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Short Summary
Main recommendation: Buy a larger property, ideally with seller financing and zero or low money down, then repeat the same principles on every deal, prioritizing "deal first, then debt, then equity" and only buying assets that cash flow with long-term fixed-rate debt. The speakers say they turned a single 38-unit property in Central Washington from a $2 million purchase into an asset worth $4.2 million by negotiating seller financing, raising a small remaining equity portion from investors, and renovating the asset.
Key Points
- The speakers say they got started with seller financing and zero money down; one had 30 apartments, the other about four units after a decade of conventional saving.
- Their capital limits pushed them to "buy bigger," partnering on a 38-unit property that had been on market for 13 years, listed at $2 million.
- The property had a negative cap rate on day one, poor collections, and needed a new roof, plumbing, electrical, and septic work, so a bank would not have financed it as-is.
- Cody brought market experience managing similar properties, while Christian brought more capital and experience running teams and the business side; they renovated the property over time.
- They say within 9 months, then another 9 months, they made seven figures each on this deal, and within 6 months of partnering they became millionaires (starting around $400,000 each), now worth over $3 million each after less than two years partnered.
Details Worth Noting
- Concrete instructions:
- Identify your market, then identify the key players in it (investors, operators, brokers).
- Call and meet those players and learn exactly how they built their portfolios.
- Repeat their proven method in your market, rather than starting from scratch.
- Negotiate the deal first, then the debt, then the equity, in that order.
- Ask sellers to finance the purchase; in this case, the seller offered $300,000 down with a $1.7 million loan at 4% interest.
- Raise the remaining equity last, since most of the deal is already negotiated by then.
- Set principles upfront and do not violate them, such as buying only on long-term, fixed-rate debt that cash flows, and pursuing cash flow and equity growth together.
- The equity raise took about four phone calls and roughly two to three days from pitch to commitments, with three investors each contributing $100,000.
- Renovations totaled about $600,000; the property was refinanced with a $2.3 million loan and is now worth about $4.2 million.
- After the first deal, the partners closed a seven-plex in Seattle within two weeks and a six-plex in Moses Lake, Washington a week later; they now report 148 units.
Bottom Line
The core lesson is to partner with experienced local operators, use seller financing to acquire the deal before raising equity, and stick to strict cash-flow principles while scaling. The video shares the speakers' personal account of how they scaled their portfolio using seller financing and strict investment principles.
