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My First MillionHow to Buy Distressed Assets, How to Network with Codie Sanchez | My First Million Ep. #176
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Chapter summaries
Setting the stage: last night’s intense interview and today’s guest
The hosts joke about being exhausted after a long, mentally taxing prior recording. They explain how the previous guest’s rapid, technical thinking left them feeling outmatched and sleep-deprived before turning attention to today’s episode.
- •Shaan describes being unable to sleep because his brain kept spinning in pseudo-scientific “gibberish.”
- •Sam describes the prior guest as unusually high-IQ and hard to keep up with in real time.
- •The hosts talk about struggling to steer the conversation because it moved across topics quickly.
- •They transition from that story to welcoming Codie Sanchez.
Who Codie Sanchez is: investor, fund manager, and writer
Codie explains how she introduces herself depending on context, from “salesperson” on a plane to “private equity investor” when it matters. She outlines her main activities: running investment funds and writing Contrarian Thinking about money and investing.
- •Codie says she often claims she’s in sales to avoid long conversations with strangers.
- •She describes herself as a private equity investor and writer at Contrarian Thinking.
- •She explains she runs a cannabis-focused private equity fund with partners.
- •She frames writing and sharing investment ideas as a growing trend among investors.
From cannabis PE to micro-PE: what they buy and why it’s ‘boring but great’
Codie details the scale and focus of her cannabis fund and contrasts it with a smaller micro-PE approach focused on unsexy cash-flow businesses. She shares examples of the types of companies they own and how they operate them via dedicated operators.
- •Codie describes the cannabis fund’s typical revenue range and portfolio breadth.
- •She explains a separate smaller fund focused on buying very small businesses.
- •She lists examples: plumbing, laundromats, podcast production, lawn care, and cleaning-related professional services.
- •She emphasizes she typically doesn’t operate these businesses directly and relies on operators.
Origin story: the plumbing business lesson that sparked the micro-PE approach
Codie shares a personal story about her uncle winding down a highly profitable plumbing business because he didn’t know how to sell it. That experience motivated her to apply private equity concepts to “micro-sized” businesses and preserve value that might otherwise be lost.
- •Codie describes her uncle’s profitable plumbing company being shut down instead of sold.
- •She calls this outcome a “waste” and a catalyst for her micro-PE thinking.
- •She explains the idea of applying PE methods to businesses below a certain size.
- •She shares an early plumbing roll-up example: buying another company, rolling it in, and selling one.
How Codie got here: journalism on the border → finance → emerging markets → cannabis
Codie walks through her unconventional path into investing, beginning as a journalist covering trafficking and smuggling on the US-Mexico border. She explains how that led her to study money and finance, moving through Vanguard, Goldman, State Street, and international investing work before going all-in on cannabis.
- •Codie says she started in journalism covering human trafficking and drug smuggling (as a reporter).
- •She describes a ‘quarter-life crisis’ and a desire to understand money’s role in outcomes.
- •She joined Vanguard and learned finance by asking lots of questions.
- •She moved to Goldman to understand active investing, then to State Street and later built an international business via a JV before focusing on cannabis.
Rapid-fire business idea #1: ‘Mailbox money’ via pack-and-ship centers
Codie explains the economics of non-franchise pack-and-ship centers, emphasizing recurring revenue from renting many PO boxes rather than the labor of packing and shipping. She discusses customer acquisition tactics and why buying an existing location can be easier than building from scratch.
- •Codie frames the concept as a non-franchise alternative to FedEx/UPS stores, avoiding franchise fees.
- •She says the core profit comes from renting mailboxes/PO boxes rather than packing services.
- •She describes marketing tactics: PPC, direct mail, neighborhood events, and simple in-store promotions.
- •She explains buying an existing store can be cheaper and faster than starting one, citing a case where an owner bought a retiring operator’s store and grew revenue.
Build vs buy: why a portfolio of small businesses can beat the startup path
Codie argues most people shouldn’t chase building “the next Facebook” and would be happier with stable cash-flow businesses. She describes her preference for a diversified portfolio of small acquisitions, comparing buying businesses to buying stocks for risk-spreading and income.
- •Codie says many people primarily want stability and lifestyle outcomes rather than world-changing scale.
- •She advocates a portfolio approach: multiple small bets rather than one giant startup bet.
- •She suggests diversifying risk by having operators run businesses while the owner holds a portfolio.
- •Shaan agrees the “buy path” is underrated compared with building startups or staying employed.
Buying distressed assets for ‘zero dollars’: acquiring customers without liabilities
Codie describes a strategy for acquiring value from failing businesses by taking over their client relationships via revenue share, rather than buying the whole business. She gives a pandemic-era example involving fitness studios, where owners closing down could still earn from transitioning customers.
- •Codie shares an example involving gyms and other studios closing during the pandemic.
- •She proposes focusing on residual assets like customer lists and goodwill, not leases and overhead.
- •She outlines a rev-share structure: pay the closing owner per transitioned customer for a defined period.
- •Shaan highlights the upside of gaining assets while avoiding liabilities.
Modular homes and building at scale: why the economics change in developments
Codie explains the difference between manufactured homes and modular homes and shares her experience buying a modular home in a development. She argues modular becomes compelling when done at scale, especially in places with short building seasons, since construction can happen indoors and be assembled quickly on-site.
- •Codie distinguishes manufactured homes (no foundation; movable) from modular homes (built in pieces with a foundation).
- •She says modular isn’t dramatically cheaper or faster as a one-off, but can be much more attractive at scale.
- •She describes purchasing a modular home in a development and notes the build timeline and cost dynamics.
- •She explains the benefit of warehouse construction and rapid assembly, particularly in harsh-weather regions.
Contrarian take #1: why ‘angel investing is largely dumb’ (with exceptions)
Codie argues angel investing can be too much like gambling due to founder charisma, long odds, and the need for many bets. She suggests people wait until they have meaningful capital and highlights alternatives like later-stage deals or debt structures with warrants, while Shaan agrees it’s often justified with a “blend” of reasons.
- •Codie says angel investing can feel like gambling because founders are inherently persuasive.
- •She notes the need for many deals to get a few winners and suggests waiting until you can afford losses.
- •She references a personal lesson from losing money on a deal and adding new diligence “red flags.”
- •She suggests considering structured deals like debt with warrant-like upside instead of default early-stage equity terms.
Contrarian take #2: why public stock picking is ‘kinda dumb’ without an edge
Codie explains that many famous ‘stock market’ successes rely on special deal structures or influence rather than ordinary public-market stock picking. She says she avoids individual-stock speculation and prefers indices and private-market opportunities where she can have more control or advantage, while Shaan discusses how markets can become a game of predicting others’ opinions.
- •Codie argues public-market success often depends on asymmetric deal terms or the ability to affect outcomes.
- •She says retail investors should be cautious if they can’t articulate their unfair advantage.
- •She states she invests in indices rather than individual stocks for speculation.
- •Shaan describes markets as a game of anticipating what others will value (a recursive prediction problem).
Real estate at courthouse auctions: lists, foreclosures, liens, and why it stays offline
Codie explains how courthouse-step auctions can precede the listings most buyers see, and describes how lists of upcoming foreclosures can be used to reach owners earlier. She also explains practical reasons the process remains hands-on: verifying property condition and understanding liens and debt priority, plus the need for cash at auction.
- •Codie describes courthouse-step auctions as an earlier stage than typical foreclosure listings people see online.
- •She explains buying a foreclosure-prep list and contacting owners can sometimes help them avoid worse outcomes.
- •She notes the need to physically verify properties due to outdated maps or unseen damage.
- •She emphasizes title/liens and debt priority can radically change deal economics, and auctions typically require cash (cashier’s checks).
Networking as ‘collecting cool people’: break in with creativity, then be useful
Codie shares how she created memorable outreach—like sending a large box of someone’s favorite candy—to start relationships when she didn’t have a big network. She and Shaan discuss how follow-through works: being interesting, having low expectations, offering value over time, and avoiding needy or overly demanding asks like requesting mentorship up front.
- •Codie explains she used personalized gestures (like sending favorite candy) to stand out from crowded inboxes.
- •She says relationships deepen by repeatedly being helpful in small ways without being needy or creepy.
- •Shaan says the best ‘networking hack’ is being interesting via expertise or doing real work.
- •They agree asking for a mentor as a label upfront is off-putting; instead, ask specific questions and close the loop with updates.
Financial freedom, skill stacks, and closing remarks
Codie and Shaan discuss financial freedom as a foundation for more freedom in thinking and choices, and they reflect on how skills and relationships provide resilience beyond bank balances. The episode ends with where to find Codie’s newsletter and social presence, plus thanks and an invitation to return.
- •Codie argues financial freedom supports broader freedom in time and independent thinking.
- •Shaan reframes financial freedom as stopping decisions based primarily on money, not just reaching a number.
- •Codie adds that skills, relationships, and competence reduce the risk of “total failure” scenarios.
- •They close with Codie’s newsletter and Twitter, plus mutual appreciation and a potential future deep-dive.
