Property operations
Cody Davis Bought a $115,000 Building and Got Paid to Do It
A walkthrough of Cody Davis's Soap Lake acquisition: $115,000 cash, zero debt, a $2,000 commission check, and a projected $375,000 to $425,000 appraisal.
When Multifamily Strategy was founded, Cody Davis was my partner. The two of us started this whole seller finance journey together in Grant County, Washington. I'm back in Grant County today to walk his latest acquisition: a building in Soap Lake that he bought for $115,000, in cash, with no debt on it, and got paid to buy.
Related reading: Every Deal Structure Behind 100+ Units in Grant County, WA
It needs a little love. Actually, it needs a lot of love. But the numbers on this thing are absurd, and the property itself is one of the strangest and most charming buildings I've walked through in a long time. Every bathtub in it is plumbed to the lake.
Here's the whole deal, and what Cody is doing with it.
The Deal: $115,000, No Debt, and a $2,000 Commission Check
Cody and a partner bought this building in cash for $115,000. It's mixed-use: residential units plus two retail spots.
I asked him the standard questions. His answers are worth considering in order:
What was the debt on this project? There is zero debt.
How much did you spend acquiring this? Zero dollars. He got paid $2,000 in commissions.
Because he was the broker and the buyer. So the acquisition cost line on this deal is negative two thousand dollars. That's free real estate, in the most literal sense the phrase ever gets used.
When he describes it himself, he says he bought "this basement for $115,000, and it has a sixplex above it", which is his way of pointing out that the basement was thrown in. We were standing in it at the time, surrounded by spiderwebs thick enough to catch a hanging wire. Obviously no renovation needed down there. Rent ready.
He has two options for that basement: wall it off for storage units, or get approved to add a unit. He probably won't be the one doing that project.
The building also came with a beautiful piano. Basically in tune.
The Exit: Appraise at $375K to $425K, Sell at $300K
Cody's plan is a heavy renovation and then a sale, rent ready.
His own estimate is that it'll appraise somewhere between $375,000 and $425,000 once it's finished. He'd sell it for $300,000 anyway, because he wants to 1031 exchange into something new: specifically brand-new apartments and townhomes.
For context on how cheap the entry was: the bare land next door is listed at about $199,000. Cody bought an entire mixed-use building, with a piano, for $115,000.
Even at a $300,000 sale price against a $115,000 purchase, he and his partner are looking at pocketing a neat $100,000 after the renovation work. And on a rent-ready sale, the buyer inherits a finished building with income in place: that's what makes a discounted price worth taking when you're trying to move capital into a 1031 quickly.
The renovation timeline is about a month and a half to rent ready.
What the Units Actually Look Like
This is a heavy renovation, and I want to be clear about what that means, because the video does not flatter this building.
Several units are down to the subfloor. There's drywall repair throughout. There are holes in the ceiling: Cody's narration of it was "a hole in the ceiling, that happens," followed shortly by "another hole in the ceiling, that also happens." That one was wet. Lots of leaky ceilings.
There's also a section of damage Cody is fairly confident wasn't there when he went under contract. Maybe the door wasn't on. Nobody's sure.
Apartment number two is a one bed, one bath. It needs a closet, and other than that it's ready to go. What's going in:
- New LVP flooring throughout
- Paint, including the outlets, which is to say, don't paint the outlets, replace them
- New outlets
- New fixtures
- The cabinets are actually decent, so those stay
There's a unit with what he called open-concept plumbing, and another where the layout puts a bathroom between two bedrooms in an awkward way. His plan there is to chop a section off and make it storage.
One unit had been smoked in badly, so the walls need a full scrub-down before paint.
There are also wasps. Inside. Not paying rent.
None of this is unusual for a building at this price point in a small market. The design underneath it is genuinely cool, and that's the part that matters: the bones and the layout are worth saving.
How Cody Organizes a Crew on a Tight Budget
I asked him directly, because the renovation budget here is not large relative to the amount of work: how do you organize the crew for a project like this?
His answer was refreshingly unglamorous. Establish what needs to get done, then figure out who's going to get it done the quickest for the best price.
That's it. He's not maintaining a permanent construction arm for a $115,000 building in Soap Lake. He's scoping the work item by item and assigning each piece to whoever will do it fast and cheap. David comes in and paints everything. Somebody else handles the scrub-down first.
Speed matters as much as price here, because the whole thesis is a month and a half to rent ready and then a sale into a 1031.
Soap Lake, and the Lake Water in the Bathtubs
Soap Lake is a touristy town. Cody's description: "It's full of soap." Not a whole lot going on. People live here and commute to Ephrata.
It's also very old. This building went up in the 1920s: built before all three of us on that walkthrough were born, combined.
And then there's the thing I did not see coming. In one of the units I noticed four water inputs and asked what was going on. Two are city water. Two are lake water.
Soap Lake water is supposed to have healing properties: good for your joints. So the building is plumbed directly to the lake, and every bathtub in it has a lake water connection. In the nicer upstairs unit you get a standard tub and then a separate lake water tub next to it. There's also a claw tub up there that isn't original to the building but is a genuinely great piece: the kind of thing you could sell on its own for real money if you didn't want to keep it.
I asked Cody how lake water treats the plumbing, given all those healing properties come from sediment. His answer: "I don't know. I don't want to know."
That upstairs unit is the standout of the property. It's a three bed, two bath, and it's big. All new floors going in. There are windows that open for ventilation from the inside, and a way down from up there. As close to a penthouse as Soap Lake gets.
The mayor and his local associates told Cody they think those units will rent for $1,800 to $2,000 a month.
Run that against a $115,000 purchase price and you can see why he bought it.
Key Takeaways
- Cody bought a mixed-use building with two retail spots for $115,000 cash, with zero debt, and collected $2,000 in commission as the broker on his own purchase.
- The bare land next door is listed around $199,000: the building cost less than the dirt beside it.
- He expects a $375,000 to $425,000 appraisal but plans to sell around $300,000 to move quickly into a 1031 exchange on new apartments and townhomes.
- Renovation timeline is about a month and a half to rent ready, run by scoping each item and hiring whoever does it fastest for the best price.
- The units get new LVP, paint, new outlets and fixtures, with decent existing cabinets kept in place.
- Local expectations put rents at $1,800 to $2,000 a month on the finished units.
Watch the Full Walkthrough
The building is much more fun to see than to read about: the basement, the holes in the ceiling, the lake water plumbing, the claw tub, and the piano that came with the deal. Watch the full walkthrough above.
If you want to learn how we buy real estate like this with seller financing and creative structures, my mentorship is at mentorship overview. There's a free course on getting started in multifamily investing at multifamilystrategy.com/get-free-training, and our free community (which comes with a free calculator) is on Skool under Multifamily Strategy.
Read the episode transcript
0:00 When Multif Family Strategy was founded, Cody Davis was my partner. So, the two of us started this wholeseller finance journey in Grant County, Washington. I'm 0:08 back in Grount County today with Cody at his latest acquisition. Let's see what he's been up to. He just bought this 5-unit building for $115,000. 0:17 It uh may need a little bit of love. We got this beautiful piano that comes with the building 0:24 basically in tune. He is doing a huge rental project on this. Then he is selling this rent ready. So, he is going to get this thing completely turned 0:32 around. Him and a partner bought this bad boy in cash. So, he has no debt on this thing. He's looking at selling it 0:40 for somewhere around 300 to 350 when they're done. So, pocket a neat $100,000, but they have some work cut out for them. My goodness. 0:51 All right, on with the tour. 0:53 Look at this place. This is awesome. So, down to the subfloor in a lot of the units. some drywall repair. But the actual design of this is really cool. 1:02 This is mixeduse retail and residential. 1:05 Uh so this is one of the residential spaces here on the side. But this is a lot of project. 1:13 Cruising down here. It smells like what? Here's the basement. What? 1:21 Okay. Obviously, no rena needed down here. 1:25 This is rent ready. Cody will actually be moving in in two. No, I'm kidding. I'm kidding. 1:31 All right, we're on Cody's latest acquisition, this beautiful basement here. 1:37 Building above this, but uh Cody, tell us about your project. 1:40 Well, I bought this basement for 115,000 and it has a sixplex above it. There we go. 1:48 Move in ready. 1:52 Gross. My god, the spiderweb caught the wire. Oh no. 1:58 What is the What is the vision for the basement? 2:01 Either going to wall it off for storage units or get approved to add a unit. I probably won't be the one doing that project, though. Nice. What was the debt on this project? 2:09 There is zero debt. 2:12 That is in budget. How much did you spend acquiring this? 0. I got paid 2,000 in commissions. 2:19 That is also in budget. free real estate. So, you are the broker and the owner. 2:28 Oh, I'm sorry. That's okay. We didn't need that. Just turn it off when you're done. Yep. Broker and the buyer. 2:37 So, is this all residential here or is this retail as well? We have two retail spots. 2:42 A hole in the ceiling that happens. Another hole in the ceiling that also happens. 2:50 It's wet. All right, apartment number two. So, this is a one bed, one bath. 2:58 Needs a closet. Otherwise, ready to go. Don't forget to paint the outlets. 3:10 We're going to do new LVP. Oh, yeah. Open concept plumbing. I can't wait. He's awesome. 3:19 That's awesome. We're going to paint this new fixtures. 3:23 Cabinets are actually decent. We'll do new LVP throughout. New outlets. 3:32 Not too shabby for 115. No, not bad at all. 3:35 The land right there is listed for like 199. 3:39 What is the uh what's the final sales price for this bad boy? I think it'll appraise between 375 and 425, but I'd 3:46 sell it for 300 cuz 1031 into something new. Well, check out the laundry room. 3:54 What things are you 1031 into now? Brand new apartments and town homes. Oh, that's cool. 4:03 Yeah, needs a little love. 4:06 But in a month and a half, these will be rent ready. 4:10 Oh, that's cool. How do you organize the crew for this type of project? Because that's not a huge rental budget for the amount of stuff to get done. 4:19 This wasn't here when I bought it or when I went under contract. I didn't do that. 4:25 What was Yeah, I'm pretty confident that that wasn't like that. Or maybe the door wasn't on. I don't know. 4:35 uh organizing the crew, just establishing what needs done and then figuring out who's going to get it done 4:43 the quickest for the best price. So, we'll have David come in and paint all this. Going to have to scrub down these walls, though. Someone smoked bad in here. 4:52 Yeah, just a little bit of uh Clorox should clear that right up. 5:00 And then all this lands included. And I got to cut that down. 5:11 For those who don't know, Cody is 6' 7 and those we are almost as tall as him. I am a tall man. 5:19 Kitchen, living room. 5:23 This actually might This is actually a bedroom. That's the living room. The weird thing about this apartment though, you got the bathroom and then there's another bedroom. So that is unfortunate. 5:34 Probably gonna just chop this off and make it storage. 5:37 What is going on with the four water inputs? 5:40 Two are city and two are lake. You have lake water for healing properties and um it's supposed to be really good for your 5:48 joints. So this actually runs to the lake. Are all the tubs like that? Uh-huh. That is cool. 5:54 That it is actually very cool. 5:59 Yeah. Tell us a little bit about Soap Lake. It's full of soap. Uh it's touristy town. 6:07 Not a whole lot going on. People live here and commute to Afraida. Lots of leaky ceilings. 6:16 But very old town. I think this building was built in the 20s. You guys want to check out upstairs? Yeah. 6:23 Upstairs is one of the nicer units. 6:29 Yeah. This was built before all of us were born combined. Well, this is cool. 6:39 This is very cool. Is this where you're moving? 6:46 This is where someone's moving, not me. 6:50 Going to do all new floors. It is very big. Yeah. This is a three bed, two bath apartment. 6:59 [Music] 7:05 So, this is a standard tub. And then you got the lake water tub over here. 7:13 Tada. That is the wildest thing. It's kind of cool. 7:21 How does that do on the plumbing? Cuz all the healing properties from the sediment in the lake. 7:26 Does it get a bunch of gross? I don't know. I don't want to know. 7:33 But I was told by the mayor and his local uh associates that they think they're going to rent for 1,800 to 2,000 a month. 7:46 Very about as close as you get to a penthouse in Soct. Those aren't bees. I'm aware. 7:54 Or wasps. They're outside, right? 7:56 No, they're on the inside. Where are they at? Right there. Are they paying rent? No. Damn. 8:04 I suppose that does happen. Please. Not here. Don't jinx it. That's only at your properties. 8:12 This is actually pretty nice up here. Yeah. 8:17 Something you guys probably didn't hear, but all the bathtubs here have Soap Lake water. What the heck? 8:24 What? They have connections for the soap lake water going through the skylight. 8:34 It does what it wants. This was built in the 20s. Oh, this is so cool. That was not original. I love that claw tub. 8:43 Oh yeah. Can you see the one downstairs? 8:44 No. You probably could sell that and get some money for it. Soap lake water and uh property water. So it's kind of fun. 8:53 Either or. Yeah. 8:55 Then the beautiful lake with all the wasps or the roof. Not lake. One of the lake roof. 9:02 I'd imagine. The way that's built, it looks like it could become a lake. It in fact does. 9:08 Oh yeah. Those open for ventilation from the inside. 9:16 Oh yeah. And then there's a way down from up here. It's kind of fun. 9:31 All right, we're on Cody's latest acquisition, this beautiful basement here. 9:37 Building above this, but uh Cody, tell us about your project. 9:40 Well, I bought this basement for 115,000 and it has a sixplex above it. 9:47 There we go. Move in. Ready. Gross. 9:54 God, the spiderweb caught the wire. Oh, no. 9:58 What is the What is the vision for the basement? 10:01 Either going to wall it off for storage units or get approved to add a unit. I probably won't be the one doing that project, though. Nice. What was the debt on this project? 10:10 There is zero debt. 10:12 That is in budget. How much did you spend acquiring this? 10:16 Zero dollars. I got paid 2,000 in commissions. That is also a budget. 10:24 Free real estate. So, you are the broker and the owner. Oh, I'm sorry. That's okay. We didn't need that. 10:32 Just turn it off when you're done. Yep. Broker and the buyer. 10:37 So, is this all residential here or is this retail as well? We have two retail spots. 10:43 A hole in the ceiling that happens. Another hole in the ceiling. That also happens. 10:50 It's wet. All right. Apartment number two. This is a one bed, one bath. 10:58 Needs a closet. Otherwise, ready to go. Don't forget to paint the outlets. 11:10 We're going to do new LVP. Oh, yeah. Open concept plumbing. I can't wait. He's awesome. 11:19 That was awesome. We're going to paint this. New fixtures. 11:23 Cabinets are actually decent. We'll do new LVP throughout. New outlets. 11:32 Not too shabby for 115. No, not bad at all. 11:35 The land right there is listed for like$1.99. 11:40 What is the uh what's the final sales price for this bad boy? I think it'll appraise between 375 and 425, but I'd 11:46 sell it for 300 cuz 1031 into something new. Well, check out the laundry room. 11:54 What things are you 1031 into now? Brand new apartments and town homes. Oh, that's cool. 12:03 Yeah. Needs a little love. 12:06 But in a month and a half, these will be rent ready. 12:10 Oh, that's cool. How do you organize the crew for this type of project? Because that's not a huge renov budget for the amount of stuff to get done. 12:19 This wasn't here when I bought it or when I went under contract. I didn't do that. 12:26 What wasn't here? 12:29 Yeah, I'm pretty confident that that wasn't like that. Or maybe the door wasn't on. I don't know. 12:35 uh organizing the crew, just establishing what needs done and then figuring out who's going to get it done 12:43 the quickest for the best price. So, we'll have David come in and paint all this. Going to have to scrub down these walls, though. Someone smoked bad in here. 12:53 Yeah, just a little bit of uh Clorox should clear that right up. 13:01 And then all this land's included. And I got to cut that down. 13:12 For those who don't know, 36' 7 and those we are almost as tall as him. I am a tall man. 13:19 Kitchen, living room. 13:23 This actually might This is actually a bedroom. That's the living room. The weird thing about this apartment though, you got the bathroom and then there's another bedroom. So that is unfortunate. 13:34 Probably going to just chop this off and make it storage. 13:37 What is going on with the four water inputs? 13:40 Two are city and two are lake. You have lake water for healing properties and um it's supposed to be really good for your 13:48 joints. So this actually runs to the lake. Are all the tubs like that? Uh-huh. That is cool. 13:54 That it is actually very cool. 13:59 Yeah. Tell us a little bit about Soap Lake. It's full of soap. Uh just touristy town. 14:08 Not a whole lot going on. People live here and commute to Afraida. 14:14 Lots of leaky ceilings, but very old town. I think this building was built in the 20s. You guys want to check out upstairs? 14:23 Yeah. Upstairs is one of the nicer units. 14:29 Yeah. This was built before all of us were born combined. Oh, this is cool. 14:39 This is very cool. Is this where you're moving? 14:46 This is where someone's moving, not me. 14:50 Going to do all new floors. It is very big. 14:54 Yeah. This is a three bed, two bath apartment. 14:59 [Music] 15:06 So, this is a standard tub. And then you got the lake water tub over here. 15:13 Tada. That is the wildest thing. It's kind of cool. 15:21 How does that do on the plumbing? Cuz all the healing properties from the sediment in the lake. 15:26 Does it get a bunch of gross? I don't know. I don't want to know. 15:33 But I was told by the mayor and his local uh associates that they think they're going to rent for 1,800 to 2,000 a month. 15:46 Very about as close as you get to a penthouse in Silver Lake. Yeah. You have bee problems. 15:51 Yeah, horn problem actually. Those aren't bees. I'm aware. Or wasps. They're outside, right? No inside. Where are they at? Right there. Are they paying rent? 16:00 No. Damn. I suppose that does happen. Please. 16:08 Not here. Don't jinx it. That's only at your properties. This is actually pretty nice up here. 16:16 Yeah. 16:17 Something you guys probably didn't hear, but all the bathtubs here have soap lake water. What the heck? 16:24 What? They have connections for the soap lake water going through. 16:34 It does what it wants. This was built in the 20s. Oh, this is so cool. That was not original. I love that claw tub. 16:43 Oh, yeah. Do you see the one downstairs? 16:44 No. You probably could sell that and get some money for it. Soaplike water and uh property water. 16:50 So, it's kind of fun. Either or. Yeah. 16:55 Then the beautiful lake with all the wasps or the roof, not lake, one of I imagine the way that's built, it looks like it could become a lake. 17:07 It in fact does. 17:09 Oh yeah, those open for ventilation from the inside. 17:16 Oh yeah, and then there's a way down from up here. It's kind of fun. 17:24 [Music]
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