Financial Freedom in 3 Years? The Brutal Truth!!

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Michael Zuber (0:31)

All righty, folks, I hate to do this, but we're going to have to do it again because all of you are blowing up my comment section. Brandon Turner has sent a video out talking about how to get financially free in three years or less. We're going to highlight what he says, and then I'm going to ask Cody to break down the numbers because I want to make this real. So in Brandon's video, this is taken directly from his video. This is a screenshot. It says, start over, kind of day zero. Oh, there it is. Year one, you've already earned financial freedom, folks. Guess what? You, you too, you're lazy. You are doing it wrong. You can earn financial freedom in one year, according to Brandon Turner. And then by year three, you're never going to believe this. You are banking $20,000 to $40,000.

It is just that simple. If you are not doing it any better than that, you're an idiot, according to Brandon Turner. Cody, I get physically ill seeing this stuff.

I think it is wildly incorrect. I think it is to the point of almost malicious, bleeding into naive.

But hey, you built up a couple of hundred units in no time, I would say less than a couple of years. So maybe I'm just a boomer, and I don't get it. Did I do something wrong? Is it just that simple? It takes one year to get financially free, and three years you're making 40 grand? What say you?

Cody Davis (2:02)

You know, I thought back when I was getting started, if anyone was going to figure out financial freedom in a year, it would have been me.

Michael Zuber (2:09)

Yeah, me too.

Cody Davis (2:10)

I didn't hit it. So as we both know, it took longer than that. It's just not real. Like, that is a fantasy.

And you look at the comments, people understand now that that's beyond unrealistic. Now, there's a couple of good things that he does share. He shares, be frugal, earn money, work whatever job can pay you the most, and then try and get ahead. The problem is that to try to get ahead doesn't mean you get ahead in a year. And you definitely don't get to $20,000 to $40,000 a month of cash flow that quickly. That is beyond...

Michael Zuber (2:48)

I mean, again, you did it faster than anybody I know.

If you were to honestly look back... And you've been doing this how long now? Eight years?

Cody Davis (2:58)

Seven.

Michael Zuber (2:58)

Seven years, okay.

Cody Davis (2:59)

Completing years seven, like three weeks.

Michael Zuber (3:02)

Yeah, what year did you make... Have you ever made $40,000 a month after seven years? Net, net cash flow?

Cody Davis (3:11)

Not in net cash flow, just from the Rennels, no.

Michael Zuber (3:14)

No, I mean, and you've got nearly 300 units, right?

Cody Davis (3:17)

Yeah, like flipping? Sure. But to scale the size from nothing, which is the topic of that video, you have to create an immense amount of equity. Because you figure if you're doing value add deals, and you're creating this imputed equity where it's basically, it's funny money, it's equity above your cost basis, right?

I did that with 100% leverage. You're probably only earning three to four and a half percent cash on cash on that imputed equity, the equity that's trapped in there above cost base. Sure. That's realistic. I usually earn around four. And so if we just do the math, let's just say that he's saying, we'll use the smaller number, the more realistic number, he's saying you get to $20,000 a month, $240 a year, 4%, that says over three years, you're going to create $6 million of imputed equity.

That means you are going to buy assets, net of partnerships, and push your equity position from zero to $6 million in three years.

Michael Zuber (4:10)

That's the math.

So that's just the equity. Some people hear $6 million and go, oh, that's possible, but that's just the equity. That's probably on a base, what is that, $50 million? That's probably $50 million in real estate. Because again, you're so highly levered.