RG 300 – Land Deals 101: The Back Door of Real Estate with Cody Bjugan

What a ride it has been! Today, we hit another huge milestone for the podcast—our 300th episode! In this week’s interview, we have the pleasure of speaking with Cody Bjugan, the mastermind behind VestRight.

Cody Bjugan is an entrepreneur, investor, real estate developer, the Founder & President of Bjugan Enterprises, Inc., and the Founder of VestRight, an educational resource where aspiring investors can learn how to get 6 to 7-figure paychecks through land deals.

Cody started out as a flooring salesman before he discovered the power of real estate investing. Since 2002, Cody has been in the Land Development space, amassing millions of dollars in revenue by investing in high-return deals. He created VestRight as a way to give back to the community and teach others to access the “back door” in real estate investing. And today, Cody shares a sneak peak into what the land development space is like.

Interested in becoming an Investor with Reed? Click here to join his Investor email list.

In this interview, we get to learn all about land deals, particularly the common challenges, the different risks, the general process, and everything in between. Cody gives us an honest look into what land development is like, which is just what you need before starting out in this particular space.

Whether you’re an aspiring land developer or haven’t even heard about it until today, this episode will be an eye-opener for you.

Key Takeaways

• The rate of homeownership has changed over the years, and it has been influenced primarily by the change in demographics.

• People want the lifestyle of homeownership without the responsibilities.

• Never close a land deal without having approvals in place.

• When you don’t know where to go, just ask where to go—no matter what business you are in!

LINKS
https://www.linkedin.com/in/codybjugan/
https://vestright.com/about/

Be Bold, Be Brave and Go Give Life a Crack!

Remember to join my Investor Database for the latest Investment Offerings!

Reed Goossens (00:00):

Good day. Good day guys. Now, before we dive into today’s show, I want you to let you know that some of you may be aware that over the past eight years, I have built a substantial multifamily real estate portfolio here in the US worth over half a billion dollars. And in that time, my passive investors have received fantastic double digit returns. And now you too can invest directly into my deals for as little as $50,000. So if you’re an interested investor, head over to reedgoossens.com to find out more that’s Reedgoossens.com. Now back into the show,

Cody Bjugan (00:40):

Instead of guessing to go, just ask where to go and what I mean by that is in any business, like even my online education company, instead of us figuring out what our followers or our students want, we just ask them what they want. Right. And so with these, so like, let’s say that I’m, I’m gonna go into, you mentioned Denver, right? And we’ve looked at some deals in Denver. And what we’ll do is we’ll go and we’ll talk to all the larger players in Denver. Okay. And we might do some deals in Denver, but more, what we’re asking them is where do they want to go? Where do they wanna be? That they’re not currently at? And they’ll tell us the tertiary mark or the secondary markets outside that main Metro that, that they want to be in. And then that makes our lives easy. We just go and put together deals in those markets and bring ’em to the guys that told us they wanted to be there.

Speaker 3 (01:46):

Welcome to investing in the US, a podcast for real estate investors, business owners, and aspiring entrepreneurs looking to break into the US market, join Reed as he interviews go-geters risk takers and the best in the business about their journey towards financial freedom and this sheer joy of creating something from nothing

Reed Goossens (02:06):

Good day Good day ladies and gentlemen, and welcome to another cracking edition of investing in the US podcast from Los Angeles. I’m your host. Reed Goossens good as always Debbie with us on the show. Now, I’m glad that you’ve all tuned into learn from my incredible guests and each and every one of them are the cream are the crop here in the United States. When it comes to real that investing business, investing and entrepreneurship, each show, I try and tease out their incredible stories of how they have successfully created their businesses here in the US, how they’ve created financial freedom, massive amounts of cash, and ultimately created extraordinary lives for themselves and their families. Life by design. As I like to say, hopefully these guests will inspire all of my cracking listeners, which are you guys to get off the couch and go and take massive amounts of action.

Reed Goossens (02:53):

If these guys can do it. So can you now, as you know, I’m all about sharing the knowledge with my loyal listeners, which is you guys. And there’s absolutely no BS on this show, just straight into the nuts and bolts. Now, if you do like to show the easiest way to give back is to give us a review on iTunes and you can follow me on Facebook and Twitter by searching at Reed Goossens. You can find the show, every you podcast on iTunes, SoundCloud, Stitcher, and Google play, but you can also find these episodes up on my YouTube channel. So head over to reedgoossens.com, click on the video link, and it will take you to the video recordings of these podcasts, where you can see my ugly mug, but the beautiful faces of my guests each and every week. All right, enough outta me, let’s get cracking and into today’s show.

Reed Goossens (03:40):

During the show, I have the pleasure of speaking with Cody Bjugan. Now Cody started his career as a following salesman, but motivated by his desire to provide for an extraordinary life for his family. He found a backdoor way into real estate development. And today Cody is a key player in over 30 development projects, developing 2300 lots from raw dirt to create over 920 million in revenue in residential sales in the last, I think it’s 20 years. He’s I think in his, in his bio now he’s a fully fledged developer and he believes in offering others a hand in defining his part of his legacy. And that’s what he started VestRight? In 2019 to teach others the systems that got him into the game. A simple way to create a five to seven figure payday from off market land deals, without owning or developing the dirt. I’m really excited and pumped to have him on the show today to share he’s incredible insight with me, but enough outta me, let’s get him out here. Get eight Cody. Welcome to the show. Hey, don’t you today, mate?

Cody Bjugan (04:38):

What’s up buddy? Thanks for having me,

Reed Goossens (04:40):

Man. My pleasure. And we’re just jamming in the green room before we press record here. I am gonna geek out on what we’re gonna get into today and for all those listeners out there, we’re gonna talk a lot about entitlements and my background’s instructional engineering. You probably heard me talk a little bit about on this show if you’ve been listening for the last six or seven years, but before we do that, Cody, I need to ask ya, rewind the clock and tell me how you made your ever dollar as a kid.

Cody Bjugan (05:04):

You know, so you, you mentioned you were gonna ask me that question right before we went live. I, the first thing that goes to mind comes to mind is when I get asked a similar question is when I started kind of my entrepreneurial, uh, kind of venture or, or journey. And, and I take it back to Iowa was, gosh, I wanna say I was probably 12 years old. And I grew up in this small little town in Oregon. They didn’t get a streetlight. I don’t think until I was in high school, but town called Damascus. And they used to hold a little flea market down there on the weekends. Right. And, and, uh, I decided on the weekends to go buy a little booth at the flea market and I would buy and sell and trade sports cards. And I mean, I didn’t even know what an entrepreneur was back then. Right. I mean, I didn’t figure out what an entrepreneur was, I think until, you know, after I graduated high school, but, um, that’s definitely where my journey started. 100% was backs selling sports cards and I still have all those cards today. So, uh,

Reed Goossens (06:03):

Yeah, I’m, I’m sure your wife, uh, loves it. Right. Plug those stuff around. It’s simply

Cody Bjugan (06:09):

Ask me why I keep ’em and I’m like, I mean, it’s a, it’s, it’s part of my journey and the reality is why sell ’em right? Like, right.

Reed Goossens (06:16):

Yeah. Doesn’t Gary V didn’t he have a background in selling cards or something like that.

Cody Bjugan (06:20):

I think he did. Yeah, actually.

Reed Goossens (06:22):

Yeah. Well, I, I know he’s definitely not listening to this show, but if he ever does, you gotta get him on. Um, but mate, let’s walk us through the journey. You’re a flooring salesman and you got into real estate development. How the hell did that happen?

Cody Bjugan (06:34):

Well, I will tell you that wasn’t in part of the plan. What happened is, uh, I love being transparent on these shows and just being super vulnerable. Right. Just authentic. And so I ended up in the flooring industry, let’s just say, cuz I didn’t go to college. Like I originally planned and that’s because I got my high school girl from pregnant. So right outta high school, I got married and went right in into the flooring at union so that I could qualify for health insurance so that I could pay for this baby. That was on the way. Right. And you know, one thing led to another, I was in that industry for about five years, uh, went from the union over to, uh, a small man paw shop blew that up, had tremendous success, very thankful. And it was all because of my draw. I’ve um, made lots of sacrifices though, which, which I, I won’t do again.

Cody Bjugan (07:23):

But what happened is being in that flooring industry, I was exposed to a lot of these real estate, home builders, land developers, and, and they were, my clients became my friends and, and I just had a desire, um, for what they had and, and what they were doing. And, and uh, actually behind me, you’ll see a clock and you’ll see a picture that was my grandfather. He was a very large home builder land developer. And, uh, he passed when I was 14, 15. So I, I didn’t really get, get a lot of time with him, but I pull inspiration, um, knowing, um, that my grandfather was in this space and, uh, that’s actually his clock from being the president of the home builders association. But so what happened is, yeah, I was just around these guys and, and, and then a guy that was a big name, guy in town got exposed to me and we just started chatting and one thing led to another and we just went for it.

Cody Bjugan (08:17):

And we were both in real estate. You know, I was, I was in the contracting side as far as the flooring and, and he was a real estate agent at the time and we decided to team up and go start our land development, home building business. And, and, uh, that was in 2002 and been self-employed since that partnership only lasted a couple of years, we were extremely successful together. But, um, you know, I was 24 at the time and didn’t really understand due diligence. And, and so, you know, you needed to do due diligence on your partnerships, just like you do on your deals. And, mm. And he’s still a friend of mine today. It’s just, we weren’t kind of equally yolked to have a successful partnership. So then I went out of my own completely in January of 2005 and, and, uh, had been going at it ever since. Yeah.

Reed Goossens (09:04):

I, I would love to talk to you about that. Maybe we’ll get back into, into, in that in a bit, you know, break up a partnerships cause I’m actually going through run myself personally, and then the things happen, right? Like we, we just, we, we grow. But, but what I want to get into before we do that is you talk about real estate. You said land development. So let’s break it down for the people who are listening to the show. What do you mean? What are you building? What are you developing?

Cody Bjugan (09:27):

Yep. So I will say let’s, there’s, let’s, let’s explain it this way. So single family, residential, we all know that’s an extremely hot market right now. Right? And also it’s been my bread and butter and really the main it’s it’s been the backbone of our business ever since we started, it has always been single family and there’s been good times and not so good times, but so in single family, what happens is, is that when you see roads being put in or all the utilities, the infrastructure, the street lights, you see the ground being, you know, to graded, you know, that whole part is called land development or horizontal construction and an in single family, the land development side is a different project than the vertical side or the home building side, because what happens you go and you do that land development, and then you create platted lots, right?

Cody Bjugan (10:22):

You create a bunch of individual legal, lots of record or tax lots. So that then a home builder can come in and build individual homes on those lots where like in a storage deal or a multi-family deal, the horizontal construction and the vertical construction are actually all one in the same project. And so, so they’re all approved. It’s all approved together. It’s engineered together as far as the structural engineering and the civil engineering, which is the horizontal where in single family, the, the horizontal, or the civil engineering, that of construction is a totally different project from the vertical site. So land development for us, when we go in, we, majority of a time are, are developing single family projects. And I should say, as of the last few years, we haven’t been developing any of ’em and I can get into why, and, and it’s, it’s lower to our risk and our exposure tremendously. And it’s all because of the demand in the market today.

Reed Goossens (11:23):

Well, I wanna get into probably a little bit of that because it’s, it, it relates it relays back to where we are on the market cycle. Right. A lot of people look at home starts and home building starts as, as, as a, a flag for the economy. Right? Sure. So maybe give us a bit of before we get into the, your niche of what you do, what are you seeing in terms of home starts and the, the, the deficit that we have here in the United States to bring first time home or home building back up to where it was actually, you mentioned in the green room and for all the listeners out there, Ken McElroy, right. He was at, uh, the, the, the intelligent investor real estate conference over the weekend, which I was at, I happened to sponsor the event and I saw his chart about single family home start since, you know, over, over time. And, and you see that the, the, the, the curve going up around 2008, then it drops and then where we are today. And that graph is that we’re not back to where we were. And I don’t know if you’ve seen that graph, but that’s the one he was showing. Yeah. Yeah. And so I just wanted to comment on, on, on that type of stuff, because it is a, a lot of people look at it, a lot of investors look at that. Well, what a new home, how many new it being started today?

Cody Bjugan (12:34):

Yeah, no, a great question. Yeah. So, um, and yeah, yeah. Rob, Ken, cuz him and I both live here in Scottsdale and we’re just, we’re personal friends and we, so we talk about this stuff, but sure. That graph that Ken showed you, I’m assuming it’s the graph that I’m thinking of the reason we’re not back to where we were is because you gotta, and when we went through oh 708, it destroyed the industry, it destroyed the industry. So it’s, there’s been a huge lull in starts during that downturn. And, and that’s why we have the demand we do today because we’re playing, we’re trying to play catch. Right. And so, and right now they’re is not enough guys out there like me putting together off market, raw land deals that have development potential and getting ’em and approved for development. And so what happened is there’s much more pent up demand than there is supply.

Cody Bjugan (13:26):

You know, are we on the risk of a downturn? Here’s the reality. None of us know, none of us have the crystal ball we’re in uncharted territories with, with what’s going on right now in our country and globally, you know, my best guess is I think COVID actually wiped out a downturn that we should have felt. I think that this cycle’s gonna be longer than previous cycles and, and I’m putting my money and my efforts where my mouth is and what I mean by that is in your intro. We probably need to update our intro for, for, for, for hosts. But, you know, I think it said I did like 2300 lots just in December. We did like we, we put together like 1200 lots. Okay. And so, um, but we’re also, you know, from the first 20 years of my career, I’ll call it my warmup or, or, or, or my practice because we’re thousand 21, my biggest takeaway in 2020 is that I needed to get outta the way of my company, that I needed to get a CEO.

Cody Bjugan (14:22):

I needed to get a, an executive leader in there because I was holding the company back that my identity and the company’s identity were wanting the same and I was killing my company because of it. And so I brought in a CEO out of Dallas, Texas, February of 21. And, um, now all of our team is in 21 or in, in, in Dallas, Texas. Uh, we’re bigger than we have or have been, and we’re going for it. So we’re scaling, we’re originally first 20 years, I was just Pacific Northwest where I was born and raised, um, moved to Scottsdale a year and a half ago. But at the end of the day, what I’m my point is right now, we’re scaling across the country. So we’re doing deals all over the country. Uh, obviously being specific on where in the country. And it’s pretty easy to figure out where to do deals. There’s more migration happening in our country, more than ever you. And, um, but we’re going hard and we’re, we’re gonna go hard, really hard. Our, our, our initial short term vision is we’re gonna scale, um, as much as we can between now and 2000 and 2025. Um, and then obviously we’ll reevaluate that along the way, but, you know, just with the amount of demand and, and all that’s going on, we think strike white, iron’s hot. And we, we, we believe the iron is really hot.

Reed Goossens (15:36):

So you are saying that for those people listening out there, taking notes, there, there is a lag, right from 2008, we’re trying to catch up. Can we catch up? Is probably the better question.

Cody Bjugan (15:46):

Yeah.

Reed Goossens (15:48):

Is,

Cody Bjugan (15:49):

Um, I mean, I, I would think, I would think at some point, yes, because here’s what happens is you go through the lull and that was a major lull and it wiped out everybody and, you know, and it’s why we even have it. You know, we have a, we have challenges with labor. I mean, there’s, there’s many reasons why we have challenges with labor right now, but so many people got out of the trade in that downturn and never came back. Um, so many guys got out of entitlement work or land acquisition, like I do, and never came back. I mean, that was a hard time. I went through it. I had friends that committed suicide. I had friends that went through major, major depression, numerous friends of mine went bankrupt, thanked the low word I didn’t. Right. It’s and there’s reasons why I didn’t, I very easily could have, but, and, and so when all that happens and then, and then the economy starts turning around it, the economy had to like have several good years before anybody was even gonna consider playing this game again. Right. Right. And that’s crazy this huge lag. And now we’re trying to catch up and it’s created this amazing here’s reality. I have guys lining up around them building to buy my deals. Like I have an easier time right now selling my deals than I ever have in my career. And it’s very simple. It’s because of demand. And so, you know, will it catch up? I would think eventually it would have to, when I don’t know, um, where word is right now, we’re, we’re seeing through 25 that we think the demand’s gonna be there.

Reed Goossens (17:27):

A and you think the average cause in my space, in the real, in multifamily, it’s very hot as well, because you were under the impression that, um, we’re in a renters, the us will be a, in a renter state. Right. Um, and you know, I think, again, back to Ken for every, I think he showed another graph of back in the day, 68% of how people, 68% of the population ha owned a home. And that’s now dwindled down to 63 or 64%. Don’t quote me on that for every 1% you change, you need another million houses in rentals, stock across the country. And his impression was that we’re gonna go to 60. So 60%. So which is we, you know, but, but then you have this, your side of the coin, again, me as a multifamily owner. Fantastic. That means I’m gonna be able to keep rents high you as the provider of dirt. Do you think that we can even catch up with that? Do we come back to the, the American dream of, of owning a home or, or, or is that becoming harder and harder as well?

Cody Bjugan (18:27):

I think there’s more that feeds that graph than just supply and demand. Sure. I think it’s, you know, it’s demographics are changing within our country. And so, no, I, I don’t, I mean, I’m just guessing on this. I’m just going off my,

Reed Goossens (18:42):

No, yeah, we just riffing here. It’s

Cody Bjugan (18:43):

Good. But, um, you know, I don’t, I do, I see us getting back up to where we were and oh, 607. I don’t be just because of the demographic change. I think, I think people might want the lifestyle of home ownership as far as a fenced backyard and a dog and, and a yard, but they don’t want the responsibility of home ownership. And so that’s why I think you see so much build the rent right now. As far as single family, where I have all these build the rent guys or build for rent, whatever you wanna call it. They’re hitting me up, trying to compete with my large clients, publicly traded companies, private companies calling me saying they wanna buy my neighborhoods and they want to turn the whole thing into, you know, a rental community. And that’s because they’re feeding that demographic, right? People, they, they want the lifestyle of home ownership without the responsibility. Right,

Reed Goossens (19:36):

Right, right. Well, let’s now pivot into what you do because this is something that I hold near and dear to my heart. It’s something that a lot of people don’t talk about and that is entitlements. And, and now you, you made a comment earlier about, you know, horizontal versus is vertical. And I would argue that at least in my experience, coming through development, myself, working for a developer here in long, uh, in Los Angeles building a lot of stuff, there are people who do just take it to entitlements and sell the dirt, whether it be multifamily or office or whatever you pick the asset class, you pick you’ve done the hard works. So maybe let’s break it down for those people. When you say entitlements, what are you, what are you saying? What’s your superpower.

Cody Bjugan (20:18):

Yeah. So let me, I’ll explain to you. So I’ve done all the way from all of our deals for 20 years, at least majority of ’em been off market. So we specialize in off market going and find, and the raw land that has development potential. Yep. Doing the entitlements, which we’ll talk about doing the horizontal development and even doing the vertical construction of building houses. We’ve done all of that over our career. Then we got outta home building and we just started developing and selling, finish lots to other builders. As of the last several years, we haven’t, even for the last few years, we haven’t even been doing the, the land development, the horizontal development we’ve been exiting our deals at entitlements or at approvals or call it governmental approvals. Right. They’re, they’re approving that piece of land and for development, I think that’s where people get so confused is they, they see a piece of raw land and there’s neighborhoods all around it and they think, oh, you can just go in and start building houses there.

Cody Bjugan (21:17):

And it just doesn’t work that way. Right? A property can be zoned for development zoned for say a residential neighborhood, but you still have to go through a political approval process to get it actually approved. And until you get it approved, all you have is a piece of raw land farmland, ag land, whatever it is, it’s nothing more than what you see there. And that’s where guys get themselves in trouble. Cuz they’ll go in and they’ll buy this raw land without any, any approvals in place, pay a premium for it based upon its, you know, being developable. And then for whatever reason, they can’t get it approved for development. Cuz there might be issues with the land we get into all the details there. But sure. If there’s one thing I could say to your, your listeners is if you’re gonna get involved in my space, which is raw land that has development potential, you never close on that at land, without those approvals in place ever.

Cody Bjugan (22:11):

Okay. The only way you ever close on that land without those approvals in place is if you’re buying it as is value. And we do that, we have a division it’s it’s our land bank division where we’ll go in and buy land it as is value and close on it. Just like a normal transaction, 30, 60 days, whatever. But you understand just for illustration purposes, we might be buying that land for 20 grand, an acre let’s just say in, in certain areas of the country, uh, if say I didn’t have to close that land until the development was approved, I might pay 200 grand an acre like 10 X. Right? And so there’s a, the, there’s a play there either way, but people get themselves in trouble when they pay the 200 grand an acre, but they close it like a normal transaction. Yes. So entitlements the easiest way to explain entitlements, it’s just the governmental approval process. You have to go through to get whatever the development is. You’re trying to design to get it approved way before it’s ever built. And I don’t care if it’s it’s called the land use process. So I don’t care if it’s multifamily single family, retail storage, I don’t care what it is. You have to go through that land use approval process.

Reed Goossens (23:23):

Right? And, and, and for those listeners out there, there is each municipality will have its own zoning maps and you need to understand what those zoning maps are in order to back into say, you know, Cody can say, Hey, I’m gonna go build a thousand lots on this property or I’m gonna go build a hundred multifamily units because it’s a high density type of scenario. Uh, Cody, are you doing any rezoning to taking from, from, from a, from we’ll call it ag farming to, you know, more of a REI, a REI spec, because, because that, that, that in itself and knowing entitlements that is quite high risk, like here in LA, I’ve done a lot of, um, by, right? So the, you know, examples that a lot of people use is I’m buying, uh, I know 10,000 square foot lot here in Los Angeles. It’s it’s high density.

Reed Goossens (24:12):

It might only have three units on it, but I can buy right. Build 20 units on it. Right. Yep. So I’m not changing the use of the land. I’m just going up to what I can build to maximum wise. So you are, you are saying you do go and do rezoning, which means in my case, I might buy a commercial lot, you know, with the sea CC tag in front of it, for those people keeping up 10,000 square feet and I need to change it to residential use. That’s a rezoning I’m taking from one classification to another and that can add a lot of complexity along the way. So, so how are you dealing with that Cody cause even, even in the, um, the entitlement space guys that I know who do it here, try and steer clear of that, that rezoning process, but based on the political crap that goes on here in Los Angeles.

Speaker 4 (24:59):

Yeah.

Reed Goossens (25:01):

For those of you who are interested in staying up to date with all the latest happenings in my business, or to learn more about passively investing directly into my multifamily value ad deals, then head over to Reedgoossens.com and sign up for my monthly newsletter by signing up, you’ll automatically be notified about my new up and coming investment opportunities. You’ll be able to stay up to date with all the latest real estate news here in the United States and much, much more. So head over to Reedgoossens.com and sign up today. Now back into the show.

Cody Bjugan (25:37):

Well, the key thing there is Los Angeles.

Reed Goossens (25:40):

Um,

Cody Bjugan (25:41):

So yes we do rezoning all the time, but I mean, I’ll tell you straight up and not trying to put down your state. Um, it’s a beautiful place. I just got back from playing golf at pebble beach. Nice on Monterey. So I, I love California as far as the, some of the beautiful areas, but I have zero desire to, to do what I do in California. We, we don’t even look at deals in California. So rezoning is much easier and at other areas of the country, um, much easier. So, uh, it’s actually, I mean, I can’t even tell you how many times we’ve got a property rezone it’s endless times. And, but obviously we don’t go into any deal planning to rezone it unless we know we have 100% jurisdictional. So port up front, like if it’s gonna be a battle, we, we, we, we pick our battles, man. If the jurisdiction isn’t excited about some rezone I want to do, I won’t even do the deal.

Reed Goossens (26:38):

Right. And, and I I’ll just, I’ll add in there something as being an Australian, coming to the United States, there is a lot of, and I I’m using a blank. I I’ve developed in New York Philly, LA, Austin, um, a little bit in Denver. There’s a lot, there’s actually really, really good municipality information that you can walk in to most places and say, Hey, I want to, I’m thinking you in this with this piece of dirt, what do you think to a planner? And the planner can give you pretty much, you know, as you’re just alluding to a pretty good sense of like, whether this is gonna get support or not. And, and I think you can find out pretty quickly if that kills the deal or not. Right. Is that what I’m

Cody Bjugan (27:16):

100%,

Reed Goossens (27:16):

You know, I’m sort of hearing,

Cody Bjugan (27:18):

Yeah. Before we even send out a, like a, a contract on a deal, we’ve all already had numerous conversations with the jurisdiction, any utility companies needed. Uh, we might have, have talked to the city manager, right. We might have, in some cases we’ve already talked to the mayor. Uh, and so we get very involved with the jurisdiction way up front, because you gotta understand a big part of what we do is we’re a very legacy focused company. And what I mean by that is we’re a part of these property owners legacy, you know, a lot of these property owners, this property is the biggest asset they have. Right. Sure. And last thing I want to do is get into a deal, get a property, all excited and just to let ’em down. Right. And so it’s all about expectations. And, um, and so we try to be very heavy, uh, in our upfront underwriting. Um, and Gary again, and we’re not looking to waste our time either, right? Like why start a due diligence pro like in depth due diligence process on a deal without doing some upfront research. So sure. You’re absolutely right. Usually most jurisdictions will have a planner or what they call a planner on duty. And so it’s someone you can really pick up the phone and call or go in and see, and they’re gonna give you some insights into, you know, whatever piece it is you’re looking at.

Reed Goossens (28:35):

And, and this again adds just probably my, my jadedness of, of developing in, in coastal cities. But like, how do you get so ingrained with the local municipality to be able to pick up the phone to the mayor? Because my experience is that that takes years to develop that relationship. I, you know, Joe blow, ain’t what you, you said, you’re in Phoenix. You may not be able to walk into downtown Miami and just be like, I’m gonna go build there. Like you need to know the right players in the city council to get your things approved. So the question is, are you going to sort of secondary and tertiary markets that, you know, that’s just a little easier process rather than those bigger markets that, you know, will have red tape and, you know, bureaucracy and all that other stuff.

Cody Bjugan (29:19):

Yeah. Yeah. So here again, it depends on the era in the country. I mean, you, you compare Texas to California and it’s like apples and oranges. Right. And so, you know, our headquarters, like I said, is in Dallas. Um, but from day one in oh two, we’ve always been focused on, on kind of secondary markets or tertiary markets. And a lot of those jurisdictions, they’re just easier to deal with. They’re more down to earth. They’re more open book. And I, you know, most, a lot of my career was up in the Pacific Northwest, which is on the west coast, much like yourself or the left coast. And, um, and I’m not looking to get politic here. We’ll, we’ll, we’ll do deals anywhere, but my point is like all the, the bureaucracy and the red tape and the hoops I gotta jump through and the political, you know, nightmares that I had over on the west coast, I’m doing deals now saying like Texas, or, or, you know, Alabama or Georgia, Tennessee, North Carolina, Arizona, like some of the jurisdictions it’s been so refreshing, cuz they’re actually thanking us for coming to their city and being a part of helping their city grow.

Cody Bjugan (30:34):

And they see us as, as a tremendous value where in LA you’re, you’re not that at all

Reed Goossens (30:44):

Get in the back of the line as they say. Yeah. So, um, well with let’s, let’s segueway into my next question, which is how are you identifying these cities? Like the, these municipalities to go and, you know, you’d have to have some numbers in terms of growth in terms of population. Um, what, what are you looking at?

Cody Bjugan (31:00):

Yeah, so good question. So like our C is a, um, very educated, very intelligent individual. We’re in the process of hiring a CFO as well. Um, we’re kind of still fine tuning our, our economical criteria for a jurisdiction and, and it just, hasn’t been a high enough priority for us. And I’ll, and I’ll just tell you why. It’s very simple. Basically we have three things we, we, we look at right now. One is it’s very easy to go and Google and figure out where the migration is happening in the country. Okay. Here again, I’m not looking to be political. You can go do what we do in any state in the country, but we, we are mainly in red states, right? So Texas, you know, Arizona, Florida, Tennessee, we’re just, those are the states we’re in, right. Carolinas, George, Alabama, you know, it, the it’s just it’s cuz we’re people are moving.

Cody Bjugan (31:58):

It’s the migration like it’s made my job so much easier. The second thing we look at is because we do at this stage in our career, we’re mainly doing bigger deals. And so I, if there’s not at least three publicly traded home builders in that market for our company and the size we’re playing at, we’re not interested in being in that market. And so, uh, if they’re there, we’re interested in being there. Here’s the reality. They have the departments, all they do is study this stuff. And so I just kind of follow their lead. Uh, but the third and I think the most important, uh, thing we do and we’ve all, I think a lot of us have heard this like quick, instead of guessing where to go, just ask where to go. And what I mean by that is in any business, like even my online education company, instead of us figuring out what our followers or our students want, we just ask them what they want.

Cody Bjugan (32:53):

Right. And so with these, so like let’s say that I’m, I’m gonna go into, you mentioned Denver, right? And we’ve looked at some deals in Denver and what we’ll do is we’ll go and we’ll talk to all the larger players in Denver. Okay. And we might do some deals in Denver, but more what we’re asking them is where do they wanna go? Where do they wanna be? That they’re not currently at? And they’ll tell us the tertiary markets or the secondary markets outside that main Metro that, that they want to be in. And then that makes our lives easy. We just go and put together deals in those markets and bring ’em to the guys that told us they wanted to be there.

Reed Goossens (33:35):

But surely you’d also be looking at a little bit more granular as well. Once you know, that identify those air is you wanna be looking at freeways and access to freeways in, in, in horizontals and all that sort of stuff, because that can add Val, like you could go get a 30 acre property in the middle of nowhere in Denver. And if it’s not, not close to a highway, no one, no one’s coming. Sure. So, so, so there would be a, probably a micro analysis that goes on once you’ve been, Hey, pointed in a direction I want to be in this area, Hey, Cody and team go nuts in that area, right?

Cody Bjugan (34:06):

Yeah. Yeah. I mean obviously, and, and we might be willing to do the deal as close to the freeway, the deal that’s, that’s, you know, 10 miles off the freeway, it’s just understanding the pricing’s different. But you know, right now with people in COVID and all that’s gone and down over the last few years and in people working virtually the, the, the, the deal that’s 10 miles off the freeway is much more desirable than it used to be. Right. Right. And so we’ll probably do both those deals, they’re just price different. Um, but yeah, we’re always looking at access, you know, like just five basic things. When we’re looking at raw land for development potentials, you know, we’re looking at the access. How do you know, how, how, how, how far is it from, from main thorough ways, but also does it even have access?

Cody Bjugan (34:53):

Does it have a public right away, right. A, a road, a public road to even be able to feed the piece we’re looking at, you know, the zoning obviously, or what the call comprehensive plan shows. They want that piece zoned. We’re looking at utilities, our public utilities available to the property. Right. I can’t do much with it if there’s not public sewer. Right. And so, and then we’re looking at topography, what’s the topography of the land that affects values of the land cost of construction. It may, can, can your utilities even grow gravity flow, you know, or do you need pump station? So we look at utilities, we look at overlays pieces having, you know, flood plain overlays, wetland, overlays, steep slope overlays, you know? And, and so we’re looking at all these things as just very basic, we have that figured out within 10 minutes. Right. And, and then if it doesn’t meet just very basic criteria, then we’ll, we’ll more than likely move on. But, but I mean, man, we have 10 people cold calling full time. So are not 10, five people cold calling full time. Plus they’re not endless mailers students bringing us deals. I mean, you know, we’re looking at, oh gosh, what did, what did my CEO tell me just on Monday? I think we’re looking at like eight to 10 new deals a day.

Reed Goossens (36:05):

Wow. That’s incredible. So you’d have to get your processes. Right. So you can do that 10, 15, 20 minute analysis to be like yay or NA because you, you just, yeah. 1% awesome stuff. Well, my look, um, come to the end of the show, um, what have you got planned for, for 20, 22 and beyond in terms of volume now and, and, and both, both personally and, and, and professionally where the business is going. Yeah,

Cody Bjugan (36:27):

Yeah, yeah. So I’ll go personally, cuz I like to talk about personal a lot. You know, I am, uh, I decided in 22, I’m in a transition point in my career because you know, my business is running without me. And so I’m really, um, I’m in a search process right now. Right. And I’m just, I’m kind of enjoying, I’m going through kind of this surrender being, you know, kind of, uh, still, you know, being silent and just really figuring out there’s a book out there called halftime and I’m in, I’m kind of in this halftime stage where it’s what’s next. Um, I know a big thing for me is Piff. My, which is kind of my saying is purpose impact fulfillment. And so that’s where VestRights, just a ton of fun, cuz we’re impacting people’s lives. But as far as the business, you know, the business, um, you know, right now we’re, you know, 10 times bigger than we’ve ever been and, and you are not involved, What was that?

Reed Goossens (37:28):

And you’re not involved. Right. Like you,

Cody Bjugan (37:30):

And that’s why, that’s why we’re 10 times bigger. Um, so I’m just the founder visionary at this point, I shouldn’t say just, but um, you know, I’m a dirt with a vision and um, you know, remember we exit all of our deals in entitlements and so our, our dollars per deal, aren’t near as high as if we were taking these things through finish lots, you know, or building the houses. But you know, we, we plan on putting together 5,000 lots in 22 and in 23, you know, probably 7,500 to 10,000. And you know, it’s, it’s a very humbling, exciting time because you know, our margins exiting and entitlements are pretty phenomenal and, and uh, we actually started allied land fund. So now, you know, in September it fully subscribed in three and a half hours, we started in September. Um, but now we’re allowing other people to invest in our business and um, we’re getting ready to launch fun too here in a couple months, but it’s just really exciting times. And, and uh, but luck, you know, if the market does turn, we don’t have exposure because we don’t own the land. We’re not in the middle of developing it. Right. And entitlements, the capital requirements to entitle is minuscule compared to if you’re actually gonna develop and, and, and what happens is our buyers put up enough, non-refundable earnest money that it covers all our capital. We put out to get the deals approved. And so we’re just, we’re just excited about the position we’re in.

Reed Goossens (38:58):

That’s awesome. That’s awesome, man. Well, I, I congratulate you to get to, to that point in your career where you can step away from the business. I think there could be a whole podcast on just talking about partnerships and how you let go of the vine as they talk about in traction. But at the end of every show, we do like to do jump into the top five investing tips. You ready to get into it?

Cody Bjugan (39:18):

Sure.

Reed Goossens (39:19):

Mate, what name, the daily habit that you practice to keep on track towards your goals?

Cody Bjugan (39:24):

Well, I have nine of them, but I would say the I’ll I’ll, I’ll say the one I have to do every day. Well, I gotta do ’em all every day, but it’s a habit stack. So I go on about an hour, hour and a half walk every day. And during that walk, I’ll listen to a book I’ll pray and I’ll listen to the Bible. And so I knock out four daily habits while I’m walking, walking, being one of them.

Reed Goossens (39:47):

Awesome. Awesome. Question. Number two has been, who’s the most influential person in your career to date?

Cody Bjugan (39:55):

You know, that’s been a tough one. Uh, I’ve been asked that many times and I have to tell you that that’s one area in my career that I’ve fallen short that I, I, I don’t, I never really found a mentor early on, but if I was to say anybody, it would be a, a gentleman by the name of Tim Tinger. And that was clear back in my flooring days. He, um, he opened the flood gates for me as far as opportunity and letting me go get it, he didn’t hold me back and he really set the tone for my career. So it definitely be Tim O

Reed Goossens (40:26):

Love it. Love it. Question number three is what’s the most influential tool in your business. And when I say tool, it could be a phone or a journal, so it could be physical or it could be a piece of software that you just can’t run. The, what is it?

Cody Bjugan (40:39):

Well, for me personally, as far as I, I journal every day, first thing I do when I get up in the morning is I journal and I go over gratitude. What I’m excited about words of affirmation, what I’m focused on, how I’m gonna get exercise. What’s my goal, how I wanna feel that day, um, uh, holes for the day. So I do all that. Um, so the journal is definitely the most powerful thing for me in our company. Uh, we, we geek out on Smartsheets. So we have a lot, our company is built out on Smartsheets and it’s just been a very powerful tool for our company.

Reed Goossens (41:16):

And for those people who don’t know Smartsheets it’s, it is more geared. Probably two. I learned about Smartsheet in my development career back when I was working at W2. So it’s not as prevalent compared to like asanas of the world or slacks, but it’s a different, it, it sort of has a bit more of a scheduling tool in there as well is pretty, pretty, pretty slick. Um, so definitely check that out. Uh, fourth question is in one sentence, what has been the biggest failure in your career? What did you learn from that failure?

Cody Bjugan (41:44):

Um, biggest failure in my career. Um, would’ve been in 2007 when, and I got whooped on, I lost 90% of my net worth. Um, let’s see. I was, uh, 20, I was 29, I guess. Um, and I, you know, I went from being an eight figure guy to being a low seven figure guy as far as net worth. And what happened is during that time, what we all gotta realize and why a downturn doesn’t scare me is because of just some wisdom I’ve gained a little bit. I got a tiny bit of wisdom is when the market turns is when the opportunity gets super exciting. Like we’re all making a lot of money right now, you know, and if you’re not ma you’re definitely doing something wrong. Um, this isn’t where real wealth is built. Real wealth is built in a in turn. And the biggest mistake I made last downturn is I was so focused on survival and staying above water that I, I didn’t even know better. No, no one ever gave me the advice of going and as I’m surviving, also being pursuing all the opportunity that’s out there. And so, um, that, that was a huge miss on my side. I don’t believe in regrets, but I’ll make sure to not make this, that mistake, the next downturn.

Reed Goossens (43:00):

Awesome. Awesome mate. Well look, final question is where can people reach you to continue the conversation they wanna be in your sphere where they go? Well,

Cody Bjugan (43:08):

I would tell you two things. One is if you wanna learn more about what I do, um, go to vestright.com via TRIG ht.com/cody. Just my first name, CODY. If you just wanna follow, you, wanna follow me and catch more of my content. You know, we post numerous times a week and just be a part of the journey together. Just check me out on Facebook. Um, just at Cody Bjugan and, um, you know, we’re on there actively, you know, on a consistent basis every few days, if, if not more, um, putting out content

Reed Goossens (43:41):

Awesome stuff, man. Well, I wanna thank you so much for jumping on the show today. I just wanna reflect some of the things that I took away from today’s show. I think your analysis and depth in an industry, which is not talked about entitlement is really valuable at how we get to be living in the houses we live in today. And the multifamily units that we rent, every town is built on development, town planning, every MSA has one it’s like, and if you can master entitlements, you do hold the keys to the kingdom. And I do like your strategy of not actually taking on the risk of going to develop man, cause I’m sure you are, you have itchy feet at times that you want to, it looks juicy, but you know where your lane is and that’s really important. I think that’s, um, yeah, that, that’s just such an, an important piece for every business to just understand what their lane is and be really, really good at that. And you’re in a business that not a lot of people want to deal with that crap, right? From LA to Los Angeles, from New York to LA to, you know, somewhere in Alabama, it still takes time. It still takes effort. It still takes a skillset. So, um, so yeah. To leave anything out.

Cody Bjugan (44:47):

No, no, it sounds good. Yeah. I mean, at the end of the day, you just gotta member whoever controls, the dirt controls the deal. And, and I think all of us, in my opinion, you need to have two sources of, of income. One is where you go and generate a bunch of ordinary income, right. That then you capitalize your cash flowing income, right. Because if you’re just trying to grow cash flow on its own, um, you can’t scale Neil as quickly as a guy like me, that is generating capital here to then inject into cash flowing or cash on cash models. Yep. Um, and so I really think it’s important that you have both

Reed Goossens (45:21):

Yep. A hundred percent. And for those people who’ve listened to the show long enough pyramid of food. Like the deals at the top is development entitlements. It can be risky from the outside point of view, but it risk is also about knowledge, right? So if you have a lot of knowledge in an area and you know how to develop, you know, how to entitle go out and do that. But also building a foundation of cashflow is really important when you’re getting started. So again like the food triangle, good stuff’s on the bottom, the, the, the tasty stuff’s on the top that you’re not supposed to eat a lot of, but if you have a really good bench and you’ve got a good knowledge set in that space, you’re gonna go out and crush it and make incredible amounts of wealth like, like Cody has. So mate, again, thank you so much for jumping on the show, enjoy the rest of your week. People can catch you@investright.com slash Cody. But thanks again, my friend and we’ll catch up very, very soon.

Cody Bjugan (46:05):

Thanks for having me

Reed Goossens (46:06):

Awesome stuff. Although you have another cracking episode, jam back with some incredible advice from Cody, remember to go to his website vestright.com for slash Cody. Follow him also on Facebook, Cody Bjugan uh, uh, the Bjugan is spelled Bjugan. Bjugan you got it. So, so I got it in there. Uh, I, again, wanna thank you all for taking some time outta your day to continue to grow your financial IQ, because that’s what we’re all about here on this show. If you do like to show, give the show five star review on our iTunes, and we’re gonna do it all again next week. So remember be bold, be brave, and go give life a.