Christian Osgood scaled from a 2-unit duplex to 24 units in three years using private money, seller financing, and refinancing, without putting additional cash into deals after the first purchase. He saved $55,000 over eight years for the initial duplex, then used the buy-rehab-rent-refinance-repeat strategy combined with partnerships to acquire a 12-plex and two seller-financed properties.
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On today's episode, I'm going to share how I turned 2 units, a duplex, into a 24-unit portfolio. Now, I used just a little bit creativity, and I did not use the 1031 strategy. If you're immediately thinking like, oh, well, he just rolled the duplex into more properties, it was a little more nuanced than that, and I didn't utilize that strategy. However, there were many real estate strategies you may or may not have heard of that I looped together to do multiple transactions, 4 in total, to get to 24 units after only buying that first duplex. After that first duplex, I did not put a dollar more into the deal to get to 24 units in less than 5 years. In fact, that LLC cash flow is enough for most people to have financial freedom. There's 6 figures of cash flow sitting in that portfolio. So how do we do this? Can you copy the strategy? I think you can, because it's ludicrously simple. Hello, welcome to Multifamily Strategy. I'm Christian Osgood. I have bought hundreds and hundreds of rentals using just a little bit of creative finance throughout the whole portfolio. A little bit of creativity can go a very, very long way. The goal of this channel is to show you how to play the game in the simplest way possible. Yes, there's a lot of strategy we cover. None of them are difficult to execute. The whole goal here is that anyone just like me can start from virtually nothing and turn it into a huge portfolio. Now, for this deal, this was one of the last times that I was able to use my own cash on a deal. So I had saved for 8 years. I want to caveat this when you guys are like, well, you had some money to start this. I had saved for 8 years and I had bought my first duplex already. I had a little bit of money from selling my first condo I ever lived in. So yes, I had a little bit of cash. It took me 8 years to get that cash. I had about $55,000 in my bank account when I started duplex number 2. Now let's talk about the acquisition, how we turn this into 24 units, because you can copy this too, with or without money. You can copy this too. Purchase price for the duplex was $112,000. It was in Central Washington. I don't do a ton of heavy value-add projects. This was heavy value-add. This was retexturing the walls, redoing the roof, the flooring, the countertops, the kitchens, the bathtubs, the everything. We completely redid and flipped a duplex. Now, instead of selling it, I refinanced it into permanent debt. So I used a private money loan to buy it 101% financed. I actually got paid just a tiny little bit at close, but virtually 100% financing. So no dollars out of my pocket to buy it. I funded the renovation. It was just under $50,000 of reno. That took me down to just about my last dollar. I could not have afforded to do another piece of this project. I'm glad it went roughly to budget. I had budgeted for $40,000. We came in at like $46,000-something. We renoved this duplex. We leased it out. It did fantastic. I refinanced it. Cash flow on this duplex was about $1,400 per month. I rented it at $1,400 per side. One side completely covered my expenses. One side was all profit. That's basically how the math worked on these two units. Now, around this time, I had a buddy named Cody, and he had a 12-plex that he'd been working on for a while, and he was in need of some capital. He took on some obligations from a past business partner and was paying those off. And so we came into a situation where I had a duplex and no cash. Cody had a 12-plex and no cash. Cody needed cash. I wanted to scale. We partnered on that duplex. I sold my duplex and no, I didn't 1031, I didn't roll it up. I didn't do any of these fancy strategies though. They're not too hard to do. I simply did a straight up sale of the property after I've owned it for a year. I paid my short-term capital gains and I turned that into a partnership for a 12-plex. Now that 12-plex, I got in at a fairly good price. I actually increased the equity I built in the property, which was about $100,000. That turned into about $150,000 of equity. Now, over the course of the next year, Cody and I did an excellent job of leasing and running this building. It got better and better. We did some projects there, and eventually we added pitch roofs to the building. Now, how did you fund two pitch roofs to a 12-plex, two side-by-side 6-unit buildings? The buildings were doing really well. We went to a private money lender and said, hello, we would like to put some new roofs on this bad boy and get it refinanced. That's exactly what we did. So we put the roofs on it. We showed the brand new stabilized property with the brand new roofs, all of the upgrades, the higher rents, the full occupancy. We brought it to the bank and we got a loan and they gave us the money to buy a 10-plex right down the street built by the same builder. It was seller financed, 10% down. We bought it for $900,000. We put 10% down, might've been 15% down. I'm actually blanking on that a little bit. Either way, low down, seller financed, low interest, 5% interest on a 15-year note. Now that is a fantastic debt product. So right there, we're at 22 units. Well, there's a little duplex right up the street from that. And it was a very, very nice duplex. I had a buddy who wanted to sell it. The price was very reasonable. The seller financing was 10% down, 5% interest. I liked that deal too. We had just enough leftover capital in the LLC where we each had to write like a $3,000 check to finalize that transaction and to buy a duplex, very nice duplex, two-story, full garages. It's a massive building. We buy that for $400,000. It cash flows beautifully. Every single one of those buildings today performs excellently, but it was 3 transactions. After I bought my duplex zero down. Now, yes, I funded the renovation. So I want to point out I did put money into this deal at some point. I had used money that I earned and I put into the deal. Now, if I did not have that money, I could have brought in any partner to go ahead and knock out that project. So if you're sitting here going like, well, I don't have $50,000, that's fine. The $50,000 is not what made the deal work. It's completely irrelevant. It was the building. It was the ability to trade a duplex for a 12-plex to improve the 12-plex, take the money and buy a seller-financed 10-plex and take the excess money and buy another seller-financed duplex. Today we're close to the point where we could do the same play again. I could get a portfolio loan for all of those properties and we could go ahead and buy yet another building. Now, this isn't the first time I've done this play either, but this is basically an advanced play using seller financing partnership and what's called the BRRRR method. You've likely heard of it. Buy, rehab, rent, refinance, repeat. It's basically a way where you put the money into the deal, you improve the project, you get a higher valuation, and you get a cash-out refi pulling all of that money back. The difference in this strategy is instead of just pulling the capital back, I'm improving the building, taking that capital and immediately buying another building in the same LLC. And we improve that building and we pull the money and we pull it into the next LLC. And it's not just pulling back the original capital. We usually get a lot more out than we put in when we do these. So you improve a building, pull capital out, buy another building, pull capital out, buy another building. It's just another commercial play on the BRRRR method. The reason we were able to buy so much real estate is because we paired that with low-down seller finance deals that are available in that market and every other market everywhere in the country. We just met other owners and talked about the projects we're doing with them while we finished the projects. Turns out other people who do a lot of real estate like talking about your active projects. The guys who are watching us put a roof on it, we talked to the neighbors, like, oh good, you're putting a roof on that ugly building, our property values are going up, hooray! You get to play the game with other people while you're making these connections. Guess what happens? Transactions come up. Sometimes people are like, hey, you know, I got a 10-plex right down the road. Turns out same builder as the 12-plex you just repaired. Are you interested in buying it? Well, I don't have the money to do that. Well, What if it was 10% down? Now we're talking. That's how the game's played. It's a relationship game. And the nice thing is, while this doesn't go at light speed over a few year period, it took 3 years from start to finish to get a 24-unit portfolio starting with only the duplex. Now, I was doing the same projects in Ephrata, Washington. We are doing the same exact strategy down in Mason County, Washington. I've repeated this strategy throughout the state of Texas. The exact same way. Buy a building, meet the owners, talk about the projects that you're doing, make connections, and magically, as you're finishing your value add, around the time that you get some liquidity from your project, the next opportunity usually appears, and you scale and you scale and you scale. And that's how, in a 5-year period, I ended up with over 300, soon to be over 400 rental properties in my portfolio. And anyone can do the same. There's nothing special about this, and there's absolutely no rocket science. And that is the simplicity. Here at Multifamily Strategy. We try to make it palatable, easy, repeatable steps. Remember, if it's repeatable, it's scalable. If it's scalable, it's a business that you probably want to be a part of. If it's simple, that makes it a heck of a lot better. But if you want to make millions of dollars in real estate and you want to play the game, not get rich quick, but move forward, you know, a lot of millions of dollars in about a 5-year period, that's a strategy you can copy. Hope this helps. See you on the next episode. Christian's out.
