The ONLY Way to Become a Real Estate Investor

Hey YouTube, it's Christian and Cody. We are back this week to talk about our rules for real estate investing. This week is number 4. Rule number 4 is the quickest way to become a real estate investor is to actually go out and buy a property. Seems really simple. This goes hand in hand with don't add steps, but today we're going to share a little bit of our stories of what it looks like to keep it very simple versus what it looked like for me to take a longer route to get exactly the same place. Cody, how did you get started becoming an investor?

Well, I had to go out and buy a piece of real estate, and so what I did was I went out and bought a 12-plex. Now, some people think that that's just an absolute home run and that I made it rich the first deal. Well, it wasn't quite that. The fact that I had unit count was great, it helped me in the beginning, but the reality is it was just a deal that I could buy. And so when you're looking at real estate, you need to quantify it in 2 questions. How do I buy it? How do I never lose it? The first question comes down to your financing capabilities. If you have a phenomenal W-2, well, this can be a little easier for you. If you don't and you're like me, well, you need to get a little bit creative. Once you figure that piece out, now you transition to how do I keep it? And that comes down to cash flow. And at the end of the day, income needs to be greater than expenses and you're going to have cash flow. And if you can keep it that simple, You just have to find a property. My first deal was on the MLS. And not only was it on the MLS, but it had been on the MLS for over a year and a half. A very long period of time. Anybody and everybody could have bought that deal. And there are deals like that. There's properties out there that sit on the MLS for years in every market in the United States. So the quickest way to go out and become an investor is to look for the opportunity that you qualify for, or don't qualify for, and do it a little bit less conventionally. And just buy a piece of real estate, whether it's a house, a 6-plex, a 6-plex, or anything in between. You just have to buy that first property.

And I want to highlight how simple this really is. Cody, how old were you when you bought your first property?

19.

Okay, did you have a high-paying W-2?

I didn't have a W-2.

Well, that's, uh, that crosses that off. Did you have really high credit to qualify for financing?

Nope.

So you don't need age, you don't need a ton of experience. You need to work with someone who has some experience, but you don't need a ton of experience. You don't need income, and your credit score doesn't matter. It's a non-factor. And those are the common objections that I hear every day of, I don't have enough experience, I don't know enough, I don't have a mentor, I don't have money, I don't have the right credit.

But Christian, what are you going to do when it comes to management?

Well, either you can self-manage For a little bit, when you have a few units, it's not that big of a job. If you're out of area or otherwise just can't or don't want to, find an excellent property manager. They're everywhere.

At the end of the day, just pick your problems. Right now your problem, if you're watching this, maybe you have some real estate or you don't. If you want to become an investor, you just have to buy a piece of real estate. You check that off the list. Well, now you have to figure out the problem of, okay, how do I manage it? But the reality is, when you're getting started, you don't have anything to manage, so you shouldn't worry about it yet.

So I got stuck in the, "Hey, I need to learn more, I need to learn more, I need to learn more." We never skip steps. Cody went through the correct steps to buy the first property. He did his due diligence, he worked on the contract, he got it under the right management. Cody worked on the right pieces without skipping steps. However, you never want to add additional steps, which is exactly what I did. So I started 9 to 5, I was working selling apparel, switched into the real estate industry so I can learn more about real estate. Went to a company called Lands.com, got bought by CoStar, and started working on commercial properties. And I spent 4 years on the other side of the table from owners of real estate, helping them market, helping them expand their portfolios, do analysis. I learned a lot. It was great. It was very, very helpful. And I lost 4 years. I could have learned all the things I needed to learn in that role in the first 6 months, but I got addicted to the W-2. I got addicted to like, oh, well, look at— I have this 800 credit score and I make $200,000 a year. That got me into my first duplex. It took me years, but I bought my first duplex with conventional financing. I went through a bank. My credit score helped. It was wonderful. I got 2 units. And I was a little low on capital after that, so I went hard money again. My bankability and having a bit of capital helped me, and it got me to 4 units after a 7-year sales career, 4 years in the real estate industry. I got 4 units. But then I was out of money and I'm exactly where Cody started. I left my 9 to 5. I have 4 units. I need to scale. I had to get creative. I had to start operating without capital, where the credit score doesn't matter, where I don't have the W-2. The lesson here is you don't need to add steps. Those aren't qualifications to go further. I, since that point, that was 7, 8 months ago.

Wow.

Yeah, I know, right? That went fast. 77 units right now. We're under contract for more without syndicating a deal, by the way.

It's not like we're just giving up all this equity. We're buying it. Our biggest deal is just Christian and myself today.

We are the ones on title if you want to be—

well, our LLC. But if you want to be an investor, you just have to buy a piece of real estate. Yes, you can make excuses But reality is, if you just take the same creativity that it took to create excuses, you can use that creativity to buy a piece of real estate. And it doesn't need to be a 38-plex. It doesn't need to be some monster 367-unit just because someone syndicated it with no money down at 19. Right? There's people out there that have that story. You can own the asset by yourself. And the reality is, if you just bought a 4-plex in a good area, you're probably going to cash flow more than the person that syndicated the 300-unit because they own nothing. I mean, they may own 10, 20%, but you get the point. You can use the same level of creativity that you're using to put up roadblocks and just buy a piece of real estate. And if you want to be an investor, that is all it takes. Just a little bit of creativity, a little bit of focus, and you can do this in any market in the United States. I've seen people do it in downtown Las Vegas or LA, Los Angeles, one of the losses. You can do it anywhere. You can do it in New York. I've seen people do it in Texas. In Missouri. You can do it all over the states, but you just got to focus your effort on— if you want to be an investor, it comes down to buying a piece of real estate.

Now, if you were raised anywhere in this country— I can't speak to every country because I haven't gone through their education system— but if you started in kindergarten and you worked your way into first grade and second grade, you went to middle school, high school, you may or may not have gone to college afterwards. Each place, they don't teach you the straight line from like, how do we get simply from point A to point B? They add a lot of steps to qualifications. That's how you progress. So you're gonna go from step 1 of, hey, you know, I'm learning how to draw within the lines, then I learned some math, and then hey, we're gonna learn some history that may or may not be applicable. General knowledge is great, but it's not where you need to go. So if you want to become an investor, the easiest thing to do is is just map it out. Where am I at point A? For Cody, it was I have no job, I have no properties. For me, when I really started grinding on how do I become an investor, I had 4 units. I had kind of just passively dabbled in it, I got there. So my starting point was I have some experience, I have a little bit of money, not much left, and I have 4 units. Map out your starting point, know where you are starting today, and map out exactly where you want to be. If the things that you are doing today are not directly moving you towards your goal, write out the steps that you have mapped for yourself. If you have 3 more jobs that you want to have to learn real estate, think about how necessary each of those are towards your goal. If you can take out additional steps that you may have added for yourself, you're going to go so much farther. We've been trained to do this all the way through school, through college. If you're in a traditional 9 to 5, You probably started in an entry-level job, and you probably got a promotion, and you're probably chasing another promotion. Do those positions get you to where you want to be? Because at the end of the day, a 19-year-old with no money, no job, can go out and buy a cash-flowing asset. You can absolutely do this too, no matter who you are or where you are.

Regardless of experience on your end or your family's, because I didn't have any family experience in the real estate game. It was me, myself, and I. If you want to do this, you just need to commit to buying a piece of real estate. Forget unit count, forget cash flow size right now. It doesn't need to retire you. My first deal did not retire me at all. It's still 87 units. We'll be at 95 next month. I'm not going to retire. I still got to keep building, and I'm paying off the debts and growing the equity, growing the cash flow. It's not get rich quick, guys. So if you want to play the game, just Play the game, buy a piece of real estate. It is that simple.

If you want to fast-track this, go to themultifamilystrategy.com. We share in depth all of our rules and a lot more on how to build this. If you have questions, ask them for Wednesday. We go over 5 questions from this channel, Whiteboard Wednesday. We are looking for anything that we can do to help you move forward and eliminate steps. So if you have questions out of this video, post them in the comments. We will get to them this Wednesday. If we don't hit them this Wednesday, we'll hit them next Wednesday. Thank you for your time, and we will see you guys in 2 days.