Welcome to The Gold Collar Investor Podcast with your host Pancham Gupta. This podcast is dedicated to helping the high paid professionals to break out of the Wall Street investments and create multiple income streams. Here’s your host Pancham Gupta.

Hi, this is Tom Burns, author of why doctors don’t get rich. You’re listening to The Gold Collar Investor Podcast with Pancham Gupta.

Pancham Gupta  

Welcome To the Gold Collar Investor Podcast. This is your host Pancham really appreciate you for tuning in today. My guest is Cody Laughlin on the show. He is the head of deal acquisitions for Blue Oak capital and has been an active real estate investor for over 10 years. Cody’s investing thesis is focused exclusively on investing in value-add multifamily assets, he currently retains ownership interests in 391 multifamily units as a general partner. Hi, Cody, welcome to the show.

Cody Laughlin  

John, thank you so much for having me excited to be here.

Pancham Gupta  

Absolutely. So, before we get started, are you ready to fire up my listener break out of Wall Street investments?

Cody Laughlin  

Let’s make it happen, man. Let’s do it.

Pancham Gupta  

Let’s do this. So why don’t just start with your background, and more importantly, the person behind that background?

Cody Laughlin  

Absolutely. Well, I am a Houston native now. I’ve originally from Southwest Louisiana, migrated here to Houston back in 2008, to pursue a career in health care as a health care professional. And at the time, I had just graduated college me and my wife just got married. And we were looking to start a new life here in Houston. And I was going to continue my educational path to go and get my master’s degree further my education and kind of go up the corporate healthcare ladder. And then fast forward to 2010. My wife and I became accidental landlords when we tried to sell our home that we bought in 2008. And we had purchased another home and we couldn’t sell it. And we were started to panic because you know, we were just young into our careers. We weren’t in a great financial state 90s a stressor. That means we couldn’t afford to pay two mortgages. So, we said, hey, we’re gonna put a tenant in this thing, and then we’ll, we’ll figure it out from there. And that was kind of the first introduction into real estate investing and had no idea what we were doing no idea about being a landlord. But I knew, hey, there’s somebody paying my mortgage, and covering my expenses, for the most part. And I thought that was a unique concept. So, I started studying more about real estate investing and came across the, what I like to call the purple Bible, the Rich Dad, Poor Dad, by Robert Kiyosaki. And it kind of opened my eyes to financial literacy, right, it kind of just shocked me, so to speak, as far as you know, what I was taught growing up about what his financial independence and financial security was just completely misled. And so that kind of led me to pursue real estate entrepreneurship, Seth, and I got their entrepreneurship bug and started kind of going down that path, but along the way, chased a bunch of shiny objects, pursuit, a bunch of non-real estate related ventures and a bunch of strategies that were not a fit for my skill set. And I can smile about it now and say, I learned a lot of expensive lessons along the way. But through that, it kind of helped shaped me where I am today and helped shape the investor I am today. And so, to sum all that up, I’m a very active real estate investor. I’m the managing one of the managing partners at our company, blue capital. I’m also the director of acquisitions. We are a privately held private equity group here in Houston. And our focus is on the acquisition of A and B class multifamily assets here across Central Texas. So that’s awesome.

Pancham Gupta  

So, are you still practicing? Did you graduate from healthcare? Did you like it still in that space? Or when did you quit that?

Cody Laughlin  

Yeah, so I’m still a health care provider. Now, I’m slowly making the transition out. I’m a part time employee now and will hopefully be fully transitioned out of the W2 by the end of 2023. And you know, right now, for us, everything that we’re doing is for growth and expansion when it comes to our company. So, we’ve kept all revenue in our company. So, we continue to push our platform and expand our platform. And so, for now, the W2 provides me a, you know, a fixed income while we continue to grow the business. So,

Pancham Gupta  

God, so I want to go back to your first house right that you bought in 2008. So, the market was tanking, like it was in the beginning of the decline, I would say or not fully declined. Let’s put it that way. And when you went out and sell it, you said that you couldn’t sell it there. The reason you couldn’t sell it probably was valued lower than what you owed on that house at the time, or was the reason?

Cody Laughlin  

Well, if you remember the, you know, the great financial crisis was related to a credit crisis, right, the credit markets had just completely bottomed out, you know, we had terrible lending practices, you know, these terrible loans that were that were given out to people who shouldn’t have been borrowing and, and what ended up happening is the, the entire credit market seized, right. And so, for us, the home itself, it still had a somewhat of a value, as far as its market value. But really, we just couldn’t find a buyer that was credit worthy, you know, couldn’t get a loan. And that was the biggest thing is it couldn’t get a loan, we couldn’t find anybody that you know, really met a certain credit profile for, you know, borrowers, for the lender, excuse me. So, you know, ultimately, we just, we said, hey, the fastest route, or a way to get out of that circumstance was just to put a tenant in there, and kind of take it from there. And I’m so thankful that we did, because I ended up holding that single family home for 10 years. And you know, and as we all know, after the recovery of the great financial crisis, real estate has been a very steady accelerated growth pattern, as far as appreciation goes. So, I made a very good exit on that single family home, and it ended up being a really good investment, long term, which is the fundamentals of real estate anyway, so got it.

Pancham Gupta  

Got it. So given that, you started with that purple book, and you got the bug, it tried many different things, shiny objects, you said along the way, walk us through the path, like people who are listening and getting excited. hearing your story, given that you’re, you have a W2 and a lot of listeners on the show, they may want to follow the path that you have, right, you have gone through, and you’re towards the tail end of you know, getting away from your W2, let’s say, how did it start? Right? Like, I know, you said that you got that house, you became accidental landlord, and you got the purple Bible, right, Rich Dad, Poor Dad, and like, where you are today, to where you were at the time, like, what was the path that you took? Was it you directly got into multifamily? Did you start buying more single-family homes? Like what happened? Walk us through that?

Cody Laughlin  

Yeah, I wish I would have bought more multifamily then because I’d have been in a much better position as far as our portfolio now. But no, you know, I started with the one home. And as I started studying more about this idea or concept of real estate investing, really having no experience, no education, no knowledge around this vertical, I started getting involved in local networks, right. And I started going to local community networking events and things like that, to try to learn as much as I could, and joined a mentorship program around 2011, I believe. And yeah, and the sole focus of that program was around residential real estate, single family homes and the multiple strategies in building out a single-family portfolio. And at the time, I really didn’t know anything about this world of commercial real estate, you know. And so, I was really trying to find my niche, what was the one strategy that really fit my skill set, and at the time, I didn’t know what my skill set was. And so, the problem I was having was, I was trying to stretch myself thin trying to do all these different strategies from Wholesale to looking at fixing flip to go in with a birth strategy, like just doing all these various verticals, trying to figure out how I can find any momentum. And it delayed my ability to kind of get to the next step. And I was just stretching myself too thin, and not really becoming an expert at one niche. So that was a learning curve. For me, that was, you know, something, some trials that I had to go through and really, again, learn a lot of hard lessons along the way. But I did get introduced to commercial real estate in 2012. I’m at a networking event, that guy’s on stage, and he stands up on stage, and he says, hey, I just bought this $20 million building with 17 other partners. And here’s how much money everybody’s gonna make. And I was like, oh, man, that makes so much sense. That sounds so much better than what I’m doing now. And that was my introduction to the commercial real estate space. But at the time, I had such a limited mindset. I was like, Man, I don’t have any capital. I don’t have any experience. I don’t have a network of people I can go raise money from. So, I’m just going to stick with single family until I can build enough capital to go invest in commercial and looking back now then that was the complete wrong mindset. I can tell you know you can do this without any of those things, you know, but again, you have to kind of go through those trials and tribulations. So long winded answers your question, but I stuck with the residential space for a long period. At a time, chasing a bunch of different verticals before finding my way into apartment syndication,

Pancham Gupta  

right, so was it after that seminar in 2005, that you decided that you will do this, and you were just waiting to get into it for the right time. Or that something else happened after four or five, whenever you started doing multifamily to get into it and get going.

Cody Laughlin  

When I discovered it, it set a new goal for me. Instead of thinking about I want to get 50 or 100, single family homes, I started thinking like, hey, how do I get to go buy the 100-unit building? You know, that makes a lot more sense. But how do I get to that path. But the challenge for me, again, being very young, having this new entrepreneurship fire lit inside me that I was just less focused, and then that’s kind of led me to worry about chasing shiny objects, I started looking at any and everything that that said, hey, you could produce a certain return, or you could produce this much passive income. And I started kind of going down those paths, and they ended up all being dead ends. I mean, you know, let’s face it, they ended up being, like I said, very expensive lessons, the result that resulted in very little return on that time and effort. But the critical moment for me was roughly around, I think, 2018, I had been doing kind of chasing my tail, so to speak for all these years trying to find my way into some niche that was going to help me get to my end goal. And I started to just dwell on the fact that like, Man, I’m working at a W2. And I have a family at this time I’m married, you know, I’ve been married for several years, I have a couple of kids at that time. And like, I’m just trading my time for money. You know, I’m so tired of having to go to the web to clock in clock out when somebody else tells me to tell me, somebody else telling me what my time and efforts are worth. And then go back to my family and miss out on family time because I’m a slave to the W2, right. And I just got tired of going through that grind. And that was really the inflection point for me where I really had to decide, say, look, I need to get serious about my investing, I really need to get serious about building a business that will allow me to get out of my W2. And that’s where I became laser focused and really disciplined and creating a beeline path to building a real estate investing business. And that’s when we made the transition to commercial real estate. And it’s been all up since then. So

Pancham Gupta  

awesome. That’s typical. And inspiring, right that you made the leap into this. And I want to talk about your first multifamily deal numbers. But before I do that, let me ask you this question. So, you know, I’ve interviewed many different people. And I have walked the path where I’ve quit my w two. And it was an extremely difficult decision to make for me at the time, because you know, how you get that paycheck, feeling right are constantly coming in. And it’s very hard to kind of leave those golden handcuffs, get out of them. But if you asked me today, with the benefit of hindsight, what would I have done differently? And my answer is, which a lot of people will say, and I truly mean that I should have quit earlier. Right? sooner. So, what is it that’s stopping you from quitting now? Versus like, is there a certain goal that you’re trying to reach before you quit? Like, what is that you’re chasing? For you to kind of get to a point where you will say, okay, now’s the time. And the reason I asked this question is because a lot of people potentially in your board might be there. And everyone’s journey is different.

Cody Laughlin  

It’s a very good question. And I’m so glad that you’ve asked that because you must be very strategic about making that decision. Right. And if you think about growing a business, successful businesses need capital, they need a steady flow of revenue coming in to sustain. So, there’s an inflection point for every business that is critical when it when you talk about taking a salary from your business, right. You know, your business too, for it to succeed needs a steady income, it needs a steady revenue to generate sustainable income. So that way you can continue to grow. And when you when you take a salary, assuming you would take a salary from your company or your business, when you’re leaving your W2, you know, I’d imagine you have some type of lifestyle that you’re trying to sustain. With your W2 income, you must replace that with something. So, when you start taking a salary from your business, if your business is not at a point of scale, where they’re steady revenue coming in, then it could stipend your growth as a company and ultimately it could lead you down a negative path and ultimately your business could fail. So, for me, I think of my fixed income as a steady stream of income. For me to not only sustain my lifestyle at home, you know, as a father and three kids, I have responsibilities that I have to care for, I can still use my W2 to give me that fixed income to supply for my family, give my kids everything that they need, while all revenue stays within our company, so that way we continue to grow, you know, so for us, the goal is to get to a certain point of scale, to where, when I do take that salary position, it’s not going to stipend the growth of the business. And I don’t think that we’re there yet. And so, we want to give it a little bit more time, we want to get a couple more acquisitions under our belt, before we get there, and then also bring on some payrolls of staff first, that way, we can further support the growth of the business, and then we can, you know, continue the momentum from there. Does that make sense?

Pancham Gupta  

Yeah, makes a lot of sense. And do you have it chasing a certain number, like, from a revenue perspective, or number of doors perspective? Or assets under management? Like, do you have a goal, or it’s more like you kind of do check in regularly? And kind of figure out what that is?

Cody Laughlin  

It’s a great question as well. And I think there are some internal goals that we have, when we would consider, like a certain point of scale. But really, I mean, you know, with anything with business related, right, I mean, you could have a great quarter, great, two quarters, and then you can have a negative quarter, right, you can have something that impacts your business and such. And so, I think it kind of ebbs and flows. So, for us, it’s something that we’re always constantly evaluating, we’re always constantly looking at our, our quarterly budgets, as well as our annual budgets to see where we’re at as far as that cash flow and cash balances for our company. And I think because we look at it so frequently, it’s kind of one of those decisions that we’ll just make, as we continue to grow each quarter, you know. So, I think once you hit a certain level of scale, though, likely, especially when you get to, let’s say $100 million of assets under your management, that’s usually where you typically see a sustainable revenue stream coming in to where your business can sustain and support itself. And then you could look at taking a salary. So, I think that’s kind of our big goal is to get to that 100-million-dollar mark first, and then then maybe sit down and reevaluate.

Pancham Gupta  

Got it? Cool. That makes a lot of sense. So now, going back to my question, like, do you mind sharing numbers on your first multifamily deal? How? And how did you get the capital for that one?

Cody Laughlin  

Yeah. So, with commercial real estate investing, you need three key things, you need experience, net worth and liquidity, right. And so, in the commercial real estate space, the biggest thing between a residential investor and a commercial investor is, you know, you’re dealing with multiple million-dollar transactions, right. And so, the barrier to entry is so much higher in the commercial real estate space. So, you really need partnerships, you really need a network of people that you can partner with, to take down these larger deals. And so, I say all that to bring back to your question is, you know, when we were getting started, we spent about the first two years kind of really building what we call the infrastructure of our business, you know, who are we as a brand? Who are we as a company? What are the skill sets, we need as a team, to continue to like to grow the business and find our way into opportunities, we spent a lot of time building relationships? And this is key, right? You know, a lot of relationships, especially with people that were already doing deals. And so, we knew that our fastest and easiest way and getting that first deal was to partner with somebody else who was already successful. So, we co-sponsored with another operator that’s here in our local market in Houston, who had already had a couple 1000 units that he’s acquired and managed here in Houston, we built a relationship with them. And we approached him and said, look, we spent two years building a database, we think that we can add a value to you and your next acquisition by raising capital, would you allow us to come into your deal and partner with you, so we can get our foot in the door so we can learn from you, and whatnot. And you know, what, we were fortunate enough that he gave us that opportunity. And so, we did we raised equity for that we participate in the asset management. And that was the first introduction into commercial real estate. So that was an $18.6 million acquisition. I think the total equity as a partnership was, I think 6 million, is what we brought to that deal. And, you know, for our in our team, we brought a little over a million, like 1,000,002 for that deal and equity out of our own database to participate in that deal. And it was a big undertaking. It was nerve racking because it was our first true raise as a team at blue capital. But I’m so thankful that we did because once that deal closed, that was a deal that could go on your resume, it puts you in the game. And then from there, we found ourselves in two other partnerships following that. And shortly thereafter, we found our own acquisition as the lead sponsors We found the deal, acquire the deal, and then raise the money and the partner for the team to get that deal done. And so, it was the catapult for sure.

Pancham Gupta  

Exactly. The first one is the hardest. Right. And that’s it takes. It follows quickly. So, are you doing your own deals now? Or are you still co-sponsoring with people? Like, what’s the goal for blue capital?

Cody Laughlin  

Yeah, so we’re very much acquisition based. We’re focused on our own acquisition pipeline. But you know, we always like to say we love partnering with good people and good deals. And so, we’re open to partnering with other people as well, especially with people outside of our target markets. You know, we’re focused on Central Texas. And there’s other markets that we absolutely love Phoenix, Florida, Carolinas, but it’s just such a competitive landscape out there that I’m not going to be able to realistically go build a footprint in those markets and compete against the local boots on the ground there. So, but if somebody brought us an opportunity from those markets to partner, oh, yeah, we’d absolutely jump on that.

Pancham Gupta  

Awesome. Awesome. Great. Well, thanks for sharing your background, and what you’re up to now. Is there anything that you would like to add before we move on to the second part of the show?

Cody Laughlin  

Ya know, I know we were talking a little bit before the show, you know, looking at your audience as a whole and kind of what their various backgrounds are, I think, for anybody that’s interested in investing in commercial real estate, I think this is a phenomenal vertical to add to your portfolio, your investment portfolio, you know, and if you take a look at what’s happening in the equities markets, crypto markets right now, there’s a lot of uncertainty, a lot of volatility. And I think commercial real estate can provide you a little bit more predictable return patterns and a little bit more comfort, knowing that it’s just not as volatile SOS market. So, I think it’s a great addition to your portfolio. Anybody and everybody should have real estate as a part of their portfolio. So

Pancham Gupta  

awesome. Well, thanks for that. We’ll be back after this message. If you’re an accredited investor and have been thinking about putting your money to work for you, then I have good news for you. I have created an investor Club, which I call the gold collar investor club, I will be putting together investing opportunities exclusively for the group. These are the opportunities where I have done the due diligence for you and will be investing my own money alongside you. If you are interested, please sign up on the gold collar investor.com/club, I repeat the gold collar investor.com/club, I will reach out to schedule a 30-minute phone conversation to discuss your investing goals. Once you sign up, this can be a good opportunity to diversify and take some chips off the hands of Wall Street to produce some passive income. And in case you are wondering, what is an accredited investor, accredited investor is someone who has earned more than $200,000 as filing single, or more than $300,000 Filing Jointly for last two years. Another way to qualify as an accredited investor is if your total net worth is more than $1 million, excluding your personal home. It includes your stocks, 401, K’s, IRAs, cars, etc. Just not the equity in your personal home. If this, is you, I would highly encourage you to sign up? So, Cody, let’s move on to the second part of the show, which I call taking the leap round. I asked these questions to every guest on the show. My first question for you is, when was the first time you invested outside of Wall Street? Was it that home that you bought in 2008?

Cody Laughlin  

it was Yeah, at the time I write when I started my healthcare career, I started putting money in a 401 K because that’s what everybody told me to do. And when I found the real estate, I was like, oh, that makes so much more sense. And so, I can I have so much more control and predictability. And that was my first investment outside of Wall Street. And man, thank God I did it.

Pancham Gupta  

Awesome. So, did you have any fears at the time to overcome when you did that?

Cody Laughlin  

Yeah, you know, there was some hesitation and there was some fear because the traditional financial model was centered around putting your money into a retirement accounts, putting in a stock market or 401 K, and you give it to a financial advisor and you hope that when you’re ready to retire, your portfolio will be able to sustain your retirement and so there was some hesitation because anytime you take control of your own investments or whatnot, I mean you’re putting the risk in your hands. Right and so it was a nerve-wracking moment at first, but I think that’s with anything and if you’re anytime that you’re growing and expanding whether it be invest thing or anything in life, it’s always going to be uncomfortable, you know, until you do it.

Pancham Gupta  

Yeah, that’s true. So, my third question for you is, can you share with us one investment that did not go as expected?

Cody Laughlin  

We’ve got several, as I mentioned to you earlier, I pursued a bunch of non-real estate related ventures, I had purchased the rights to a multi-unit package franchise agreement for a fitness franchise back in 2015. And, really, I’ve always loved health and fitness, I love the idea of owning a business, like a gym, for example, fitness center. And so, I came across a brand that I was very familiar with that I really liked, I spent a lot of time in the in the fitness centers then. And so, I was like, hey, I’m gonna go start me a fitness gym, you know. And so, I bought a multi-unit package. And to make a very long story short with that, that’s a whole nother podcast episode. I spent about three years trying to build momentum in that space and ended up not opening a single unit out of that franchise back then. And it cost me probably about $120,000. After it’s all said and done, that I completely lost. So that was a hard one. Yeah, it was

Pancham Gupta  

a real-life seminar. And it’s hard. It’s hard, you know, but you learn so much from that.

Cody Laughlin  

Yeah, I’m thankful for the experience now. Because looking back, the best lessons you ever learned are the ones that where you lose money, so yeah, yeah.

Pancham Gupta  

All right. So, my last question for you, Cody is what is one piece of advice would you give to people who are thinking of investing in Main Street that is outside of Wall Street?

Cody Laughlin  

Like I was mentioned to you earlier, I think anybody should absolutely have real assets as a part of your investment portfolio. You know, I don’t try to encourage anybody to completely divest from equities, if you like equities, or crypto, hey, that’s great. But you should have real assets in your portfolio to hedge against some of the volatility and unpredictability that you’ve experienced in those markets, right? And look at the inflationary environment we’re in now, real assets are a perfect hedge against an inflationary environment. And so, you should be considering adding that to your investment portfolio, and just get educated, you know, surround yourself with other investors that are pursuing the verticals that you’re interested in. And you start networking, and I think that’s a great way to help with that transition.

Pancham Gupta  

Awesome. Well, thank you, Cody, for sharing your knowledge and background here on the podcast. If someone’s interested in getting in touch with you, how can they connect?

Cody Laughlin  

Well, I want to thank you again for having me, man, this is great conversation. Really appreciate it. If you want to connect with me directly. I’m not hard to find. We’re very visible on social media. You can find me on LinkedIn or Facebook at Cody Laughlin. But if you want to reach out to me directly, feel free to email me at Cody@Blueinvest.com

Pancham Gupta  

thank you, Cody for your time. Thank you so much. I appreciate it. Thank you for joining me today on the podcast. If you have questions, do not hesitate to email them to me at p@thegoldcollarinvestor.com. That’s P as in Paul at the goldcollarinvestor.com This has been Pancham signing off. Until next time, take care.

Thank you for listening to The Gold Collar Investor Podcast. If you love what you’ve heard and you want more of Pancham Gupta, visit us at www.thegoldcollarinvestor.com And follow us on Facebook at The Gold Collar Investor. The information on this podcast are opinions. As always, please consult your own financial team before investing