How to Invest in Real Estate at Any Age – Seller Finance 2022

In this short video Cody Davis explains exactly how he surpassed 100 rental units without syndication, starting capital, family money, or experience in real estate. We cover two different perspectives on how to invest in real estate at any age. We originally filmed this for Dion Mcneeley’s channel to feature seller finance techniques but we had trouble transferring the video. So you get to see it here!!! Sorry Dion. Cody goes deep into our strategy to acquire multifamily properties seller financed.

Howdy welcome back to dion talk today i want to talk to my friend cody davis who is killing it in real estate and at the age of are you 22 yet 22 22 has how many units 105 105 units all acquired i believe with seller financing a very creative way to get around things like higher interest rates and your income mattering your debt to income ratio mattering things

That are barriers for most people that want to invest in real estate so what i want to do is just cut right to the chase cody and ask you probably three different questions the first one is how do you find your sellers for your seller finance deals because that’s something that’s tripped me up a lot of times yeah so dion when i’m going out and trying to meet with

Property owners people that could sell to me in seller finance i’m actually not calling them to try and buy their property i’m calling to learn how they got to where they’re at because what i’ve found is that the store is more powerful than the real estate and i can learn from that and use that to grow as a byproduct of learning from their story a lot of them got

Started with seller financing and so i was able to leverage that story and go out and actually buy real estate from them and from others exactly that way okay so probably a little easier to talk to somebody if you don’t come with a sales pitch on when you take your asset from you yeah i don’t ask anybody to sell to me my goal is hey how did you get to where you’re

At because you’ve done something i’ve never done and i approach it with the mind of a student instead of a buyer okay so that was the first question well so that’s how you approach them how do you find them so i find everybody on google maps okay yeah because there’s a map online google maps that has every property i ever wanted to buy on it so i figured okay

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I can just find the ones that i like and then i just have to find their phone number online and give them a call okay so almost like skip tracing to find their phone number yep okay and then you approach with the idea of building the relationship and seeing what you can learn from them how do you transition from i’m learning from you to what kind of a deal would

Make it worth you selling your property so once they’ve gone out and they’ve shared their story with me and i’ve shared my story with them we’ve shared goals what we’re working on why we’re working on it i then ask how they recommend i’d go about accomplishing my goals because at that point i’ve outlined what i’m trying to do why i’m doing it where i’m coming from

And i’ve learned about their story i’m just asking them for recommendations on what to do next how should i go out and apply what they shared with me because what i found is one way to build trust is to get an actionable step and then go apply it and let them know you did it that actually works for me if somebody’s ever reached out and asked for some mentoring or

Coaching if you if i give you advice and then you come back and say hey i did what you recommended what’s next you’re more likely to get some attention from somebody who you’re trying to mimic okay how do you determine if a deal is good enough to pursue as a seller finance deal well i only have two questions that i have to ask how do i buy it and how do i never

Lose it and so once i find the deal i have to figure out the debt if the seller’s willing to finance 100 of it and it cash flows then i’m going to buy it typically they’re not going to do 100 so i have to figure out okay can i do a down payment and if i borrow a down payment with expensive interest will it still cash flow because it’s one thing to go out and buy

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The deal but if i can’t hold it for super long because it’s a short term loan it’s not long term fixed rate debt or it just doesn’t cash flow then i’m not going to be able to hold it very long because i’ve never had a real job i’ve had a lot of jobs none of them are real how do you pick the interest rate and the terms of your seller finance deals because i think

This is something that we would do differently yeah i just make sure it makes sense i don’t want to lose the property so i just write it where it cash flows if it’s three percent interest and it cash flows i’ll do it as long as it’s a long term note i can afford to overpay for something on a 30-year fixed rate mortgage if they finance it at 2 interest so i can

Compensate with that for time i just want to make sure it cash flows okay and how are you handling balloon payments or those kind of things because that’s something i haven’t done that’s the one thing that has stopped me from getting into commercial loans or yeah or any type of loan where i don’t know what’s going to happen in five seven or ten years yeah so my

Typical balloon is 10 years or greater i have some that have no balloons they’re fully amortized for 30 years i’ve got some that are 15 years but the way that i underwrite is i make sure that if i took all the cash flow and hammered the mortgage i could pay it off in the balloon payment so i have some five year balloons i’ve got one on on the 38 plex i could pay

It off in five years if that’s all i focused on okay um and this is this is so it’s just my thought to you when we’re talking to the sellers sometimes they haven’t considered seller financing and what we speak into existence is what happens yeah and a lot of times people will say things like well i don’t want to do seller financing because i have to pay more

Interest rates or higher interest rates well there are people like michael zuber who’s done a zero percent interest rate because the price is what mattered and for a lot of the sellers that i talk to when i’m thinking of coming at them with the idea of seller financing i only talk 30 30 year fixed rate debt because a lot of times they’re trying to avoid that

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Capital gains hit so with your five-year balloon payment you’re actually just postponing their capital gains at five years but it does depend on what the seller wants and i think that’s the main thing to look for and you can push the balloon back it’s not all set in stone i have a five-year balloon that we’re likely going to extend 10 more years and it’s just a

Seller refinance we can readjust the note terms we can make addendums we just have to all sign off on it and what i’ve found is that yes you can do it for the tax benefits however that’s not the main reason people would do seller financing anymore it’s a lot easier to pass on a note than it is to pass on a property because they don’t have to manage the note and

We’ll give it a second because i’ll edit this out we’ll wait for go ahead yeah these actually don’t catch a lot of that it’s pretty cool it’s pretty amazing nice i’ve got the other mic in it it picks up lawn mowers and stuff like that okay so um that’s atrocious he’s doing like two miles an hour there’s an outtake for us that’s great okay so the main takeaway

That i want people to look at is first you can be as old as a dinosaur or just starting out or dion’s age and there is no one right way to do this there’s a one right way for you so you need to look at different content like check out cody and christian multi-family strategy they have a course they have a youtube channel where they put out great content if you’re

Looking to do what cody’s done and i i think you should check it out um and i’ll edit this out you think i’m missing no that’s great all right so if you’ll wrap up now by saying until our next video thanks for coming to his dion talk until our next video thanks for coming to his dion talk cool throw a little bit of humor out there

Transcribed from video
How to Invest in Real Estate at Any Age – Seller Finance 2022 By Cody And Christian – Multifamily Strategy