should message these guys on Instagram. I mean, of course I'm going to be biased and say you should do it because I know it works and we've proven that it works with a lot of people. However, you should chat with the guys that are actually investing in your market because it turns out the people that own real estate in the market you want to be in are more knowledgeable than even myself. I know the strategy works, but shoot these guys a message on Instagram. What's your Instagram, guys?

Chucky_Sotelo.

I should be in some of Cody's and Christian's Yeah, if you look at our post, you'll be able to find it. But then what's yours?

Yeah, I'm Caleb.Hommel. Just hit us up, we'll answer any questions we can for you guys.

Yeah, if you want to be in the Texas market and you want to invest with the youngest people in the space that didn't inherit a dime, these are the guys. They own more real estate than I did when I was 19. They've got a lot more cash flow than I had when I was 19, and they're gonna freaking blow up to 100 units in the next 6 months. Simon, I'll get there, brother. Won't be long now. Drop the grams in the video. You guys can comment your own Instagrams in the video.

I'll probably do that. Yeah, I'll probably get some edits in either tonight or tomorrow. So if you don't see it immediately, you too comment your socials. Everyone follow these two. They're gonna try to compete with us next year for who can have the most units, and they, they will, uh, they'll do pretty well.

However, we're gonna knock it out of the park. I don't know, maybe we'll pass up the coach someday.

Keep it friendly competition for now.

Friendly. Alrighty, well, that's it for this live. We're gonna go ride some rides and enjoy Disneyland, maybe get a churro. But if you have any questions, we're going to be back to normal. We're back. I'm gonna be at the resort next week, but, uh, make sure to tune in for all the videos. We appreciate you hanging out, and as always, have a phenomenal rest of your week.