Apr 28, 2021 · 59m · my-first-million
How to Buy Distressed Assets, How to Network with Codie Sanchez | My First Million Ep. #176
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Investor Codie Sanchez joins Shaan Puri and Sam Parr on My First Million to break down contrarian wealth creation strategies, focusing on micro private equity acquisitions of boring cash-flowing businesses, distressed asset structuring, and high-impact networking.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The hosts hold 46.1% of the talking time here. How this is scored →
The hosts as informed peer 5.6 Guest teaching 4.7 Guest disagreement 1.4 The hosts pushing back 1.0
speaking balance: gold is the hosts, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 33:38 Codie calls out stock market investing without edge
Codie bluntly dismisses retail stock picking, noting no Forbes 100 billionaire got rich purely from public equities without asymmetrical backroom advantages.
Hardest push from the hosts ▶ 35:08 Shaan presses Codie on her own public market holdingsShaan challenges Codie's anti-public equity stance by directly asking whether she practices what she preaches with her own portfolio.
Biggest teaching moment ▶ 24:09 Codie corrects Shaan on modular vs manufactured housingCodie directly clarifies the distinction between modular homes on permanent foundations and manufactured trailer homes when Shaan assumes they are identical.
The host holds their own ▶ 36:19 Shaan educates Codie on the Keynesian beauty contestShaan takes command of the theoretical discussion by introducing and explaining Keynesian beauty contest dynamics when Codie admits she has never heard the term.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The hosts as informed peer | Guest teaching | Guest disagreement | The hosts pushing back | Why |
|---|---|---|---|---|---|---|
| Post-Balaji Podcast Hangover and Late-Night Banter | 3 | 1 | 1 | 0 | Shaan and Sam joke about their intellectual exhaustion after interviewing Balaji Srinivasan. Codie joins in warmly to poke fun at the situation before the interview starts. | |
| Introduction to Codie Sanchez and Micro PE Portfolio | 6 | 5 | 1 | 1 | Codie introduces her cannabis fund and micro PE strategy of buying unsexy small businesses. Shaan and Sam validate the thesis with examples from their own angel and micro PE investments. | |
| Codie's Journey: From Border Journalist to Private Equity | 4 | 3 | 0 | 0 | Codie details her career path from border journalism to institutional asset management and cannabis investing. Hosts listen attentively with friendly inquiries into her background. | |
| Mailbox Money: Pack-and-Ship Centers and Micro PE Strategy | 6 | 6 | 2 | 1 | Codie breaks down the economics of pack-and-ship centers and mailbox rentals over startup building. Shaan engages with the unit economics and applies it to real estate he currently leases. | |
| Buying Distressed Assets for Zero Dollars via Revenue Share | 5 | 6 | 1 | 0 | Codie shares a case study of acquiring distressed gym client rosters on revenue share without taking on lease liabilities. Shaan enthusiastically summarizes and praises the zero-cash-down mechanics. | |
| Modular Home Economics and Scaled Real Estate Development | 4 | 7 | 1 | 1 | Codie educates Shaan on the technical distinction between manufactured and modular homes and explains the cost efficiencies of modular developments at scale in Park City. | |
| Controversial Take: Why Angel Investing Is Largely Flawed | 7 | 4 | 3 | 3 | Codie argues angel investing is essentially gambling for most people. Shaan agrees and expounds with his own philosophy on why 'blended reasoning' is a red flag in investment decisions. | |
| Public Equities, Unfair Advantage, and the Keynesian Beauty Contest | 7 | 4 | 3 | 2 | Codie explains why retail stock picking is flawed without an unfair edge. Shaan introduces and teaches her the Keynesian beauty contest economic metaphor to describe market psychology. | |
| Buying Real Estate at Auction and Courthouse Steps | 5 | 7 | 2 | 1 | Codie breaks down buying pre-foreclosure real estate on courthouse steps in Texas and hidden debt mechanics. Shaan explores why this process hasn't been fully automated via tech platforms. | |
| How to Collect Cool People and Establish Meaningful Mentorship | 8 | 4 | 1 | 1 | Codie shares tactics for networking with high-profile figures without being transactional. Shaan delivers a deep breakdown on how true mentorship is formed through actionable follow-ups rather than asking for advice. | |
| Redefining Financial Freedom and Value of Skill Stacks | 7 | 5 | 1 | 1 | Codie and Shaan exchange philosophic views on financial freedom, distinguishing between dollar thresholds, desiring less, and relying on transferable skill stacks. |
Statements from this episode (20)
Parr: Balaji Srinivasan is the highest-IQ person he has ever met
“But if we define genius as just like a certain IQ, I would bet a lot of money that, that he was the highest IQ person that I've ever had a conversation with.”
Sanchez: Early market opportunity exists where people think you are crazy
“When people think you're a little crazy for doing something, there's usually at least some opportunity left. Otherwise, all the smart people would have moved first, and I'm not smarter than anybody else.”
Sanchez: Pack-and-ship store profits come from mailbox rentals, not shipping
“So essentially the money is not in the taping of boxes and the stuffing of stuffing to make sure stuff doesn't break. It's actually in the little mailboxes in the front.”
Sanchez: There are far better paths to $1M a year than doing a startup
“If what you're really going for is I want to make You know, 200,300 1500 thousand, a million bucks a year, and that, that is my goal, not to change the world. There's so many better ways to do it than do a startup, in my opinion.”
Puri: Buying existing businesses is criminally underrated compared to building
“And so the buy path versus build or join, I think buy gets criminally underrated right now, but I think it's changing.”
Sanchez: 60% of temporary Yelp business closures became permanent
“60% of the businesses on Yelp that closed temporarily closed permanently.”
Sanchez: Acquire distressed customer lists for zero dollars via revenue shares
“I would be out there right now going after every one of their client lists, even if they were unrelated and doing discounts and coupon codes, giving a rev share to the owner who probably could use it and taking their client space. And that's how I would buy di…”
Sanchez: Modular homes only save cost and time when built at scale
“They're not That much cheaper, and they're not that much faster when you just drop one on your property. And I did a bunch of research, asked a bunch of people, they're kind of sexy, but they're not that much cheaper. But when they are cheaper is when you do t…”
Sanchez: Angel investors need 20 to 40 deals to get 1 to 4 winners
“The thing with angel investing is, you know, this, you need like 20, 30, 40 deals for every one to four that are going to go through.”
Sanchez: Do not angel invest until you have made at least $500K to $1M
“Once you've made a few million dollars, and I mean that literally, then I think go into angel investing, or if you're on a path where You're making really good money and you've made at least half a million bucks. Then I think you can start angel investing, but…”
Puri: Needing a 'blended reason' to do something signals a suboptimal decision
“Anytime you have a blended reason, it just really means that there's not one really great reason to do something. And so those are always like, you know, suboptimal choices I find for myself at least whenever I have to come up with a blend.”
Sanchez: No one on the Forbes 100 got rich just investing in stocks
“If you look at the Forbes, 100 list, there is not one person on there who made their money from just investing in the stock market.”
Sanchez: Do not speculate on stocks without an unfair advantage
“If you don't have an unfair advantage, if you can't like write down why specifically you're going to win instead of somebody else, you should be really careful speculating on stocks because the big boys don't really do it.”
Sanchez: Investors must always check debt and lien priority before investing
“And like one thing I've realized about wealth over time is debt is just about everything you should always look for even before you do a startup investment. Is there any debt on the company? Am I in a first lien? Does that, you know, do I have first access to …”
Sanchez: California government will be biggest home buyer in downturn
“One of the interesting things is like the biggest buyers of homes in California, for instance in, in this downturn, in my opinion is going to be the government because they've essentially made it where if this is not your primary residence, you cannot buy thes…”
Codie Sanchez: Networking with creators requires building and zero expectations
“You gotta be doing cool stuff to hang around cool people. Rule number one... You have to actually be out there creating thing to be around creators. So I think that's rule number one and it's to have the lowest expectations humanly possible”
Shaan Puri: Seeking a mentor is an advanced form of procrastination
“Seeking a mentor is a advanced form of procrastination. You think that you need a mentor before you do the thing. And in reality, your mentor and all other people who succeed don't use mentors as a prerequisite.”
Shaan Puri: Mentorship requires asking specific advice and following up
“The way you actually do form a mentorship bond is you ask somebody for a specific situational piece of advice. So not just what should I do, but like, Hey, I'm debating between these two options. How would you think about this? Or here's how I'm thinking about…”