Christian OsgoodCEO, Multifamily Strategy · CEO at Multifamily Strategy

Americas Favorite Slumlord Hates Class A

28 Nov 2024 · 1 min

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In this monologue, Christian Osgood explains his real‑estate investing philosophy, contrasting a high‑end Class A waterfront property with the bulk of his portfolio, which consists of renovated Class B and Class C rentals acquired through seller‑financed, $0‑out‑of‑pocket deals. He argues that lower‑tier properties generate higher cash returns, provide decent housing for people who need it, and are far more market‑resistant, giving his portfolio stability during economic downturns. Because of these advantages, he continues to focus on acquiring more Class B/C units despite the attractive appearance of Class A assets.

Chapters

What kind of rental property do you want to own? This is Class A right here, multi-thousand square foot on the water, Hood Canal. This place is beautiful. I bought seller financed, $0 out of pocket. Using the same $0, I bought hundreds of rental properties that are Class C, Class B, fixed them up. Basically bought slums and ran them better than a slumlord. Here's what I found. One, on top of making more money in the lower class properties, we're able to rent nice spaces to nice people who need a place to stay, who appreciate it, You feel better about what you're doing when you do a great job running that type of real estate. You're really providing a need in a community that needs the housing. 2, it's market resistant. In a down market, you don't live in places like this. You can always downgrade. But if you're in a Class C, Class B building that is well renovated, you don't really go anywhere. Economy goes down, if you can afford where you live, you stay there. You don't go. Having the resistance, having the stability in my portfolio is so important to me. For that reason, I don't buy a whole lot more of these even when they're $0 out of pocket.