Cody breaks down how he structures real estate deals with partners, using ownership splits tied to cash flow and trust. He puts each property in its own LLC with a branded name, finds investors through local groups and Facebook, and sources deals through cold calls rather than mass campaigns.
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Hey YouTube, this is Cody and welcome back to Whiteboard Wednesday where we answer your questions that you put in the comment section down below. If you want to see your questions answered, put them in the comment section and I'll see you next week. Starting out today with question number 1 from Derek from Tuscaloosa. What's your typical deal structure? Do you do 50/50 or do you get creative on that? Well, it depends on the deal. And the order of every opportunity you ever look at, whether you're quantifying a deal as a potential partnership, a new relationship, or an actual property, it's deal, debt, equity, in that order. So you start with the deal, and then you have to figure out the debt. And if there's a ton of cash flow, if someone wants to come in as a partner, maybe instead of a partner, they just loan you the money and you buy it yourself. But as an actual partnership goes, The numbers, similar to seller financing, are made up and they're whatever you can negotiate. I've done deals where people front all of the money and I keep 67% ownership and I have it written in the contract that I can buy them out for double what they invested in 5 years. I have the option to. I've also done deals where I've just been 50/50, people front the money. I've also done deals where I'm a smaller owner and I put in less money. I put in a little tiny bit of my own money. An example of that, the Tequila 7-plex. I put in $10,000 and I got 20% ownership. You can do it where you're equal based on the money you put in. You can do it based on if the deal's stellar, you can just keep more ownership in it for no money down. But it comes down to what's the opportunity? Who are you working with? Is there trust? Do you have a solid relationship already? And are you going to take care of them? Because if you do good business and you make sure everyone's taken care of, everybody's making money and hitting the goals that they want to hit, this is all negotiable. Question number 2 from Aaron Sisson: Where do you find investors for your seller finance deals? Well, investors are people. They're just other people that have been in the game for longer than you have and have money that they want to get a return on. And so I've met people at local groups, I've met people on Facebook, and regardless of whether I meet them in person or on Facebook, I don't start just asking for money. I prioritize building that relationship out. I want to learn about where they're coming from, where they're going, and why. Because at the end of the day, I can go find opportunities all day long, but I have to know what's significant to that person. For them to actually want to invest with me. And even if I can get them to invest, it doesn't mean I should. Not every deal is the right opportunity for them, even if they're willing to do it just to help you out. When you start building relationships with people, you don't want to abuse those relationships. You want to put people in opportunities that really get them closer to the end goal in the most efficient timeline. I work with some folks who just want to keep doubling their money, and so I put them into a short-term flip. We go and double their money, and then sometimes if I need to borrow money from them, they're willing to do it because I was out there and I'm really focused on multiplying their money so that they can get closer to their goals. Question number 3: How many properties do you put in each LLC? From Boudica. Well, every property that I own is in its independent LLC. That's not necessarily the right way to do it, but that's how I do it. And every property has a brand, every property has its own theme, and so I give it a name and an LLC that is individual just for that. It's independent of everything else. You can just do an insurance, an umbrella insurance policy for everything.. But for me, I just put it into its own LLC. I also like making different LLC names. I'm not very creative when it comes to that. So my 6-plex is 6-Plex LLC. I'm looking at potentially buying another 6-plex, so that'll be Broadway 6-Plex LLC. And you can just start naming different properties, but I like to keep everything separated. That way I can keep my own P&Ls just for the LLC at the end of the year. Yes, it costs a little bit more to file all of those LLC taxes. However, I just like to keep it separate, keep it clean. That's personal preference. That doesn't make it right, but that is what I do. And then, how do you market for deals from Paint Warrior? Well, I don't do the text campaigns. I don't do email blasts. It's just the set of the meeting. I'm just trying to set the meeting from cold call from Google Maps, and we made a video about that. Everything that I do is relationship-based, and I don't believe that I'm going to build a relationship sending email blasts or sending just a text campaign because none of those are super tailored to that person. It's very automated, or what I've seen is it can be very automated, and I don't really like that. It's not focused around building relationship. That's just focused on, oh, I need to get so many scheduled contacts. That's not what I want to do. And so I just make a phone call when I think about them. If they come to mind, I'm going to give them a call. It's not scheduled, but I'm just finding people that own the big roofs on Google Maps. I'll give them a call. And sometimes small roofs, bought duplexes too. I just give them a call and learn how they got to where they were at. And that gives me the confidence to either go buy from them or buy from other people because I learned from their stories, where they came from, where they were going, and why it was super significant for them when they got to where they're at. And that is more powerful than just texting as far as marketing goes, because now you understand what it takes to get to where they're at and you can go repeat that as far as marketing goes with other people. And then what's a unit from Pierce? A unit is an apartment. So if you buy a 10-unit apartment building, there's 10 apartments in that building. So that's it for today's short Whiteboard Wednesday. These will be longer when Christian's back, but if you have more questions, thoughts, concerns, or ideas, put them in the comment section down below, and see you guys on Friday.
