Analyzing Deals with Cody Laughlin and Esteban Cardenas

Episode 153 of the Diary of an Apartment Investor Podcast with Cody Laughlin and Esteban Cardenas. Transcript by – please forgive any errors.

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Brian Briscoe 0:00

Stevan we got Cody on the line, what do you want to ask him?

Esteban Cardenas 0:02

What advice would you give to newbies in regard to keeping emotions in check when analyzing the deal?

Cody Laughlin 0:10

So Esteban, I would tell you three things number one, education. Number two, repetition. And number three, analyzing larger deals for practice, the more that you continue to educate yourself, the better and more confident you're going to feel about your underwriting practices or analysis. And the next thing I would tell you is repetition and this is key. So in learning a market in particular are learning how deals are operated. The more that you do, the more that you learn.

Brian Briscoe 0:45

Welcome to the diary of an apartment investor podcast with your host Brian Briscoe. In this podcast we bring some of the top professionals in the apartment investing field to discuss various aspects of the apartment investing journey with the sole purpose of educating listeners to make wise investment decisions. The Diary of an apartment investor podcast is sponsored by four oaks capital bringing you high yield returns through apartment complex investing. This is journal entry number 153. And part of our Ask the Expert series today we'll hear from experienced investor Cody Laughlin and aspiring investor is Devin Cardenas. Keep listening to hear discussion about key indicators at your analysis and which team members are most important when figuring out if it's a good deal or not. And now the show Welcome to the direct apartment investor podcast. I'm your host Brian Briscoe with crokes capital. We're very excited for today's show. We got two amazing people on the line with us right now. We got Cody Laughlin and Estefan, Cardenas Cody is a real estate entrepreneur, a podcaster meetup post. He's got 10 years of real estate investing experience. And His focus is acquiring cash flow producing real estate assets with a special focus on value add multifamily. I'll drop the rest of his bio in the show notes for anybody else who wants to get the full bio. That's cliff notes version. But that's it. Cody, welcome to the show.

Cody Laughlin 2:02

Brian. Good morning to you, man. Really appreciate the honor to be here and excited to be on your show, man. It's a bit of a fan.

Brian Briscoe 2:09

Yeah. Hey, thanks a lot. I appreciate it. It's been fun. Interestingly enough, tomorrow is the one year anniversary of episode one. So you guys got the Anniversary Edition three. Congrats. Yeah, thank no congrats to you guys. You know, being on the anniversary edition. So um, but

Cody Laughlin 2:27

I feel I feel honored now now for like a VIP.

Brian Briscoe 2:30

Yeah, exactly. Yeah. Yeah, that's that's that's exactly not not coincidence whatsoever. But this was this was 100% planned a year ago. It's like, Anniversary Edition is going to be Cody, and a 700%.

Cody Laughlin 2:42

Let's see. That's why we delayed getting to this point. Right. You remember we talked about swapping shows for a year now. So

Brian Briscoe 2:47

a year yeah. And we finally we finally did. So yeah, that was a nice treat, too. But it was probably just over a year ago. I think it was before the first episode was released that we talked about doing the show swap. But a year later Here it is. So happy to have you on the show. And do us a favor. Tell us a little bit about yourself, your background, your history and kind of walk us into you know how you got into apartment investing.

Cody Laughlin 3:09

Yeah, thanks again, Brian, really appreciate again, big, big fan, love what you're doing love the show format too. But, you know, my background, my introduction to real estate started in 2010, my wife and I relocated from Louisiana to Houston, Texas, about 2008, we bought our first home. And after about two years, we wanted to relocate to a different part of Houston. And for those who recall, you know, 2008 2010 great financial crisis housing market was in the dumps. And in the process of relocating in Houston, we bought another home, close on that home. Our first house did not sell yet, but it was under contract. And then we had a buyer that backed out the day before closing. And me and my wife panic, because we didn't know what the world would do. Number one, we couldn't put it back in the market things were moving too slow. Number two, we couldn't afford to pay two mortgages. And we were just like, what do we do? So we just hurried up and threw a tenant in there and said, You know what, we'll figure it out from there. So although it was very stressful at the time, in hindsight, it was a blessing because that's what really got me involved in real estate. And again, around that time was also studying, really how to protect your wealth, how to build your wealth, how to invest in equities, markets and retirement accounts. And somebody saw me and said, Hey, have you read this book, Rich Dad, Poor Dad. And, you know, I joke I call it the purple Bible. And so I read it and you know, everything changed for me, light bulbs went off and, you know, just completely changed the trajectory of my, my entire life, really, because I was going to continue to go back to school, you know, get a master's degree go up a corporate ladder in my industry. And when I read that, I was just like, everything I had been taught had been incorrect, you know. So, fast forward through a few years I was I had this new entrepreneurial spirit. And I was excited to get out there and just try all these different things. And unfortunately, I took some detours from real estate and I tried some non real estate related ventures that I learned a lot of expensive lessons from, but you know it. Again, all all great seminars, as rod Cleef would like to call it, and got fo re committed back to real estate. Several years back, I started out in single family again. And really just because of a limited mindset, I didn't have any network liquidity, any experience, and I was like, man, I really need to, I need to build my own capital base. First, I need to, you know, get out there and transact first. And so I started out doing single family flips, and realized very, very quickly that I'm working myself into a second job, you know, I still maintain my w two, I'm hot, I'm a father, excuse me, husband. And here it is, after work, I'm going to these flip houses, and I'm dealing with contractors, I'm running to the store every weekend. And I was like, this was not what I thought this was going to be. And, you know, finally, a couple years back, I had this epiphany moment and with one of my kids and realize, you know, I'm in real estate, to take control back of my time, I really want to be able to control that aspect of my life, but I can't you know what I was doing. And that's that was the big moment that led me into transitioning into multifamily in realizing that I need to scale and scale much faster. In order for me to be able to get to a scale where I can, again, you know, take back control back of my time. And so that's kind of how I got into multifamily real estate and became active investor 2019, at will, trying to learn how to become an active investor and through that started passively investing, networking, following a lot of the industry leaders. And here we are today, we're code GPS in 240 units and a deal here in Houston. And again, I'm a passive investor, and an opportunity in Phoenix and, you know, got a lot of other great things happen. And so,

Brian Briscoe 7:02

yeah, so you became I think what a lot of people call an accidental landlord, you know, yeah, you know, there's, there's a lot of stories start out like that, you know, I was the I did the deliberate landlord. And it was also a seminar. And it was one of those things where, you know, we held the property for 10 years, and never cash flowed, you know, but it was Southern California. And so it appreciated. And it ended up being a nice little thing. But yeah, so accidental landlord, purple Bible, which I think is probably the most common book that comes up on this podcast is that Rich Dad, Poor Dad, and then you get into flipping and then use another Robert Kiyosaki term. Sounds like you were carrying buckets, instead of merit making the pot pipeline, right, you realize that, you know, flipping houses is a full time job by itself, and moved into apartments for I think, the same reason a lot of people do, you have the ability to scale, you know, the ability to step back from it. So anyway, that's, that's, that's awesome. So let's talk about one of those, one of those units, if you do one of those deals you guys have done and tell us about, you know, just wave top information, how you found it, and, you know, how you closed and how it's doing?

Cody Laughlin 8:12

Yeah, you know, what I'd like to do is highlight the most recent acquisition that were a part of, again, our code up opportunity. And, and I think this is gonna be important for those who may be just newer into the space looking to find a way in because it is a very, very competitive landscape right now. I mean, it was already competitive prior to COVID. But even more so now, I mean, the amount of liquidity out there is just insane. And so it is getting increasingly harder for the newer investor to break into the space. So, you know, and we were part of that we consider ourselves a part of that, you know, again, we've we've been in the active sizes 2019, we had been building broker relations, sourcing deals underwriting making offers, but we just weren't coming close on anything. And then COVID hits, everybody took a big pause, and then when things ramped back up, again, all of a sudden, you went from one of 10 to 12 offers to one of 30. No. And so, you know, in the, in the midst of the two years that we have been active, we've also been building a pretty large investor database, building a lot of great relationships. And so what we, what we realize is, listen, we need to get our investor database engaged, right? We need to give them something to be excited about something that they could be proud to work with us on. And so in the midst of us looking for opportunities, we said, Hey, why don't we go and work with some of the operators that are in our markets that we know that have track records that have experience that may be getting opportunities that we're not getting exposed to? Right, and that's kind of what led us into this 240 unit deal. We had a relationship with the lead sponsor Jorge Abreu, with elevate commercial investment group known him for about at this time, almost two years and moving with a tremendous amount of momentum at the time that we approached him earlier. This year, he had, I don't know, 600 units under contract. And he had a 1200 unit portfolio here in Houston, where we're based out of, and so we were working on a deal January a big deal that we needed help on, we invited him to come participate. Long story short, the deal didn't work out. But what it did allow us to do is open that door for future conversations. And so, you know, fast forward to march or So this year, we, George had this deal. And we said, Look, our value add that we can bring to the table is we can raise capital, we can help brings capital, we're here in Houston, we can be involved in the asset management, boots on the ground, whatever you need us to do, you know, we'd love to be a part of one of your opportunities, if that's something and so, and that's kind of how it led us to this opportunity. And so, again, I tell people, we're not the lead on it. George and his team are the lead, but but we are active co GPS in the deal. We did commit some capital from our investor database, and we are involved in some of the asset management stuff. And, and I thought, I think it's been a really, really great experience, because you get to learn firsthand from somebody who, you know, has a rather large portfolio 2500 plus units, you kind of see how the Catholics his timelines, determine how the capex budgets put together where should you allocate certain capex dollars, right? asset management, property management, takeover, things like that, you know, so it has been a really, really great experience for us.

Brian Briscoe 11:23

Yeah, yeah. And there's a lot of keys there. I mean, we're talking about single family homes at the beginning. But there's a lot of a lot of parallels. I mean, I think a lot of people are familiar with the single family analogy, you go to an agent, you know, who's the equivalent of the broker, you go to an agent, and the first thing you're gonna ask you is your pre approval letter. Sorry. Yeah. Yeah. They ask you for a lender pre approval letter. They're vetting you out there. They're seeing if you're a viable buyer or not. And it's the same thing in the multifamily space, except to be a viable buyer. And this is the conundrum to be a viable buyer in multifamily. You have to only multifamily to most Boeck brokers. And so you did the smart thing, you teamed up with somebody who already has experience. And you know, you you're able to basically jump in feet first that that direction. And I don't know, in a lot of ways, I mean, you went through sounds like you went through a lot of the same amount of work that a lot of other people try to do, where you're analyzing deals, you're doing everything else, and you built the relationship, and then later on Oh, come on, come in as co GP. So love the story. And I think you're absolutely right, that is a great path. And that's something that a lot of people should pay attention to. So yeah, you know,

Cody Laughlin 12:36

and you're right, there's, there's so much work involved, right? I mean, there's so many hats to wear, there's so many things to juggle, and these relationships take so much time to build. And as you alluded to your credibility in this space is everything right? And so it takes time to build that. And so a great way to do that is again, aligning with successful people in your market or and add value to them get involved.

Brian Briscoe 12:59

So let's let's do a quick change of pace here. You know, one question I'd like to ask everybody is, you know, what is your big burning? Why, you know, what, what motivates you? What drives you in this business? Yeah, you

Cody Laughlin 13:11

know, we alluded to this earlier, and for me, it's, it's my family, it's my children, it's my wife, and it's my time, you realize at a certain point your life that you're trading time for money, right, you go work for somebody else, they tell you when to be there, what time to be there, and what your time and skill sets worth. And if you're a father, you, most of you will understand this. It's like you have these moments in time where you look at your kids, and you just think, Wow, you remember yesterday, when you were holding them in their hand, and all of a sudden, you blink. And now they're, they're driving and they're going to work themselves. And you know, they don't want to be around mom and dad anymore. And for as a parent, that's a gut punching moment, because you're like, that just is like a blink of an eye. And I feel like as we get older time seems to go by faster and faster. I remember my parents telling me that like whatever. And now I'm sitting here reflecting and it's such a true statement. And so for me, the burning wise really is controlling my time, right? How do I, how do I be the driver of my own chips, so to speak. And so my kids and my family are really big motivational on why I'm out here grinding every day to get there.

Brian Briscoe 14:17

Yeah, and I agree wholeheartedly, not in a lot of ways. I mean, I've got a 20 let's see what day is a 21 year old daughter, and she's 22 and a couple of weeks and a 19 year old daughter. And it's I mean, when he says absolutely true. You're holding them one day, and you know, next day they're out of the house and on their own but well good. Yeah, I think I think your your big burning license resonates with a lot of people very similar my own is I wanted to be able to spend time with my family when I want to spend time with them and not March the beat of a different drummer and that's same thing you're looking for is to be able to control that more. Well. That's, that's great. So quick question now. What's next for you guys.

Cody Laughlin 14:58

We're still looking to Add assets to our portfolio this year, you know, we've gotten pretty close these past couple months, we've landed in three best and finals. And so we're still, you know, still submitting offers still evaluating opportunities, still building relationships, which is you should never stop doing in this business, right. And so we're always networking, engaging with other industry leaders and professionals, and, you know, just trying to find our way into other opportunities, whether it be our own or partnering with other people that, you know, could use some value add as well. So for us the end, but the end goal for the year, we're hoping to add another $20 million of assets to our portfolio. You know, fingers crossed, that will come true, and, you know, just keep grinding away.

Brian Briscoe 15:39

Nice, nice. I love it. Now, are you only looking at Houston? Are you looking at other other Metro? Yeah, no,

Cody Laughlin 15:45

we're across Central Texas, East Tennessee, Kansas City. You know, I think we love being in primary markets with love, even though it's extremely difficult to break in. I love that the fundamentals that come along with primary markets, but there are some great opportunities and some secondary markets around some of these MSA. So we do believe in diversifying, especially, we did isolate ourselves just to one or two markets in the beginning. But once we just became so well ingrained in those markets, and really built our footprint, we felt comfortable with diversifying, going outside and just modeling the same thing. So

Brian Briscoe 16:24

yeah, I know, there's pros and cons, both directions. I mean, when you're when you're in Houston in the primary markets, you know, sometimes you are one of 30 offers on the table. And there's a reason there's 30 offers in Metro and in primary markets, because they have the fundamentals and he hit that you hit the nail on the head right there. You know, you go off into secondary markets, and now instead of being one out of 30, you're one out of eight, you know, so you may have a better chance of closing but secondary markets, you know, may not have the same fundamentals. So it's it's your pros and cons both directions. You know, we we live in a secondary market space. And that's that's where we built our business so far. But anyway, that said, let's shift gears a little bit, we'll bring Stevan on the line here. So as Devon's been spending the last 15 years in the industrial automation and process control space. He and his wife sir, their real estate investment journey two years ago with an out of state turnkey single family property. And their original plan was to build a single family portfolio but they shifted to multifamily right now looking in the Idaho and Utah markets. Incidentally, I know Stephen and I are somewhat neighbors. Now it's Devin, you're out of Pocatello. Right. Do us a favor. Tell us. Tell us about yourself. Give us your background and history. And you know, let us know who you are.

Esteban Cardenas 17:38

Yeah, well, I'm a native born, raised here in southeast Idaho, grew up in a small town, about 4000 population straight out of high school, went into college, I acquired my first associate's degree in computer support, and then decided to continue my education and went to electronics, got my second associates in electrical Chemical Technology. And that allowed me to pursue my career and my current w two. I work for a potato processing facility. One of the one of the largest companies, potato processing companies in the world right now. have several processing locations across the Northwest and Washington, Oregon, Idaho, we have a couple places and China Hall. And so all over the world, the wife and I were looking for ways to supplement our income and possibly potentially replace it. And we've found real estate to be very, very lucrative. Yeah, we started our real estate career in like you mentioned single family turnkey space. We were going to continue that that route, and we found multifamily. really enjoy a podcast and obviously a fan of yours. Thanks. We came across the Michael Blanc product. And the specializes in apartments indications, and that really spoke spoke to me. It really made sense. And we decided then to pursue the multifamily space. We ended up signing up for his mentoring program. We were working with the green mentor right now. It's a great program. We wouldn't be where we are right now without without that program. So

Brian Briscoe 19:37

yeah, yeah. No. And I did the same program obviously, which is helped me tremendously. I think everybody who who's been anywhere in the business has done it by partnering with somebody experienced you know, Cody did it one way where he came in as you know, a co GP to partner with somebody. You know, we leaned on mentors, you know that the foros Capital guy I mean, the four of us when we had our first property under contract, we didn't have any GP experience. And we did. But we were leaning on mentors the whole time, you know, and that's, that was the experience we brought to the table. You know, so when we were talking to the brokers, we were leaning on our mentors experience as well, hey, you know, we got this group and, you know, together we have X amount of apartments, like, like most people do, we know, we ended up partnering with one of our mentors, you know, just to be able to get the loan be able to get the closing across the finish line. And that's, it's a key and it's, it's something that I think is extremely valuable. You know, it doesn't matter which way you find it doesn't matter if you pay to play for a mentor. Yeah, you hustle and bring value. It's something that I think is is a key ingredient to anybody's success. So wish you the best of luck and probably seen in a couple of weeks he Are you going to his his big conference in Dallas in two weeks? We're planning on you. Okay, good. I have to fly, you know, 1500 miles to see even though you're probably about 50 miles down the road. But you know, eventually I'll get down there. So let's, let's, let's talk about your big burning why right now? I mean, we talked a little bit I mean, you you talked a little bit about, you know what you were doing a little bit but let's let's boil down your big burning. Why? What is your big burning? Why?

Esteban Cardenas 21:16

Yes, like so many others. And then Cody nailed it right on the head. It's that time, freedom, time control, you know, the older you get, the more valuable time becomes. We all know time is very finite resource. And the goal is to have little more control than

Brian Briscoe 21:35

Yeah, nice, nice. Control your time be with who you want to be and where you want to be when you want to when you want to do it. So all right, well, here comes my favorite part of the show is seven, we got Cody on the line. What do you want to ask him?

Esteban Cardenas 21:48

Yeah, my questions revolve around my favorite part of the syndication process. And that is the deal analysis. My first question is Cody, when you first come across a deal, what key indicators do you typically gravitate towards to, to help determine whether it's a property with

Cody Laughlin 22:09

so I have a three step process market criteria, investment criteria, and then resources. Number one, you know, you want to have an established market that you become an expert in, right, you want to know a market like the back of your hand, and this is going back to the conversation we're having a minute ago, Brian, where if you start out in too many markets, you never become an expert at one, you know, it's going to take you a lot longer to really establish a footprint and understanding of that market. And if you make, you know, if you make a wrong judgment call on a particular market, it could be very costly for you. So, you know, my first thing is looking at a particular market to see is this a market that I even want to be in? You know, is it a primary market, secondary market, tertiary market, location, you know, fundamentals of the market, you know, everything from population to jobs, to, you know, migratory patterns, crime, all of those things, you really want to have a good fundamental understanding for So, once I go through the market analysis and determine Is this a market that I, I like And right now, where we're at, we have our very defined markets, and anything outside of that, it just goes to the junk inbox, we don't even waste our time with it. Okay. Then the next thing is the investment criteria. And I spent some time looking at, you know, what type of opportunity as I looked at the size of the deal, the vintage, is it a value add? Is it a core play, again, location in the market, that it's in, and whatnot, and to see if that's a fit for us in our strategy, right now we do like, you know, more the stabilize assets that have a light value Add Component versus a deeper value, add or reposition, you know, that's just not our appetite. Right now, we don't want to be dealing with 1950s and 1960s buildings, you know, we want to be in the 1980 space and above, you know, we want to stay for us, we're looking at 100 to 200 units, and you know, so if it's a 400 unit deal, I'm not gonna waste my time, it's a 40 unit deal. I won't say that we won't look at it, but it doesn't go up on the priority list. So we truly definitely triage those deals through the investment criteria, through that analysis, right. And, and we'll go through more details, but high level. And then the last thing that we want to look at is resources, right? And and this comes down to your own personal network and resources, right? And these are these are multimillion dollar transactions. And if you don't have a database or network, if you don't have the liquidity, network or experience to put these deals together, then you really have to evaluate kind of your approach. Do you? Do you reduce your search to fit whatever resources you have? Or do you go build out your network and and build the teams that you need to take on bigger deals and so, but it's very, very important, you know what that is what that threshold is, you know, if you're not in a position to take down a $20 million deal, again, your credibility is everything. So you don't want to be out there wasting brokers time and trying to analyze deals, and then you get to a point where they realize that you're not a closer, right. So really looking at your own resources and figuring out what you have, and what's your capacity. And the beautiful thing about that is, if you do want to go bigger, go build your network around that, you know, go find that people, right, that can help you do it. But you really want to have that defined as far as what is your capacity to close? So. So that's kind of the high level funnel that we go through and looking at a deal. So you know, we have deals a hit our inbox all the time, like everybody else. And you know, I would argue that probably half of them end up in the junk folder. You know, just going through that very simple analysis. Yeah. Yeah. I

Brian Briscoe 25:44

love I love the triage you guys do I mean, markets are huge. I think, if you buy in the right market in the right time, it's, it's I'm going to tread lightly on this, when it's almost hard to screw it up. You know, it's kind of how I'd say, you know, if the markets going the right direction, it's almost hard to screw up. So if you pick the pick the markets, right, you know, you got 50% of the deal already. And so so Cody, I appreciate you saying that that's, that's half the battle, you pick the markets that you like, based on the market fundamentals, but good, solid, good, solid three step process there. I

Esteban Cardenas 26:18

like it. Yeah. So my next question is, was around around the team, we always hear in real estate investing. It's always a team sport. What What team members do you typically reach out to? First off to help gather the information you need to properly analyze your deal?

Cody Laughlin 26:38

Yeah. So as far as my internal team, I have two great partners. I've got my partner, Brian on farro, john Beatty, at Blue oak. And, you know, collectively, you know, again, we distribute the responsibilities amongst this right. And so that's a very, very big help. Because while I may be focusing on one aspect of the business, I know that john and Brian are tackling other aspects of the business. So things are always being worked on, improved on and whatnot. So I think when you talk about building your team, build those partners who you really want to build a long term existing relationship and work with. Over time, it's, it's absolute must, in this space, I feel like, but then when it comes to the actual team around itself, I would definitely encourage people to build relationships with industry professionals in the particular markets you're focused in, right? Whether that be lenders, property managers, title companies, I mean, there's a laundry list of team members you need. But I think in the immediate, especially when it comes to deal analysis, I would really put an emphasis on building relationships with a good property management team that has experience in your target markets that are focused on the same type of opportunities that you're looking at, and that have a good reputation in the market, you know, and one easy exercise to do is when you're in a market, ask for referrals, hey, who do you recommend for property management, and when you start hearing the same few names pop up, then you know that, you know, this is somebody that's reputable and well respected. And by the way, you want somebody that has that reputation, because you're going to need it for the lender side, they're going to be looking at those things as well. Right. So the first two big relationships that I would put focus on is your property managers and your, your Capital Advisors, your capital markets team, so your lenders and such, because, you know, in when you do find an opportunity, and you do go the exercise of evaluating your deals, and then you work with your property management team, that property management's, they're great, they're your, they're your local experts in those markets, right. And so they can tell you a lot about that particular asset or that particular market. And if they've been present in the market for some time, you may even discover that they've had their hand in the management of those assets, you know, before we've had some of those experiences as well. So, but once you get through that, you know, when you go to work with your capital markets team, your you know, your lenders are going to be able to tell you like, Hey, you know, is this qualified for agency debt? Are you going to have to go bridge, is it too big, and you have to go, you know, small balance, and they can give you insights as to current terms, especially right now, you know, the markets are insanely cheap. But, you know, there's still a lot of debate on where treasuries go, which dictate rates and things like that. And so they can give you that up to date information on, on what's happening in the capital markets, which you need to be able to underwrite to, because the last thing that you want to do is make an incorrect assumption on how you're going to qualify your debt for this particular deal. So, again, you should always build relationships with the team. But if I had to tell you, Hey, who do you start with property managers and lenders, I would definitely link very, very heavy to Yeah, and

Brian Briscoe 29:37

I agree, and I'll refer you back to Cody's answer to your previous question. Now you look at your, your resources as well. And if you don't have the, the net worth or liquidity to be able to tackle these because that's what lenders are looking for, you know, then then you're also looking for for the right people to partner with as well. So yeah, a lot a lot of a lot of good things in that. Aaron, you know, I think Cody hit the nail on the head as well, I mean, your property manager is going to be, you know, the absolute key to, to your success, if you had, if you had to put it on one person or one company's property manager, and, you know, you, it's super hard to underwrite super hard to analyze a deal without that current, you know, the somebody who can tell you advise you on debt to Capital Advisors, well,

Cody Laughlin 30:28

you have to remember to these are professionals that have access to data that you probably don't have access to, right, and then they have resources at their disposal, that they can allow you to use for your own analysis, which is going to be very, very important. And, you know, listen, some of the subscriptions to some of these, these data that's available, it's very, very costly, it's very, very expensive, you know, you know, 10s of 1000s of dollars to some degree. And so, leaning very heavily on those relationships, because you can get a lot of great access to some of the data that they have to make you to help you improve your analysis in a particular market or asset types or such like that. So, and I'll

Brian Briscoe 31:06

throw one thing in there and you know, a little little plug on Cody, listen to his podcast last night, he had a guest on that brought up the fact he was a capital advisor, he brought the fact that, you know, he calls you know, 40 to 60 different lenders on a monthly basis, which saves you from having to call 40 to 60 yourself, you call one person who's able to to link you up with the right, lender for what you're trying to do. I'm honored, Brian, that you're listening to my show, buddy. Thank you. Wow, absolutely, absolutely. So I drive a lot. So when I drive, you know, I got a podcast or an audio book up so just happened to be the the Cody Lawson and Brian Alfaro show yesterday. But Alright, step seven, what else have you got, man?

Esteban Cardenas 31:50

So thank you for that. Great answers. What What advice would you give to newbies in regards to keeping emotions in check? When analyzing a deal, you know, especially for someone like me, who's been working real hard, trying to find the first deal so that they don't enter budget numbers and in passages getting yourself in trouble?

Cody Laughlin 32:14

I love that question. That's a fantastic question, by the way, so I have a few answers to that. And then what we'll do is we'll go back and tackle each one. So number one, education, to repetition. Number three, I would tell you analyzing larger deals for practice, okay, and and so let's go back and tackle each one. The more that you continue to educate yourself, the better and more confident you're going to feel about your underwriting practices or analysis, right? I mean, the more that we become educated, obviously, it's going to give us it's going to open our horizon, it's going to give us more of those that confidence to go out there and make great sound decisions, or judgments, right. And the next thing I would tell you is repetition, and this is key. So, you know, in learning a market in particular, or learning how deals are operated, the more that you do, the more that you learn, right. And if you're like me, I'm somebody I love to get out there and put myself out there and knowing I'm gonna make a few mistakes, but you learn through mistakes, right. And so the more that you can analyze deals, the more that you can underwrite deals, you know that it's going to make you a better analyzer, because you're going to be able to see trends, you're going to be able to see how different operators are doing things, you're gonna be able to see different things that are particular to a particular market that you can identify. And so so I think repetition is going to be important. And I mean, shoot, we've analyzed hundreds and hundreds of deals now and, and that's what it takes, you know, just putting in that constant constant work, it's kind of like working out, right, you don't just go to the gym once a month and think that, you know, you're going to be fit it takes, it takes daily commitment. And so the same would go would be true for analyzing. And the last one, this is something that I've been recommending to a lot of people is I would recommend starting out, if not solely at least part of your analyzing practices, and analyzing bigger deals that are professionally owned and operated. And here's why I say that. Because if you're just starting out, and let's say you're looking at a mom and pop deal, those finances are gonna look terrible, a lot of time, they're gonna be behind the napkin, a lot of time that you're going to get just to do a PDF form that has just a few little line items here and there. And it can be quite frustrating, especially if you don't know what you're looking at. Right so when you when you get experienced looking at larger deals that are professionally managed, that have good clean profit and loss statements, you can really understand how to read those profit and loss statements and and articulate the story right, these profit and losses. They tell you the story of the deal. And so you can really dig in and see how these businesses are being operated because these are small businesses. And then you can take that understanding and then go apply it to you know, the mom and pop owner you can see you know what's missing or what what information you need to put that story together to to analyze that. So I find that to be a very good practice. And, you know, start out by looking at 100 200 unit deals that are on that, you know, the CBR E's Marcus Miller chap, so you can download those financials all day long from their websites, and just get familiar with reading this profit and loss statements. I think that's a, it'll really, really help you in understanding the financial part of that. Yeah,

Brian Briscoe 35:20

that's solid. The one thing that that I would emphasize is just knowing your criteria, the way to stay unemotional, when you're analyzing is to pick a pick your criteria before you start analyzing, you know, if you pick your criteria, then you compare it against your criteria. And it's just it's a yes or no, at that point. Does this meet my pre determining criteria? Yes, or no, if you don't have that pre determined criteria, you know, every single one comes in, it's like, man, I really want this and I think you're a little more in danger of, of making the emotional decision that could be could be a lesson learned, or could be a seminar.

Cody Laughlin 35:58

So can I piggyback off that real quick, Brian and just absolutely, you know, Esteban, listen, this is, this is an industry that you have to have patience with. And you have to have discipline with because, like Brian just alluded to, you know, if you don't know who you are, as an investor, if you don't know what your investing criteria is, and your investing thesis is, you can go down a lot of different rabbit holes, and you can spread yourself so thin, to where you never really gain any momentum. So I think, to Brian's point, identify what that criteria is, and just be disciplined enough to stick with it, no matter how long it takes you, okay? Because people will end up pivoting or deviating from their criteria, right, when they're on the cusp of something, a breakthrough or an opportunity. So, you know, just be willing to put your head down and know that there's always going to be deals coming, there's always going to be opportunities out there. So don't get frustrated when you know, you've analyzed 10, and none of them work out, that's okay, just keep on going.

Brian Briscoe 36:56

Yeah, just just get better sharpen your pencil every single time, you know, and, you know, the first time I've heard the, the Analyze the bigger deals, and there's a lot of wisdom in that because the smaller the property is, and usually the smaller properties, you don't get the big property management companies that are going to come in and run it super efficiently. And that there's either a lot of expenses that don't hit the profit and loss statement, or there's a lot of expenses that, you know, aren't in line with what a, you know, a better management company would would do. So, you know, if you're looking at the bigger properties, you might see a couple line items that you're not going to see on the smaller ones. And you you do you got to start scratching your head and thinking, Okay, is this something that's just not the profit and loss statement? I mean, maybe there's a marketing budget, and the larger ones, there's none of the smaller ones. Hey, guess what, they're probably marketing. Where is that money? You know, is that on the statement? Or is it not on the statement? And, you know, sometimes the smaller property management companies, you know, aren't as good at getting things on the statement. You know, that's something we found from a lot of experience where we get charged stuff, and it doesn't hit the statement. So anyway, my two cents on that one little frustration on my part. Yeah, there you go. Not saying it was specifically marketing expense that didn't hit our, you know, line items. But that's, you know, that's beside the point.

Cody Laughlin 38:22

Yeah. Well, right. When you're starting out, when you're looking at opportunities, you don't know what you don't know, right. And I think if you if you're looking at some of those opportunities that don't have all the right pieces, or don't have all the right information, it can leave you a number one very frustrated, but it could leave you missing out some pieces that you need for your own analysis to determine is this going to be a good sound opportunity for you? And so I think that's why, you know, having that just general business understanding of how these things work will be a benefit to you.

Brian Briscoe 38:53

Yeah. All right. Well, we are a bow out of time so I got one question to clean up everything for each of you. And Cody, you get to go first question is how can listeners learn more about you?

Cody Laughlin 39:06

Well, Brian, I want to thank you again so much for being honest it's been awesome Esteban great to connect man I keep crushing it just keep putting the work it's awesome. So if you want to get connected with me you can check me out on LinkedIn very very active on LinkedIn and or you can reach out to me via email Cody at Blue invest comm if you love podcasting and whatnot, you can check out our podcast the prosperity through multifamily real estate investing podcast. We've had our our good friend Mr. Brian Briscoe on here recently that have so be popping out pretty soon. So check us out there and if you're in the Houston area and love to do some live networking, you can check us out at the South Texas multifamily and more bass book group where we have our live and virtual meetup events that happen at the first, second and last Thursday of every month. So

Brian Briscoe 39:55

all right. Live meetups. Wow, what are those? Yeah Yeah, amazing. So we'll put all that links Talos in the show notes, email address, website, Facebook group and LinkedIn profile. So if you guys are interested in I definitely encourage you to check it out. podcast too. That's something else you mentioned but just hit the show notes. You know tap in this magical thing called the internet will whisk you away. So Stevan Your turn. how can how can listeners learn more about you?

Esteban Cardenas 40:27

Yeah, I'm also on LinkedIn. Oh, that'd be a great way to get a hold of me. Or good old fashioned email, email, email me at Esteban creaminess, capital calm. All right.

Brian Briscoe 40:38

And we'll also have links to those in the show notes as well. Thank you so, so much to the two of you for coming on the show today. I very much appreciate your time and this is going to be an amazing episode.

Thank you for listening to the tiger and apartment investor podcast today brought to you by four oaks capital. If you'd like to know more about how to invest in apartment buildings or want to be a guest on our show, visit our website at four oaks capital comm slash podcast or email us directly. If you're still listening, you obviously like the show. So pull out your phone, app, subscribe, and leave us a five star rating on your favorite podcast app. And we'll see you again next week.

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