81 Rental Units at 21 by Doing What 99% of Investors Won’t

Business / strategy takeaways (how Cody builds deals)

• Stay “on brand” with your long-term acquisition goal

  • Don’t chase other asset classes just because they work in someone else’s playbook.
  • Example: if the goal is SFR, don’t mirror an apartment strategy.

• Use a “buy box” and only do deals that support the plan

  • Explicitly: he won’t buy if it doesn’t fit what he and his mom need and/or can be paid off.

• Seller financing as a core play

  • Most (or all) acquisitions use owner/seller financing.
  • Often paired with a second trust/loan to cover the down payment.

• Relationship marketing instead of transaction-first outreach

  • Avoid cold-calling/wholesale with an immediate offer like “I’ll give you $X.”
  • Book meetings/lunch, learn the seller’s story, and build trust so sellers choose to work with him.

• Deal sourcing through networks

  • Leverage real estate/investor proximity.
  • As an agent, he had MLS access.
  • Identify deal “triggers” early (e.g., contracts falling out) and move quickly.

• Focus on cash flow + survivability, not exit valuation

  • He doesn’t obsess over cap rate.
  • He’s not dependent on “exit timing” because he owns assets outright.

• Operational systems + scaling management

  • Start by self-managing using systems/software.
  • Hire out as unit count grows.
  • Eventually in-house property management:
    • Starts a property management company
    • Hires a full-time employee
    • Expands gradually
  • Hire/train people aligned with the owner’s standards.
  • Prefer PM team members who personally own real estate.

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Frameworks / playbooks mentioned or implied

• “Backtrack to principles”

  • Review earlier deals and map them to today’s repeatable principles.
  • “All my principles today are the same as they were then.”

• Relationship marketing playbook

  • Get to the table via a relatable story
  • Book a meeting to understand how sellers got where they are
  • Earn the right to discuss financing/offers later
  • Frame seller financing as aligned with the seller’s motivation (e.g., “pass the torch”)

• Risk management via underwriting targets

  • Prioritizes net cash flow and “day-one cash flow,” even if financing is expensive.

• “Own the asset, not the timing”

  • Don’t over-optimize for exit metrics if you can hold, refinance later, and keep collecting rents.

• Rent stabilization / value-add roadmap

  • Stabilize operations and renovate to support long-term value and future refinance.

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Concrete examples & case studies (what he did)

1) First deal (~19–21 years old): seller-financed 12-plex

• Age: started immediately after turning 19
• Property: 12-plex apartment complex in Washington state (about 3 hours from the Seattle area)
• How it appeared
  • MLS listing with seller financing terms included
  • On market for ~560 days
• Deal execution
  • Called sellers/broker, negotiated terms, and structured seller financing
• Operations
  • Property was “beautiful” and ran well—“on autopilot” for two years after purchase

2) Second deal: 12-plex (worse condition, still owner-financed)

• Timing: bought end of June 2020 (~9 months after first deal)
• Property: two side-by-side 6-plexes (single-level units)
• Price & returns
  • Purchase price: $680,000
  • Seller didn’t need top dollar; implied value closer to ~$800k
  • Cash flow: ~$7,500–$7,600/month
  • Mortgage payment: ~$3,300/month
• Down payment concept
  • Seller finance covered most of it
  • He raised the remainder and used a second lean/equity-backed collateral approach

3) Major deal deep dive: 38-unit complex (MLS)

• Property: 38-unit apartment complex
• Acquisition
  • Found via MLS
  • Purchase price: $2,000,000
  • Seller-financed: seller funded $1,700,000 at 4%
  • Equity partner capital:
    • $300,000 from 3 capital partners (with buyout agreements)
  • He and Christian split renovation costs:
    • Christian fronts renovation costs
    • Cody fronts the renovation portion (as described in the segment)
• Negotiation focus (terms > price)
  • Sellers needed $10,000/month consistent income
  • Tenant non-payment issue required renegotiated payment schedule:
    • First 6 months: $7,000/month
    • After 6 months: steps up to $10,000/month
    • “Extra” payments go to principal paydown
• Rent / value-add plan
  • Rents hadn’t been raised since 1991
  • Collected rent examples ranged: $380–$450–$500–$700–$900
  • Stabilization targets:
    • Conservative base case: ~$700
    • Aggressive potential: up to ~$900
  • Stated value outcomes:
    • If $700 rent level achieved → value ~$3.2M
    • Stabilized value expected around $4.5M after renovations/upgrades
• Exit / financing plan
  • If stabilized to $3.2M, expect refinancing at about 75% LTV
  • Plan includes cashing out other investors while retaining the asset long-term (“keep forever”)
• Renovation learning
  • Rehab costs were ~2.5x his assumption
  • He expected ~$10k per unit but dropped closer to ~$25k/door

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Key metrics & KPIs mentioned (with targets / timelines)

Portfolio / current state

• Total units: 81 rental apartment units
• Experience: ~3 years
• Age: bought first at 19, currently 21
• Financing approach
  • Claim: all/81 units are on seller financing notes

Cash flow / payments (deal-level)

• 12-plex #2
  • Cash flow: ~$7,600/month
  • Mortgage payment: ~$3,300/month
• 38-unit complex
  • Seller note: $1.7M at 4%
  • Payment schedule:
    • $7,000/month for first 6 months
    • then $10,000/month
  • Example rent levels: ~$380 up to ~$900
  • Value targets:
    • Conservative stabilized value: ~$3.2M
    • Aggressive stabilized value: ~$4.5M
  • Refi plan: ~75% LTV after stabilization
  • Rent growth lever: target ~$700–$900 rent range

Financing cost & structure

• Second-lien style financing
  • Interest-only: 12% interest-only
  • Payment rule mentioned: “1% of whatever I borrow a month”
  • Described as expensive but justified by day-one net cash flow of $1,000+/month

Timeline milestones

• 38-unit deal rehab: “in the middle of process”
  • Stabilization targeted within a 5-year principal paydown window (seller note context)
• 38-unit payment reset: step-up occurs after 6 months
• Personal goals
  • Long-term target: 100 units paid off
  • Foundation first, then scale

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Actionable recommendations drawn from the talk

• Act on seller financing opportunities immediately

  • Especially when seller finance terms are already shown (e.g., on MLS).

• Use relationship marketing

  • Approach as: “Let me learn your story and why you’re selling.”
  • Book meetings, build rapport, and leverage existing property-owner networks.

• Underwrite for net cash flow and survivability

  • Don’t reject deals solely due to interest rates if the cash flow supports operations and you can refinance later.

• Structure seller finance to match seller pain

  • Sellers want consistent monthly income.
  • Tenant/payment risk may require staged payments (e.g., lower payment initially, step-up later).

• Operationalize fast

  • Use tools for property management and operations (examples cited):
    • AppFolio
    • QuickBooks
    • maintenance ticketing and 24/7 maintenance workflow
  • Self-manage early (recommended learning period of about ~10 units), then hire out.

• When scaling property management, prioritize culture/alignment

  • Prefer PM team members who also own real estate so they share urgency/empathy around “fix it today.”

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High-level investing / markets notes (execution-focused)

• Cap rate and interest-rate debates can become “musical chairs” problems in syndications (where investors depend on an exit window).
• Cody’s approach reduces dependence on timing by owning assets, then holding/refinancing based on fundamentals and stabilization.

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Presenters / sources mentioned

• David Green (host, BiggerPockets Podcast)
• Henry Washington (“H Washington”, co-host)
• Cody Davis (guest; referenced alongside Christian as a multi-family partner)
• BiggerPockets (rent estimator tool/community context mentioned)

Referenced authors/books (in the “famous four” segment):

• Robert Kiyosaki (Rich Dad Poor Dad)
• Grant Cardone (How to Create Wealth / referenced as a “Grant Cardone fan”)