From College to 2 Million Net Worth at 28 Years Old | Cody Tuma

Cody tuma, my brother. How you doing, buddy? Man, I am back from Brazil. I had a whole two week trek across the country, which resulted in nine flights in 14 days. And then food poisoning on the way back. And then as I got food poisoning, I had to get on a 5am flight to get home. And I'm texting Cody, and I'm texting everyone. For people listening. I'm texting Cody, I'm texting everyone. And I'm like, guys, I don't know how I'm gonna do this. I'm puking, I gotta get on the plane. I was literally doing positive affirmations in my head. I was like, you're healthy you are? Well, you've got this. And that was my entire time. And then I somehow made it on the plane, 10 hours, another plane five hours back in Atlanta last night. And now I'm doing the number one thing I wanted to do when I get back. And that's talk to you, buddy. So I love that I can be your reason to get you healthy to get back to United States that we you and I can sit down and do this podcast, man. It's been a long time. Yeah, brother, I'm very excited about it. So I'd love to hear your backstory give us like a 30,000 foot view about where you started, how you got into real estate because I know where you're at now about like to be able to understand where you came from, and how you got started as a realtor even and how you got started in all this spec homes and all the things that you're doing currently. Yeah, yeah. So I've always been an entrepreneurial type person, I've just always had that entrepreneurial drive. Even when I was in college. I don't know if you even know this. But I was running an online e commerce Store where I was selling like these electronics, importing them from China. And then eventually I started like labeling like getting brand name labels and had my own brand going and got like a software developer and him and I partnered up together on a product and had this like this electronic device that it was like a like a Roku or an Apple TV. But it was like way ahead of its time. And this thing was pretty sweet man, you could do all sorts of things with a watch, like free TV and like record live TV, and all this stuff. We ended up taking it to Las Vegas at this electronic showdown there, the thing was like blowing up, and it was pretty awesome. But unfortunately, like just a bad turn of events. And then just some stuff happened. And my partner ended up passing away, which was just like a huge shocker for me. And I took a step back from being involved in this industry and that, you know, whole aspect. And I was like, wow, what do I really want to do, I'm about to graduate college, and I just this business that I've been in for a while is falling apart now. So I graduated from college, and I just not sure what direction I want to go. So I go and get a real job. And I go work for somebody else. And I've really, for the most part had worked for anybody for a long time. So I've always just been doing my own thing. And I worked at this startup for should maybe it was like, three, three to four months, and I'm working for the startup and I'm just making terrible money. Like I think my salary was like $30,000. And I mostly just took it for the experience. I didn't really necessarily take it for the money. But but the whole time that I'm working for the startup, I just feel like I'm building someone else's dream. Like I'm making someone else their brand name and their company huge, where I've always been the type of person that wants to build my own thing and build my own kind of destiny, and all that sort of stuff. So I quit that job. And I just wasn't sure where to go from there. And a family friend of ours was a real estate agent. And I was like maybe while I'm trying to figure out what I want to do with my life, maybe I'll just pick her brain and think about becoming a real estate. And so I talked to her, she tells me oh yeah, being a realtor is great. You get to pick your own hours and make about $50,000 a year and I was like 50,000. That's not terrible. But it's more than I was making at my last job. And it gives me a little bit more freedom and figure out what I want to do next. And so I ended up getting my real estate license. And my first client was my brother and he's now let you sell my house. And so I sell my brother's house. It was about maybe took me two months to sell my brother's house and I made$10,000 off of it was like a$400,000 house and I was like, wow, that was the easiest money that I have ever made. I love being a realtor. Like why doesn't everybody do this? This is amazing. And then a couple months go by and I don't have any other sales. That was my only sale and I was like okay, you're telling me that being a realtor. You can't just go into it and then just have People pop up and just continuously do this. No, I that's what I thought it was. I was like, my brother wanted to list with me, that means that everybody's gonna come to me and want to list and buy a house for me. This is amazing. But no, that that is not how it works, unfortunately, wish it was. And so I'm two months into this thing. And having sold another house since and I'm like, Okay, what in the heck am I gonna do? I can't sell any houses like how do you find someone that wants to buy or sell a house? This is crazy. And a couple months more go by. And I was like, You know what, maybe this isn't quite for me. Maybe this isn't what I want to do. But I hear from somebody else that they're selling timeshares. And they're like, Oh, you got to go sell timeshares. You can use your real estate license. You can make all this money. Oh, there's a guy up there. He's making 400 grand, you got to go up there. I go on an interview with these guys. And they promised me the world and all that stuff, and I get a job selling timeshares. And you have to be in the state of Oregon, you have to be licensed real estate agents sell timeshares. And so I go to this company, and it is absolutely not at all what I thought it was supposed to be. I felt like it just dirty. Like I felt like I was selling my soul to sell these timeshares. And so I just felt like I was just a bad person by working for this company and selling something that I did not believe in at all. And I was like, You know what, screw this, I'm going to go back to being a real estate agent, I just need to actually put in work and figure out how to make this work like It's do or die. So I quit that company and go hang my license up at another brokerage, where someone is a top performing agent there. And I just pick his brain on everything from how he got started and how he built this mega team. He's got like 75 million in sales at the time. And I was like, I want to be like you how do you do it, yada, yada. And essentially, what helped him get started was he just started dumping money into online leads. And he did a lot of Zillow and realtor and all that stuff. So I just took all the money that I basically had saved up over the last couple of years and put it into online advertising. And I like you, if you get someone in front of me, I can sell them. And I just started talking to these people that wanted to buy houses. And one thing that's always been really good about me is my communication skills and following up with buyers and sellers and whatnot, and always answering the phone. So I quickly rose to one of the top agents in my office like the year that I actually took real estate serious. I did about 10 million in sales, which was like pretty crazy for being a newer agent. And every year it started to increase and go higher and higher every year sales volume. And I did enjoy being a real estate agent. I'm still a real estate agent now. Let's pause right there. Okay, sorry. Yeah, that was that's a lot to unpack. Let's pause right there. Because people are listening in the car right now. They've got the coffee. They're jittery right now. They're listening. This guy's got a lot going on. This guy's exciting on here more about this. So Cody, so you started off at excited at the possibility of making $50,000 as a realtor, What year was this? This was 2016 2016. Got it? Okay, so it is the year 2022. And how much you gonna make this year? As a realtor this year, I will have closed about 27 million in sales volume, which is a little over 500,000. Okay, cool. So, casual 500,000. Got it. Love it. That is a Tenex from what you were originally excited about? Yeah. Let's take a second and simmer on that. Because I think that's something you said that was very important that a lot of people gloss over. And that's the, that's the theory where whenever you start something, you go through multiple phases, right? You go through the enthusiastic beginner, or you don't know what you don't know, the world is your oyster, you're like, I'm gonna do everything that it takes to be successful. And then you get punched with reality where they're like, Hey, this is what it takes to be successful. And then you go through and then you start doing the inputs that you need to be successful. And then you go through what's called the valley of despair, to where you don't see any of the results yet, but you're doing the correct things. You don't see any of the results yet. So then your mind is like I'm putting in work, but there's no result associated with this. So then that's where most people quit is that valley of despair, and they go back to phase one where they become an enthusiastic beginner again, which is what you did with timeshares. But then you decided to go back thankfully to real estate. And then so you'd already been through that valley of despair. So this time you go to a person that Like has been there, done that. And then you ask them their advice. And then all of a sudden, once you get to that valley of despair, you get to you get to the progress side. And then you get to the abundance side. And then you're off like a frickin rocket ship. And now look at you here, in 2022. And you Tenex Yeah, let's go Virtual High Five brother. Yeah, man, like 100%. And what is so interesting, too, is I didn't even think that real estate and being a real estate agent was anything that I wanted to do. I, uh, it was like one of the last things that I've never really thought about doing. I'd always thought I'd be more involved in like the tech space, or do maybe computer programming or something. And never did, I think that I would become a real estate agents, which has led to so many other doors that it's open for me. And I just remember to, I thought when I was younger, even in college, I was like, if I made six figures, just over six figures, that would be amazing. Like, I, it's just, that would be just the coolest thing ever. And yeah. And once you cross that threshold, it's like, Okay, what's next? What's next? What more can I do? Yeah. Oh, that was a wild story. I didn't even know about the tech part where you're your friend. And that's a horrible thing to hear from that side. But that also is just a testament to how short, there's nothing guaranteed here with any of us. No, there's no guarantee you're even going to make it to 65 to retire. So that's why I love your story so much, because you're so young. And you're getting after it so quickly. And that's why me and you were good friends. So before we get into your investment side, I want to hear a little bit about your philosophy when it comes to all of this because how old are you? 2929. And right now, I feel that you're doing a good job of going in enjoying your life along the way. How do you balance being a successful person in your job? A successful entrepreneur and a business owner? How do you balance all of this with your lifestyle to be able to enjoy the ride as you're going on it? Yeah, and that's one thing that I would say that I've probably been working on and something that I continue to work on. And I think one of the biggest things is that if you actually like, sit down and take the time and clear yourself of the distractions, and actually focus on the dollar producing activities, like I remember, when I first started as a real estate agent, I would spend way too much damn time on making sure my business card looked great, making sure my website looked great, making sure my email signatures were awesome, like just spending so much time on these things that actually were not dollar producing activities, instead of being in front of buyers or sellers and making calls and doing things that are actually going to make the money. So I think that just having a different mindset of just because you're working doesn't really mean you're working on something that's going to make you and you don't and I almost had this mindset where I felt like I had to like stay busy doing something otherwise, like I had a hard time like stepping away before five or 530 at night when I would stop working because I feel guilty for it. But if I actually take a step back from that, and it's okay, if I spend a solid four or five hours, maybe it's two hours of prospecting on the phone for expired listings or following up with clients. And then just doing these super high level dollar productive activities in a four or five hour period, it allows me to actually accomplish significantly more throughout the day, and just clear yourself from the distractions. And then when it's time to take like a three, four day trip or whatever. You've got a lot of stuff done from the week prior because you took the time to do all of these high level dollar producing activity type things. So yeah, that's kind of how I'm working through that stuff right now. That's awesome. And I came to that epiphany, a year or two ago myself where I was like, it's your condition to think that you have to do this 40 Hour Workweek. But if you ask the question, the quality of your life depends on the quality of the questions that you ask. Right? Yeah. So if you ask the question, I challenge you listening to this right now to ask the question. What if you could do your job and 20 hours a week? If you could do your job in 10 hours a week? What does that look like? What would that look like? If you did your entire week's worth of work and 10 hours? What would that look like? What would you do? And whatever your mind instantly goes to is probably the answer of the things that you need to be spending your time on. And then I had Daniel Ramsay on here who owns a bunch of companies. And he talked about the sticky note challenge where he walked around, and he literally would document what he was doing on sticky notes. And then so he could be able to send out to his virtual assistants. But then he realized that 70 70% of what he was doing was bullshit. Yeah. And he was like, This doesn't even need to be done. Why am I even doing this? Yeah, oh, man. That's a great lesson in and of itself. So you're a successful real estate agent. I want to hit on this in a couple of different sections, because I know you're pretty well, we're good friends, I want to start with the spec homes, because the spec comes was always something that was very interesting to me. I didn't quite understand it fully. And I feel like people that are listening to this may be an asset class that they can go into where it's been very lucrative for us. I'd like to go into this for about 10 minutes. And then we can go into some of these other asset classes, and do this as a financial breakdown. Because I think that would be super beneficial. So let's back homes, how you got into it? And then what's the profitability? And what's the process here? Yeah, 100%. And for your audience, for those that don't know what a spec home is short for, like speculative home, like, You're speculating, you're going to build a house and make a profit. So that's where the term spec home comes from. And how I got into that was just so random. But it has led to so many different things and opportunities that it's just like I was thinking about this driving home the other day, it's a How did this all kind of STEM about and really where this comes from, is, I got this seller who wanted me to help list their manufactured home. And in my market, there's not a ton of manufactured homes, it's a pretty higher end market, our average price point, and I live in Bend, Oregon. For those that don't know, our average price point is around like $670,000. And at the time, when I took this listing about three and a half years ago, it was a manufactured home, and the seller wanted $215,000 for any said, Cody, if you can get me$250,000 For this property, I will be ecstatic. And I think Ealer be the best real estate in the world. And so I just wanted to do whatever I could to help this guy out and help him get his property listed. So I list this guy's property. And within about three weeks, we get a buyer that wants to buy this property, He offers us 200. And I think it was $10,000 on it, which is five less than the guy wanted and the guy was ecstatic. So we go under contract, and the buyer does his due diligence on his property. And during his due diligence on this property, keep in mind, something I forgot to mention was there was these tenants in this property that were very difficult tenants to deal with. They didn't keep the property up, like the property was trashed, there's trash all along the property. And it just unveils just a nightmare of issues that is wrong with this manufactured home. The biggest thing that it unveiled is the property needed a new septic system. And in this area, you have to put in a special septic system because the water table where the river is close to this property, there was all this black mold that was in the trusses. And so it needed a new roof, there was just mold issues everywhere. And the buyer was like, I'm sorry, but I'm going to back out like this is too much. And so we lose our buyer and our seller, my seller, my client is pretty desperate to sell his property. And he's pretty, he's pretty devastated. He's an older guy, and he really wants to just move on to the next chapter of his life. And he says to me, he's like, Cody, I'm really disappointed in this. I don't have the money to put the money into fixing the place up. Do you have any investors that you can help? That would just pay cash for this and I can just move on that we'll just do a quick close. So I start strolling through my rolodex of people that might be interested in this property. And I find some guy that I know is a friend of a contractor. And he's, yeah, I'll give you an offer on it. And so he writes up this offer and as a real estate agent, you have to present every offer to your seller. And this was a really lowball offer. This guy writes the offer up for $90,000. And keep in mind, the seller originally wanted 215,000. And so I get this offer. And I presented to my seller, because I have a fiduciary duty to present that to my seller and my seller. He I tell him this and he goes silent and he's just wow. How quickly can he close? So he's actually thinking about doing this and I was blown away that the seller would actually entertain this, but I guess it comes down to you don't really know what someone would take or what someone's situation is, unless you go through the process. And he's going through the motions of that. All possibly entertain this. And so give me till tomorrow and then I'll give you an answer on it. And I'm thinking to myself on like, $90,000? What if I just told my seller all buy it, I have no experience and no idea what I'm doing when it comes to fixing and flipping anything. But what if I, what if I buy it and figure it out. So I tell him that I said, Hey, I'll give you $100,000. And I'll close on this thing in a couple weeks. And you can just walk away from this property. And he agrees to doing it. And I ended up getting a private money loan on this deal, or it's just$1,000 a month, just flat interests. For I think it was like six months is the deal that I got for 100 grand. And then I was just going to use my own funds to fix and flip it up. So I get a contractor who is a friend of mine, and I get to work on this thing. And I learned so much about doing a fix and flip, then I hired a general to do things that I was spending way too much money on, I didn't get fixed costs on things like he had guys out there that was like taking trash and raking leaves. And he was charging me like 60 bucks an hour. And it was just like, dang, that's that seems like not a great use of money. And so I learned a lot about dealing with contractors and project management as a whole. But I ended up getting this thing fixed up I spent about should I think I spent probably about 75,070 to 75,000 on this thing to get it fixed up because it needed that new septic system needed a whole new roof I put on, I gutted this thing down to the studs. By the time I was done with this house like this manufactured house, it looked it was dialed in. I was it was really nice like it. So I ended up selling that made a profit of$57,000. And on my first flip, I was ecstatic. I was like, wow, that was a lot of work. But shoot 50 grand, that's I gotta sell a lot of houses to make 50 grand. I was like, man, maybe this real estate investing thing is maybe there's something to it and at the time, right? Yeah, it's all right. And at the time, I started listening to a lot of bigger pockets, because I'm in the process of fixing up a house. And I was just curious on learning more about it. So I started listening to a ton of BiggerPockets podcasts and just really taking a ton of information from that. And this particular area, I had really not spent much time down it was a area south of where I normally sell houses. And I was like, Wow, maybe this area is doing big things. Maybe this is an up and coming area. And I was working with another client of mine who was building spec houses and I was selling those spec houses for that client. And I thought to myself, What if I just bought pieces of land down in this area? Because there was a ton of land? And what if I just tried one with the profits that I made from that deal and and see what can happen. And so this kind of leads us into right pre COVID, when I'm start exploring the idea of doing spec houses, and I start researching the areas trying to find land, and I didn't want to pay market value for these pieces of land. And what I did was I pulled a criteria from an area that's nearby. And my career criteria had to be that this particular area was buildable lots where you could build on it. And you didn't have to do septic systems. And you didn't have to do wells. And it was just easy build for the most part is just clearing trees and getting the lot ready to build. And so I pull this list of about 150 landowners, and I just start hitting the phones, I start skip tracing all of these property owners and trying to see if anybody wants to sell. And I came across this guy that said that he had thought about selling he didn't really remember he had this piece of dirt. And he's let me talk to my brother him and I own it together. And then maybe we can do something on it. And so we came to a price $90,000 for this piece of dirt. And he's like, Yeah, I'll sell for 90 grand, let's do it. And this is right before COVID really became a big thing. And as for all the shutdowns and all that stuff. And so I lined up the dirt, but now I gotta find a builder. So I start interviewing builders of who I'd want to work with. Since I'm a realtor. I've been a realtor at this point now for a few years. I know a lot of the different builders and stuff. And so I start interviewing and talking to some builders and I find this one builder who sounds like a great program. Their prices are very transparent. They're pretty well known and I talked to them get pricing from them. And it all sounds really great. And I was like, You know what, yeah, let's do all those things. And then COVID happened and I was about to pull the trigger on everything and COVID just came in like a wrecking ball and The real estate market was in complete disarray. Nobody knew what the heck was going to happen. I thought that the market was totally crashing. But before all this, as a real estate agent, I was about to have a record year, like sales were through the roof, I'll sell more houses than ever. And this all just came to a screeching halt. Nobody knew what was happening, buyers were canceling escrows, left and right. And here I am about to spend 400, some $1,000 on this spec home project. And I put the brakes on that because I'm freaked out on what's going to happen. And about a month goes by and things aren't much better. And I'm just like, wow, this is crazy. Do I really want to do this? Do I really want to proceed with this? There's so much uncertainty, and what's going to happen? And I just roll the dice. And I was like, How can I get creative with this because I don't have all the funds, I need to pull this deal off. So what I ended up doing is I ended up working a deal out with this landowner where he covers the entire note on the property where I take possession of the property, I get to own the property, but he, you know, has the owner carries the entire thing. I didn't have to put $1 down to close on this lot. And I told him, for whatever reason, this deal goes upside down, you get the house, I'm building a 300 some $1,000 House on here, and the deal falls apart. You can just you know, keep the house. And he's How did you negotiate that? So how does that benefit him? Besides? Yes, I told him that I would give him because there was uncertainty in the market right now. But there wasn't a whole lot moving. Yeah, there was a gap there. Sorry, yeah, there wasn't a whole lot moving real estate. With what was going on, especially in this area, it really just all slowed down. And I told this guy, I said I, you and I agreed on $90,000. But there's a lot of uncertainty in the market, I don't know what's going to happen, it's a gamble if the deal falls apart, you get get the house that I'm building, and I will pay you an additional$10,000 When this house closes if you do this deal. And so instead of 90,000 up front, he got $100,000 When the property were to sell, and for him he was just sitting on this property for years never done anything with it, he gets an extra 10 grand on the property if the deal falls apart, he gets to keep the house that I'm building. So for him it was a good deal for me it was a great deal because I don't have to come up with 90 grand I can just use my own money to build this house. And so I just put all the events in motion, get the property in my name, assign the paperwork, the title company sign all of my documents with my builder to get this thing rolling. And the first part of this like my responsibility is to get the lot like shovel ready and essentially what that means is clearing all the debris from the lat removing trees, getting utilities and stuff connected set up all these things so that way the builder can come in and put the X or the foundation in and start building vertically up from there and yeah, I went to town I personally went out there and took down trees I had a chainsaw had some equipment and I was I was taking down trees doing this all this stuff myself at the same time of running high producing real estate operation as well. And so I just Just experiment to see what what would happen and so I get ready to go big Cody this made Cody is selling houses taken off his tie and then going to be in the lumberjack part time. Yeah, honestly, that's what was happening. And you know, and around me the whole world is freaking out man with all these shutdowns. And I'm just focused chainsaw on getting these trees down and getting ready to go on this property. So I get it all cleared and the builder starts doing his thing and it was from there. Once the lot was shovel ready. It was pretty hands off because I I really didn't have to do anything the way that I have this setup with the builder as soon as I did my part with getting the last shovel ready. The builder took everything from there like they they general the deal. They all the subs, all that stuff. All I did was write him a check every I think it was like every 6090 days. And they just continued away. And they built the house like 30 days ahead of schedule, which was crazy. This was before all of the crazy supply chain issues actually built the house quicker than I thought. And what I also forgot to mention as soon as I ate all of these deals and paperwork and all that stuff to get the build going and own the property. I listed this property before I had permits on the house before any of those things. And I had this property sold within four days of listing it when it was just dirt and trees and all I did was just list what it was going To be listed the specs and the square footage, but people could not see really what this house was going to be. But somehow I sold this property four days after listing it for the exact price that I wanted on there. And at that price point that I sold it that would have resulted in a$99,000 profit. And I was like, wow, okay, this is awesome. So okay. 99. Okay, so that's 99. That's 99. Net after 99. Yeah, after everything, I walk away with $99,000. And you had a seller carry? Yeah, it carry. Okay, so how much so you had no money down. I had no money down on the land. But I brought the construction cost. So it was like the construction costs and like establishing like permits, and utilities and all that it was around close to 290, some 1000. I don't have the exact numbers, but it was somewhere around there. And, and so all I had to do was every 3090 days, just write a check, draw off to the builder to pay those things out, and then the permit and the utilities to get all that stuff ready to go. And someone's listening to this right now. And they're like, Okay, cool.$90,000 into backup. But what Cody's talking about is for a deal to make sense. And for doing work, you either need to have money, or you need to have hustle and creativity. So if you don't have money, you can have hustle and creativity. So let's do a quick little minute sidetrack here. So somebody is listening to this. They're like Cody, Damn, that sounds awesome. You just made $99,000 off of that one deal. And in a relatively short time. So you were creative with the land. So then the construction was 210? What are the loans and stuff that you get on the construction portion? So financing options are there on the construction portion? Yeah. So on this particular deal, I sell financed everything I had the cash to pay for the build, and pay for the permits and all that stuff, I just have just some cash that I had saved up from being a real estate agent, I had the cash from that other flip the $55,000 that I made on that other flip. So I had some money set aside in my bank account to do this deal. And because the owner carried that land, I could do an all cash, which is, which was really cool. But then I started to realize that there's different ways to do it. But I wasn't 100% aware of what those other deals were like. I like knew what they were but I hadn't really explored it. But all I knew was that the real estate market was going gangbusters. Like when I timed all of this, it was just perfect timing for when the real estate market just started to just go, boom, like straight up, like nobody could have predicted what was happening with the real estate market, and it was gonna go where it was going to go. So I knew that after I had sold that property within four days, and it's just literally dirt, I was like, I gotta do more of these, like, I got to figure out how to do more of these. So I hit the phones again, I start calling property owners, and I find another property owner that says that they'll sell it to me for 100 grand, some older lady who'd had the property forever, she didn't really want it. And if I give her 100 grand, she's out. Okay, that sounds great to me. And that that was awesome. But the thing is, I didn't have any more money because all my other money was still my other build. And these builds take about six months before six to seven months before they're done, and you get paid on the deal. And so I was like, Okay, how am I gonna figure this out? So I started like thinking about people I know who have money. So I reached out to someone that I know that had some money, and they weren't really doing a whole lot with it. And I told him, Hey, look, how would you like to make $60,000, all you got to do is just put up the money, I will manage the project, I'll find the deal. You don't have to do anything other than just write the checks. And I sold this person on this idea. And they were game to do it. And so I started off on my next one. And with this property, I did the same thing. I actually hired someone to do the trees this time because that was so much work removing all those trees from that property. I was like okay, I got to outsource this. So I hired someone to take down the trees and get the property shovel ready. But I ended up having this property sold within about a week of listing this one and it was just dirt two permits were pulled or anything yet either. So I had that property sold within seven days. Let's fast forward from that point. Okay, so you get so you've got your first two done. Fast forward to where you're at now. What What were your spec homes and what were the profits on each one? So thank you. So after those ones, I knew I wanted to do more deals because I knew it was completely blowing up this second deal. I made$60,000 on it. It was 120 total, but I split that with the person that got the money. And then that person and I did another deal together and then they were telling out, but I wanted to keep going more like I was ready to go all in on this, like I was betting strong that Mark was going to keep going. So then I got hard money loans, which I'd never done any hard money loans before I found just some random Hard Money Loan person. And the terms were like 3%, three and 10, which is you pay 3% of the origination of the loan, and then 10% interest on the deal. So then I did three of those. And I was like, just hitting the ground running. And then I did another one cash. And the best one that I've done so far, which everything worked out great, I made about $200,000 220, some$1,000 on that one on just one spec home. And then my averages now are around 120 to 150,000. But margins have shrunk a little bit. But still making 120 to 150,000. A house isn't bad, but the margins have shrunk a little bit because the cost of materials have gone up with building materials, and supply chain issues and all those things and land has my first you know a lot I paid 100 grand for in the last three lots I paid 180 grand for and now they're going for close to 200. So everything has just increased, but also my first house I sold for 425,000. My last one I just put under contract for 650 things even now, is this something that you're going to continue perpetually? Yeah, yeah, I think I'm going to continue this perpetually. And I want to grow this into even bigger and larger developments. I want to bring on new investors also to help keep these things going. So I feel like I'm really good at identifying areas that are blowing up and room for growth and whatnot. So I want to continue to do these back homes potentially do bigger, maybe subdivisions, even and potentially apartments. So whether that is a syndication or some sort of partnership in some way, shape or fashion. I don't know. But that's something that is on the horizon that I plan on doing. Okay, so I'm I'm doing okay, so first off, what's your email address for someone to get in touch with you that's listening to the show right now? And they've got Monday part? Yeah, my email is Cody touma@gmail.com. Cod y t you ma@gmail.com. All right, there you go. If you're listening to this, you got some money. Got a guy to give it to because if I had the money, I'd be giving it to Cody, I promise you. We had these conversations every single freakin week. All right. So right now, so is that I'm doing the math. So that was six homes. It was about over the course of the last year, I've done about nine homes and the total profit on all of those is going to be right around $1 million. And I knew that I was going to have a massive tax problem for 2021. And because it was also my best years being a real estate agent because at the same time, I was doing a lot of other things. It wasn't just doing the spec homes, I was selling a lot of real estate. I started a real estate team, got my principal broker's license, got my real estate license in Arizona sold my first house in Scottsdale, and I brought on another assistant to help me in the real estate business side of things and did about Yeah, 27 million. So I had about 500 some 1000 in profit from that about a million in profit from the spec homes. And I'm like, Wow, I'm gonna have a massive tax problem. What am I going to do about this? And leads me into the next phase, which you know what I did with that? Pause again, Cody. Pause. What the hell? All right. So everyone right now, okay. I'm doing the math. Don't worry. I'm doing the math for you driving right now. So everyone that's driving right now, I'm doing the math for you on my calculator on my iPhone calculator, because we're first rolled over here. Alright, so we got million dollars profit from the spec homes. We got $400,000 coming in as a realtor. I got$500,000 from your personal home. So so correct. What was the profit on the on my personal home? Oh, yeah. You said there was another home for like your Arizona or something. Oh, no, that wasn't a personal home that was just said. So I got licensed in Arizona. And then I sold a client a property down there. My first like sale down in Scottsdale. So total income for 2021 is right around like 1.4 ish. Okay, cool. So that's the math that I got. We got 1.4 million and that was at 28 or 29. That's this is 2028 and 29. Okay, so 1.4 million. All right. That's all right. Decent, decent. Let's see. It's close. This is a little more than the 50,000 I thought I was gonna make as a real estate agent a few years prior. So We're gonna go into our last two parts here, shortly, something that you said that was very important to reiterate money and hustle, pick one, if you have both, you're unstoppable. You're off to the races. But we all go through different phases in life to where it's like, I've discovered that right now I want to lean into being more of the money side of it, instead of the hustle. But it's just pick one and make the deal work. Go after it. You were talking about how you split your deal. 5050 with the guy for the creative financing the private investor, you said, Hey, I'm gonna give you 50% of what I make on this. You paid him $60,000 You lost half of your profit. But I think that was freaking awesome. Because most people I feel would say, I'm not losing 60 $60,000 I'm not losing half of my profit on that. But guess what, Cody made the deal happen? And if you didn't, if you wouldn't have done that, you wouldn't have gotten the deal. Yeah. And then the next three deals because that guy funded three of them right before he funded? Yeah, three. Yeah, he did three. Okay, cool. So you found two, which are closing in the next couple of weeks, Were each going to make $100,000 on each of those. So you found a niche, you found a time period, you knew that there was a time period associated with this, because we don't know how long this is gonna keep going on. And then you just went completely 100% in and you're like, come hell or high water. I'm making this work. Yeah. So for you listening, that is what you have to do to make $1.4 million in a year. That's what you got to do. You cannot Dave Ramsey your way into this shit. Like you cannot save. Like, Cody, did you give up Starbucks to be able to do that? No, I continue living my life as I did. But I knew that. I just wanted to make more money. I didn't really cut back expenses. I just increased how much money I made. So you got into communities and networking, through being a realtor. So you had relationships with builders, you had relationships with some money that you had made also through being a realtor and going around, and then you had like, action, and you had a game plan. And then you had execution to where you executed like viciously on all of this. And so then that's how you created this at 2829 2829 years old. Unbelievable. That is fantastic. So it is freaking possible for anyone listening to this. Cody got into real estate four years ago, correct me on the timeline five years ago, five years ago. Okay, so five years, we have a Cody Touma. 23 years old coming out of college, going into real estate, no idea what's happening. $50,000 excites him, get some route up. Now, if you tell him he's making $50,000 on a deal. That's a little slim for him. Okay, that's in five years. So imagine what you can do in five years. Because this is insane. This man's drinking a little sip of coffee right here, because we're not even finished yet. We're not even finished yet. This is just his income production. So now, like this has turned into a whole financial Friday. So we're gonna just dive deep and all this because now you've got me fired up. Now I'm ready to go. So we've got $1.4 million coming in on your taxes. You are about to get destroyed on your taxes. But what happens Cody, why don't you get destroyed on your taxes? Yeah. So why I don't get destroyed on my taxes is because, as I said, I was listening to a massive amount of podcasts and bigger pockets. And I started reading a lot of books on like advanced tax strategies and planning, which is a bigger pockets book as well. And I knew that as I was setting the spec homes, that I was going to have a tax problem at the end of the year, because I just knew that if things continue to this trajectory, I got to figure a way out how to help, you know, alleviate this tax bill. And my current CPA at the time, I was asking her I was like, Okay, now we make a lot of money, what can I do about it, and they told me the traditional things that CPAs tell you, right off your meals, write off your car, write off all of these real traditional things, make sure you write off your laptop, your home office, all of these things that most CPAs tell people and I was like, Isn't there any better way to do it? Like how to eat better? And how are these massive billionaires saving all this money not paying any taxes? Like there's got to be a better way to do it. And I talked to multiple CPAs and they pretty much told me that this is what it is sorry. You're just gonna have to pay whatever. But then I started looking at some of these podcasts and reading these books. And then I learned about something that completely blew my mind. It's called a cost segregation study. And I was like, Whoa, that sounds super cool. And so I dove into it. And essentially, what a cost segregation study is, say you buy a building a commercial building, someone will come in who is certified to do cost segregation studies. And they will break down each individual component of the building, from the age back system, to the cabinets, to flooring to electrical to plumbing, and they'll break all of those components out. And they'll give you a price of what all of those things can be depreciated at. And you can do bonus depreciation in year one, and write off all of those items. And in year one at whatever value that this person is an expert at doing Cost Segregation studies gives you and I was just my mind was blown. And when I had heard that you can do this because you can do this at a really high level and save a massive amount of money in taxes by doing this. And I listened to some people who, you know, purchase commercial properties, and they did the studies on it. And some of these people won't be paying taxes for the next foreseeable future. And it's not because they're doing anything illegal or wrong, but it's just taking advantage and learning the tax code. How you can make that to work to your favor because IRS said the tax code. Tom wheelwright, I'm sure you read him. I'm not sure if I read his or not. You need to read Tom wheelwright tax free wealth. Okay. Yeah, he's wrote Rich Dad, Poor Dad means He's Robert Kiyosaki his financial adviser. Okay, yeah, then yeah, I've heard of him, then. Yeah. So he talks about how the tax code, if we stop looking at tax, the tax code is not a document and a set of articles that are meant to screw us. The tax code is a set of articles and documents that are set, the tell to guide in enforced reinforce behaviors that the Government encourages and the government wants. It's what the tax code does is that these business owners aren't greedy. I'm sure that there's great around everywhere. But like, these business owners aren't being like just greedy and hoard money. There. The United States government says, Hey, we, we want business, we want growth, we want real estate. So if you buy businesses growth and cause growth in real estate, like we're going to give you ways to go around that. So they put the code to say, hey, here's what to do. Here's what not to do. And if you just follow the code, and you play the game, you cannot pay taxes. And that's what everyone that's wealthy does. If there's someone that's really wealthy, and they're paying a lot of taxes, they're just not paying attention. And the CPA like Cody was talking about, there's not a knock on them. They just don't know any better. So you just need to invest in a better CPA. But so you find out about costs. And then you meet a gentleman. Yeah. So yeah, so I listened to this podcast episode, I think it was like 416. If I have that, I don't know if I have it right or not. But the this gentleman that was on this podcast is Matt on a Frio. And I listened to his story. And I listened to at this point, a ton of real estate podcast episodes, but none that quite resonated as strongly as what Matt is doing. And I was just like, wow, this guy's on a whole nother level in a whole different league. I got to try and do a deal with this guy and learn from this guy. And, and what he does is triple net commercial real estate investing, and just all the amazing benefits of triple net commercial real estate investing, it just got me just so excited to want to do a deal like that. And some of the amazing benefits of doing triple net commercial real estate investing is with triple net leases, your tenant is responsible for paying for the maintenance on the building, they're responsible for the taxes, they're responsible for insurance, they're responsible for any management, if that's in the lease, it's pretty hands off for the real estate investor, and not a ton of risk either if you buy the deal, and I was like, Wow, this sounds like a great way to have passive income. And Other benefits include, if you you know, are financing these properties. Your tenant is paying down your principal on the loan, which I think a lot of people don't realize that you're getting someone that's actually paying off your loan on your behalf. So you're getting presently down. Yeah. Yeah, yes, it's huge. And then another huge benefit to that is you're getting cash flow. On on the property because you're making money on the deal. And then another big part of it is the appreciation which I don't buy these deals for appreciation, but you will, that is something that is factored into it is the appreciation on the deal. And then the cost segregation study with the tax benefits, I ended up working out and working with Matt, and he helped me find a deal where I was able to buy a property, and this property was a great deal. And I was able to cash flow on the property after my debt expenses, basically roll the money that I had made into all those back homes and roll it into this commercial property. And I'm now cash flowing on this deal, I'm getting someone to pay down my principal on the loan, and I was able to get a $1.3 million tax write off on that property. So it's just amazing and mind blowing on these commercial properties and what you can do with it. And what's really interesting is I always thought that would have rentals, but I never owned a single family rental or any residential type of real estate rentals, I went straight into commercial property, just because I knew that's where like the big money was at and the big deals. And I've always been someone that is just trying to really retry and do bigger things. So yeah, it all worked out. So for anyone that's listening to this, that is questioning why I will end up buying a commercial property, and why I talk about it, and why I think it's even possible. It's because I'm best friends with Cody. And me and him talk all the time. And I'm like, Cody is buying a commercial property, I can buy a commercial property. And that's just a testament to everything that we talked about on the show to where the level of conversations that you're having with the level of people that you're having will be a direct indication of your success more than anything. Because before it's like in these things, he's talking about cash flow, like these things are cash flowing 1020 $30,000 a month. It's ridiculous. So now if you're wanting cash flow, passive cash flow, how many single family rentals would it take to get that? So you need to have some money to put into the deal. But you can find ways to generate it, Cody figured out ways to generate it, and that you can literally copy and paste what he's doing. And make that you just have to go, you just have to go have the hustle. So now he has the money. So that's just insane. And I can't wait to see where you go with all of this, because I'm gonna be right there with you. I'm just getting the money part of it. Oh, yeah, that is that is freaking crazy. So I want to be conscious of time here. So that we don't have like an extra long show here. I want to finish up on. So we've talked about all of the success that you're having in this field. Ironically, haven't even you don't even own any single family homes, which is like ridiculous in and of itself. But it's been cool, like pulling the curtain back. Thank you for that for allowing us to have that look into your finances. So offer forum. Let's talk about offer form right now. Because if everyone else is listening and has a brain, they're fired up about what you've got going on. Because I'm fired up every time I talk to you. So right now everyone's riled up, you need to talk about offer form and what you got going on with this, because I think this is going to be a huge company. So tell us what it is like how it got started and where you think. Yeah, absolutely. So offer form. And where this, like the origination the inception of offer form was during the whole boom when the real estate market was just taken off like a rocket ship. And I was writing offers for clients, upwards of 10 to 15 to 20 offers per client, it was just like so much of this repetitive motion of going to my client and telling them sorry, guys, you're offered and get accepted on this property. Let's look keep looking at more properties. And then they'd send me a property and they would just say, Oh, we want to write on this one, we want to write on this one. So I keep running through the same motions of gathering all this data and information to write offers on these properties. And the traditional way of doing it is either texting your client, okay, what do you want to do for purchase price when you want to do for earnest money, closing date, etc, etc, all of these pieces of data that you have to gather for these offers. And I was like, wow, this is time consuming. And I think there's possibly a better way to do it. So I just created this really basic Google Form to just gather some basic information. And I started doing this in my business about a year ago, and I was you really positive feedback from my clients like, oh, wow, this is just really simple. I just filed this form and yada and I'm away. And I was just really was making my business a lot more streamlined. I'm all about systems and processes. And this was just one of those things that just really helped streamline everything and my real estate agent business. And one of my best friends was like Cody, you and I, we really need to start a business together. I don't know what it is yet. But we got to do something together. Let's just brainstorm. I want to do something with you. You're doing big things. Let's just brainstorm and just figure something out. So my buddy, he comes into town and him and I, we just take a whole day of just brainstorming business ideas, I've always enjoyed technology. I've always been a fan of tech. And I've always thought at some point, I would be in tech in some fashion again, and at a bigger scale. And we're going through these ideas, and I was telling them about just casually I don't really think a whole lot of it. But I was like, Hey, here's this kind of way that I'm writing up offers for my clients and how they're getting that offer information. Wow, dude, that's so cool. You know what I wrote an offer on a property with my last agent, he made these mistakes he didn't do what I told him to put on the offer was back and forth. He's like this, this could really be something big here. And we really dove into how big it could really be and how powerful it could become. And that's really the inception of offer form. So what offer form is, it's a data collection tool that real estate agents, particular buyer agents send to their buyers to gather that information that they want to write on a property. And what is on this offer form has just grown a tremendous amount from just a basic Google Sheet. So on this form, your real estate agent sends this to you. And you fill out your information, your first name, your last name, your birthday, and your agent gets all this data, there's no misspellings, because you spelled it all on that form. And then, when it comes to the more technical terms of the real estate offer, like what is earnest money, the client actually gets to see a video a 35 to 45 second video that just briefly explains what earnest money is. And there's a little snippet that states that okay, good rule of thumb for earnest money is typically between one to 2%, you know, you can make your offer more attractive by increasing your earnest money, and so on and so forth. So the buyers getting educated on the offer experience and the offer process where I feel like that's been something that's been a gap, real estate agents are fully educating their clients on all of these different steps. And we still want to involve the real estate agent in this process. So on this form, your Realtors branding is in the top right hand corner with the picture of them. And then there's a phone number and an email. And all you have to do is click on that phone call or the email and you can call your agent with any question on this form. And as you continue to fill out this form, there's other things to talk about your closing date, and what's a good rule for closing date, if it's a conventional loan, it'll take 35 to 45 days, and then we go on to explain what a conventional loan is. And then cash can close quicker. And then we go on to talk about the purchase price. And then as the client fills out the purchase price, there's a mortgage calculator on there. So the client gets to see, okay, if I offer maybe $10,000, more my payment changes by X amount of dollars, or maybe if I put in maybe just $20,000, more for a down payment, my payments gonna change to XYZ. And all of these things came from me working with these clients. I've worked with hundreds of clients now over the last five years. And I it's just all of these questions that I've gotten over and over again. And I've came up with ways to educate the buyer on this whole process, not only with just with these legal texts and stuff that's in there, but we've got these really awesome like interactive videos that people are experiencing at the same time they get to see in real time what is happening with their payment. And then it goes on to talk about like personal property, what personal property is because I feel like a lot of newer buyers don't understand what personal property is and all of those things. So basically, it's if you see something in that house that isn't physically attached to the property, you need to have it in your offer. Otherwise, when you go and close on that house, you're not the buyer, the seller is going to take it with them. So like things like a washer and dryer refrigerator, those are things that you got to put in your offer and a lot of newer agents sometimes miss this. And when that happens, that agent is forking out the cash to buy that buyer a new washer and dryer fridge because it was under the assumption that it was included. But the agent didn't properly educate their client on. Those are things that we need to have in the offer. Same thing with closing costs. If a lot of buyers don't understand what closing costs are, they have no idea what to expect to pay for it. They don't even realize that you can ask the seller Are to pay for these closing costs too. So we go in, and we educate the buyer, all these different aspects of the real estate transaction in the offer process. And we really truly think that this is just putting a lot of the power in the hands of the consumer, where we're going to have a much higher educated consumer base. And real estate agents love it, because it saves them time on collecting this data. Because at the end of the day, every real estate agent has to gather this data some way shape, or form, whether it's in person, a phone call, or text or whatever. So now their time is better spent by sending your clients this form your clients getting educated. And what's super cool about these forms, our offer form is those videos that we have these 35 and 42nd videos, the agent can actually go in there and customize these videos, and record a video of themselves on a webcam, talking about what earnest money is, what a closing date, good date for closing costs, and all those other things. So they look like a huge professional that has just this whole thing dialed in. And so their clients are like, wow, this guy knows exactly what he's talking about. I'm so glad that I worked with him. This process was super easy. I know a lot more about this house that I'm buying and the whole process associated with it. So the client feels better, the agent looks like a rockstar agents life is easier. And we truly think that every single agent, once they start using this thing is going to just continue to use it because it just makes their lives easier. And the coolest thing about it is we're giving away this product for free to real estate. And so it really is going to be a no brainer for clients to use or for buyer's agents realtors to use this in their business. So say I'm a say I own a brokerage right now. I'm listening, though, and there's gonna be multiple people that own brokerages that are listening to the show. What do I Who do I email? Where do I email? What does the process look like to get this signed up for my team now? And you said it's free? Correct? Yeah, yeah, it's we have two versions of it. But our free version is pretty much packed full of all the features that you'd want. And then our paid version, the only difference is that you can select referral partners that you want to work with. So if you work with a frequent title company or a frequent lender or home insurance or home warranty, you can just add those people in on the paid plan. But other than that the free plan has all the features and fully loaded with everything. And if a brokerage wants to learn more about this and potentially sign up their brokerage or maybe look at custom branding and white labeling this for their brokerage, email me Cody cod, why at offer form.me. And just give me a brief intro on what you got going on and how I can help and more than happy to set up a Zoom meeting and demo off this product for you. Awesome. That's o f e r f o r m.me. Me. Yep, that is freaking awesome, man. I love love watching you operate love watching you move. It's fun. Whenever we touch base multiple times a week, my girlfriend just came in when me and Cody were starting this. She's like, Oh, I finally get to meet Carrie, the person that you're talking to just as much as me, huh? Me. But to close this out, man. If you could attribute your success, especially at such an early age, such a young age, in contrast to a lot of people that haven't accomplished what you've accomplished in many years, you could narrow down to maybe three things that you would say are the main things that you did. What would you say to someone that's listening to this, to be able to get them to where you're at in that next three to five year window period? Yeah, I would say that one of the biggest things is mindset, having a mindset that you really can accomplish these things that you set these goals, and you really can't do it. And another thing is grit just powering through, and just having the sheer will and determination to know that you're going to succeed. And third, maybe not necessarily in this order, but educating yourself read books, listen to podcasts, such as Brian's because there I have learned so much by just listening to podcasts, and listening to people that are smarter than me. And I think that that's a game changer. We live in an age right now where you can learn everything, pretty much that there is out there. And all of these people now are coming on these amazing podcasts such as yourselves, and they're telling you how they did it. That is so powerful. And I think that people really should take advantage of that. So I love it, man. I frickin love it. And this has been Whoo. Every single time man. Every time I get fired up. Never stops man. So I'll add that bonus. I'll add a bonus fourth is control who you're talking to control who you're hanging out with. If Cody and I met on Instagram, right, we literally met on Instagram. It's crazy to think about that. But flaming DMS man, we just messaged each other. Were just like, Yo, bro, you look like you're doing you look like you're doing cool stuff like I'm in real estate. I do cool stuff. Let's be friends. And it was like, that's what started this and that dude, was that a year ago? Yeah, I think it was almost a year ago today. What the hell? Yeah. Crazy. Oh my god, and he's an Oregon and I'm in Atlanta. And this is just one example of a friendship and we've got friends all over the country that are just like this. And that's what I would. That's what I would advise is set up, start thinking about what kind of people you're trying to attract into your life and then start portraying yourself as that freakin person. If you're portraying yourself on social media, as someone that's sloppy, and that someone that doesn't care to achieve anything, I'm sorry, but if someone like Cody's look at your profile, or somebody happens to come across you, they're going to be like, Oh, okay, I don't really want to know that person. So think about that. Like that's the powerful use of social media is this you can actually use this to do really good things and really cool things and form really cool authentic relationships. So on that point, Cody, glad to be your friend, buddy. I will be meeting you in Austin, Texas soon. And I'm sorry my friend, but we have a year's worth of beers coming up. So Sandman prep prep for that way to get after it. And the two email addresses that Cody gave again, he's Cody touma@gmail.com for investing in the spec properties. Cody at offer form dot M E for the offer form if you have a brokerage or if you're a realtor that wants to send this to your brokerage lead. Where else can people find you Cody? can find me on Instagram at Cody tumah. Find him on Instagram at Cody Touma or find them at your local bar in San Diego whenever he's whenever he's visiting. Because he's probably going to be there, brother what's been fun. This is Brian Luebben with the action Academy and it's a Cody San Diego slumlord, Touma, signing off