From Broke to Financial Freedom by 25: Ruthless Strategy Changed Everything with Cody Berman

[0:00] Welcome back to the REI agent. I’m here with Cody Berman. Cody, thanks so much for joining us today. Thanks for having me, Matias. I’m excited. Cody, where are you coming out of? I am in Massachusetts. Well, I spend most of my time here, but we’re kind of digital nomads. We usually travel like four months out of the year, but currently in my home base. Awesome. Awesome. And give our listeners, if they haven’t heard of you, a kind of a bird’s eye view of who you are and what you do in real estate. So Cody Berman, I kind of started out as a side hustle guy. So I might be different than some guests and that real estate isn’t like my only thing or my main thing. It’s just one of the vehicles I use to hit financial independence as fast as humanly possible. So basically I got addicted to this idea of retiring early.

[0:42] I hated my job in corporate. I only lasted seven months, went full tilt into entrepreneurship, started doing things with digital products, eventually stumbled into real estate, bought 11 units in one year. And the cashflow I was making from those 11 units was enough to fund my life and more. So real estate plays a huge part in my financial freedom journey and happy to dive into any and all of that today. Yeah. I mean, yeah, that’s, that’s pretty, that’s pretty rare. Like having the ability to, to just kind of like drop the mic, I’m done. If you wanted to be, I’m sure you sound like you’re wired like me where like, you kind of always have to have something you’re, you’re, you’re, you’re working on. Um, and, and, you know, I relate to like the kind of wanting to be on my own fiercely independent. And, and I worked customer service for a little bit and it was soul sucking, uh, for me, my personality type. Uh, but yeah, tell, tell me, I guess let’s just start with that deal. Like what, what, what did that look like? So funny enough, I started looking at my home base, Massachusetts and the price to rents just weren’t making any sense at all.

[1:41] Massachusetts is a notoriously high cost of living state. And so I was looking around me and I’m like, these don’t make any sense. I was using the 1% rules of proxy. I’m like, okay, you know, this house is 4,000, $400,000. Can I get $4,000 per month in rent? No way. So after like probably touring 20 properties in mass, I jumped the border down to Connecticut and the numbers started to jive a lot more. So the first property we ended up buying was a three unit. It was a split level duplex on top and then a one bed, one bath basement kind of behind it. So my then girlfriend, now wife and I, we did the house hacking method. So we lived in that one bed, one bath. We rented out the split level duplex above us. And we actually went from paying rent every month to live to taking in about $500 per month. So it was such a huge shift, not just for real estate, but for our personal finances.

[2:27] Like we eliminated our biggest expense, which is the biggest expense for most people housing and turn that into an income producing asset. So that was that first deal. We bought it for 235k rent for the split level above us was 2200 and expenses all in. This is like PITI, you know, reserves for capital expenses and everything. Basically everything was like 1700. So we were making about 500 bucks while we were living there. So it was, it was awesome. It’s awesome. Yeah, that’s perfect. Wow. Okay. So I was thinking that you had like, you bought like an 11 unit place. No, no, no. I bought 11 units kind of, that was three. And then I had nine, what’s the math? I can’t do math live. Eight more that year.

[3:05] Yeah. Yeah. So we’re talking about all of them if you want. Yeah. I mean, just give a quick rundown on those. I’m fascinated how you could do that many that quickly just getting in. Yeah. So we bought that kind of house hack for 235k. Then two months later, we had a distressed seller who our agent kind of hooked us up with them. And so it was off market. We ended up buying a duplex for 170k, which depending on where you’re at, like that, those numbers were insane to me as a Massachusetts guy. If you’re in Alabama or Mississippi, that might sound expensive, but for people on the coast, like 170k for a duplex was, oh my gosh, this is insane. So we bought that place for 170k rent was 2250 expenses. All in were 1350. Again, this is a PITI plus all like capital expenditures and, you know, having like a nice little cushion.

[3:48] So we’re making like 900 bucks from that one. Then we bought another three unit and that ended up house hack hopping. So we moved out of that first house hack into this second house hack. That one was for 315k and that was actually in Massachusetts, but it was kind of a funky situation with property lines. And it was like a mixed use property, had like a commercial portion, but bought that place for 315. We moved into the one bed, one bath, and then we’ve rented out the four bed, the two bath apartment and the 600 square feet of commercial space. And then probably a couple months after that, I think it was three or four months after that, we bought another triplex for 245k rent was 2900 expenses were 1900. So after all was said and done, like after we bought those 11 units, we were averaging for that first year between 3000 and $3,500 a month in cashflow. This is post all expenses. So we were living like dirt bags. I was, how old was I at the time? This was in 2020.

[4:42] We bought our first property. So this is kind of COVID year. Things were all funky and people were kind of scared to be in the market, but we were still living like as cheaply as possible. I graduated college in 2017. So it was only three years post-college. I was like 25 years old. So our expenses were far lower than the 3000 to $3,500 per month. We were spending like 2000 or $2,500 per month. And at that point, in addition to all the other stuff I had going on, I was like, babe, we could just live off of our real estate right now. Like these 11 units are literally funding the cost of our lives. So that was a really cool realization that in one year, we kind of just completely transformed our financial position by buying those 11 units. So were you still working that corporate job the whole time? No, at this point I’d already quit. I quit my corporate job on January 31st, 2019.

[5:25] This stuff happened like a year later. Okay. And it was it hard to finance those properties? And I mean, I guess, did you have a decent amount of a nest egg saved up for that? That’s a great question. That’s a real estate investor question. Yes. It was very difficult to get financing because the banks wouldn’t count my self-employment income until it had seasoned for two years. It’s kind of sucks as a self-employed entrepreneur. Like the bank doesn’t count your stuff like they count regular W-2 stuff. So I had to do a lot of shopping around and finding different lenders. We finally found a lender that would work with us, but it was a long painstaking process. I thought it was just gonna be so easy. Like my entrepreneurial stuff was going really well.

[6:02] My digital product stuff was going good. I had my podcast. I have my personal brand. I’m like, I’m making a pretty good amount of money. These guys should have no problem lending to me. They’re like, nope, we actually can’t count pretty much any of this. So I had to get creative. Wow. Okay. I mean, that’s awesome that you could. And I know that there’s things now like DSCR loans. It may have been around then too. It’s a little bit newer to me, but that they don’t worry about that. If you’re buying a property, but that has exactly what we have to do. Yeah. Yeah. They had to look at their income potential of the property and then they would make their lending decision based on that versus a traditional lender for like a regular homes, looking at just your personal income. And to break that down, guys, this is, this is pretty genius because what Cody did here was everything he bought, including what he was living in still cashflowed and still qualified for these DSCR loan products. And it’s, I mean, it’s probably a lot harder now just with interest rates being so high and the way DSCRs work is you have to have a certain ratio as far as how much rent can come in

[7:04] or rent does come in. I wonder if you could get away with that a little bit by, you know, counting yourself as a renter and paying rent to… I don’t know. I didn’t go down that room. I mean, right. But that’s fair. Like the potential rent lost maybe by you living there, because I know I had mentioned I had done what I called house hack hopping. That first property that we were making $2,200 in rent on when we moved out, it was then 3000 because we rented out that one bed, one bath for 800. So like there is that potential rent you’re giving up by being a renter. So it’s like, Hey bank, you know, once I move out, the cashflow is going to actually increase. It’s going to be better for you guys. It’s going to be better protected.

[7:41] Yeah. And I guess I’ve never gone through the path of trying to be an occupant with the DSCR, but I mean, ultimately they, the appraisals and everything are looking at the rent potential. It’s not like it’s necessarily has to have renters in it that exist and are paying this amount. It’s kind of more the rent potential, like a comp would be, you know, for a regular sale. So I mean, that, yeah, that makes a lot of sense. I don’t know why I’d never really even thought about that before, but that’s, that’s awesome, man. So you, you must’ve been killing it. Were you, were you building this like digital brand and all this stuff, the digital products, uh, before you quit your, your job? Like, did you have like a pretty good feeling like, okay, this is going somewhere like screw this job. I had some proof in the pudding.

[8:24] So basically rewinding way back, I read the four hour work week in 2016, that book completely changed my life and how I thought about money. And before that I had thought, okay, you make X dollars per hour. Like you make money on a linear basis. You work X number of hours and you get Y paycheck depending on how much money you make per hour. But Tim Ferriss kind of flipped that on his head. He’s like, you could actually build these things or you can buy these things like, you know, build something like a personal brand or digital products or buy these things like real estate where you can actually put in a lot of the work upfront and then they’ll pay me pay you in perpetuity. So I had already kind of started on this hustle journey, started my first company in 2016 actually was still hustling like crazy all of 2017, 2018. By the time I quit my job, it wasn’t like gangbusters. Like I mentioned, it was January 2019. I was making like 12 to $1,500 a month on the side, but I was also extremely frugal.

[9:14] So I was spending like 12 to $1,500 a month. I was, I was literally just slumming it. I was like sharing a room. And so my rent was only 450 driving the same paid off car, being really intentional about like groceries and going out to eat all that stuff. So I was literally living like as cheaply as possible. Um, so it gave me, you know, some peace of mind like, okay, I’m really not spending that much. I can take the sleep. I saved up about 50 K between like my corporate job and all the side hustle stuff I was doing because I was living so cheap. And then I took the leap. So again, I wasn’t like making a ton of money from my side stuff, but I’m like, if I’m getting back 50 or 60 hours a week that I’m using at my day job to commute or to work, like I can definitely make more than this 12 to $1,500 a month. So just rewinding back, but then my stuff started to explode. So I actually have the numbers here.

[9:59] I have my income numbers from those years way back. I know people like to hear real stuff. So 2018, I worked for half the year. This is the year I graduated college. So I started in like June, ended up making $44,000 that year. 2019 is when I quit that corporate job, ended up making $96,000 that year from like my entrepreneurial stuff. 2020 made 198 K. So this is like kind of prime real estate acquisition phase. And then 2021, I ended up making $403,000. But the kicker is that during that whole period, I was spending less than $2,000 per month. So even when I made over 400 K in 2021, my gap was like $375,000. So that to answer your question, Matias is where all the money came for the down payment. I just had this massive gap between what I was earning and what I was spending. Guys, that is awesome. That is such a laser focus.

[10:50] And, you know, we, we mentioned briefly you’re, yeah, I I’m coming out with a book and, you know, talking about kind of this life phase that you’re in, um, is such an ideal life phase to do things like this. Um, and you know, you’re going to have probably, I don’t know if you had parents or people like being like, what are you doing? Quitting your job? I did. Um, but, but you know, like it’s, it’s just, you know, there’s not a better time. Like, you know, the more that you have on your plate, that getting married, having kids, like whatever you might get into, um, is just going to make it so much harder to take those kinds of risks. Uh, but also to be flexible, like to live that cheaply, to be able to, um, live in, in, you know, the one bedroom apartment, um, to, you know, the one that would make the least amount of rent in the property you buy to be able to live in maybe less than ideal conditions. If, if you are doing a fix and flip or live in flip. Um, but, but man, like that just accelerates your growth so crazy high when you’re, when you’re starting out. And, um, so yeah, awesome. Awesome job. That’s, that’s amazing. I love it. Thanks, man. One thing I want to highlight

[11:56] is I think a lot of people will hear a story like this and they’re like, well, that sucks. That, that guy’s way too frugal for me. Like, but the cool thing is like, you only have to do that for a couple of years. Like if you can have a massive gap between what you earn and what you spend for three, five years, and you just invest all of that money into real estate, into the stock market, into whatever you want and to some stable asset, like you might just have enough to never have to work again for the rest of your life because you sacrificed three to five years. Like it can really be that simple. You don’t have to live this extremely frugal life. Like I spend way more than $24,000 a year at this point because I’ve reached financial freedom and my income has continued to grow. But like my expenses have now grown with that because I’ve built that kind of financial runway, that financial cushion. So I just want to throw out that caveat.

[12:40] No, it’s a really good point. And you know, Erica and I, we, we spent our first three years of being married, both working. I mean, we were probably making 60 to $70,000 collectively at the beginning. And we, we, yeah, we went to, we paid off all our student debt, which was, and I think a little bit of her car loan, which was like $120,000 altogether. So like, you know, we were living really cheaply as well. We owned our own house and we actually look back, like, you know, like we, we like, you know, ate rice and beans so often. And we did all the things that like was so frugal. We didn’t go out. We like, I mean, she lost some friends, honestly, over it. Like it was like a sticking point for a lot of people that didn’t understand. But, you know, at the end of the day, like we look back at that time really fondly. Like we were like very like in sync with each other. We were, you know, we kind of were striving towards the same goal. It definitely didn’t, we don’t look back on it. Like, oh my gosh, I’m glad those days are over. It was like, actually, I kind of missed that. That was kind of

[13:41] cool. And do you feel the same way? I feel the exact same way. I was going to bring up a story actually from the four hour work week. Cause a lot of people, I think have this misguided notion of what money means to them and the life that they’ll live once they have a lot of money. And Tim Ferriss in that book was talking to some guy who sold this company for like $40 million. And Tim’s like, dude, why are you working so hard? Like you’re working 80 hour weeks. You barely see your wife and kids. And the guy’s like, so I can travel the world. And Tim’s like, you can travel the world for like 20 K a year. If you really want to, if you really want to slum it. And like me and my then girlfriend, now wife, Lauren, we went to Australia for six months and spent like 12 grand total collectively.

[14:18] So like a lot of these things that people think that they need a ton of money for, there are ways to do it much, much cheaper. Now, if you’re, if you’re going to like, if you’re like Cody, I want a yacht and I want a private jet. Okay. You might need a lot more money for that. But if your goal is like to travel the world or to have freedom, to take off a Tuesday, to do something fun with your family, you don’t need a lot of money for that. You just need to like really kind of set your intentions, see what that actually costs, see what you need to sacrifice and then go after that thing. So yeah, I totally agree with you, Matias. I think that’s a, it’s a misnomer that a lot of people fall into that trap. Yeah. Like it, and, and yeah, like you have to, like, it sounds terrible, but you know, it’s, there’s a couple of things I wanted to say on that line of thought. Like, I think, you know, part of, you know, the person that is, you know, has $40 million and is still working so hard. Like, I think, I think that we have this, everything in society is kind of selling us this idea that, you know, we need to have things easier. Like everything, like all the products are

[15:12] like trying to solve problems. And, and, you know, we have air conditioning and we have all these things, these luxuries, but like, then there’s also this big movement of like making yourself get into a cold plunge or, you know, making yourself going to a really extremely hot sauna. Exercise can be really hard and painful and difficult and you’re sore from it. But like all these things actually help your brain and help you feel better, make you less depressed. And I think it’s because we have to impose artificial hardship, but we have to get into these flow states. If we’re just sitting around watching Netflix or whatever, it’s because we sold our company for $40 million, we’re probably going to be really depressed. Yeah. It’s not actually wired to work hard. I agree. Yeah. Yeah. I think humans are wired to work hard and it’s the journey, not the destination. That’s why people always say the goalpost always moves. It’s like, yeah, because the amount of money in your bank account is not, that’s not the point of life. It’s like setting up your goal and going after it. And it’s, it’s the day in day out. It’s not just the shiny object at the end of the road.

[16:08] Totally. And it really money doesn’t have to be that goal that you strive towards. But yeah, unless, and also on that note you know, one of the things I kind of preach to you in the book and everything that’s coming out is the, is kind of the idea of if, if you can get to the point where you kind of have, you know, a hundred percent of your expenses covered and you just kind of grow your lifestyle that way. Um, you know, and before you buy the, the car or whatever, buy the asset that pays for the car, uh, et cetera, um, is, is just, uh, yeah, an amazing way. Cause you can always, you know, have that flexibility of, I don’t really want to work this year. I’m going to go to Australia for, you know, travel, travel instead. Um, there’s that ability that you wouldn’t have otherwise, if you just put your lifestyle first and depend on your, your earned income. So yeah, great examples.

[16:56] Living the dream, man. I’m trying, I’m trying, I’m still working hard, but only on things that light me up. And when I want to, yeah, that’s the, that’s the point. That’s a hundred percent me too. Um, so now what, what are you doing? Um, now like what, yeah, after that year, buying 11 properties, all that kind of stuff, where’d you go from there? Yeah. Let’s see. I honestly started to go into more hands-off real estate. So I started investing in like syndications and I would partner with, I partnered with one of my buddies who was a GC and he would do, I would kind of finance the flips. He would do all the work for the flip. So we kind of got our hands really dirty that first year. And honestly, we kind of realized like, Hey, we don’t really want to own too many properties. Like I don’t know what the right term would be like outright, or we’re the only kind of people involved. Let’s just like pool our money into real estate in other arenas, like through a syndicator or, you know, doing a flip with someone else who’s kind of handling all the work because I started to really focus on some of my other

[17:49] businesses. So after that year though, we, I mean, we tried, I mean, we still do. We have some Airbnbs. Uh, we did a bunch of flips. I have a lot of money in various syndications throughout the country. Um, we’ve kind of just tried it all. I’m, I’m kind of like a dabbler. I feel like we’re the same way, Matias, where I just like to try stuff. Like I’ll hear, I’ll hear of someone doing something on a podcast. I’m like, wow, that guy made a hundred K from a flip. Let me try doing a flip. And then I tried doing a flip where I’m like, Oh, this person said they’re making three X their long-term rent with Airbnb. I’ll try Airbnb. If it works, it works. And I keep doing it. If it doesn’t work or if it’s too much work and I don’t enjoy it, then I stopped doing it. But I’m like a chronic dabbler. I just can’t help myself from trying something new. Um, but yeah, I’ve, Oh, I’ve done hard money lending. I feel like I’ve like dipped my toes in all of the different waters of real estate, not all of them, but a lot of the main buckets. And at this point, the ones that I’ve stuck with, we didn’t do a flip last year. We did a couple of the year before made pretty decent

[18:40] profits, but we still have Airbnbs and long-term rentals. And that’s, we’re kind of cool with where our portfolio is at right now. We actually ended up selling one of those original or two of those original properties we bought in that first year, because it was just, the cashflow was great, but there were just kind of like tenant nightmares. They were in places that we wouldn’t really want to live ourselves. And that, that lent itself to a lot of unforeseen problems from when we first purchased. No, that makes sense. I think, I think, yeah, you just have a lot of options when you’ve, you know, had real estate for some time, uh, with, especially with all the appreciation here recently, um, you can roll that into other stuff. Uh, you know, the syndication thing I think is such, uh, under utilized under, under, under, under a stood understood misunderstood. I don’t know.

[19:24] Yeah. Or it’s just not, it’s not well known enough in like real estate agent circles. Uh, because I think, you know, it’s such a cheat code. Like, I mean, obviously there’s risk you can lose money and it’s not like it’s a guarantee. And there’s been a lot of blood in the water here recently, but, um, yeah, I mean, like if you can get the accelerated depreciation as a real estate professional, um, you know, you can really offset some of your, your commission income tax wise, and you’re investing in a way that you don’t have to have a tenant, uh, that you have to deal with. You don’t, you know, Airbnbs, yes, they can make more. Um, there’s also a lot, also a lot of risk with them. I mean, there could be, you know, regulations that change that no longer allow that use case. Um, there, you know, and then there’s just more work. I mean, it’s just, unless you completely outsource it, it’s, it’s, you’re just more hands-on. You’re really providing a service. Um, yeah. Hospitality service. So, but, but syndications. Yeah. I mean, if you get enough of an understanding of how they work, what they are, um, you know, get a relationship with

[20:23] some really good, uh, people with a proven, uh, track record of, of investing successfully in these, uh, you know, you can, you can invest confidently and, um, sit back and just let the quarterly dividend checks come in and the, uh, what is it? K ones come in so that you can write, write off your taxes. So it’s, it’s a brilliant thing that, you know, I don’t think enough people really understand. I think, especially for your community, this is actually one of the few podcasts where probably a majority of the people listening can take advantage of this, but if you’re a real estate professional, if you have real estate professional status in the eyes of the IRS, when you invest in a syndication, you can offset your active income. Like normal people can’t do this. You can offset all the money you’re making from your 1099, like as a real estate agent, or if you’re a broker, um, most people can’t do that. They can only offset their passive losses from, or their passive gains, like their, you know, long-term rentals from their syndication, like depreciation.

[21:16] But you guys listening, if you do have, if you qualify or your spouse qualifies for reps status, it’s like such a huge hack. And so me and my wife did that where we like kind of got her hour log and we were able to take depreciation against our active income, like in all my online business stuff from our syndication investing. So it’s like, it’s such a super hack. If you’re someone who has, maybe you, you’re not so interested in investing a bunch of your, like, or investing personally, and you don’t want to own the properties, but you’re like crushing it as an agent. It’s a great way to get extra real estate exposure. And it’s a great way to kind of reduce your, your active income taxes. So that’s a, that’s a pretty niche hack for an audience like this.

[21:55] Yeah. Yeah. And you can, you can diversify like what, you know, the location, uh, property asset type. Uh, there’s all sorts of different ways you can, you can do this. And, uh, you know, I, I brought this up a hundred times, but you know, we, we did one, uh, where we invested $50,000. Um, the first year we were able to write off $66,000 off our taxes. So like, I mean, it also is returning like, you know, nine, 10%. Uh, I think it was 11 at first, but then it slowed down because I think they sold a mobile home park or something. So the beginning was a little bit more and, uh, heavy, but, but yeah, it’s, it’s returning just as good as the stock market. Um, you know, from a, you know, a return on investment standpoint, but the tax benefits then are huge. And there’s, you know, the possibility of them selling and getting a, you know, all my money back, plus whatever the profits are, and there’s the possibility of them refinancing where I get all my money back and I still have ownership in the property. Uh, so it’s just, you know, when it works well, it’s pretty amazing.

[22:50] And, uh, I guess if you want to play devil’s advocate here, there, there were a lot of people that were kind of caught with the pants down a little bit with, uh, the interest rates, uh, changing, uh, so drastically people were buying like, let’s say apartments, um, with bridge debt where they were, you know, not forecasting that the interest rates would spike that drastically. Um, and then the deal really didn’t work anymore. Um, so like people were not getting paid out their dividends. Um, and sometimes they’re being called for more money, uh, to try to keep the deal afloat. Um, so it’s definitely, you know, you need to be smart and that’s why they have like, it’s like, you have to be an accredited investor. Um, so you have to really make sure that you are able to wisely invest and not, you know, put all your life savings into something that doesn’t work out and then be ruined.

[23:37] It’s the idea. This is definitely a level two. I don’t want people thinking people listening to hear this and be like, Oh, syndication sound awesome. I’m going to start doing that. If you don’t have any properties yet, start with like a house hack or like a simple investment property. Like this is, this is level two. You, you kind of, you asked me, Matias, what I’m doing now. So I answered honestly, but that’s because I’m years past that first stage. Like if you’re just getting started, please don’t be like, all right, syndications, that’s it. And only do that. Like, you know, get your, get your hands dirty, get your feet wet in the, uh, just regular investment property market. And then you can move on to syndication, bigger projects later on.

[24:12] Totally. I mean, you have to build up your net worth often. You have to usually be worth a million, um, outside of your primary residency or have a high enough earned income, which is, I think it’s like 200 solo 300 married, uh, something like that. I think that’s right. All this stuff, check you with your CPAs about it. But, um, so yeah, it’s definitely not a beginner strategy, but something good to have in, in, in mind for, you know, what you, where you want to go, especially if you are building up a successful real estate sales business. It is, I mean, it’s really makes a lot of sense. Um, absolutely. But yeah, I mean, Cody, we, I feel like we have so many different directions we could go from here. Have you ever talked about leading, um, some syndications as well? Or, uh, are you, you’re what, what’s your digital products? Like what, what are you doing in that space? I mean, I know that’s your kind of your niche here. So.

[24:59] Yeah. I mean, so like I said before, real estate is not a main focus. I have never once had the urge to be a GP, like a general partner on a syndication. Um, I’m even like trying to be as hands-off as possible with the properties I own. Uh, the digital product stuff is I kind of got my jump on Etsy and Shopify and just started selling like printables and digital products. Think calendars, planners, templates, worksheets, all that type of stuff. Um, that was one of the main reasons I was able to actually kind of quit my job and really start to increase my entrepreneurial income. When I got this whole thing started, that little side hustle has since turned into like a massive company. We have a bunch of employees and now we have like this huge template library. We have like a whole community and course and all that fun stuff. So yeah, that turned into a whole, a whole beast of its own. Uh, gold city ventures is that’s the logo, the logo I’m rocking on my shirt and behind me, um, that’s kind of my main business and real estate. Like I mentioned before, I’m just, I’m an opportunity. I’m an opportunist.

[25:53] I’m a dabbler. It was just like, okay, this is a really safe place for me to park my money. And like the cash on cash return is great. And I can, you know, in one year I could put down like $200,000. That’s how many, that’s how much I spent in down payments that year. I bought the 11 units and like, just that was the key to financial freedom. So that’s why like I invested in real estate. It’s not because I like love real estate or something. And I have no desire to go buy a hundred units and raise a bunch of capital. Um, I just saw it as one, you know, one lane to achieve financial freedom. And so I like to be, sounds like you do as well diversified. And so I have like all my income sources, all my net worth kind of scattered.

[26:28] So if one thing crashes, then I’m, I have a little bit of a safeguard somewhere else. Sure. Yeah. I mean, if you’re, if you’re looking at it from like a Robert Kiyosaki cashflow quadrant kind of a perspective, uh, you, you, you’ve definitely moved yourself around that whole quadrant, uh, started off as an employed person, uh, went into self-employed. Now you’re a business owner, um, and you know, obviously an investor as well. And I think that’s something key to kind of, you know, I think that’s something that, that agents often miss as well, of the importance of kind of working that, that, um, investment side as well. Um, I think agents also have a really good opportunity to invest in real estate cause they understand it. Uh, they’ll be, you know, in it all the time that it would be, I mean, kind of, I mean, I feel like it’s a little silly not to, um, but you know, again, not everybody wants that headache of a tenant, that kind of stuff.

[27:18] So like if, you know, if you need to use it to build up your, uh, passive or your, your net worth a little bit, and then bump into things like syndications could be a good runway for it, or just, you know, focusing on your sales. And if you make enough money in sales and you can do just something like that as well. Absolutely. Just to give people a concrete example, I was trying to pull up the Etsy shop here. Cause I think these guys have done an amazing job. If you want to just see what I’m talking about, like digital products, like here’s one real estate agent specific, the site or their Etsy shop is called the agent site shop. It’s this couple from Tennessee and they have like 67.5 thousand sales. And each one of those sales is like a $20 price point. And it’s things like I’m scrolling through here, a home buyer’s guide, a home buyer’s presentation, a real estate spring market flyer, a St. Patrick’s day marketing bundle. It’s just like all these random things that they’re probably already using in their brokerage. They decided to kind of like template ties it and put it on a platform like Etsy. And these guys have made like an extra,

[28:12] almost $1.5 million from these quote unquote silly little digital products. So if you guys want to go check that out, like you guys are already agents, you, you probably could go and start an Etsy shop or a Shopify store with a lot of the digital assets you already are using in your day-to-day life. You just got to white label it and template ties it so other people can use it. So that’s just a little bit of homework. If you guys want to see what the heck I’m talking about. That’s awesome. That’s really cool. I’ve seen things like what you’re talking about, like the calendars and all that, you know, using things like in GoodNotes. Yeah. Or GoodNotes. Yeah. Yeah. There’s a lot of opportunity out there.

[28:45] But yeah, that’s so cool. I mean, that’s such an awesome story you have. Curious if you have any golden nuggets for our listeners today. I do. I got a couple for you, Matias. Okay. So golden nugget number one is that passive is the name of the game. So I’m such a huge fan of passive income. I used to be a guy who I would just trade my time for money. Like it was nobody’s business. Like actually during that six months stint in Australia, I did Uber Eats on a bike. That is literally the most active side hustle you can ever have. I got, I got a couple of one-star reviews because I was sweating on people’s food. It was that active. Now I’m very big into passive income. So what I was talking about before with like the kind of front loading your time or your money or your energy into something like real estate, but what a lot of people get wrong is that you need to need to build a solid system from the start. I see a lot of people complain about real estate because they’re going and collecting their rent and cash, or they’re not screening their tenants properly, or they don’t have proper maintenance

[29:40] system set up. So like when a plumbing repair happens, they have no one to call. So like, I am such a huge advocate of setting up your systems before you even get your first property, like know what property management software you want to use, know how you’re going to collect rent, know who you’re going to have, like have an Excel spreadsheet. Like this is the plumber or these are the top three plumbers. These are the top three electricians, yada, yada, yada, have all that stuff handled before you get that first property. So you’re not just absolutely scrambling because most of the people I see who are like managing real estate sucks. It’s so much work. It’s such a lie. If you say it’s passive, it’s like I spend like one to two hours a month, maybe managing our portfolio now, because I built these systems. The people who are spending 10 plus hours a week are the ones who are like just scrambling because they don’t have a system set up. So if you can get your system set up from the start, then this can become a much more passive side hustle or passive business.

[30:30] Can I ask a follow up question for that real quick? Absolutely. Yeah. Did you ever do any of the maintenance? I know you talked about a couple of these properties being distressed and you were really frugal. Were you ever hands on on some of the things? I was, and it was the biggest mistake ever. So the first property we bought, there was a something with the sink and it was leaking. So I went on YouTube university. I’m trying to replace the P trap underneath the sink. And I was literally going back and forth to Home Depot and working on this thing for like five hours, just watching a million YouTube videos. I couldn’t figure it out, called a plumber over and he fixed it in 15 minutes. And literally after that, I’m like, I’m never DO-ing again. This is such a waste of my time. I don’t have these skills. This is a cash flowing property. The tenants are paying for these repairs to happen. I don’t need to be doing this myself. So yeah, I did a little bit of DOI at the beginning. That P trap incident was the last straw. And since then I’ve hired everything out. I’ve definitely taken on the more or less a hard

[31:27] rule of like, I don’t want to touch anything. Cause I think that’s when I’m going to get frustrated with it. That’s how I would get myself out of owning these properties is. And then right now, you know, really it’s more about that long-term wealth growth than it is about the monthly cashflow. So, um, but anyway, keep going. Great followup. Okay. So two actually ties in perfectly to your followup and what we’re talking about here. So two is don’t be afraid to invest outside of your local area. So unless you want to be a very active property manager, you’re the guy or girl going to fix the P trap, going to fix the electrical, going to repaint that wall. Unless you want to do that, then just don’t listen to what I’m saying. But if you want to be a passive investor, which I’m guessing a lot of you guys want to be that it doesn’t matter if the property is five miles away or 500 miles away is the same exact process to set it up. You’re going to be using the same screening software. You’re going to be using the same rent collection tools. You’re going to build that list of handymen or handy women, your plumbers, electricians, your repair people

[32:24] on an Excel spreadsheet, just the same, whether you’re investing in Massachusetts or Kentucky or California, it doesn’t matter. Like the system is the same. So don’t be scared and think you have to invest in your local area. And maybe you’re in a really expensive high cost living area. Like the playbook’s the same again, unless you want to be the active person and you’re doing all the repairs yourself and you need to be close. That’s different. But I’m guessing most people listening don’t want to be that person. I definitely didn’t want to be that person. And that’s why I ended up investing a couple hours away from my home base. And you’re not even, you didn’t even mention a property manager, right? Yeah. Yeah. We, uh, yeah, we know you don’t even need a property manager, honestly, to start. Like if you have these systems in place, then you kind of are, you’ve kind of created a property management business in and of itself. And you’re able, you can manage your properties in a couple hours a month, max. And the last one is that house hacking is by far the easiest slash best way to get into real estate bar none. So in my own journey, I was able to

[33:19] eliminate my largest expense while also building a passive income stream and getting my feet wet and getting into the world of real estate. Like it was a double whammy. I was increasing my income and decreasing my expenses at the same time. There are very, very few things that you can do to make that happen. Like you start a side hustle that’s increasing your income, doesn’t decrease your expenses, or you downgrade your car, you spend less going out to eat and on groceries, that’s decreasing your expenses. It doesn’t increase your income. House hacking is one that does both. And it’s one of the very few things that does both. So I hear so many investors today, even people who are pretty plugged in, they’re listening to podcasts, they’re reading books. They’re like, I don’t have enough money for a down payment. I’m like, Oh, you know, what are you saving up?

[33:58] They’re like, Oh, I need 25%. It’s like, okay. If you’re going with a commercial loan and a property that’s super far away from you. But if you, if, if house hacking is like the best option available and you only need 3.5% down with an FHA loan, if you’re living in that thing, like go that route, even if you’re like, even if a property is not really, you know, hidden the 1% rule, just getting your feet wet in real estate and owning that first property, I think it’s worth it kind of going to house hacking route because you have to, you need somewhere to live rather. You’d rather pay the mortgage on that house act and pay rent to someone and never build equity in that place. So I’m just such a huge fan of house hacking. I think it’s such an easy way to dip your toes in the real estate waters. I couldn’t agree more. I think that’s, it’s definitely true. And, you know, going back to Robert Kiyosaki as well, again, since that’s often a lot of people starting his point is, is one of his books, but he, he also talks about how, you know, your, your primary residency is a liability, not an asset, but you’re flipping that on its head.

[34:56] I mean, that’s, you know, you’re changing that up too, because if it’s earning income, even if you’re living in it, it’s a, it’s now an asset. So yeah, those are great. Appreciate it. Cody, then do you, do you, I hope I didn’t cut off any other ones, but do you have a favorite book? One that you think is fundamental that everybody should read or one that you’re currently really enjoying? I’m going to give a shout out to the four hour work week that I mentioned before. If you haven’t read that book, it’s just, it’s such a good book just on kind of rethinking and relearning what money is and really realizing that money is a tool and that you don’t have to trade your time for dollars on a linear basis. So that’s, that’s one that really affected me. And I think anyone who’s interested in entrepreneurship should read it.

[35:40] You know, I’ve, I, I need to come back to that book now, especially with like the context of AI. But I, I have definitely heard that one be mentioned a lot as like kind of one of the biggest, like mind shifts people have gone through, like kind of maybe not quite as many times as like, you know, rich dad, poor dad, but that one is, is definitely one that has just, I think, rocked a lot of people’s world. So that’s, I need to go back to that one. That’s a great recommendation. Yeah, check it out. And I think it depends on what, where you’re at, right? Like I remember first reading it and kind of thinking, oh, this guy’s kind of a douche, but I like saw, I went past that. And I’m like, there’s a lot of good takeaways here. Like he just talked about things that were so uncommon and so different. Like he was on the forefront of hiring, like outsourcing to foreign VAs. He had this whole like supplements business that was getting run by this team in the Philippines for like $2 an hour. There’s just like so many things that he just, he breaks the norm. He breaks the mold and just does things in weird ways that you don’t think are possible

[36:34] because the average person doesn’t do it. Yeah. He’s a smart guy. That’s for sure. Great podcast as well. Then Cody, if, if anybody wants to follow you on social media or, you know, find anything more about you, where can they go? I’m everywhere at Cody D Berman. So whatever social platform is your favorite, I’m probably there. I have a book coming out at the end of April. It’s called retired by 30. It’s not going to be out when this podcast airs, but if you want to kind of keep up with the updates there, I’m going to be doing some, some sneaky freebies and fun stuff behind the scenes. If you want to just follow me on social media, you’ll, you’ll see all the fun drops there. Awesome. Cody, thank you so much for being on the show. It’s been a lot of fun talking to you.

[37:14] Appreciate it, Matias. This is a lot of fun.