Whiteboard Wednesday trial run: your Questions Answered Live

Hey YouTube, this is Cody. Christian is here with me today and we are launching our first Whiteboard Wednesday minus the whiteboards, where we answer 5 questions in the comment sections every single Wednesday. If you want to see an answer or you have a question that you just are wondering about how we're doing what we're doing, drop it in the comments and we are devoting every Wednesday to posting a video to answer all your questions so that you are up to date on and you have all the information that we have in our heads.

So there we go. So Cody, what is our first question for today?

So our first question for the day from Bo is, could you make a video on how to find these off-market properties without MLS access?

Oh, that is fun. So we actually find almost all of our deals off-market because we go by relationships. I want to know all the people in the market Our main method of doing this is when we choose our market, I will literally hop into Google Maps with Cody. We will look at roofs that look like multifamily. We will throw them into the county assessor's site to figure out what LLC owns it. We'll actually just dive right in, find the ownership, call them, and try to get a coffee meeting, take them out, learn how they did, what they did. But that is how we're finding almost all of our deals.

Yeah, and the goal is like, we're not looking just for a property. We're looking for a new relationship that we haven't had yet. So when we're going on Google Maps, it's almost like driving for dollars. That terminology is in the flipping world. We are driving virtually for dollars, saves us time, and we get to look for a property that would look better with our name on title. And we got to figure out, okay, how do we book a meeting with them? So we're going to look up who owns it on the county assessor. Then we need to find out, okay, how do we get their contact info? Most people have information online, whether it's through their work, it could just be that they are in the real estate space. Some people are real estate brokers or realtors that have their public information online. And so you just got to figure out how to reach out to them, connect with them, and then book that meeting.

And you can get as detailed— what we've done is we've done this long enough where in our target markets we've compiled spreadsheets of here are the owners, Here's what they own, here's their contact info. We know most of the players in our market. This is a really good way for anyone to get started. Drive on Google Maps, find who owns it, document it, give them a call, and start the relationship. All right, Mitch asks, if we were to move to a new state with no connections at all, what would you do? What steps would you take?

If I had to move to a new state, and this is almost exactly how I got started, because where I started investing was 3 hours away from home. Completely new area. I had no friends, no connections. If I had to do that all over again, I would do exactly what we just mentioned to Beau, and I would try and find property owners in that area, and I would find a way to utilize my story to connect with them. Hey, I'm new in the area. My name's Cody, 22-year-old trying to get into the real estate space. I'm completely new to the area and I don't know where to get started. Curious how you got into the game. I would ask for a helping hand. I would ask to see how they got into the space because at one point they were investing in this market for the very first time. They will be able to relate to you. If you are moving and you have no connections, the quickest way to get connections is to call people, to contact support. Just like the quickest way to become an investor is to go invest into something, the quickest way to have connections is to make phone calls and connect with people. Even if they hang up with you, if you keep the contact moving forward, you will get new connections and you will get people that want to help you. This is a little bit of a numbers game, but if you focus and prioritize building relationships with people that don't know you, eventually they will know you and they'll be able to help you do leaps and bounds above where you're at today.

Yeah, and that's the beautiful thing about the relationship marketing. It works everywhere. It's universal. So we can hop into any market and it's the same way we tell anyone else to start. Meet people in the space. Don't ask for sales, just get in front of people. Talk to them about their story. Learn how they did it. Share a little bit about yourself. Once you have a relationship, the deals will start to flow organically. And in any market, this works.

Alrighty, question number 3 from Zachary. Zach is asking how to bring the option of seller financing to the table. He's never done it before, and he's looking to bring up the idea to potential property sellers and owners.

Okay, and this one's kind of two-part. It depends on if it's a listed property or not. If a broker represents it, And this is a question I get a lot. Don't go around the broker. The seller has contracted that broker so that they don't have to sell their own property. Talk to the broker. You want to have a little bit of a relationship with that broker. Build credibility and ask if the seller is willing to carry a contract. Let them do their job. Now, if you're working directly with the owner, which is what I believe this question is probably targeted towards, if you're working directly with the owner, it is all about the relationship. A seller financing the property for you is like a partner on that deal. They have a stake in this for the duration of the contract. I don't want to have partners I don't know or trust. I assume you don't either, Cody. No, no. Build that relationship with them. Make sure that you know what are their goals, what are their objectives. Do they know enough about you to trust you on how you're going to manage the property? Because that's their collateral. Almost every time you do this is you fail, they take back the property. I would like to communicate, these are my plans to increase rents, to improve the property. If I fail, you're getting a better asset back. You make money if I succeed, you make more money if I fail. I am way more comfortable lending to someone like that. That's, that's my two cents on it. Cody, anything you want to add to that?

No. If you can just focus on building the relationship and figuring out how to benefit both parties. Again, this isn't just about the money. There's a point if they can sell or finance something, they own it outright. They may not just need money. They may want to help the next generation succeed, which is how I've been able to scale. I found folks who have more money than they necessarily have time, and they want to be able to pass on the torch and help the next generation up. If you can prioritize learning and then applying what they teach you, just asking the simple question, okay, well great, I appreciate you sharing this with me. How would you recommend I go apply this? How would you recommend I get started doing something that you've done? Let them pass the torch on to you and then work together on building out your dreams and your portfolio. Love it.

All right, Hugh asks whether we own under your personal name. Or under an LLC when you buy a multifamily property?

Alrighty, so I actually own under different LLCs. I have everything separated from each other. Christian has done something a little separately. He's done under his personal name on a couple of the smaller properties, right?

Yeah, my first 2 duplexes.

Okay. That said, straight and simple, we utilize LLCs for all the different properties that we're doing. However, there's a lot of different people and a lot of different opinions on this. If you want to check out someone that's amazing and has some great advice. You should check out Dion. He has these Dion Talks on why he doesn't use LLCs. Different ideas, different perspectives. That said, everything that I own is in an individually owned LLC.

And for me, like my first few properties, it was really convenient. They're, they're not huge properties. There's not as much liability. The most important thing is there's no partners on it. If you have partners you're gonna need to come up with some entity to put the property under, which is a reasonable amount of Cody's portfolio and the larger stuff we own together. If it's just yourself, the best thing to do is just get great legal counsel on how your lawyer thinks you should structure it. We're not lawyers. I have two little properties that are outside of LLCs, everything else in separate entities.

Cool.

Great questions.

Alrighty, Samuel from Sacramento, California. California is having a difficult time finding cash flowing properties in his market. We're also in a pretty close, not quite as expensive as where you're at, but we are in a very expensive market just outside of Seattle. Price is going to kill your cash flow unless you target terms. This is where seller financing comes into play. You can get terms that no bank can offer you. I've seen people get 0% interest loans. Anywhere from houses to 16-plexes. I've seen 2% interest. Christian and I have gotten 3% interest. If you can structure the terms to where they cash flow, you can buy in a great location. You can use that extra cash flow to improve the property, to get your cash flow and your monthly income up. So when you go to refinance it into bank debt, it will actually make sense with lower amounts of money down.

Mm-hmm. Another thing that we've had a lot of luck doing is we actually do invest a little bit out of the major metros. You will have an easier time finding cash flowing deals in other areas. That being said, if you want to invest where you live, don't let that discourage you. We recently picked up a 7-plex right here in the Seattle area. It's hard to make things cash flow. We had the right relationship to get 3% debt, and they moved price just enough where the deal made perfect sense for us. So build relationships. Don't let it discourage you from your market, but I do encourage if you're looking for higher cash flow deals and you're having a lot of trouble, it's not a terrible idea to look a couple hours outside of your market. You typically will find a little bit more.

Yeah. So this said, you can do deals anywhere you want. Buy on terms, not just on price. You cannot outprice yourself out of the market. You should not way overpay for something, but if you can buy a property that cash flows day one, it doesn't cost you a dime, and you're in a great location providing a great place for great tenants, go buy it. And if you guys have more questions, put them in the comments. We are going to be answering 5 questions like this with a dedicated video every single week. Today was a little bit choppy. This is our first time doing this, but as always, we're working on improving. We're going to put out this content so that we can help you guys progress in your journey. And if you haven't already, like, comment, and subscribe. We'll see you guys next time.

I think that was good.

I think it was.