Christian Osgood and Cody outline a two-phase real estate strategy: acquire and stabilize properties, then prioritize cash flow and debt paydown. They target 300 units and a $7.5 million portfolio in 4-5 years by selling high-equity properties to fund debt reduction and simplify operations.
Chapters
You know, how do you own it? How do you never lose it? Aren't you losing some of those properties to get there? We can't stop buying real estate yet. Here's why.
Welcome back to the channel. My name is Cody. This is Christian. And we're talking about doubling down today. We go buy one hotel. Now we're up to 3. Buy one apartment building. Now we've got more than one.
A lot more than one.
We doubled down. We had a problem because in the beginning we were told if you solve problems, you get paid money. And we wanted money because that allowed us to live a better life.
And we didn't have any of that when we started.
Didn't have any of it. We still don't have a lot. Are we rich? No, but we're building wealth. Yeah, we double down on everything, whether it's a hotel, whether we're buying some RV parks right now, we'll buy a couple of those. Doing the multifamily thing. And we've been having a lot of fun with that. Every time we get a problem, we're focused on getting a bigger problem. This is called your build phase. We talk about this at multifamilystrategy.com. That is how you build a successful business. We're in build phase right now because we stabilized and optimized the piece of real estate we wanted to stabilize and optimize. But you have to keep on buying to make your current problems insignificant. We owe one person a million bucks. How do we make a million dollars insignificant? We go figure out how to get 10, and we And we're not going to do that with duplexes. We're not going to do that with 12-plexes. Got to go buy 40s, 50s, 60s. And so what are we doing? We're closing on a 33-plex here in a couple weeks. We're working on some other bigger deals than that. And that makes our current problems insignificant. Now, what's the problem with that? Oh, you don't get to exit. You have to keep playing the game. And that is a cycle that most people don't know how to get out of. So what do we do?
Well, you keep scaling until you hit the point that you actually hit your financial goal. This is why the goal setting phase is so—
important.
A lot of people kind of meander through real estate. They typically don't buy enough. Some people will overbuy, lever to the moon, and one day will do the big project they scaled to that sinks their entire portfolio. We've seen this happen again and again. You hit your goal, whatever that goal was— $25,000 a month, $100,000 a month, $5,000 a month, whatever it is that you're trying to build— you hit that, you get a little bit past it, you scale up so you build something big enough to actually pay down your debt. And at some point you're going to sell off a few properties to jumpstart paying off the debt. If you can build your financial freedom in your stabilized phase, so you're cash flowing with debt, your target, and then you get a little bit more cash flow and eliminate all that debt. Now you just have more cash flow than you need and no underlying liabilities, which feels amazing. So we've heard.
And an example of that right now, we're a little north of 200 units. I think I've got 201. And you've got a couple of buildings I don't have.
And yeah, and you have a few that I don't have, but somewhere in there we have about 200-ish.
Yeah, 200-ish each. At the end of 2024, I want to be at 200 units. However, I think we're going to get to 300. So what do we do? We sell down. We take the less desirable assets, we keep the nicer assets, and we sell down to 200 and pay off to secure our base, to pay off the rest. If you own 200 units in cash or if you only want to make $5,000 a month or $10,000 a month, If you own an 8-plex in cash, you're probably going to be there. So go buy 20 units, sell down to your goal and pay it off. Own your freedom.
But Cody, you say not to sell and, you know, how do you own it? How do you never lose it? Aren't you losing some of those properties to get there?
No, you have to look at exactly what it is you want. If you have pieces on the table, you can use those pieces. And selling off an asset to solidify what you actually want, even if it gives up some future upside. I'm doing that with Christian on a couple businesses right now, a couple buildings. I buy him out of some things. We all— we're only buying the big stuff together, but I'm buying him out of some little stuff he doesn't need to own because it gives him exactly what he wants. And it gives me what I want. I want to own buildings on my own. So you can adjust your pieces, you can sell some to solidify everything that you started this business to actually get.
You have to build first and all the deals have to follow the rule. How do you buy it? How do you never lose it? Because you never want to have to lose the property. You buy everything sustainably where it gets to stay in your portfolio. How are we deciding what we sell off? I think that's a fantastic question. That would be the first thing I think of. Well, you build this portfolio and Cody and I own more than we need to hit our financial goals. We have a lot. Yeah, we've hit that build phase. So how do you decide which ones are the winners, which ones are the losers, and which ones move you forward? There's a few things that we look at. Which buildings have the most equity? That's the first thing I want to look at to say, hey, which ones actually have a piggy bank there that we could tap to start paying down our debt or otherwise move liquidity through our portfolio? Next thing I'm looking at is how much time does each building take? Great example. We have a 38-plex. We have a 6-plex, same market. Now we have pulled about $1 million out of our 38-plex. It has already made us a lot of money. It still has a lot of equity. It doesn't cash flow all that much more than our 6-plex that does fantastic. 6 units cash flowing about $3,500 a month. 38-plex is going to be cash flowing about $5,000 a month. There is a lot more work that goes into 38-plex that has a lot more equity. I'd rather take a similar cash flow with less work on a smaller building and pay that one all the way off.
And so an example of something that we could do— we're not doing it because we love that building, but we could sell 38 and pay off the 6-plex and another 6-plex, and then our cash would go up probably $6,000 a month. Yep. So we'd get a net positive. We'd eliminate debts, a lot of debts, eliminate a lot of the maintenance that we have to upkeep, and life gets simpler and we have enough pieces. One of our first stated goals was 100 units. We get to 100 units, we retire his wife, my mom, and we're good. Well, if, if we get to 300, we can sell 200 and write a check for the other 100. And buy out every partner.
And then we're done. In like a 4 to 5 year cycle, we could finish our entire financial goal.
Have $7.5 million each in real estate. Wouldn't be as flashy. No, but that's not what it's for. And so back to the point of the video, you go in scale mode until you get to a point where you can adjust your pieces and hit every goal that you want in the business that you're building. You're probably not going to do it all right. On the first try. So you're going to build a business, you're going to have some problem properties, you're going to have some problem tenants, you're going to have some problem contractors. Once you get to the goal, adjust your pieces. You don't have to keep all the pieces. Adjust it, get what you want, take it off the table, and hold the rest.
That's why it's so important again on the front end, that goal setting. Look at this like a board game. You need to set what does winning look like before you start playing the game. Once you're there, keep adjusting the pieces to optimize that victory. Win the game, pay off the debt, have the assets. No matter your starting point, you can do this with or without money. We did it without. But build that equity and that position in your investments, simplify it, and away you go.
