"Inspired to Invest" Real Estate Investing Podcast

Discover The SECRET To Success In Industrial Real Estate Investing

• Serena Holmes • Episode 68

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Discover The SECRET To Success In Industrial Real Estate Investing

Curious about how a car salesman transforms into a leading expert in industrial investment properties?

Welcome back to "Inspired To Invest" ep68 with Cody Payne. To watch rather than listen, click here

Join us as Cody, Senior VP of Collier's International, takes us along his remarkable journey filled with trials, triumphs, and invaluable insights. 

With nearly two decades under his belt and 850 successful transactions, Cody recounts his start in real estate during the tumultuous 2008 market crash. Explore why he favours small bay flex industrial properties for their stability and rental income potential. 

Learn Cody's strategic approach to investing, and gain a nuanced understanding of the market and operational aspects crucial for success.

In this candid conversation, Cody shares more than just his professional expertise—he opens up about the unpredictable nature of real estate investing. 

From navigating complex relationships with business partners to the surprising success of his niche book, Cody's stories underscore the importance of due diligence, patience, and ethics in the industry. 

Discover how his financial goals have evolved, and why the meaningful relationships and opportunities in real estate have been just as rewarding as the monetary gains. Whether you're a seasoned investor or just starting out, Cody's journey will inspire and educate you on the art of real estate investing.

To connect with Cody, go to https://flexbusinessparks.com or @txofficeindustrial on instagram.

Thank you to Giancarlo Carangelo from Proventure Real Estate Corp for supporting this month's episodes. To learn more about how to scale your real estate investment portfolio with their support and guidance, go to https://www.realproventure.com/ online, @real_proventure or @carangelorealestate on social.

Need support underwriting potential property investments? Check out PropertyCast.io - https://propertycast.io?via=serena

“Inspired to Invest” is proud to support the Beyond Success Program, a not-for-profit financial literacy program for students, launched by More To Give & MAK Investments. Find out more at @more2give.ca.

Join us again Oct. 16 to hear from a guest sharing wealth secrets and how to invest passively in multifamily real estate!

Thanks again for tuning in & remember, "when you invest in yourself, the sky's the limit!"

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And, for everything related to real estate and real estate investing, please make sure you've subscribed to @serenaholmesrealtor on YouTube & other platforms. We also have a page dedicated to this podcast on Instagram and Facebook @inspiredtoinvestpodcast where we preview guests each week, highlight their episodes, top takeaways, tips, quotes and more. 




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Serena Holmes:

Welcome to the Inspire to Invest podcast, where we're sharing stories from real estate investors and how investing has changed their lives. This episode of the Inspired to Invest podcast has been brought to you by ProVenture Real Estate Corp. Hey everybody, welcome to Inspire to Invest. I have Cody Payne with me today. From Dallas, texas, he is the Senior VP of Collier's International and he specializes in industrial investment properties. He's got 19 years experience and 850 successful transactions under his belt, specializing in leasing management, market analysis and strategic planning. He leverages Collier's platform to maximize value and ensure optimal results for his clients and investors, and him and his team are currently spearheading initiatives that attract investors from around the entire world, facilitating exploration and investment in the dynamic small bay flex industrial sector. So I got through that without slipping up too much, but thank you for being here today.

Serena Holmes:

How are you?

Cody Payne:

Good. No, I appreciate it. Thanks for having me.

Serena Holmes:

So obviously you've kind of been in this field for the last couple of decades. But what did life look like before real estate really came into the picture?

Cody Payne:

I mean, I was a car salesman before then you know, so nothing, nothing too exciting, just kind of working my way into the business, cause I mean, as you know and a lot of people know, I mean, you know, going into the commercial real estate side, you side it's good to have some money saved up because it's 100% commission. So you got to make sure that you can start it and operate it correctly and give yourself that buffer. And luckily I got connected with a good local guy and worked for him for about 10 years and so I started my career there and then joined a national firm and now we're actually at an international firm. But yeah, no love it no love.

Cody Payne:

It's been a great ride. We've got a great team, we've been together a long time here and we just kind of specialize in the small base flex stuff all across the U? S.

Serena Holmes:

Awesome. So in terms of your own portfolio, like that's obviously on your career side, but can you talk a little bit about kind of starting your own portfolio and any investing that you're focused on as well?

Cody Payne:

Yeah, so, and I know I was telling you this before we got started on here, but you know, when the market crashed back in 2008 and nine, I had actually started. You know I didn't have a whole lot of money, but I had started investing in residential and duplexes and I mean we were buying them out here as well as $10,000 for, you know, a two bedroom house, which is unheard of, and so, you know, did a lot of that sold off. All those have, since then, just been in the. You know, we've built storage facilities, small bay flex, we've done syndications, we're partners in quite a few deals, and so our main forte is just investing in the small bay flex industrial side at this point moving forward. Forte is just investing in the small bay flex industrial side at this point moving forward yeah, so now we build like a number of different things.

Serena Holmes:

Like I was at an event recently and they talked about storage facilities and they're like you know, if you want to buy a business, like invest in self-storage. But maybe you can talk about what you feel like is your sweet spot. And out of all those different types of real estate, like, is there anything that you think you like better than one another? Like, or do you just like to have that balance and diversity?

Cody Payne:

So you know the diversity was good at first, but you know we're such specialists over here and what we do that you know we're really not doing anything on the storage side anymore. We sold all that stuff off and so we're just on the small base flex side. I like that side. It's to me the most stable. We can push rents. We're very good at reducing expenses. Operational wise, we understand the build side of it, the leasing side, the management side, and just because that's really what our main business and focus has been over the past almost 20 years, we really like to stick into that. We get brought in, we get brought opportunities all the time to join up with other people and some multifamily and stuff like that. But it's kind of like Bitcoin and things If we're not truly understanding the full aspect of it, we're not investing in it.

Serena Holmes:

Yeah, yeah, I think that's really smart.

Serena Holmes:

That's why I never got into Bitcoin because a million people explained it to me, but I still don't understand it yeah, I mean, I do understand it, but I think one thing that I I mean I feel like the real estate market's a little crazy right now, but just the volatility right like I feel like bitcoin could be like the stock market, like you know, one day you have this, the next day you have that and anything can shift it and you have absolutely no control over it. So I think that's one thing that I would say I prefer about real estate is that there's that tangibility and even if there is a situation where you have a 2008 or nine like of course it's not going to stay like that forever where I just feel like in those other platforms who knows, yeah, I agree.

Serena Holmes:

Now, when it comes to things like challenges and obstacles, what would you say, whether it's your own experience or something that you really see as a common thread through the investors that you work with, like that they tend to find themselves up against and that they find to be pretty challenging?

Cody Payne:

I mean, really the biggest challenges that we find in our stuff right now is, especially if we're doing new constructions, is finding the land. That's just really it. Finding the land at the right price, because where your interest rates are right now, where your build cost is, all those things are kind of in the same area it's the land that's your deciding factor in many cases. And so you know we're consistently outsourcing land. You know, trying to do stuff off market, finding some of those guys. But as far as getting money, you know, or getting investors to invest with us or to buy something with those guys, we have zero issues with that. It's just finding the right deal which is.

Cody Payne:

You know what a lot of people have right now too. I know some folks. You know some folks have issues, syndicating deals and things of that nature, but there's so many people trying to get into our asset class that that part generally pretty easy.

Serena Holmes:

Yeah, and I think that's really where your career is very complimentary, because obviously you're working with a lot of these investors and building those connections. So I guess when you have opportunities, you've got the database and the Rolodex to go along with it.

Cody Payne:

Well, yeah, oh yeah, I used to have one of those actually. But yeah, like I said, as far as our asset class goes, you know I know there's quite a few others. You know office retail and a lot of these other guys are kind of struggling but our stuff is just doing so well across the board that there's so many people that want to invest with us. It's just, it's just finding the right opportunities where it makes sense, and if you're, if you're going to buy existing, you know finding that opportunity. And then if you're going to build it, you know a little bit more. There's a lot more intricacies to it because you know you get your build and hold period and things of that nature.

Serena Holmes:

Yeah, understood. Now, when you look at the last couple of decades, what would you say is one of the biggest lessons that you've learned?

Cody Payne:

I mean, it was probably the last one perhaps is just stay patient, you know, because it you know when 2008 and 9 hit, you know I was at a smaller firm but we had like 20 people there and really it didn't take that long for it to dwindle down to just me and the owner for a long period of time. And so, since I had never experienced a market crash before, I didn't know how long it was going to take. I didn't know if it was just going to be like this forever. And so you know just staying patient, understanding you know what to do in that time period. You know we were doing a lot of BOVs for lenders at that time period.

Cody Payne:

That was probably a mistake on our part, because a lot of them actually didn't end up selling or they would package them up and sell them off to another lender. And you know then we're having to create a whole new relationship. And so you know understanding where your time is most useful at and how to capitalize on it is key. But you know just also being prepared for you know when things do come around and get better. And you know just also being prepared for you know when things do come around and get better. And you know you never want to quit working. You always want to stay relevant, you want to stay in everybody's face, everybody's ear, um, so that when those opportunities do come, that you're remembered yeah, no, that's amazing now.

Serena Holmes:

Is there any people?

Cody Payne:

take off, so many people take off.

Serena Holmes:

I mean, there's people in our business that I mean we haven't heard from like a year or so yeah, I mean, I think it's something that right now I don't know what your market's like compared to ours, but in the last six to 12 months there's been a lot of challenges where there's some companies that maybe scale too quickly, they couldn't accommodate the rising interest rates and stuff like that, and there are a lot of people that are kind of leaving the market like they're going bankrupt. They're, you know, trying to come up with all these different ways to save their portfolios and stuff like that. But I think we could never have expected interest rates to climb as quickly as they did, necessarily. But then I think you know, if you were kind of walking that line to begin with, then obviously like you can't support something that's cash flow negative when it comes to, like those larger portfolios and stuff like that, right, so it's really showing kind of who set things up properly from the beginning, based on who's going to be here next year.

Cody Payne:

Well, and I mean, there's agents, you know, just like us, that are leaving the business or changing asset classes, or just sitting on the sidelines waiting for things to get better. And so you, just you, never want to wait for things to get better.

Serena Holmes:

in my opinion, yeah, and there will always be pros and cons depending on exactly what you're doing right, but that's where I think having that diversification across your portfolio is really important. Is there anything that you would say you look back on, that you're most proud of or you feel like is your biggest success?

Cody Payne:

Yeah, you know, when I got started, I was doing a lot of leasing and I'm glad I took the risk to convert to the investment sales side and the development side. You know I'd done leasing for so long. You know anytime you're going to change, it's obviously a little scary and you know you're taking a risk and you know you lose a lot of business that I built up over that time period. But that ended up being one of the best things for you know me and the team is converting over to that and becoming the specialist in that arena and so, um, you know we worked very hard to achieve that. Um, you know, very excited to continue to push it. Uh, but yeah, I'm very glad that we made that change.

Serena Holmes:

Awesome. Well, I'm glad to hear about that. We're just going to take a really brief break for a word from our sponsors and we'll be right back. Have brief break for a word from our sponsors and we'll be right back. Have you always wanted to invest in real estate to build long-term wealth? Start today with just $10,000. Introducing Honeytree Real Estate Investment Trust. Welcome to the Temple Building, a mixed-use 0.48 acre site with 25 residential tenants and five retail spaces In the heart of Brantford, ontario. This property was purchased for $5.8 million and was recently created for $6.470 million and an instant investor upside of $670,000. Honeytree is taking on a light, value-add strategy, adding AC, laundry and energy-star-efficient appliances Coming soon to Honeytree Real Estate Investment Trust. For more information, go to honeytreegroveca.

Serena Holmes:

I value transparency, integrity and trust. If you choose to work with me, you can be assured that business will be conducted honestly and openly. Time is of the essence in this industry, so you can expect nothing short of quick, clear communication from me. I'll keep you informed every step of the way so you feel comfortable throughout this entire process. Our homes are where we eat, sleep, relax and play. My clients' best interests are at the heart of everything I do and, with this said, my service to you doesn't end when the transaction does. As your realtor, I'll not only help you buy and sell your property, I'll also educate and support you along the way. I want to help you fulfill your goal of home ownership and become your trusted real estate resource for life. I can't wait to share my passion for real estate with you. More importantly, find you the perfect house to turn into your home.

Serena Holmes:

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Serena Holmes:

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Cody Payne:

The craziest thing. Yeah, I don't think that's been just like whoa, that's crazy, you know. I mean there's things that have worked out much better than we ever expected. You know, there's people that we worked with before that we thought were good people to work for and they actually turned out not being good. And so we've got, you know, plenty of stories on that side.

Cody Payne:

That's a weird one. I'll have to come back to that. Well, I will tell you, there was actually a group that we had tried to penetrate for a long time to work with and liked them a lot, finally got in with them, was able to work with them, and it turned out they were not the best business people, and it's very shocking to see that. You'll see somebody that's, you know, that's decent size and has a lot of good stuff, and then you know, obviously, you know, come to find out a lot of people knew about it and whatnot. And hey, those guys were a little screwy and that's why we don't work with them anymore. And so it's just funny that you find out things about people that you have a different perception of.

Serena Holmes:

Yeah, I mean even right now, like I've been heavily in the private lending space for the last five, six years and there's some tools and things that I've learned now in the last little while that I'm like I really wish I had known about some of these sooner, because it would just help to do that kind of due diligence and really get to know what some of those companies and people are all about. Because the reality is, when things go wrong, a lot of times people are ashamed and they keep things really close to their chest. And if they kind of talked about it like you've got to be careful, like you can't be slanderous and things like that, but I think if the community was talking more, like maybe they could help other people like dodge bullets and stuff like that, right.

Cody Payne:

so yeah I do know I actually I do know the thing. That's great for you, so I've got a better one. So we I mean the guys we actually wrote a book, um a while back ago, uh, about building and investing in the small day flex industrial side, and we did it to really send out to newer investors that were maybe looking at getting into the space or maybe looking at converting over, and we put it on Amazon and a couple of the platforms and I was shocked that thing's been selling through the roof and we've had so many people buy it and have called and said, hey, great book, we loved it. And I mean I'm surprised with our education level that anybody was even able to read it and comprehend it. But uh, but no, it was very, very proud of that book and yeah, it's done a lot better than we thought it would have done.

Serena Holmes:

But I think also, if you're providing something that's very niche, like if people were looking into that and maybe you guys are one of the only ones that have written a book on it right, I can see how there could be some good and I think that's.

Cody Payne:

I think that's why, to be honest with you, I think we're you know, because if you like, you know, if you go Google like investing in residential or investing in multi-counter, it's just a mile long yeah, and so I think, because it is a very niche asset, that that's probably one of the reasons why, yeah, no that makes sense Now, with all of your experience working with different investors in your career, what would you say?

Cody Payne:

is some of the best advice you've ever received. You know, just stay patient, stay loyal. You know, stick to your, stick to your code of ethics. And you know, if they don't see value in you, then you shouldn't be working with them.

Serena Holmes:

Yeah, yeah, I love that one. And in terms of financial freedom, obviously you've got this diverse portfolio, you've got your career and stuff like that. Do you have a particular financial freedom number that you are reaching towards and if you're comfortable sharing it, we'd love to hear it.

Cody Payne:

I always thought I had when I was younger, and then I hit it and it made me even more hungry and didn't ever want to go backwards and just kept, and so it really kept exceeding. So I mean, I really don't have a number that's in mind. You know, we want to be either owners or part owners, and I think we were looking at like 100 assets across the US. That's what our main goal is to get up to, and so we'll see if the goal then changes at that point once we achieve it. But it's yeah now that you say that. Anytime I look back because you know when I first got in business, I'm like, oh yeah, I want to make $100,000, because that was a lot of money in 2005.

Cody Payne:

It's still a lot of money today. But you know, and then you make that and you're like, well, now I need to do a little better, and so the goalposts always really kind of moved and it just keeps moving. But I think that's also what keeps me motivated, too, is not having that goalpost.

Serena Holmes:

Yeah, yeah, no. I love that. Now, in terms of how real estate investing has changed your life. What do you think that looks like in terms of time, opportunity, net worth?

Cody Payne:

I think the biggest thing actually is the people that it introduced me to and have made some really good quality friendships in those as well, quality friendships in those as well, not just business partnerships, but good quality friendships that have introduced me to other people that you know have great outlooks on life and you know very positive and uplifting individuals and I'd say that's the biggest thing. It's not so much money, but you know more just personable items that you know I've I've seen and come across, and you know there's a lot of guys you know, as I'm thinking about it, that you know I've I've seen and come across, and you know there's a lot of guys you know, as I'm thinking about it that you know we do business with and we do partnerships with and we love hanging, we hang out all the time now and um, and so I think it's probably the relationships that were made.

Serena Holmes:

Yeah, and I can see that because I think that when you are doing something that's different, like I don't know about the rest of your friends and family, kind of before that but obviously what you're doing may not relate to or resonate with them. So I think that when you are starting to do these higher level things, obviously it makes sense to start connecting with people that are on the same page as you, are, on at least the same trajectory as you.

Cody Payne:

So I think, surrounding yourself, in the communities, it's makes sense that you develop those, those friendships, along and surrounding yourself with people that you know will help push you to and that are maybe more successful than you on the business side or whatnot I mean anytime you surround yourself with people that you know I don't want to say are better than you, but you know are. You know, bring good value to the table is always a good thing, and so you want to make sure that you're bringing good value as well.

Serena Holmes:

Yeah, no for sure. Now, obviously, the name of this podcast is Inspired to Invest, so I like to ask a quote that motivates or inspires you.

Cody Payne:

So we have a quote that's actually written down out here. I don't really know if it inspires us or not, but it says if you don't have all the power, you have no power, and that's, and that's really just a a, a mindset tool. Anytime you're dealing with something or you're dealing with somebody on something, that if you don't have all the power, if they don't have all the power, then then you know, and so we consistently say that all the time. So maybe not, maybe not the best, most inspiring, uplifting quote, but just something that we like and live by.

Serena Holmes:

Yeah, no, I hear you on that. Now, for anyone that wants to learn a little bit more about your investment opportunities, what's the best way for them to reach you?

Cody Payne:

Easy Flexbusinessparkscom. Awesome, so we'll include that in the show notes below All the guys are there. Yeah.

Serena Holmes:

We'll keep it nice and simple, obviously. Thank you for your time. If you've enjoyed this episode, make sure that you like, comment and subscribe. You can also follow along on social at Inspired to Invest Podcast. And remember, when you invest in yourself, the sky's the limit. Thanks again. Thank you to ProVenture Real Estate Corp for bringing you this episode of Inspired to Invest. The views represented on this podcast are for general information only and does not constitute investment or other professional advice or an offering of securities. The host and guests featured on Inspired to Invest make no representations as to the performance of any particular investment. Should you decide to make an investment, you are responsible for conducting your own review and analysis. It is recommended that you obtain independent legal accounting and tax advice from licensed professionals.