💸 He Was 19 With $3,000. The Seller Lent Him the Other 90%

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Hey RE Rockstar,

Rich here from RE Riches.

Almost everyone reading this believes the constraint is money. Find the money, then you can go find a deal.

Today's subject ran that sequence backwards, and it's the most useful idea we've published all year.

He was 19. He had $3,000, saved from coaching gymnastics. He had never had a W-2 job.

The building was a 12-unit apartment complex. It had been sitting on the MLS for 560 days — publicly listed, visible to anyone, for a year and a half.

The seller carried 90% of the price.

Meet Cody Davis.

One thing before we start, and I'd rather say it at the top than bury it: this all happened between 2019 and 2023, when debt was historically cheap. The sequence still works. The interest rates in it do not transfer.

WHAT WILL YOU GET TODAY?

✔️ Learn the order that shrinks your money problem by 90%.

✔️ Get the phone call that gets sellers to say yes.

✔️ See the one ratio that stops this from being reckless.

✔️ Understand what "no money down" actually means.

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INVESTOR SPOTLIGHT OF THE DAY

Meet Cody Davis,

Who did one semester of college and left.

He posted in a Facebook group asking for a mentor,

Got his real estate licence at 18,

And had about $3,000 to his name —

Saved from coaching gymnastics.

Nine months after getting licensed,

At nineteen, he closed on a 12-unit apartment building.

HERE'S THE BREAKDOWN

The building had been listed for 560 days.

Not off-market. Not a skip-traced lead. On the MLS, in public,

For a year and a half, while everyone scrolled past it.

Price: roughly $1,250,000.

The seller carried $1,125,000 of it —

A long, fixed-rate note, no balloon.

The remaining $125,000 came from a private second lien

At 12% interest, interest-only.

Cody's own cash into the deal: zero.

Month one, after every payment: over $1,000 of cash flow.

By 21 he owned 81 units across eight deals.

By 22, around 105 units across eleven properties.

By 23, with his business partner,

Roughly 180 apartments across Washington and Texas.

Every single one of them seller-financed.

No bank loans.

CODY'S BLUEPRINT TO SUCCESS

• Deal, then debt, then equity — in that order. Most people start at the end: raise the money, then go shopping. He structures the purchase first, gets the seller to carry the large majority, and only then raises what's left. Look at what that does to the size of the ask. On a $1.25 million building, the conventional route means finding $1.25 million. His route meant finding $125,000 — about a tenth as much. As he puts it, structuring the deal is the hard part; "sourcing money is the easiest."

• Don't ask them to sell. Ask them how they did it. His outreach isn't an offer. It's a request for a coffee and a story: "I've never done this before, I'm curious how you did it." His own summary of why it works: "I don't ask people to buy and I don't ask them to sell to me. And because of that... I'm not getting objections, because I'm not asking for things." And his read on why owners agree to carry paper: at some point "there becomes a moment where they have more money than they have time." An owner in their seventies often doesn't want a lump sum and a tax bill. They want income, and increasingly they want to hand something to somebody.

• Where he actually looks: the MLS, filtered for seller financing — the same search bar everyone already has open. Plus Google Maps for large roofs, then the county assessor for the owner's name, then a phone call. None of this is proprietary. The 560-day listing was available to every investor in that county.

BACK TO CODY'S STORY

Now the part that keeps this honest, because it's the part people skip.

"No money down" here means none of his money.

There was still a down payment. It was borrowed at 12%, interest-only.

That is expensive, short-dated debt stacked on top of seller debt,

And it is the single most dangerous thing to copy

If you don't have the ratio underneath it.

So here's the ratio.

He structures deals to keep debt service coverage above 2.0× —

Even when the property is 100% financed.

One example: a 7-plex producing about $8,000 a month,

Against debt service of about $3,625.

That's roughly 2.2× coverage —

Rent could fall by more than half before the loan is in trouble.

And his stated rule on maturity:

He won't sign a loan he can't pay off before it comes due.

He also doesn't syndicate. He borrows.

Nobody is a passive equity investor in his buildings —

Which means nobody is waiting on a distribution that might not arrive.

That is a deliberate, and unusually conservative, choice for someone moving this fast.

LESSONS FROM A SELF-MADE MILLIONAIRE

LESSON #1: THE ORDER OF OPERATIONS IS THE STRATEGY

Deal. Then debt. Then equity.

Raise money for a structured deal, not for a hope.

The second one is a much smaller number and a much easier conversation.

LESSON #2: STOP ASKING FOR THINGS

He gets no objections because he makes no requests.

You cannot be turned down for a question you didn't ask.

Ask how they did it — the rest follows or it doesn't.

LESSON #3: CHEAP DEBT ISN'T SAFE DEBT, AND EXPENSIVE DEBT ISN'T UNSAFE DEBT

12% money on a property covering 2.2× is survivable.

4% money on a property covering 1.05× is not.

Coverage is the safety, not the rate.

LESSON #4: THE DEAL WAS IN PUBLIC FOR 560 DAYS

It wasn't a secret list. It wasn't a skip trace.

Hundreds of investors saw that listing and moved on

Because the price didn't work with a bank loan.

He changed the financing, not the price.

He was nineteen, with three thousand dollars and no job history, and the reason he got a 12-unit building is not that he found something nobody else could see. It had been on the open market for a year and a half. He just asked a different question about it.

This one takes about five minutes and costs nothing.

Open your MLS, or ask your agent to, and filter the listings for seller financing in your market.

Then sort by days on market, longest first.

How many are there — and what's the oldest one?

Hit reply and tell me the number. I read every one, and I'm genuinely curious what comes back from different markets.

To asking a different question,

— Rich, RE Riches

The content of this newsletter is for educational and informational purposes only and should not be construed as financial advice. Conduct your own research or consult a financial professional before making investment decisions.