“I started from nothing and didn’t have any liquidity network experience, but I knew I had to go find it”

-Cody Laughlin

 

“If you show up enough, and you’re present enough, and you build your brand, and you build strong relationships, you start to overcome that hurdle”

-Brian Alfaro

 

Cody Laughlin is a real estate entrepreneur, podcaster, and meetup host with 10 years of real estate investing experience. His focus is acquisition of cash flow producing real estate with a special focus on value-add, multifamily assets. Cody is the founder of the “Prosperity Through Multifamily Real Estate Investing” podcast and the Space City Multifamily Meetup. He works alongside other investors through syndication to acquire multifamily assets and is currently invested in 128 units as a Limited Partner and 240 Units as a General Partner.

 

Brian Alfaro is a real estate entrepreneur and local Houston business owner. Starting in food service operations, Brian quickly expanded his span of control in a customer focused Franchise business. Leveraging his expertise, Brian now controls a multi-location business in Fort Bend county that serves 1000’s offering an upscale coffee experience. In addition to his Commercial Real Estate experience from his Retail business, Brian is also a residential real estate

investor, current licensed residential agent, and he is currently a General Partner in 240 Units in Houston, TX.

 

In this episode, Trevor, Cody and Brian discuss:

  • How Cody and Brian met each other and became successful partners.
  • To find a great market, go to an area where opportunities are available and that you are very familiar with. An area where you really know the market well.
  • The uphill battle that you will experience as a new investor – network, liquidity, track record.
  • How Cody, Brian, and John put the company together, their biggest challenges and how they find deals.
  • How to build your network and tell the world what it is you’re doing.
  • And a lot more informative topics!

 

Listen to all our episodes and leave a review: HERE

 

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CONNECT WITH CODY AND BRIAN:

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BOOK RECOMMENDATION:

The ABCs of Real Estate Investing | The Advanced Guide to Real Estate Investing

 

CONNECT WITH TREVOR

Links:

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Email us: Trevor@podcastingyou.com

Full Transcription Of Today’s Episode

Trevor Oldham  00:44

Hey, everybody, welcome back to the real estate investing exposure podcast. Today on the show. I’m super happy to be talking to two people out of blue oak capital. They are a Houston based private equity firm with an exclusive focus on the acquisition of workforce BNC multifamily communities across Texas, Tennessee and Kansas City. Today on the show, we have Cody Laughlin. Mr. Laughlin is the head of deal acquisitions for blue capital and has been an active real estate investor for over 10 years. Cody’s investing thesis is focused exclusively on investing in multifamily assets in which he retains ownership interests and 240 multifamily units as a general partner. Also on the show, we have Brian Alfaro. Mr.  Alfaro is the head of investor relations for blue capital, carrying a background in foodservice operations as a multi location retail business owner. Brian’s real estate experience spans across both residential and commercial real estate. And now our team’s ownership as well. And 240 multifamily units as a general partner, Cody, and Brian, happy to be talking to both of you today. Thanks for having us, Trevor, as always, thanks for having us. Yeah, mostly, I mean, and this is the first time you know, while I’ve been going through this podcast, typical person or just talking on one off, so it’s nice to be able to talk to two people from the same company today. And I’d love for the audience to know, you know, how you guys met, how you became partners and this company, because I think that a lot of times people want to get started in real estate, but they aren’t sure how to find a partner. So I’d love for you just to go into your background, how you guys met each other and how you ended up becoming managing partners of blue oak?  

Cody Laughlin  02:24

Sure, sure. And it’s funny, Brian, we were starting to get this feedback more and more, right, we’re the first duo on podcast shows. Right? Yeah, pretty common. That’s it. But yeah, you know, like you alluded to in my bio, Trevor, my real estate journey started 10 years ago, in the single family space after I became an accidental landlord. And this was, you know, right after the Great Recession, you know, housing market was still in the dumps. And my wife and I had bought this house in 2008, was our very first home. And we went to move to a different part of Houston is where we’re based out of, and we tried to sell the home, and we purchased another one prior to selling it and we couldn’t sell it, we and we were stuck. Because we’re like crap, we can’t afford to pay two mortgages. So we’re just like, hurry up, put a tenant in there. We’ll figure it out later, right. And then around that time, I came across the the purple Bible, Rich Dad, Poor Dad, and all the all the lights started going off. And I was like, Oh, this, you know, everything I’ve been taught up to this point about wealth creation and whatnot was completely, completely wrong. And so started pursuing the real estate entrepreneurship journey. And, you know, fast forward 10 years and a decade of making several different business choices that didn’t pan out and cost me a lot of expensive mistakes and learning lessons or whatnot, you know, made the transition to multifamily 2019. And, you know, started from nothing didn’t have any liquidity network experience. And so, but I knew I had to go find it. So just really started following the framework of the industry leaders started networking, building up my database. And along the journey, through another opportunity met our first partner, John, and John, and I started collaborating with one another, we started analyzing deals together, doing property tours together, and really just kind of, you know, going through some training exercises, so to speak, to see if this was a good fit. And, and sure enough, it was, and we decided to launch flow capital, early 2020. And, you know, just continuing on to build out the network, John, and Brian actually connected through a Neil Ball boot camp. And coincidentally, he’s based here in Houston as well. He was joining a mentorship program that we had joined earlier last year. And we said, Man, this is this stuff that is here so let’s go meet with this guy and see, see if this is a good value add to what we were doing in our business. And I mean, it sure was, you know, we needed a lot of help in a particular area of our business. And I mean, it’s a lot of hats to juggle and so and Brian had that perfect skill set that fit right into that and had a great conversation with him at his coffee shop actually and, you know, the rest is history. So now we’re the trio.

 

Trevor Oldham  05:04

That’s excellent. That’s definitely a good way, I think to meet a partner, especially going through Well, you mentioned Niels Niels boot camp. And I think that’s a great overview for our audience. And, and I will, as I was reading your bio and out of curiosity, you mentioned that, you know, being from Houston and investing in Texas makes sense. And then you also mentioned that you’re investing in Tennessee, and Kansas City and for the audience that’s listening to the markets differ, you know, from Texas to these other locations, you know, what was the reasoning behind going to, you know, outside of your home state to invest? 

 

Cody Laughlin  05:37

Yeah, you know, for us, we believe in going where opportunities make sense, and Texas is a fantastic market, it’s a great market to be in. It’s a very, very competitive market, most of the multifamily commercial industry, commercial real estate industry right now is probably pretty competitive. But, you know, for us, we wanted to really go into areas that where opportunities that made sense, but we’re also familiar with. And so our partner, John, is actually from Tennessee, and knows those markets really well. And so we said, hey, that’s a great point, a great target market that we could start putting some focus in as well. And his family has some deep rooted relationships there. And Kansas City was a coincidence that came on our radar. Last year through our podcasts, we had a guest on the show that was based out of Kansas City, and was both on the investment sales side as a broker and an investor. And, you know, he shared a lot of great insights as to some of the fun months, excuse me market fundamentals. And we said, Hey, this is something to watch out for. And we sure did, we watched it for I don’t know, Brian, probably a good quarter to last year. And we just saw that throughout COVID. They just kind of, you know, just put it alone that with no issues really didn’t feel any significant impact from COVID. And, and that’s something that we look for, you know, is how resistant some of these markets are to certain economic downturns. And we took our tour there in October, really enjoyed the lay of the land and got to meet a lot of great people there. And so, so we’ve been focusing there presets

 

Trevor Oldham  07:02

For the real estate investor out of Kansas City. Did that happen to be Logan Freeman?

 

Cody Laughlin  07:07

Sure was Miss Mr. Casey.

 

Trevor Oldham  07:08

Yeah, I know. Oh, man, I so Logan had been a previous client of ours known for probably two or three years now. That’s, that’s when I know he’s a broker, as well. So when he mentioned Kansas City, honestly, I was like, I wonder if he knows looking for anyone else. He’s definitely the guy to know if you’re going out of that space.

 

Cody Laughlin  07:08

Yeah, that’s right. That’s right. He’s everywhere.

 

Trevor Oldham  07:08

Yeah, exactly what not, that’s great. Having, you know, being in Texas, and then also, you know, having that connection in Tennessee, and then obviously, Kansas City, you know, that’s one of the markets that you always, you know, not always hear about, but one of those markets where you got like Kansas City and Memphis in these other areas where I might make a little bit more sense to invest. And as you’ve been growing this company, what are some of the challenges that you think that you’ve experienced as an investor?

 

Brian Alfaro  07:54

I think some of the challenges we face are definitely some of the similar challenges. A lot of new investors, you’re gonna see, you know, being new in any space, you’re gonna have the uphill battle of not having what Cody said, the network, the liquidity, the track record, you know, we’re looking at assets that are millions of dollars. And that’s something that anybody who’s new entering space, you’re gonna have, like I said, that uphill battle. So I would say, That’s definitely been our biggest challenge is just getting people to at first, you know, take you seriously, it’s just like anything else. And I think if you show up enough, and you’re present enough, and you build your brand, and you build strong relationships, you start to overcome that hurdle, which I think we personally started feeling, if not late last year, definitely earlier this year, that although, you know, the hard work that we had put in the momentum that we had been building throughout 2020, even with COVID going on, was starting to finally bear some fruit. So I would say that’s probably been one of our biggest challenges. I don’t know if Cody has anything to add for that.

 

Cody Laughlin  08:54

Yeah, I agree. I think, you know, to kind of piggyback off that being patient, because this is not a get rich overnight industry. And it takes a lot of work and a lot of time to put in that foundation, like Brian mentioned. So you know, we’ve been at it on the active side for two years. And as he mentioned, just now finding that traction and that momentum this year, that’s finally you know, hopefully going to, you know, propel us to the next level. So I think that’s hard for any entrepreneur to get in. Because you have this, you have this drive, you have this passion, and it’s very easy to get yourself completely immersed in your business, but then you fizzle out and you die out because you don’t see those immediate results. And so it’s kind of like, it’s kind of like going to the gym right? Where you go if you go work out for the first week and you look in the mirror, like I look the same, and then you quit Well, it doesn’t really work that way. You know, you have to put in the time and effort and consistent behaviors in order to see those returns on your efforts, so to speak. So

 

Trevor Oldham  09:55

I’m going along with that and having experiences as an investor and starting out With this company, what was that first deal like that you put together? Did you raise capital? Did you just take in money from friends and family? Do you mind just walking our audience how that went about?

 

Cody Laughlin  10:10

Yeah. So this first opportunity for us came through, again, relationships and came through networking. And you know, one of the biggest challenges right now this market cycle is the level of aggression and competition that’s out there. I mean, there’s a ton a ton of liquidity out in the market chasing yield, chasing assets, and there’s not a plentiful supply of good deal flow out there. So, you know, we had a pivot, as Brian mentioned, we spent all of last year really expanding our database, putting in great infrastructure, increasing our brand presence, telling the world what it is that we’re doing, and who we are. And, and through that we had a lot of great relationships. But we were having a hard time finding deals. And so we said this year, we’re like, how do we get? How do we find our way into the industry, as opposed to just continuing to beat our head up against a brick wall, right? And so we just leveraged the relationships we had with successful operators and sponsors in the target markets we were in, we’ve aligned with one of the particular sponsors in our Houston market that had over 1200 doors, under management had another force a sec for 600, under contract, and we were able to come in and his opportunity as a co sponsor, and help place some equity into the deal in exchange for, you know, just being a part of the opportunity. So that’s another message I encourage people to ask, if you’re looking for a way to get started, figure out what your value add is to build relationships with the successful operators, get at their table, and partner with those guys, you know, it’s a great way to get in, get started.

 

Trevor Oldham  11:43

I think that’s excellent advice for our audience. And now let’s say you know, you have some experience under your belt, you have some deals under your belt. Now, when a property comes across your desk, are you able to look at it and say, I know, 510 minutes, and I determine whether or not it’s gonna be a fit, how much due diligence, do look into the property before, you know, taking it to the next stage? And, you know, potentially wanting to put it under contract?

 

Cody Laughlin  12:06

Yeah, there’s a lot of analysis that goes into determining, you know, whether this is something we want to move forward or not, I mean, fortunate for us even despite this first opportunity we were able to participate in we have been underwriting deals after deals. I mean, last year, it was 100, plus deals, 150 deals, whatever it was, and this year, I think we’re definitely on pace to surpass that. But the point being is there’s a lot of analysis that goes into that before deciding to invest and, or pursue an opportunity. And so, you know, I think for us the biggest advantage, Brian, you probably agree with this, too, is just from us closing this first deal. And being a part of this first deal is people watching them see what you’re doing right, and they see who you’re partnering with. And I think that’s the biggest thing that we’ve seen coming out of this is the doors that it’s opened already, just from being a part of that deal, people seeing that it closed and and you know, now we’re getting, I don’t know, I don’t know that we’re necessarily getting new opportunities that we weren’t before. But the conversations are a little bit different now. Because now you have credibility. Right now. Now you have proof that you’re in the game, so to speak. That’s, that’s like not I want to be any more.

 

Trevor Oldham  13:20

That’s excellent. And now I want to, you know, hop into your podcasts. And I was very grateful to be a guest on your show a couple of months back and I’d love for you to walk our audience through what that process was like of starting your own real estate investing podcast, why you decided to launch and and potentially how it’s helped your brand, you know, build more, I guess, credibility, authority, and also network with other potential investors? 

 

Cody Laughlin  13:44

Well, I’m putting myself out there. So when I first started again, I had no idea what in the world of podcasting was and couldn’t tell you how to download one. And all I knew is that all the industry leaders were saying the same message, build your network, start a newsletter, start a thought leadership platform and start a meetup. Right. And that’s what I kept hearing that it’s just a thing, basically building your brand, your presence and telling the world what it is you’re doing. And so I literally just said, Okay, I’ve got to go do each one of those things and just kind of went step by step, and started putting each of the pieces in place. So my original tip to start the podcast was really just going with the script. Somebody else said, Hey, you gotta do it, it’s going to be great for your credibility. I said, great, I’m going to do it. But immediately from the very first episode, what we discovered was the power of building that relationship with these high profile industry leaders, or professionals that are coming on giving them a forum to share their message to the world, which is a big value add because a lot of people have a lot of great feedback, you know, or skills that they can translate into the community that people can learn from. And it’s relationship building. And that’s where I think right now today the most important part is relationship building, because, you know, as much networking as Brian and I do as many people as we talked to, you know, we’re only two individuals, right? And you can only talk to so many people in a day. But when somebody subscribes to our newsletter, and they’re reading what we’re doing, or somebody reads our blog, and they see, you know, kind of our thesis around our investing strategy, when somebody is in the car, and they listen to our voices, and they hear our show, and they can hear our thought processes and who were engaging with, it just builds that relationship with people, even though we may not be in direct contact with them face to face every day. So I like to tell people that this podcast has been all about building those relationships. And for us, I mean, it’s been a complete impact on our brand presidents, again, our message and who we are, but making us resourceful Brian, I think you tag along here, too, if I mean, we get people reach out to us all the time for different questions. And it’s so convenient to be able to say, Oh, hey, let me introduce you to my friend, Trevor, who’s an expert in helping you brand yourself to market yourself for podcast episodes, or, or whatever the case may be. I mean, it allows you to be resourceful, which is a massive value add in this industry as well. So what do you think Brian?

 

Brian Alfaro  16:09

Yeah, and it’s very educational content as well. You know, we’re private equity. So we’re definitely, you know, networking with people that are interested in passively investing in real estate as well. So we’ve got a great library of resources for those people that have maybe never invested in real estate, or they’ve never invested in commercial real estate to be able to, if we meet somebody, and they say, Hey, you know, I have a lot of questions about this particular topic, then we can say, Oh, well, why don’t you go listen to Episode 37, where we interviewed this, you know, this gentleman who has 5000, doors passively, or whatever, and you can really hear from an industry expert. So it’s definitely been a huge value add not only from our side and building the network of active vendors and people to work with specifically, but it’s also adding value to the real estate community in general, and passive investors as well.

 

Trevor Oldham  16:58

That’s excellent. That’s excellent advice. So any, any potential real estate investor, anyone that is in the real estate investor space, definitely recommend going out there, and starting off your own podcast, but Cody, and Brian, I want to be a little respectful of your time. So I just have a couple of final questions to ask you. Before we end our interview today. And this is the question I’m asking every real estate investor that comes on and one that I’m just genuinely curious about and getting your opinion on, is where do you think that the real estate market is going in 2021 and beyond?

 

Cody Laughlin  17:28

Go ahead, Brian, I’ll let you take that one first and I’ll piggyback off.

 

Brian Alfaro  17:30

Oh, man, that’s a tough question. I think that I hate there’s no right or wrong answer, right? And it depends on your paths, right? Your history, if you’ve been through real estate, you’ve been in real estate for 40 years, and you’ve seen different things, you know, your, your answers are gonna be based on that. But for me, just in general, I think with the amount of inflation that we’re starting to see in the marketplace, I don’t know if we’ll ever get to a place of hyperinflation. For me personally, I know Cody and John are their partners. Well, we want to invest in things that can touch tangible assets that are sort of a hedge against inflation. So I think there’s a lot of Cody mentioned this earlier, there’s a lot of money chasing yield, looking for cash flow, something that’s going to be solid and steady. If the real estate I’m sorry, if the stocks and bond market comes tumbling down. If the crypto market comes tumbling down, people are looking for more tangible, more secure, I hate to use the word safe, because it’s still an investment, it still can be risky, but you know, stuff that’s more physical, more tangible to invest in. So I think that money’s gonna keep chasing, chasing these assets. So everything from multifamily to single family, self storage, mobile, home parks, everything is just on fire right now. So I foresee that continuing, especially with the interest rates staying as low as they are, and the Fed coming out and announcing they don’t have any major changes for that for the next couple years. I think you’re gonna continue to see a hyper competitive landscape, I think rents are going to continue to rise, especially if they end up passing things like wage increase bills, and you know, everything else starts going up from from labor to material costs for building new construction, doing renovations as well, I think overall, you’re gonna see a lot of price increases. So that’s kind of my forecast for the foreseeable future. I think Cody’s probably on a similar page there.

 

Cody Laughlin  19:17

Yeah, yeah. I mean, you said it absolutely perfectly. And I completely agree and echo that. And I think we’re entering in this perfect storm of this low interest rate environment cap rate compression, and, and inflation all in one, which is going to make for a very prime time to invest in commercial real estate over the next probably, you know, at least five years, but I would even argue probably the next decade or so. So it’s a no get out there and start buying.

 

Trevor Oldham  19:46

Yeah, those are, those are great insights that I can definitely say, you know, I’ve been interested in investing in cryptocurrency and invested. I put probably 2% of my portfolio into it a couple of months ago and I thought I was doing good and then over the last week I think I dropped 40%. Yeah, John when you need them? Yeah, that’s good. Perfect. Yeah, those are great insights. And then I wanted to ask you, you know, I say outside of rich toward Rich Dad, Poor Dad, as we were getting that recommendation a lot. Do you happen to have another favorite real estate investing or business book that you’d recommend for our audience to check out?

 

Brian Alfaro  20:24

I mean, I think if anybody’s interested in real estate, I mean, that whole network, so Ken McElroy has the ABCs of real estate investing the advanced ABCs of real estate investing, I think those are two great books. And then if you’re focusing on syndication, Joe fairless has a great book on it’s like three or 400 pages, but the best ever apartment syndication book, I think those are probably just two good books to start with.

 

Cody Laughlin  20:49

Yeah, I’m gonna reference an old one because I haven’t talked about this in a while but I thought it was really impactful when I started to think about Grow Rich by Napoleon Hill, I think in that he you know, and that that book was written years ago, right? But it’s still relevant to today. It’s just about having that mindset and an entrepreneurship mindset, which is just as important as anything else in this business. So

 

Trevor Oldham  21:14

That was a great book recommendation. And the last question I have to ask you is where can our audience find you?

 

Cody Laughlin  21:20

Oh, man, you can find us everywhere. I think, Brian, we always joke that people tell us we’re not hard to find. Words. Brian and I are both very, very active on LinkedIn. I’m not gonna lie. I’ve been slacking here for the past week or two. But you can find us on LinkedIn. If you’re interested in, you know, tuning into another great podcast with other industry leaders. You could check our podcast out as the prosperity through multifamily real estate investing podcast where we’re streaming on Apple podcasts, Google podcasts, Spotify and Stitcher. You can check our website out at www.blueoakinvest.com/why real estate. And then if you just want to reach out to us directly, you can find us at Cody or Brian@Blueoakinvest.com.

 

Trevor Oldham  22:03

Awesome, thank you for that. I’ll make sure to include it in the show notes of today’s episode. And those show notes can be found on our website and Brian and Cody, thank you so much for coming onto the show today.

 

Brian Alfaro  22:14

Really appreciate the opportunity. Trevor. Thanks again.

 

Cody Laughlin  22:17

Always a pleasure to talk to you man. Great to see and appreciate you having us on.