Easiest Way to Make Money is Operations

Hey, it's Christian Osgood. You probably heard that you make money in real estate on the buy, and while that's kind of true, it's way less than half the equation. The easiest math, the easiest way to make money is in the operations. I'll show you exactly what I mean. So I own 600 units today. I found that when we improve the appliances, we buy nicer things, you work on the little things like how do we save power, water flow, how do we run a better unit that's actually nicer for their tenants, we have less turnover. We save on average $50 per unit portfolio-wide. So 600 units times $50 saved every month is $30,000 added to income every single month. Now per a year times 12, that's $360,000. In commercial real estate, if you lower your expenses, you increase your net operating income, which is how your property is valued. My markets are called a 7 cap market, which means I divide by a rate of 7, divide by 0.07 to find the value of the deal. I make by doing good operations $5.1 million. Do you know how hard it is to make $5.1 million only through real estate acquisition? It is way harder than being good at operations, and the math is Algebra 1. That is why I love real estate. That is why you make money on the buy is not technically true.