Christian Osgood argues single-family rentals are wealth killers compared to multifamily buildings. He closed a $2 million, 38-unit deal with just $300k investor capital and no bank, later appraised at $4.1 million. He's replicated this across 23 deals and over 300 units using creative financing.
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Investing in single family is one of the worst decisions you can make in your investing career. Now, while some people have made a lot of money doing it, most don't. I'm going to share exactly why in this video. By the way, you may have noticed the channel is called Multifamily Strategy. I am a huge fan of apartment buildings. There is a reason for this. It is going to be easier and less expensive for you to make a ton of money. If you're a fan of making money or you want to pursue financial freedom in the most efficient manner possible, and in my opinion, the safest manner possible, I'm going to share exactly how you do that. In this video. By the way, my name is Christian Osgood. I've bought hundreds of rentals over the last several years using creative finance with a $0 budget. I bought a ton of real estate, which brings us to the first problem with housing. If you buy single-family housing, not only are you taking a house off the market that a family who wants to own their own home could potentially just live in, you're buying one single unit. You only have two modes: 100% occupied or 0% occupied, full income or no income. That's the first problem is that you have a lot of starts and stops because you're small. You have no advantages of scale. The only way to make a lot of money in single-family houses is to buy a ton of them. The second problem is if you build a cash flow of say a few hundred dollars a month, you buy a property, it's cash flow positive, which is hard to do in single-family, but you get some positive cash flow. It's usually not world-changing. You have to take a lot of time and focus and if you happen to be buying out of market or you have some travel time, you lose a ton of time for a very low income stream. If you stack a bunch of 'em, now you have to have a big company that can churn a ton of deals. You have employees, headaches, and guess what you've done? To make a lot of money in single family, you've created a job that is likely much worse than the job that you left seeking financial freedom. Second, let's talk about some of those efficiencies that you get in apartment buildings that you lose in single family. Every unit that you own in single family or even in small multifamily, you pretty much have one roof over one family. So all of your maintenance expenses, do you have 100 units, which is about what it takes to have real financial freedom in single family. You have 100 roofs, 100 water heaters, 100 ACs, 100 individual tenants on 100 individual buildings. Your maintenance costs are much, much, much higher than having one roof over say 25 tenants in a small multifamily building. It is crazy how much more efficient it is to take more people under the same roof, under the same utilities, under the same tax bill. You have such massive savings. It's an easier business to run. What I think happens is people get suckered in by the fact that the pricing is so low, which I'm going to get into, by the way, because it actually costs less to buy multifamily. And I will explain this. Hang tight. When you're buying single family, I think people can wrap their head around the concept of, oh, there's these crappy little homes in the middle of nowhere you can still pick up for $35,000.. And you can buy a whole bunch of these and maybe make a little bit of cash flow. People can wrap their head around $35,000, a smaller investment. I can dip my toe into the pools of being a landlord. Here's what ends up happening because you have no efficiencies. It actually takes more time to manage that tenant. You make more mistakes, you make more concessions, you have a smaller tenant pool, you end up with a few bad experiences, and now you are the one dealing with toilets, taxes, with Late night phone call, all the problems that you hear about in real estate, it happens to the small investors because it doesn't make enough money to build any systems around. You just have this little cheap house in the middle of nowhere. Cheap assets are like penny stocks. They're cheap for a reason because they suck and no one else wants them. If there was more demand, they would be more expensive. Now in multifamily, I started with a $0 budget and I found a deal, 38 units. It was on market, it was listed. For $2 million. Now, $2 million for a lot of people, you'll look at that and say, that is way more than the $20,000 house. There's no way I could possibly do that. But it should have been worth $3.5 million. It wasn't performing correctly because we had all of the efficiencies of a bunch of people in one area. We focused on one project, on one close. It was the easiest thing I've ever done in my life, raising capital for the first time from people I didn't know. I brought in $300,000 and we turned that into $2 million, 15% down, seller financed, no banks were involved. I made 4 phone calls to complete strangers. 3 of them put in $100,000. The deal appraised later on for $4.1 million within about 11 months of when I bought it. First $2 million made, which you cannot do in a cheap house in one transaction with all of my focus on that one deal. We then replicated that more than 20 times. I think we're on 23 deals, over 300 units. I purchased all over Washington State, all over Texas, in big cities, in small cities with the same budget. We found opportunities that either have amazing cash flow day one, or they have like that deal, a ton of future upside. You can come in and be a better operator. Now I want to point this out. If I tried to do this in houses, Buying 300 houses would've been insane. The amount of deals we have to find and underwrite, the teams that we have to have to manage that, the utilities and the maintenance cost of that many buildings. That's a huge company. I am able to run my portfolio with a handful of people because it's not that many buildings overall. In 23 transactions, I believe we have about 30 buildings total in the entire portfolio, like unique buildings.. But overall, that's built complete financial freedom, plus, plus, plus, like we're way beyond financial freedom, which is a huge blessing. But it's only because we made the decision to buy a little bigger. And again, I'm not talking these big institutional size investments. I'm talking about buying from mom and pop the same way you would a single family home. The biggest problem with single family homes is because they're cheap, they are low value, and because they're small, you have small business problems. If you don't want to get stuck as a small business and you don't want to go slow, you want to take a $0 budget, I'll tell you the easiest thing to bring capital to a larger opportunity that other people feel they can't do. Now you're bringing something unique to the table. You're bringing value to the table. It is easier to make more money with less effort and more efficiencies. It cost me the same $0 that many people try to buy small houses with. You may end up putting on a $20,000 house, you might end up putting $4,000 down. It's more than I have put down on some multifamily deals. Let the real estate buy the real estate. And if you're going to go with that strategy, you gotta buy bigger to make more money. It's as simple as that. The business gets easier the larger you go to a certain point. I would say anywhere between 5 and 75 units are gonna have the most efficiencies for you to start scaling your portfolio to really build financial freedom in a reasonable amount of time. You can very easily go on market today and buy a cash flowing deal within the next 90 days if you know how to play this game. And if you don't know how to play the game, go ahead and click the link below for Multifamily Strategy. We have an entire course and mentorship group where people all over the country buy a ton of real estate. Last year, just within the group, people like mentees with each other have partnered and bought over $21 million of real estate just internally. That has nothing to do with all the other real estate they bought with outside capital, raising money from other people. That's just within the group. This community is awesome. You guys are welcome to join that. If you want the free version, you just want to dip your toe in the water, there's a link for our Facebook group. I'll let you in if you watch this video, click the link for the Facebook group. I will approve you. And welcome to the club. All right, I hope this was helpful. If you are trying to buy single family and you think that's the way you're going to scale, I have one piece of advice for you. Don't do it. I'll see you on the next episode.
