Functional Flipping W/ Danni and Christian Osgood Live - Multifamily Strategy

All right, and like that, we are live. Welcome back to the channel. I'm Christian, this is Multifamily Strategy, joined by my lovely wife Danielle Osgood. Hi.

Hello.

So when I started real estate, I started with the goal of retiring her from teaching because we just absolutely loved her teaching kindergartners over Zoom in the middle of 2020 and all the other politics that happen in Washington State. So, uh, very excited to have my lovely wife on the channel.

Thanks for having me.

Yes, we'll have a couple of updates for everyone, but very excited to have you here, Danny. Um, as we start, we're going to start sharing some questions that we had from Instagram. We actually said we're going to answer some questions for you. So Danny is a master of what we call functional flipping. This is where we rock at value-add housing because we have a lot of systems in place to affordably renovate so we can keep rents under market rent. Gives us high occupancy, really nice places. The goal is nicer places than our neighbors at lower prices, and we can do it very well. Very much thanks to her and our team in property management. So everyone, post your, uh, your questions in the comments section here on StreamYard, and we are rolling. We're going to dive right in with the questions that we got from Instagram this week on our question. So, Dani, I'm going to start with you.

Okay.

Have we done new build yet?

No, we have not done new build yet, right?

Yep.

Okay, you just looked at me like I was wrong. I'm like, oh my gosh, I regret my decision. We have not done new build yet. The reason why is I don't want to expand us too quickly. I want to make sure that we're focusing on the areas that we are good at, get really good at them, and then grow slowly versus just expand too quickly and then implode. So that's my reasoning why we have not done new build yet.

Developers are the richest people on the planet until they aren't. So when we go and do this, I do not like variables. New build very much depends on, hey, we think it's going to cost X or Y, and at completion, we hope that market conditions are also X and Y. That doesn't fit well into my business model. Now, Cody has developed some new units in his buildings. He's added existing units. Those have had their own hassles. He's done well, but he has had his own hassles. By the way, first time trying to have one mic do all the audio. So if our audio is quiet, let me know. It can be adjusted. So everyone let me know in the chat as we, as we roll here and we'll get everything dialed. Right in for you. All right. Next question. What is your biggest concern as you scale? I've never asked any of this, so we're going to find out together.

I think my biggest concern is that if we scale too quickly, like I was saying, the first question, that we will not implode per se, but just grow too fast where all of a sudden we have to backtrack a bunch. I think that's my biggest worry with scaling too quickly. Um, what about you?

You pay a stupid tax, which we talk about a lot on this channel. When you, when you do things where you don't know what you don't know, when, like when we bought the Robin Hood, it just, it's more expensive than we thought it would be. It's still doing well, but it's more expensive than we thought it'd be because we shouldn't have got into hospitality. When you expand really fast, you learn things and you pay to learn new things. I want to point out that we bought in less than 3 years 200 multifamily units, a resort. We built multiple companies. Some of them 7-figure companies. It is a lot. As we scale, that's what I worry about too, is our mistakes that we made going to detract what we're best in the world at, which is that value-add multifamily. I want to stay amazing there. So my biggest worry is when we overexpand or we do too many projects, it takes away from the main thing, which we never want to do.

Yeah, we should maybe make a shirt that says stupid tax on or something like that.

I would be down for that.

We say it all the time.

The stupid tax is really expensive.

It's really expensive.

I can say for a fact that we have— I can think of things that we've paid stupid tax on. I can think of about, off top of my head, about $750,000 of stupid tax. It hurts where we made money on all the deals, but stuff where we could have made the money. And there's times where $750,000 would have made a huge difference in what we're doing, especially in our renovations right now. Being able to reinvest that in your portfolio, game changer. Uh, hardest part about doing your very first deal? I'll let you think about this one. For me, our very first deal was a duplex. It was a duplex over in Bremerton, Washington. The hardest part for me was, what if I'm wrong? What if the math is wrong? What if things are more expensive? There was just so much that I didn't know. We got an inspection report that says there was no flashings on the roof, they need to be added. I didn't know what flashings cost. I didn't know what they did. Things like that. It was the little things. What happens when the washer and dryer breaks? Those things are really intimidating to me. Now they're nothing. But how about you? And we were first buying our first property. What was it for you?

I'm thinking— I'm taking this, this question more in like a functional flipping context. So our first property was the duplex Christian's talking about in Bremerton. But the one I'm thinking about is the second property we bought, which was the duplex in Moses Lake, where we were flipping those units to make them nicer. And I just feel like we overpaid a lot for those units. We didn't realize how much we were overpaying for those units. They're beautiful, like gorgeous, Instagram-worthy, you know, all that stuff. But they are way too expensive. And we did not realize that we were putting way too much money into the units for not the best return. We got the return when we sold the duplex later, but it wasn't upfront return. It was later on return, which was, I think, my biggest learning. I know it's the second duplex we bought, but still, it's in the ballpark of our first year. We're learning, we have no clue what we're doing.

Absolutely. Yeah. And that does happen. By the way, these first set of questions, we're gonna dive back and forth between these. We got about 15 questions, uh, from Instagram. If you guys want to follow us there, uh, you can check it out, uh, bottom of the screen right there. There we go. @ChristianOsgood is a great place to ask these questions. You can ask them in my DM or respond to any of our stories. Dan and I will do this as a recurring thing. So you can contact me there. Follow us on YouTube, which is generally the most popular of all these streams, at Multifamily Strategy, and visit us at multifamilystrategy.com. I will turn off that overlay because it looks corny. I'm going to answer a couple of questions from the chat, and then we're going to go ahead and dive in, uh, back and forth between these. So I'm going to throw up the first one here. This is for Miss Osgood, question for Miss Osgood. Are you a contractor or do you work aside, uh, beside them when you're doing flipping, uh, flipping units?

I am not a contractor. I am not a DIYer. I'm not, not those people. Uh, I work alongside. I coordinate. I go into the units. I look at the units. I see what they need. I also know what they need through, uh, an owner who it has a a vision for the units versus, you know, somebody else is just trying to sell the property or whatnot. Uh, that's my role, um, and how I do all this.

And Dani undersells herself a lot. She spends every waking hour— there are so many things in value-add properties that go wrong that people don't think of. So not only are you managing the renovations and the contractors, when there's a plumbing problem, when there's a dispute, when someone in PM has a question If you guys have noticed, I'm going live a lot more. I do a lot of the media, I do a lot of speaking, I do a lot of acquisition. I'm involved in multiple projects. You need someone who is consistent, who is focused on the portfolio, and that is her. If you want to know the key to our success, it is this person running all of the licensed and bonded people.

Thank you.

Who run our portfolio. My wife is amazing. I married up. From Emmanuel: After due diligence and closing a property, how frequently do you all do inspections on your units and How extensively? Dani, you're very involved in the PM and you work very closely with Corey, our Director of Property Management in Moses Lake. How often after we bought it are we getting into these units doing inspections at all on renewal? What is our system for this?

So we actually have to do inspections on renewals, yearly contracts, because if tenants removed like smoke alarms or CO2s or those kind of things, we have to check. Uh, we also need to make sure that the units are in the same standards we gave them when we are re-signing a lease. And so that is a major point in our going and doing those inspections. If there is a tenant that reported a problem and we get it fixed, but then we have to come back, um, like say like we're gonna do another inspection every 3 months for the year just to make sure that, you know, problem is resolved, that is what we also do as well. With the inspections. And it doesn't matter what kind of property. It can be like an A-class plus, you know, A++ property, and we do those inspections all the time. Or it could be a property that's one of our properties we're flipping to fix, and we just want to make sure we're always having our eyes on the property, especially inside the units, because we don't know what the units are, how the wear and tear is being handled in those units, and we just want to make sure we're keeping them, you know, nice.

Very important, and one of Dani's, uh, main tasks. It is hard to understate how many hours she spends doing that. When I say I work a crazy schedule, you should see hers. Okay, from the questions we promised to answer from our Instagram, uh, story here, I'm gonna choose some of the best ones. Uh, I'll answer this one. What is your script on your initial outreach? When we are reaching out to someone, we're gonna treat I assume this is an owner, not a broker. When we are reaching out to new owners, the main thing that I am going to be asking to everyone is like, how did you get to where you're at? So the transition there is really simple. You map out your story and what you're trying to do, because there has to be a reason for the call outside of, hi, I want to buy stuff, because that's what everyone's doing. The mailers, the emails, the cold calls— everyone is just blasting people trying to buy things. I look at people who've done something I haven't done yet. So it could be they've built a 100-unit portfolio, they own a 50-unit building. I don't have any of those yet. I'm looking for someone who's done something I haven't done. Call them and say, here's where I'm at in my business in 45 seconds or less. This is where I'm at, this is where I'm trying to go, and this is why I'm trying to do it. When I started, I have 2 duplexes. I'm trying to retire my wife from teaching because our politics have gotten crazy here in Washington. One duplex at a time is not doing that. I've spent 8 years building my 4-unit portfolio. How did you buy this 20-unit building? That is what the outreach looks like. The goal of the call is to get to a coffee meeting because these relationships really happen in person. But that's what initial outreach looks like. It's organic, it is real. I am asking people real questions on how they build their business, and then I am using that to structure the way we build our business. And that's how we've met majority of the people who sold us properties. They're the people who've connected us with our brokers, lawyers, everything that you need. Is from the people who've gone before you and done what you want to do. That's what the script looks like. How did you build your business is the easiest question that you can possibly ask. Another question from Luke: any websites you go to when getting titles or tiles for power rooms, glue down LVP, etc.? So when we're shopping, how are we shopping these? Are we the ones doing the shopping? How are we finding all of our electric renovation materials. How does that all work?

So I go to the vendors, they know best. They're the people that, this is their field, this is their specialty. It always drove me up a wall when people would tell me how to teach. I, I was the expert. I knew what I was doing. They are the experts. They know what they're doing. So I just tell them my vision. This is my cost for this unit. This is how much I can spend on these materials. This is what I would like the units to look like. How can I get that cost? Uh, and so then they just go to their suppliers and they find what they want. They'll text me pictures and they say, is this the color scheme you're looking for? Is this the carpet color you're looking for? Is this the floor color you're looking for? And they just walk me through it and I just pretty much pick and choose and say yes. Um, I don't have the actual like stores that they're going to because a lot of them go to suppliers that they can find the best prices, so that they can mark up the prices and get a pay as well. Uh, but they are the ones who I go through for everything, um, regarding all that stuff.

And here's the genius of functional flipping. It's all about creating replaceable parts. The flooring in one unit is going to be the flooring that we use in almost everything. So you can keep a backstock of things. You have the people who buy these things at affordable prices in bulk. You can use it throughout the portfolio. That is why we built the size portfolio that we did. When you have a few hundred units, You can build a portfolio that sustains a whole lot of business. We can buy extras of everything. So the same interior paint colors, the same floors, the same trim for the most part. There's some variation. There's reasons that will deviate, and those are usually up to Danny. But generally speaking, everything looks roughly the same and everything looks better than all the places around it. You're not the one in this business model physically going into every unit and laying the floors. You're not the one shopping. This isn't HGTV. This is running a business, and businesses need to be able to scale. The best way you found to do it is find the people who have the best deals, trust your contractors, and buy extras of everything.

Yeah, like we're about to do 3 units, turns, and they're all— they're not gonna be copy and paste, but they're gonna be pretty similar, but they're gonna have their own flares, uh, their own uniqueness to the units. And so that's what Christian's talking about, is all those things will be bought in bulk. They'll all look great. We don't skimp out on materials. We buy nicer quality stuff, but not the nicest stuff. And then they'll put it in, they'll do a great job because they have before for us.

What's up? Ah, our good friend Cody Davis just sent me a text. That is very exciting, but we will share that news on probably the next live because it looks like exciting things are happening. Um, the next question: top 5 things that a newbie can avoid when getting in the multifamily. I'll start with one and then I'll text back our good friend Cody. And while you come up with number 2, uh, the miracle of running a business while also doing live stuff— there is no editing here. Um, number 1 for me, mistake that a newbie can avoid: I would avoid over-renovating. I see almost everyone do this, including Cody and I. We were renovating at $30,000 a unit when Danny can do it at $8,000 a unit, and we get an extra $50 to $100 a month for those units that are nicer renovations that we spent the extra money on. That is going to take forever at an extra $100 a month to pay off an additional $30,000 bill. Like, it's just no return on investment. It's a nicer building, sure, it helps us with appraisal. If your goal is to over-lever a building, you know, maybe there's an argument for it. We want everything to cash flow on long-term fixed rate debt. You are not doing what you see on TV with like, oh my gosh, these amazing finishes. And we're getting— you are trying to build a business where you're building nice places for people to rent. You do not need the stone countertops, the stainless steel appliances. Those come later as you optimize. Stabilize first and keep your costs down. You'll actually do a better job making the building nice for your tenants if there's more money to do so. So be really cost conscious when you start. Yeah, because you'll actually have happier tenants when you have money to fix the big problems when they come up. That's my— that is my number 1. Danny, come up with number 2. Go, go, go, go, go!

You said 5.

I'm like, okay, but we'll do 3. They asked for 5. We're gonna— we're gonna do 3 because we're getting some great questions in the YouTube channel that we're gonna respect.

Can I see the question, Christian?

Absolutely. So the question is, uh, top 5 mistakes newbies do that are easily avoidable.

Okay, I think something to a top— one of the top 5s— we're into top 3 actually, uh, is they decide to do it themselves. Now this might be a little controversial because some people are like, well, I don't have the money, so I do need to do it myself. My thing is your time is your money. If you don't have enough time, why would you take on the project? I would rather personally go find the money and then go and have somebody else who's going to do it faster and better than me, who I don't have any general contracting experience. I'm— I know how to do some of the things, but it's not going to be as nice as my contractors who really truly know what they are doing because it's their field, it's their profession. Plus also, they're going to find things when you're— when they're tearing into that unit that you might have not noticed, um, which then would also save you money in the long run versus you accidentally might cover it up and move on when then your tenant moves in and there's actually a huge problem that you missed because you don't know what you're looking for. Uh, now like I said, if, if you're like, I have the time, I just don't have the money, sure, take on the project. If you're like, I know what I'm doing relatively well, you're like, I just have to put some paint on the walls, let me switch out a few things, go for it, do it. But if it's a big overhaul of a unit, I just would not take it on, um, personally. Because I just don't want to make those mistakes, which then will cost you money and time later down the road.

So, oh, this next question on YouTube's fun. Okay, let's do that because I, I, I, I want to see your take on this. Might be a personal question. Do you envision starting a family one day, and if so, do you think your business priorities start to change? I will answer the first half of this a little bit. The original goal was to have the option to start a family, not that we have to. An option to start a family. We did not want to do that in Washington State. We wanted to do that in Texas, which is why we're building a house right now in Texas. Concrete was just poured and walls are already starting to come up, which is insane to me.

Stressing me out.

Yeah, it's wild. We are building the— a house that could sustain a family.

So yes, we are doing a build.

Yes. Oh yeah, I guess we're technically— okay, we're technically doing new build. It's for primary residence, is not for business. I know, I know. Um, I do want— so, so that's the personal side. We want to have the option and flexibility to do so. Is that, is that fair to say?

Yeah. For me personally, it doesn't mean— I don't feel like a baby is going to complete me or my relationship with Christian. We've been married for 7 years, been together for 8. I'm super happy where we're at. Uh, I want to be able to have the freedom and flexibility. I don't feel like right now I would because we are so busy. I mean we work insane hours. Our friends and families can attest to that. And I just, I'm good right now where we're at.

So that was a great answer. On the business side, if we start a family, how do priorities change? Well, that's a, that's a big deal. So risk tolerance probably changes a little bit when you have a kid. You want to do that out of stability. You don't always get to have as much control as you want over the timing on that. I've seen some people like, uh-oh, um, You work with the pieces you have, and it's never different than the rest of the business. When we have a problem come up in business or an unexpected thing come up in business, you look at your pieces and you go, what do we need to adjust? You have 3 resource pools that we talk about a lot on this channel. You have liquidity, you have cash flow, you have equity. I'll probably focus a little bit more on having some liquidity.

Well, I'll make you focus on that.

Exactly. Kids cost money. Stability changes. But it's just a reallocation of resource pools. As far as what we want to do in the business, the this is what we want to do. Yeah, I tell people not to leverage things you're not— you're not willing to lose. We both agreed when we bought our first property, we're going to do— leverage the HELOC on our house, because if we lose our house building our business, it's worth it. That was a personal decision. If that's not worth it to you, don't do it. If I have a kid, that option is now off the table. I can't afford to just lose the house and figure it out because you have to deal with me. Yeah, and my kid's more important than, uh, than, you know, being the king of, uh, Grant County. Are you guys doing anything to pick up multifamily from distressed owners? Uh, I think that's supposed to be— yeah, i.e., owners struggling to pay a mortgage because of increased interest rates. If so, what is the strategy? I've been doing as much on the increased interest rates because we buy so many properties from people of a higher equity position with the seller financing, and we don't use subject-to because I hate creating callable notes as a business strategy. I don't know how you feel about those, but I'm going to say a callable note is not what I want in my portfolio of, uh, of properties. When we're putting together our general strategy, uh, distressed owners, absolutely. The interest rates being the thing that wipes them out, I have not done any transactions related to that to date.

Stressed owner or stressed owners make me distressed. Sorry, not stressed. Distressed owners make me a little hesitant because what does their property look like then? Are they just the ones who are in distress or is the property also in distress? Properties that are more run down are more expensive to run even when they're finished. We're all learning this right now. We all were like, wait, why is this one property not cash flowing like we thought? And it's like, ah, because it was. A distressed property, but the bones, the structure, like the plumbing and electrical are still old. We have a plan to redo all that stuff. That takes a lot of money and a lot of time. But all of a sudden it's like, oh wait, those properties still cost more money in the long run as well. So it just, it makes me, I would want to do more of like an inspection, like an actual inspection where somebody comes out and really starts to look at things just to make sure that the property is doing okay. It's just not completely dilapidated. I know you got to go to Texas one time and go look at some completely dilapidated properties, and that was fun.

Oh, that was, that was Missouri, actually.

I thought it was Missouri and Texas.

No, well, we ended in Texas because we were speaking in Dallas, but we drove through the entire state of Missouri, which, by the way, I'm allergic to all of the state. It's not your fault, Missouri. It's just, um, I can't— I can't be there. I can't be there. Properties were missing roofs. All the copper piping had been ripped out and stripped by God knows who. There were dead rats everywhere, so the rats couldn't survive in there, let alone people. It was gnarly. I've seen that stuff. Those aren't the projects I want. Our first one that we did together though, as a group— Danny, me, and Cody— we picked up that property. It had a chicken infestation. It had a homeless camp on it. It was— I mean, that was a distressed property. They'd owned for a long time and it was losing money even though they had no debt on it. A bank wouldn't finance that and there was no cash buyer who wanted to put $2 million down into that project. Seller finance was the only way that was ever going to trade. And that is the type of opportunity that, you know, we took that from $2 million to $4.1 million just by operating it better than the last person. So those opportunities, absolutely distressed, is a reason people will seller finance. Uh, one more question I loved from our questions on Instagram from this, uh, from this week. How do you separate real estate from your marriage? Do we? I don't. I loved the question though, and this is for us, and this is, this is a, a we thing. A lot of people reach out and they have a spouse who's not super into real estate, so it's, it's going to be something that, you know, they're figuring out. For the two of us, she retired from teaching, she works full-time in the companies. I work with her all day, every day. I rarely don't see her, to the extent that we sold one of our cars because We didn't need it. We didn't need two cars. We're always next to each other. I love it. Yeah, we work on the same problems together. We have a very sizable business, so the problems are all unique. We share the stress, we share the joy, we share the cash flow. It has been amazing for our marriage. Is that going to be true for everyone? Probably not. I've heard some people who hate working with their spouse but love hanging out with their spouse outside of work. Yeah, we spend about 16 hours a day together realistically, probably more.

Yeah, more.

And it works really well for us, but that's us personally. That's, that's what we found. But I have found that separating work and marriage is not something that we have— making it the same thing has been really fun. We're partners in everything.

Yeah, what he's interested is what I'm interested in and vice versa. It's just, I think it makes it easier for us to have conversations because then I can help— I can listen to him, like, dive into the conversation versus I just get like a surface level. I'm like, okay, great. And I don't understand what he's saying versus I do understand what he's saying. And it's really fun to have those conversations with him.

With the exception of the Kardashians. I don't care about the Kardashians. Oh gosh, Christian. For me liking what you like, I can't get behind it. I don't get it.

Now I have to throw some dirt on you.

No, no, no. That sounds like it's time to move to the next question. Let's go with Hobbes. Is it reasonable to hire property management on deal 1 since you're a few months in and know the property better? I'm a huge advocate for managing your first few deals. I mean, if you're starting with a huge building, no, you know, don't do it. Don't do it. But on the assumption that the building you're picking up first is 25 units or less, it's very reasonable to figure it out. And you're going to be an astronomically better manager of your managers if you do so. It doesn't work for everyone. Some people have a really high income job or a really intense job. That needs their focus, and they should not distract from that. Again, work with the pieces you have, but I would say generally, as a rule of thumb, I, I would say if you can manage your first property, you are going to understand so much more about the game. Your underwriting will be better, your management will be better. I recommend 1 to 25 units if you are in a position to self-manage. I recommend it. Danny, what are your thoughts?

Can I argue you?

Uh, no, no, you have to. Okay.

I disagree with Christian. He's completely wrong. Uh, no, I think it matters on the state that you have the properties in. If you buy in a state that is more landlord-friendly and has calmer laws, go for it, even if you don't live in it. Washington State, I would not. The laws change so fast. They're also very scary if you mess them up, and I feel like you put that liability on the property management company versus you, because if they mess up, the lawsuit is with them, not with you. Versus in like a more landlord-friendly, you know, area like Tennessee, Texas, you know, there's not that many rules that if you accidentally made a slight mistake, um, then it's a huge slap on the wrist. Um, in Washington State, it's like you have to— like with notice postings, it has to be under a certain kind of rules, and you take pictures, and you have to make sure you knock, and you there's all these rules where if you miss one thing, you could be, you know, trespassed or saying that you were trespassing. So it's just things like that. It just makes me a little— I'm all about the liability piece.

I don't like liability.

And I just want to make sure too that you're being respectful of your tenants and you're making sure that you're abiding by the rules and you know the rules. So I just argue against it. But okay, it's whatever you want to do.

I think it makes you stronger, but that's okay. We don't agree on everything at the end of the day. We run the property management company, so we self-manage about 200 units and getting close to 100 units for other people. We have about a 300-unit portfolio under management. It's freaking hard. It's ludicrous.

So hard.

Super hard. Uh, if you're thinking about getting into property management as a career, advice: don't unless you have to. We have no other managers who can manage our stuff to the level that we need done.

Yeah.

From Manuel: how do you guys go about deciding, um, or how did we go about deciding to work together in business. How do you balance it with the relationship? I'll start with number 1 while you think of number 2. I'm not a balanced person. If anyone's followed this channel for a while and you look at me for balance, wrong role model for that. I am all in on the businesses all the time. I'm extremely intense. She can attest to that. So I'll let you talk about the balance side for what we have, but I am aware that my balance is— I'm about the business. How do we go about deciding to work together though? A lot of it came out of necessity. She knew that she wanted to get out of teaching.

She had an injury, actually, major injury, yeah, that they just kind of just let happen and didn't care about.

So on top of our already political dislike of a lot of the school district, that was added on of she's now injured, we need to get her out of there. There wasn't necessarily a plan when you quit teaching other than get Danny out. Get Danny out. And so we got Danny out of teaching, and, and she had asked, you know, what can I take off your plate? Because if anyone's followed the channel for any amount of time, I wear a ton of hats and I work every second of the day. And the one thing that came to mind was I'm like, well, we don't physically have time to go through all of the bills. And so what I was doing when we first started, the bill's under $200 and the penalty is less than 10% for being late. I was like, cool, we're gonna keep crewing that because I don't have any time to figure out how to pay these or who—

don't do that, by the way.

No, no, not a best practice. It's just, it's just reality of what happened. I'm like, I, I— there's nothing I can do here. I— it's not working.

Yeah.

So Danny came in and caught up all the bills. She got comfortable.

Apologized to all the vendors.

Here's all the— here's everything that's going on in the portfolio. Here's where everything is. She had to know all the properties. And from there, we needed a little bit of help in property management, so she came in and just was helping us coordinate some of the renovations. And we found that all of a sudden our cost on renovations were going way down. Eventually brought you into the PM company, and I don't know how the rest of it happened. You just all of a sudden work here. Uh, but that's how it wasn't necessarily a decision. She asked how she could help with the businesses, and she fell in love a lot of the businesses, especially PM. You've done a fantastic job of helping us grow that. Yeah, she also does a ton for the Robin Hood. None of us really like doing hospitality tasks, so we do those because we have to. The rest of them we do because we want to.

It is fun though to see what the Robin Hood is going to become.

I love making that place better. Yeah, but I love it when I'm there. When I'm not there, it's like, oh, it's really— it's draining because it's not our main business model. And when we're there, I've never— I've never been on site and regretted owning that. It is beautiful and fantastic, and I invite everyone to come out and view our most beautiful mistake.

Wait, I gotta finish the last.

Okay, how do we balance— how do we balance the relationship outside of frequent dinner dates and walking to Safeway?

This is more of a lecture for Christian. Uh, he— we have talked about like when the phones are on and off. So like after a certain time, usually 10 PM, it's like he's no longer taking phone calls. It's like that— it's more like we're shutting down the house, we're having time to ourselves. We love playing video games, so we'll— we do some video games together, rarely though. And just in the last year, just in the last year, he didn't realize that that's something I like to do and I have done growing up.

And 7 years in the marriage, I know what those buttons mean.

Um, so we will do some like fun activities together like that. We like to watch a lot of, um, videos and shows together, but it's just more like quality time just hanging out. And just like, the phones are down. They're on in case there's an emergency, but it's also 10 o'clock at night. I mean, our time, so it's like midnight or 2 in other areas. So it's— and then just, it's our time where no one can bug us and we can have our space.

Yeah. Oh, well, and part of the fun thing is the part of the relationship is building the business together. So our business ideas, how are we going to fix something at the Robin Hood, or is this marketing piece set up I had an idea for the YouTube channel. It's just stuff that we have throughout the day where it builds our relationship. We get to be creative together in how we build the business.

Yeah.

And I think that's a huge piece of it, is we have ownership in the business together. We are partners, and that means a lot.

Yeah.

How do you dress when you first meet new owners? Um, occasionally I'm wearing sweats, but generally jeans. I'm always— oh, I'm not flexible enough to do this. Oh. I almost always wear barefoot shoes. I love these things. They're fantastic. Are they professional? No. Are they comfortable? Absolutely.

Your foot actually didn't smell that bad.

It doesn't because I'm just, I'm just a good smelling person. There's nothing we can do about it. It just happens. In all seriousness, um, I wear barefoot shoes. I usually wear jeans and a t-shirt. When we bought the 38, Cody showed up in Seahawks slides and paint-stained shorts.

I hate those shorts, by the way. You Everyone can blow up Cody and ask him how much I hate those shorts. He'll literally be like, I'm wearing the shorts, Dani. And I'm like, throw them away, please.

To be fair, they do not look good. We don't dress up for owner meetings. I never have. I don't want to. I'm not some corporate professional. I got out of corporate world where I had to wear a suit occasionally. I actually like wearing blazers with t-shirts because they're comfortable. But that's about it for dressing up.

Yeah.

And I'll do that on a podcast occasionally because I'm like, I think this kind of looks sharp. Um, but I dress normal street clothes everywhere, as does Danny.

Yeah, I just think it just shows that you're just coming to the table as a person who just has questions for them and wants to learn from them versus as someone who's kind of stuffy and just like, well, give me your deal kind of attitude.

Yeah. So would you ever consider short-term rental Airbnb? That is what the Robin Hood is. We are on Airbnb, VRBO, we're going to be on Expedia, Booking.com, something called GlampingHub.com. We're, we're basically trying to push the Robin Hood out to everything that we can. Um, but we do short-term rental at that resort. It is, is it 18, 19 cabins?

I think it's 18.

18 cabins with hot tubs, waterfront. Um, but they are all on Airbnb, which is a huge revenue generator for us. There is direct booking, which is still a majority of our revenue. But Airbnb does a lot. Yeah, I do not like being in hospitality. It is not what we're best at. All the efficiencies that I have in my business do not translate to hospitality. We are long-term rental. I like stability. I like predictability. My thing is stick with what you are best at. Right now we're doing hotel conversions. That's a slight deviation, but we own a bunch of studios, and if we can turn hotels to studios affordably it's, it's this much of a jump from what we already know how to do. Yeah, it's, it's, it's just a baby step to the left. I just realized I moved to my right. Everyone forget about that. It's just a little deviation going from long-term to short-term and trying to do both at the same time. Completely different businesses. I would not recommend mixing the two. No, be good at one of them. Be, be the best at one of them. Supposedly the bank said they don't do long-term fixed rate debt on commercial residential and would only lock an amort— in an amortization schedule if the deal works. Is this true across all banks? Absolutely not. Banks, if they're talking about fully amortized, yeah, that's going to be abnormal in commercial. You're not usually going to get 30-year debt. I would call long-term debt 10 years plus, because within 10 years you're going to have a full or multiple market cycles where it's gonna— you're gonna have excellent places and bad places to exit the debt product. So when we're putting together commercial debt, 10 years, 15-year debt is extremely common. That's almost every single bank is going to offer you, uh, 5, 7, 10, and 15-year products. That is the standard for commercial debt. If a bank's not offering that, they're a really weird bank. That's basically the products that everyone has.

Shop it around.

Yeah, shop to literally anyone else because, yeah, banks have long-term debt. That is just the thing that banks actually have. Great seeing you guys. Good seeing Christian at Reeps last night. Ben, Ben, that was a fun event. I'm so happy I was able to make it out. I have never been down there. I'm rarely ever in Fife. Um, that was one of my favorite, uh, favorite times getting to hang out with everyone. So Ben, fantastic meeting you and, uh, thank you for joining us. Jonathan, can you briefly go over talking with owners when you first call them? I'll handle this one. I had a few folks say they're too busy to meet with me, possibly just a numbers game. Sometimes they'll say too busy, but generally speaking, if you do a good job with creating a reason why they would meet you, they're going to meet with you. I rarely ever get that, but when I first started, I used to get that response all the time. And that means that you failed to create enough value on the front end of the call. Which is fine. It happens to everyone. You learn how to do this. They have to believe that you're someone worth their time to meet. If they're telling you, hey, I'm too busy, it almost always means I'm too busy for you.

Yeah.

What has really been helpful for me is what we call the circle drill, and we cover this in multifamilystrategy.com, by the way, a lot. This is a huge piece of the mentorship, is mapping out your story. Cue ad on bottom of screen. Yes. The power. Uh, but seriously, multifamilystrategy.com and our mentorship group, our course, we hammer this. This is the first thing you learn in the course. Circle drill, how to map out the pieces of your story so you can share something that is relatable in the first 5 to 10 seconds of the phone call. You want to talk about where you're trying to go, and again, this is happening instantly. I'm Christian trying to retire my wife. I just saw your 20-unit building and I'm trying to get out of duplexes. I'm not scaling fast enough. I want to know how you got there. It's like we're setting that as fast as humanly possible. If they're responding with, hey, I'm not selling, awesome. I spent all my money on the duplexes. That's not why I'm calling. I want to understand how I can do something that you did. Like, whatever that thing is, we get right into it. If you do a good job in this and you ask some good questions and get off the phone soon enough, they will make time for you almost every time.. And it takes practice. You have to do this call a few times. We weren't just born with the ability to do this. Cody practiced on Starbucks baristas on how to talk to people. Yeah. Not doing the owner meeting. A lot of baristas don't own properties, but Cody used to be scared to order stuff at McDonald's when he was a kid.

I did not know that.

Yeah. So he actually learned how to— I see this as an adult. Yeah. As an adult to practice tonality and to practice how to get through a conversation and engage someone. He would just order coffee in person in the restaurant just to practice like getting into conversation. Super cool. The more you know. Um, I did this by just making calls. Cody handed me a number, he's like, here, call this owner. I was like, what do you say when you do this? He's like, well, you can ask him to buy the property or you can ask him to, uh, to meet with you for coffee. And I just like blundered through both and then I got better and better. I just saw a number and I rang it. That worked really well for me.

I've also noticed too, Christian, when you do these calls, sometimes you— I mean, not all the time you guys get stuff from them, but sometimes you guys get great relationships from these calls as well, where nothing transactional happens, but you guys learn a lot from these people, and you actually like now have a lot of these people on speed dial where you can just ask them questions at all times, um, and they've been really helpful to our business. Yeah. Absolutely. A huge value add as well.

I think so too. From Brock, do you call owners, or when you call owners, do you call just, say, multifamily owners? So I, if I understand the question correct, it's do we just call people who own multifamily, not single family? Yeah. Yes, I'll call anyone who owns multifamily, by the way. Yeah, uh, it's just not— it doesn't have to be someone who owns 200 units. It doesn't have to be the person who owns a 20-unit. If you own multifamily in my market, there's a reason that I would want to meet with you, that we can communicate on a phone call. They've done something I don't— they own a property that I don't own today. If I have— say I'm the bigger owner, I'm calling someone saying, hey, I have 200 units. I'm not usually going to open with that, but I'll bring up a nearby property I own to them. Hey, I own the property down the street. I want to get to know all the other owners here. I saw you had this duplex. I was curious how you got started in real estate and what some of your goals are. And we'll just talk about being property neighbors, what we'd like to see for the neighborhood, and I'll use that to book the meeting. Again, find a relatable point, communicate your goal. And when you're calling up to someone, the significance of you reaching that goal is going to be a huge reason of why they'll meet with you. Anything else, if you're, if you're talking to a smaller owner in the market, it can just be as simple as like Hey, I'm Christian. I own on your street. I'm trying to get to know all the other owners. I bought a few other rentals in Moses Lake and I want to get to know the other players. I happen to be in town this week. I was just curious if you're around to snag coffee. Could be that simple. What is your preferred contract for deed structure? Do you still need to use a deed of trust and promissory note? So you actually don't have a promissory note. So on a sales contract, oh, at least it's, it's not recorded on title, so you don't have, you don't have a first lien on the property. You're still going to have it in the contract just like a standard note, deed of trust. You're going to have all the terms in the sales contract of this is owed and this is the payments and this is when. But the, the big difference between seller financing, which is traditional note and deed of trust, and contract for deed is a lot of the Details end up on the actual sales contract. It's still held by title, but instead of a lien against the property, both parties show up on title. In some states it looks a little bit different, but it's most similar to buying a car. If you buy a car financed, the bank's going to hold title, and when you pay it off, you get title and the deed goes to you. That makes sense. Contract for deed means you get the deed when you fulfilled the contract. So instead of a note, you have a sales contract and both parties are listed on title. You have equitable title, which is what you have. I have the rights to the income of the property, the sale of the property, just like if I owned it out, like if it was mine under traditional financing. And the owners have— the prior owners, the sellers, have legal title. They still hold title until the execution of the contract. In Washington State, both parties will show up as owner 1 and owner 2. In some places, you don't show up as owner until that contract is executed, exactly like a car payment. But that is what contract for deed looks like and how it's done. It's a little different than the note and deed of trust. You execute the contract, you get the deed. When you call multifamily owners, do you call only the ones who have owned it for a long time? Or just randomly anyone who owns, anyone who owns. If you own multifamily, I want to meet with you. Do I filter that in any way? I do not. Cody's joined the chat here. Fact, Christian is busy AF. Also, also fact from earlier in the conversation, uh, yes, we do a lot. That is why Dani joined the company and she does a ton. We're all busy. Cody included. Without Danny, we would be slum lords. There we go, testimonial for the Danny office.

You guys aren't trying to be someone— you guys are so busy and you need someone to help you.

Yes, to execute as much as we're doing, it takes more people, and no one cares about the property like someone who owns it. And conveniently, when I buy something, I own it. She owns it. She is a fully active member of ownership. Yes, she does. And I don't think you've ever joined me on the YouTube channel, if I'm not mistaken. So this is your first time, everyone watching, meeting the entire team. Hello. Okay. How much does Dani love the hood? That being the Robinhood.

I like the Robinhood quite a bit.

Good. It's fun. I like the Robinhood as well. It was the wrong deal for us at this point of our business. I wish we had a lot more money when we bought it.

And time. And time. That's what we need is time.

That is what we need.

We don't have a lot of time.

Yes, but Robin Hood itself is awesome. Yeah, awesome property.

Yeah, you should definitely go look at it. Looks— it's pretty great.

Fact. Robinhoodvillageresort.com.

Book now.

Not related to real estate, but how did you guys meet?

I met—

oh wait, how do we meet? Or how did we like meet? Uh, we met at church. We were going to Reach Church in Kirkland.

Osgood.

So that is a non-denominational Christian church. Uh, we were going— I was going there for about a year. She was friends with some of my existing friends, and so I knew of her, but we actually met at a bar at a mutual friend's birthday where we actually like connected and had a conversation and got to know each other.

Yes, well, he connected with me.

I just ignored him, and then I closed the deal later. Still the best pitch I've ever landed. Yes, right. Without Danny, we've achieved our goal of being slumlords.

Yes.

Uh, yeah, it's what would have happened.

Oh my God, Cody!

We talked about Cody's ugly shorts as well. We're catching up in the chat, we're making time.

Uh, actually, make him throw those away, please.

Yeah, shout out to, uh, Cody's girlfriend. Get rid of those shorts. Uh, where do you store all the extra materials for 100 units? What, in our portfolio, we pick up a lot of buildings that have either an extra storage room that have—

I mean, we just have a lot of units that's not going to be done for a long time.

Yeah, we have a lot of stuff when we're picking up these projects, so there's always somewhere to store them. Occasionally you sell a building and have to move stuff. Occasionally, I mean, they occasionally forget you stored stuff in the building when you sell it. There's a lot of things that happen, uh, but generally speaking, uh, there's always somewhere in the portfolio— we've bought enough real estate where we have places to store. Uh, Robinhood actually stores a lot of its additional equipment in the adjacent property. We bought a property, also seller finance, next door. Cody did a fantastic job of negotiating. He called them and said, would you seller finance? They said no. And they called him back and said, actually, no, we'll pay off our debt. Yes. Well done, Cody. Um, it has a huge garage there that serves our space, but we just picked up enough real estate where there's somewhere to hide it. Cody, if you're still here, thank you for doing that. That makes the Robin Hood a much better property. That was, that was the Cody special. I was not involved in the front end of that project. Now renovating that thing, getting it up, Danny, I did a lot, but Cody literally just made— yeah, the lodge. Cody just made that call, and that is a fantastic place that really makes the Robin Hood a lot easier to run.

We were all in that unit together.

Oh yes, we all worked very hard, but, uh, putting that together was a Cody Davis special. You said you pay off all at once, so do you try to get interest-only prepayment and then just balloon when you can? Uh, I like to do interest-only with no prepayments because prepayments if they're there, it's harder to adjust your pieces. Sometimes you do want to call an audible and change something around. Um, interest only is unique. So if you're doing multiple properties, you want to determine where every dollar goes. This does not mean you don't pay down your debt. People think that amortize is better because it's paid down. Like, I build equity. Well, if you save cash, you can still just put it into the property. You can literally just pay down your note. So why do we like interest only as opposed to amortize? I can choose where that money goes. It's only a problem if you take that money and you spend it on the sports car or you buy a house with it. If you take the money that you're making out of the portfolio, now it's a problem. If you take the money that would have been amortized and you choose which property gets it, it could be used for renovation and increasing the value. It could be used to pay down debt. If you save enough of it, you can pay off your debt in full on one property. You want all of the flexibility of how you use your cash flow. So the less prepayments you have, the longer balloons you have, and the less total money that you're paying down towards your debt as an obligation, you're now playing with the same money but with options instead of obligations. That is why we love interest only. It's not that we take it out of the portfolio. It's not that we don't pay down our debt. It's having the power to choose which debt I pay when. Interest only is empirically better. Than amortized debt if you can get it. And I will argue that all day. I've had people disagree with me on that. I will argue that all day, and I will win because I am right. Rob, sounds like Cody needs a product link, uh, to the thread for shorts to annoy one's wife. Cody, if you can find those shorts online, go ahead and post that in the chat. How do you pay off as little as possible till you pay off all at once? We call this the debt hammer. So to hammer your debt, what you do is you essentially save up your cash flows. This is why I love interest only, but you save up all the income. You're going to buy the portfolio that you want to build your debt hammer. So get the income to where you need to be, buy enough real estate, stabilize the real estate so that it's performing the way it should. We used to think that's enough to pay it down, but I realized no, that doesn't make enough money fast enough. We then need to optimize the portfolio. Once you get it cash flowing and stable, what things are we adding? Units to a building? Are we building on raw land? Are we adding storage space? Are we adding a whole new roof to, like, a pitch roof to a flat roof building? How do we optimize this to get the absolute maximum amount of income? And with that, we've built our debt hammer. So now we have the maximum cash flow coming out of what we have. The easiest way to do this is similar to the debt Ramsey snowball. You're going to pay off each and every debt one at a time in full. You are not going to start paying down a loan slowly. The reason you're going to pay it off in full in one lump sum is because while you hold the cash, you have flexibility and you have safety. If something terrible happens unexpected, you have a pile of money to throw at it. If something happens at another property, again, flexibility. You have a pool of money that you control. In addition, if you're paying down a property, say you've put— you owe $500,000 and you put $250,000 in and something happens and you default on that note, that money disappears. You want to keep the risk on the lender until you're ready to eliminate the lender. And whoever has the most money out against the property has the most risk. So to mitigate risk, the only way to play this correctly— this is why we don't call it the snowball. We're not rolling downhill, we're hammering one debt at a time. It's like whack-a-mole. Smack these debts, get rid of them. Every time you pay one off, your cash flow goes up like that because you have one mortgage you are no longer paying. We have a whole lot of shorts conversation I'm going to go ahead and skip. We're talking too much about Cody's pants now. Um, how do you keep connected with owners? We keep connected with owners when it comes up. They're organic relationships. I have people I haven't spoken to in a year because there's— I have nothing to talk to them about.

I just don't.

Uh, we have people who I speak to almost every week because I have questions and we're close with them. My goal is to call owners. My goal is to meet with owners. And then when you have something that's relevant to them, you reach out. Uh, someone who reached out to earlier is a great example. Cody called Bradley, who owns Lightspeed. He's an online presence. He's kind of a goofy dude, but we like him a lot. Cody found his number online and in the arsenal of stuff we have, and he has a podcast that would be fun for us to be on. So there's a way for us to move forward. He also occasionally will bring on real estate people. We reached out, we actually asked if we could host our course on this platform. That was the original platform we used, and he helped us get launched. Later on, we didn't talk to him for a while because we had nothing to talk about. There's nothing big enough to be on the podcast. When we bought the Robin Hood, Cody reached out and said, hey Brad, thank you for helping us with the course, it's doing really well. We just bought a seller finance resort, $0 out of pocket 4.5 million dollars. I think we have enough for dropping bombs. Is it time to drop a bomb? And I think you actually use the, the drop a bomb emoji, a little bomb with the fuse lit. That got us on one of the best podcasts we've been on. And that was— yes, I was there. They only have a camera on Cody. My voice shows up. Watch it again if you don't believe me. But we got to be a part of that podcast, and in my opinion, it's the best podcast Cody's ever had. I don't know what it was, but Cody dropped the one-liners. He dropped bombs on dropping bombs. That's what he's supposed to do. Um, we got to have that, and we just— that was a relationship that we just didn't touch for a long time because there was nothing to talk about until there was. So I don't keep a spreadsheet. I don't do a tracker. That's not, hey, talk to everyone every 2 weeks. When you do something that's relevant to that person, let them know. If you have an interesting question for them, ask the question. If you use their advice somewhere and it helped you, call them to thank them. That's how we track things. At the end of the loan, if you cost seg, do you need to pay back anything at the end of the loan? At the end of the loan, no. You have recapture if you sell the building early. Yeah, you can refinance all you want. You don't have recapture on a refinance. But if you cost seg— so that is where you accelerate your depreciation— if you sell the building, there's going to be recapture on anything that you wrote off and depreciated. So keep that in mind. But that'll be a thing. My lights are flickering, so if I lose power, it's not my fault. If this— if we end abruptly, I apologize. How did the floors come out? I'm wondering which floors these are because we do so much flooring. I'm gonna guess flooring that Cody was doing in Moses Lake. I had an emergency, so I had to run back home. Uh, but on Motel Imperial, Cody finished full, full subfloors and brand new flooring for one of the units while he was in town. He did a billion other tasks, like a ton of other stuff. But while running around doing meetings, coordinating stuff, showing insurance companies and contractors around the portfolio, he managed to completely renovate floors. I think they look fantastic. Uh, 10 out of 10. Cody's getting a lot of love on this call, so Uh, yeah, huge thank you for Cody for running that project. That meant, uh, that meant a lot to, to me personally. Uh, Michael just found you guys today. No way! Well, Michael, welcome to the club. Multifamily strategy. Uh, awesome. My wife and I's goal is to work together. Someone might have already asked this: where do you pull the multifamily list? You pull it from Google Maps. We found this magical map that has everything. Cody showed it to me in the office. He's like, dude, I found a map with everything. It's like, where? Aerial view. You can fly right over the market and go, ooh, that looks like multifamily, that looks like multifamily, that looks like multifamily. Fun fact with multifamily, city zoning usually has them all grouped together, so you find what grumps together, all groups together. Some of ours have been pretty grumpy, but you find them all grouped together and you find the areas that have a lot of multifamily, and you can literally just drive those streets and call them, uh, from there. Google Maps will give you an address. Plug that into the county assessor. This is anywhere in the country. County assessor, or if their website's hard to navigate, Google, uh, parcel map for that city, and you type in the address and you'll almost always find whatever the county assessor has. You find the owner. If it's a person, Google their name with the word phone number. If it's a business, you're going to dump it into OpenCorporates or True People Search. And if I'm going too fast, there's a YouTube video on our YouTube channel. I know we broadcast across multiple channels, but, uh, our YouTube is Multifamily Strategy on YouTube. I can go ahead and throw that up here on the screen.

Christian learned all these fun little things, so now it's like I have it in a toy store.

I have the power. I have to hide this though. There we go. So you can go to our YouTube channel. It's one of our most watched videos. It has a bright pink background so it's hard to miss. How to find any multifamily property owner ever. We do it in 10 minutes with screen share, exactly how we do this. We have never changed it throughout our entire career. Back to the comments from Zach. Have you ever had a promissory note with a contractor to pay after refinance? Is that even possible? Um, no, we have not paid any contractors with a note. Now, we have fallen behind paying contractors before. We have actually spent more money than we had on projects, and that is not a super fun call. And usually that means the contractor charges us some interest, and then we, uh, we quickly get that paid. That is, uh, we—

that's like— was like a couple weeks.

It wasn't— yeah, and it's not like— it's not like we go insanely delinquent. We've had one where it's like, ooh, cost ran up from when we started the project to when we ended the proper, uh, project beyond what we had allocated. So we had to call them and those are just conversations where it's like, hey, we went over budget, we can pay you what we budgeted. Can we have a second to move around capital? And they're usually okay with that. Uh, you do not want that to happen often, but most contractors understand when you do a ton of business, occasionally something will happen and you have to move some pieces. Yeah, but no, we've never paid with a promissory note. We always find the cash up front to pay a contractor, or at least have enough time during the project where we know where the money's coming from.

A lot of our contractors want half down. Yep. Uh, and that makes it super easy. I just don't— I don't know a contractor who would be paid— I mean, would take promissory note payments, because then what happens if you decide not to pay? That's my thought.

Yeah.

Uh, it's just too much of a risk. Because they're, they're doing a multi-thousand dollar pretty much gamble on you at that point. Yeah.

So what would be the best first step for someone to make buying their first deal out of state?

I would go to the location.

That was my thought too.

Yeah, you gotta go to location and get like a good feel for it. If you go there and it feels I feel like if it feels unsafe or it just doesn't— it's not the vibe you're looking for, uh, it's just not a good spot for you to buy. Um, that's my thought.

I've invested in several places that— or looked at investing in several places that look amazing on paper. Yeah, uh, fantastic population growth, jobs are moving in, and we've driven there and I was like, this place is terrible. I can't imagine wanting to live here. I imagine the people who live here are sad and want to move away. Yeah, those are not places that I want to invest. I'm not excited about the project. I'm not— I don't believe in the stability of that area because if I wouldn't want to live there, why would someone else? Yeah, for the most part. So that I think is the, the very first step to drive the market. The second thing is go actually look at those statistics once you've driven that area and you're like, I like this. Is population going up there? Supply and demand. You're providing housing for humans, so make sure that humans want to live there.

I feel like I would do both at the same time, actually, Christian, because yeah, if you do— if you go there and then the second one where you look at it and it's actually not profitable or anything like that, you've wasted your trip. So I feel like they have to go hand in hand so you're not wasting your time, but also you're not getting your hopes up. Yes.

So have you ever done a subject-to buy? And would I? We have in one contract that has multiple transactions a small subject-to clause on one piece of real estate. This was a— obviously the note is $3.5 million and the subject-to portion of it is about $75K. So small. Yes. If that was called We would figure it out with the other— with the seller who it's in their name. It has not come up. I do not like subject to. I do not like calling— creating callable notes. That is creating variables that you have no control over. Right now in the US, this is just the statistic, about 20% of subject to deals get called due within the first 60 days of placing because banks have alerts on all of their properties in CoStar or Reonomy or whatever system that they are using. They just set up alerts for if there is a change in title on a property that we have lent to, we want to get an alert. And any of those systems pick it up, banks can call the note due. It's very easy for them to do, it's very inexpensive for them to do. And with requirements that were released in 2020, banks are required, as a risk management requirement, They must have software that tracks those things. You actually— there's only, uh, I think there's 4 now, but there were only 2 when I was working for CoStar. CoStar and one other competitor were the only 2 programs that fit the regulations for what you had to have as a bank for risk management.

Are they doing that now because it's more popular?

Uh, they're calling them because they're more popular, but more importantly, they're calling them because people are assuming 2% interest or 3% interest notes. Okay. And interest rates are now 7%. So if you're a bank and interest rates move from 5 to 3, you don't want to look at that. You don't want to call that note because you're going to replace that money at less for less money. Now you can call a 2 or 3% note and you can go ahead and place it at 7, 8%. That makes sense. Banks make money doing this now, so the incentives align. So if you're negotiating interest-only payments, do you schedule a regular balloon, uh, payment to pay down the principal, or not necessarily? A lot of them have a balloon because at some point the sellers want to exit. So the balloons are normal, but the balloons aren't there to pay down principal. They're there to pay the owner money. If we had a note that was interest-only for 100 years with a balloon, then that would be fantastic. I would love to be dead before I have to pay off the note. I don't intentionally create anything where I have to do anything because I don't want to create obligations. I want to create options. It'd be awesome on a note where I was like, wow, we have excess cash, we should just pay off this note, be done, and now our income's up. I love that, but I don't want to do that when I need cash on other places in my portfolio. I've said this 3 times in this call, but this is like The thing is you have 3 resource pools. You have liquidity, cash flow, and equity. I want them all in balance. And when you're building, cash and cash flow are really, really, really hard to maintain. So you want to keep those at a premium, especially the cash. So I want to hold cash in the beginning so I can get through my projects. Later, when I have enough cash, I'll trade it for cash flow. That excess cash flow is always going to be rolled back in equity in the buildings. From Dylan, how do you offer to the seller to pay all at once? Do you determine when you are able to make sure you don't miss a balloon? Um, yeah, well, you never miss your balloons. When your balloons are due, that is when you have to pay everything. And you can do that through a bunch of ways. You can do that by refinance, sell, out of available cash. You can do it out of your earned income from your job. You can save from it, from cash flow of your property. At the end of the day, you pay for your debts with money, so you need to make sure that the money is there at the time that you have a balloon. But when we do want to pay off something, the nice thing is there's sometimes a prepayment penalty. So sometimes they don't want you to pay off a certain amount of time. If the prepayment penalty is over, or it's worth paying it, or there's no prepayment penalty, you decide when you want to pay it off. You can pay off your debt whenever you want. No one can prevent you from doing that. That. But people can make it inconvenient on certain deals if they don't want to be paid off for a certain amount of time. And bang is very common in banks. Banks usually have prepayment penalties. What if the agent asks for the deposit to be sent upon acceptance and you haven't found an investor yet? Say no. If you don't have the money and you can't send the deposit, it's not a piece that you're playing with. You can't do that. What we usually do is in Washington State, earnest money is due after due diligence. In other states that we've operated in— Cody owns in Indiana, I own in Texas, Cody's girlfriend owns in Tennessee— in all three of those states, some consideration is required to have a valid contract. So in those states, we do $500 down and the rest of the earnest money is due after due diligence. That's not negotiable for me. I do not want to tie up capital, or especially investors' capital, in a deal before we're done with due diligence, because if we find out that the seller lied about something, I have money that's in escrow. And we have had disputes on how escrow money is returned. In fact, we've had a $130,000 dispute. That's a lot of money to be tied up. And while we are right, we had to sue them for specific performance of a contract. There's actually someone where we came to close and they just didn't sign for it and said we would like to keep the earnest money even though we didn't sell the building to you. Insane. But they got a lawyer to get in there and hold up the funds. I do not want that situation ever happening for any reason. So we don't put money together until we've already gone through due diligence and we know what, what it is we're buying exactly. If they say no, then we'll go ahead and buy another deal. Would you recommend someone still meet with owners in their local market even if they plan to buy out of state? Yes, you're going to learn from them, you're going to network with them. Often they'll be your capital partners investing out of state. This happens all the time in California. I have a lot of Californians who are like, oh my gosh, I hate owning here, or it's hard to find something here. Network with the other Californians. All of them are investing out of state. They're likely to become capital partners with you. So meet with owners who own in your market, no matter where you are in the US. And yeah, absolutely. Daniel, stop dominating the questions, by the way. I'll give you one.

I'm not going to be able to answer those ones.

How is your communication with your investors? Weekly, monthly? What methods do you use to keep them in the loop? That's your question. Okay, I'll take this one. Um, I feel like we answered this one a little bit earlier. It's Reach out to someone when you have a reason to reach out to them. I don't touch base with all of my close friends either every week. These are people I know and have a relationship with. It's, it's a real relationship. I'm not trying to get anything from them, so I don't have some CRM where I track them. I save their number on my phone, and when something comes up where I think about them, I give them a call or shoot them a text. Hey, I ran into this deal, reminded me of a deal you did. We should catch up. You want to snag coffee? I have a couple questions on how I would run this deal based on what you you learned in your deal. I'd use less words than that, but that's the concept that I'd go for. Uh, that— reach out to thank them for something that you used that they taught you. Those are the type of things you do. So that's the method that I use. Thoughts on starting a fund of funds? I don't like funds. I don't like syndication. I don't like reporting to the SEC. Uh, there's a lot of things I don't like about funds. Not that I'm against using them. There, there is a time for funds. There's time for a lot of tools, but it's not a primary method. And so I've seen fund-to-funds where you basically— for those who are trying to get the concept— you have multiple funds for multiple projects and they all roll up into a master fund. Fund-to-funds is a way to raise a lot of capital. You typically end up with very little equity in them, but you can move a large amount of money through a portfolio. I find just a bunch of LLCs in a simple structure, even if they're just a bunch of LLCs in parallel, and eventually a holding company comes in and takes your equity of those. That's how we built it. It was super straightforward and simple, and we have a ridiculously high equity in our portfolio for using none of our own money. We own a very large percentage of each of the LLCs with clauses to buy everyone else out.

I can answer the next question, then I'm gonna have to go because I need to check in with the contractors.

All right. When you do your inspections prior to lease renewals, are these professional inspections, or do you guys do them yourselves? How do we do that?

Um, this is the property management company. I do not need them. Uh, the employees in the property management company do them. Um, they know what to look for. They have the paperwork. They, they have all the handle of it, and I would not know, um, how to do it. Also, they have— it's their job to schedule this with the employee because you can't just show up. Like, you want to make sure that, uh— sorry, it's their job to schedule it with the tenant because it's not your— it's their job to do all that, um, and you can't just show up and do it unannounced. So, and then they might bring up some— the tenants might bring up some things that need to get fixed during these inspections, and then that's when they get sent to us. So have your, um, have the property management company do it. If you are self-managing, um, then that would need to be you, um, who is doing that. And it would just be like a quick little checklist, um, where you're just looking for things, making sure that everything's in order, and then you sign off and then you renew the lease.

That's— yeah, that is pretty much how I do it. I'll take over the rest of the questions. Also invite Mr. Cody in if he happens to be, uh, around and still available. We'll see if we can't drag him in here. Uh, but yeah, I will continue to handle the questions. Danny, thank you for joining us today. Welcome to Multifamily Strategy. Will we be seeing more of you?

Yes, you will be.

Okay, and how do people find you online if they want to get to know you? Where are you?

I'm a hermit. I need to like make something. My account's private.

Okay, everyone find Danny Osgood on Instagram as soon as possible and make her start her own thing. I vote we call it functional flipping because that is her mastery.

We can do that. I just— my— I'm a hermit on Instagram, unlike this one.

Everyone keep the questions coming and, uh, we will get— we will get a way to contact Dani out there for you. Um, but yeah, those inspections, one of the— my favorite things to do in most— because we've done so many projects, I know most of the costs. We do something that I call inspection light. I have a few inspectors who are our very close friends Actually, I'll name drop one of them, Ben Brenner, Olympic Home Shield. Fantastic, fantastic guy to work with. He's done some projects where it's like, hey, look, we really just need to know what's going on with the electric panels. How bad is the roof? And is the foundation okay? Can you swing out here and just, you know, we'll maybe walk through 2 units as a sample, but we know what we're doing on all the rest of the units. I'm not worried about anything we're gonna find. So sometimes we'll do a full inspection. Sometimes we'll do what I call inspection light. There's, there's multiple options and multiple ways to do it. Sending the invite here to, to Cody. We'll, we'll bring in the, we'll bring in the troops if we have anyone else to join me. It's always fun to have multiple takes on these, on these deals from the Buildy Bunch. Always good questions for the building bunch, by the way. Thank you for joining the chat. How do you protect your personal assets, house investments, in the case of failure on the real estate project? Now, don't lever something that you're not willing to lose. So for me, I have, I have a couple personal guarantees, which means my house is in question. I also have a HELOC on my house that I use to scale, which means my house is involved. How do you protect that? One, with insurance. So for catastrophic failure, as, as far as like a lawsuit or building, umbrella insurance is ridiculously cheap, super inexpensive. And I have millions of dollars of insurance for the portfolio. I also have very good life insurance. There's a whole bunch of things that I put together. Since this was Danny and my episode, I have a bunch of stuff to protect my family and my wife in the event of catastrophic failure. However, if you personally guarantee something and no comes due, that is a factor, and you need to be able to think about that. Boom, look at that! Cody's here now too. We did it! Oh, I have a better format for this. Boom, look at that, full screen! For those who joined this late, who see Danny on the thumbnail, they're gonna be like, wow, Danny looks a lot different than I imagined. Everyone, this is Cody. Uh, let's see here. Uh, Cody, how are you protecting your personal assets? Granted, you only have like a few cars, but how do you protect your personal assets in case of failure on a real estate project?

Well, I have equity on my stuff, so if I need to bail myself out, I can sell something or I can borrow against it and throw money at my problems.

Putting yourself in a position where you have a lot of equity and you have good insurance is basically the answer to that. If something happened on an insurance front where there's catastrophic failure to a building or loss of income, we're insured for that at replacement value on all the properties. Uh, we both have umbrella insurance. I have life insurance. There's a whole bunch of different things to insure against. But yeah, build a portfolio that has equity. They don't go after your house first. They— you don't get to choose when, uh, you know, let's just say something went massively wrong and we failed a balloon and we owe someone money and it's personally guaranteed. They don't get to come in and just pick, I would like to take your house and I really like your Tesla. They don't get to do that. You look through all of your assets and you come up with a plan, and it takes time. So One, don't fail notes and don't have failures. But when you do have failure and when it does come up, and if you are down and out, make sure that you're set up well and that you have equity elsewhere to tap. From Zach, how much crime rate statistic— how much do crime rate statistics factor into where you choose to buy? Cody, what are your thoughts on this?

Well, if you're going to buy in a bad location, buy the whole neighborhood.. So you can bring up that area. If you have a lot of variables, if there's a lot of crime in the area, and you're only buying a duplex, or you're buying a fourplex or sixplex, you're going to be subject to all the other landlords' ability to fix their stuff. If you buy up the whole community, takes a little bit of time and takes a lot of money, but you can fix it. And we've done that before in different communities where we've gotten rid of the drug activity, the gang activity, and completely turned around neighborhoods. But we had to buy the whole neighborhood. So it matters only if you can't afford to fix that whole location. And if you can, and you can buy the whole location, then it doesn't really impact us.

Nothing else to add there. I mean, that's a drug— drug use is a factor in some places. I know that that is a legitimate factor in Moses Lake. There, there are drug problems there. It's not the— by any means the worst city or county in the state of Washington, but it is a factor. So you factor it in and it's something that you're aware that you may have to deal with, and we've certainly dealt with our fair share of it. But, um, you know, the fundamentals are the fundamentals. If it, if it makes money and you have a plan for it, there's usually a way through it. Uh, struggling to find a project that cash flows. Do you use terms to make a project cash flow, uh, with— or how do you use terms to make a project cash flow with still making it a good deal for the seller? I'll start with the back half here. You have to map out what the seller wants first, so you really need to— you need to set the goalpost. What is it that they want to achieve and what are— what is it that you're bringing to them? So handle that piece first. Once we know what the actual target is, how do we make the terms work, Cody?

Well, uh, there's a couple numbers you got to know, and you've got your net income expressed as a percentage, so it's your, your cap rate, and you got your factor rate, which is your true cost of capital. And when it comes to making terms work all you really need to do is make sure that one number is higher than the other. The cap rate needs to be higher than the factor rate. So if you're looking at your deal, the way you make any deal work, regardless of price— it doesn't matter what the price is— you have your net income divided by your purchase price. That percentage needs to be higher than your annual debt costs divided into your loan amount. And if you can do those two things, You can make any deal cash flow as long as it has a positive net operating income. And you just have to make sure that if their goal is the price, that your factor rate is lower than your cap rate. And if you're curious on what the heck that means, we go in depth at multifamilystrategy.com. But that is how you do these deals.

Dylan, for 0% down, do you look for distressed? And if so, do you add value, or how do you add value without money?

I would not look for distressed because distressed people are not going to be able to give you great terms. You're going to probably take over their payments, or you're going to do some, um, less than straightforward paths to take over their real estate and keep their loan in place. And when it comes to buying deals that'll be successful for you, you got to buy from successful people. And successful people typically don't have a bunch of distressed real estate. They typically have got the best maintained properties because they have no debt. They can pay off their stuff, they can make it nice. And you're not going to get that from a dumpy property. You're going to find someone that's highly levered, not making any money, and very limited on what they can do. When it comes to adding value, you pay for your bills with money, and that could be with your money. But if you have no money, it could be on a credit card, but that's not sustainable. It could be with an investor, but if the property doesn't pay for them, that's not sustainable. So you have to structure terms in which allow you to fix up the real estate. It could be no payments for 6 months. It could be a reduced payment. It could be a— you just find a deal where you can bump the rent a little bit, get the value up, pull a new loan against property and fix it up. We've done all of those things.

Any business cards we like? I have 2 that I've used frequently. Frequently now. When you're using credit cards, you have to have a plan to pay them off before they're due. And to be fair, we've not done that a couple times. We've gotten all the way to the end, we're like, uh-oh, we did Moreno, we now have really high interest loans. Then we pay them off really quickly. But you have to be very careful with these. So I just want to preface this with your plan. If you're using credit cards, especially the zero interest ones, you are playing with a double-edged sword. That being said, you may be able to get 12 to 18 months of interest-free money, which is phenomenal, especially on a shorter-term project. So we really like— AMEX has been fantastic. AMEX Blue Cash Card is a great cashback one that is zero interest for businesses. We've also had a lot of luck with the Chase Ink card. Um, I use the cashback ones here because again, the goal was to borrow money at zero interest, and if you can get cash back for that, you literally get paid to use that card if you stop using it before the, uh, before interest is due on it. As a next level, if you have a business in which you travel, especially if you're doing out-of-state rentals, you can look at cards that actually give you travel miles. And both companies have cards geared towards that, but those have been the two that we've used primarily, is cards that paid us to use them in the first year. Cody, do you have any other recommendations for cards? I know you had an interview on our channel with, um, Javed, who is like the master of using that strategy.

I use the cards you filed for. We've done a lot with Chase, we've done some with Amex. Uh, the main thing if you're using cards is either get the 0% or pay it Full. There's a card that I looked at, it's just an Amex card, but I spend so much money on it. I have hundreds of thousands of points and I didn't realize I did. And it's not 0%, I just pay it off every month. And those points add up. I can do a lot of travel on it. It's a lot of points. I didn't even realize. But that's not even the best card I could have for all that, but I could fly across the world and back a couple of times. I was looking just based off of my spend. So if you spend enough, you know, the rules on that are either do 0% or make sure you have a business model that allows you to pay it off. And we've spent hundreds of thousands of dollars on cards, but we make sure that we pay them off as quickly as possible, especially paying them off if they're not 0%.

From Jack, how do you solve the inside and outside basis problem? So for those who don't know, this is a problem that we ran into early on. If you have no money invested in a deal, even if you have ridiculous tax benefits from your cost segregations, it still goes to you. It's in your account, but you can't claim it against your active income if you don't actually have that money in. Now we'll roll over to the next year. It's not that it's not your depreciation to claim, it's you can't use it. So Cody and I ran into a problem where we had brought in an equity partner. They brought in all the money as equity. They had a future buyout. We actually had no capital of our own at all in the deal, which means we couldn't write off against our income our cost segregated amount, which was a bummer. So Cody and I paid six figures more in taxes than we expected last The workaround, if you contribute money, even if that money is debt, it is your money. So we've had a lot of people borrow. Say you're going 50/50, half of their money goes towards their buy-in and half the money is written as a loan to you, and you put that money into the deal. And when you refinance or whatever you do with the property, both of your money comes out and you pay off your note. That is a valid way to do it. With no money down, and you have money in the deal because you borrowed that money and you put it in the deal. That's a great way to do it. And just do it in proportion to your equity. So if you own 60% and they own 40%, 40% of their money goes towards their equity and 60% of their money is a loan to you. It doesn't have to be 50/50, it just needs to be proportional to the equity. It makes it easy for the IRS, it makes it easy for your taxes, it makes it easy for your CPA, and bypasses inside and outside basis. Because inside and outside basis are the same under that model. Also from Jack, which one of you handles accounting? We handle different pieces of accounting though.

Cody, what do you do for accounting? Well, I've made sure in the beginning that, uh, we got all the bookkeeping done for our tax filings. I handled all the money movement. I still do most of that. Yes, that is a bulk of my responsibility to make sure that anything that's going to get spent by our spender in the org, which is Dani— she makes sure we're not slumlords— I make sure that nothing bounces. So I do all the money movement. I know what the money was spent on. So if we go back in time and Christian's like, what was this? I know exactly what it was because I know how to check for that. And We're doing less bookkeeping now because we've got a team, which I think is going to be our team moving forward, who handles our balance sheets, who handles our P&Ls. And that takes a lot off of me because I was the one doing that in the beginning.

On my end, I have spent months and months and months and months moving all of our data, all of our transactions, all of our tax docs, everything into organized files for our CPA. And our first CPA got sick with cancer and was unable to even get close to filing taxes on time, and they botched a bunch of stuff. And it was, it's just a bummer all the way around for, for everyone. They weren't healthy enough to do our taxes. It was too late in the game for us to swap. Uh, that was just painful. Our next one was a highly reputed firm that had a lot of large clients that do a lot of business. That was a good fit for us. On paper. Unfortunately, the owner developed a cocaine problem and turns out they were doing massive fraud and they went to prison. So that was a bummer because that took months of work for me. Our current CPA seems to be fantastic. They're very responsive, extremely easy to work with, and, uh, we've liked them quite a bit. I think we did find our team. I've spent months and months and months compiling all the things that we need for them. Every single 1099, every K-1, every historic piece of paper, every transaction, every question they have. It's a lot of work. However, we're probably about 2 weeks from being done with everything that they need for the year for our business docs, and that project's finally off me after a year of grinding. So we handle different pieces. I usually interface with the people and Cody makes sure that the books are looking correct as they come out from our bookkeeper. And that is a lot of work. It doesn't sound like it's a ton, but Cody does a lot. Dylan, so your plans to own forever and then just replace capex, uh, when needed— if you do sell, 1031 to defer capital gains, or what else?

Yep, that's pretty much it. You fix stuff if it breaks, preventative maintenance And if you're going to sell, there are times where you just pay the taxes and don't 1031. Not everybody's a fan of that, but sometimes taking chips off the table and get rid of— or getting rid of obligations is actually the right decision. More is not better all the time. Building a bigger foundation is always better. So there are a couple of situations where we're going to liquidate some assets Something I've been thinking out about a lot is I only want to own 10 properties max. And so if I want to up the unit count, then I have to change the amount of units under the roofs. And right now our average property is probably 10 units, 10 to 12. Eventually we'll get the average to 30. Eventually we'll get the average to 100 and 200 and 400. And if we have 10 properties of 400 units, it's 4,000 units. It's fine. But there are going to be some times where we go down to 6 properties or 7 properties because we're going to pay the taxes and pay down our debt obligation on the existing properties. And then we can scale back up and go to the next level of bigger assets as we grow towards the 10 properties again.

That's pretty much— yeah, I mean, that's the thing. You stabilize, optimize, pay down the debt. You have 10 large properties paid off. I mean, you are so incredibly done. I mean, that's, that's a lot of money, uh, especially you can get into those larger assets. But it's paid off, and then yeah, I— we do not want to pay taxes on it. We pay enough in taxes. I died with property tax and employee tax and all the other taxes we pay. What's the best approach to be successful in the broker route? Uh, I would, I would say first and foremost, find the brokers who are moving the type of properties you want to own. And then figure out which ones that you just like and work well with. We have a few brokers who I really enjoy working with. One who we name drop on this channel a lot is Eric with the Foundation Group. He's been a really good broker for us. Uh, he gets the creative aspect, he understands how to put things together. No, you don't get to call him and say like, I want to do a zero down deal. Uh, it's like, yeah, so does he. He'll probably buy it if he finds it, but he'll sell to us and then we'll partner. Yeah, but he can help structure and understands the basics of what we need to do. And so you just want to work with someone who you resonate with, who specializes in the asset class that you are trying to do. And he does a lot of multifamily, it makes him the right broker for us. That is the key to success though— who has the deals. And then some of those people are awful to work with, so don't work with those ones, and work with the people who have the deals who you enjoy working with. And it is really just that simple. I don't know how to answer this question or how to read this question. Cody, does this question make sense to you?

A desperate owner reaching out to you to see if you will adopt their problems. Well, one note on that: when you buy real estate, you do inherit their problems that, uh, that happens if they've got bad tenants. I don't see a question on here, but fact, you're buying people's problems.

Yeah, it might be, I hate desperate owners reaching out, though I love it because if it's a problem I can solve, I like spinning the Rubik's Cube. And Cody and I sit down all the time and do this. So if that is what this question is, it's like, yeah, um, sometimes we sit down and go, hey, there, here's an issue, and this problem's been a pain for me. And it's sometimes it's a, it's a big property for us, it's a small property for them. They're like, it's too small of a problem for me to fix where I'm at in my career. And for us, it's like, oh my gosh, we fixed that problem, it's life-changing. So I do love it when owners reach out with their problems. I just, I'm not always the one to solve it. At the end of the day, their problems are not your problems unless you make it your problem. So you don't have to fix every problem, you don't have to do every deal, but Man, I love it when owners reach out and go like, do you have a fix for this? Because that's been a lot of our opportunities. How do you stay in contact with investors after you close on a deal? Okay, so with the investors— yep, uh, call.

Yours is less cracked than mine.

Yeah, I've treated ours, uh, I've treated mine pretty well.

Oreo did not treat my phone well.

But, um, yeah, to stay in contact with investors after you close on a deal, you should be— and this is pretty standard for operations— you should be holding meetings with your investors at least quarterly that are documented in your meeting minutes. That is the correct thing to do with an LLC. So you should have scheduled times where you're meeting up and talking. We make sure that all of our partners get owner statements on the properties so people know where things are at. But these are all things that you need to stay on top of. Um, outside of that, yeah, give them a call, let them know what's going on. Biggest do not do is don't not tell them when bad things happen. I've seen people do that. I've seen people at multifamilystrategist.com in the mentorship group. I've had multiple people call and say, hey, I've been embarrassed to talk to my partners about this, and things have gone from bad to more bad because I just, I, I don't know how to tell them. I was like, well, start by telling them. They're investors in the deal. People need to know when things come up. Usually you can work on the problems together. So I— any of those things are big pieces of communication with investors. Thoughts on hiring security for areas that you own multiple big properties on? We have never done that.

I don't know why you would need security. I mean, maybe security cameras. We've done that. Yeah, we got all our cameras. I mean, they're worth multiple 5 figures, uh, just for the cameras alone. But, uh, do we have a security guard at a 38-plex?

No, that would be excessive. And that's what the police are there for. They're like, we, we have public things for that. Now, having security in a Class A or B 100-unit complex, that may make sense to have someone in charge of that on a big, massively expensive asset. Um, we don't have those.

We're baby investors.

Yes. I don't know what the sideway thing is, but everything else— for your deal, that was 38 plex we bought was great. Yeah, I was gonna say that went very well. It was, it was, I would make the argument that it was completely sideways when we bought it, but we fixed that quick. How do you find those people, especially since you said most of the money is coming from out of the county?

The first 3 people that we partnered with that funded that deal, one of them I met on Facebook, another one I met on Facebook, and someone messaged me from the Michael Blog Podcast. So they were all three of my relationships originally. Now everybody is friends with everybody. But one was a podcast and two were Facebook. So ta-da, we found them online. And one of them was in a Facebook group. One of them messaged me because A good friend of ours, Beth, who owns a lending company, made a post about me in front of my 12-plex. So they reached out and he and I did a flip together and then they used that flip money to fund the 38-plex. Third one was a cold email from a podcast and then they gave us $100,000 as a test run and we ended up buying everybody out early.

I'm not super—

yeah, on those relationships, one of them we met up at the Berliner in Renton. It's the first time we met. It's my buddy Champ. And then, um, the other two, I did a flip with Paul, and we each made good money on that one. One. And we flipped a house in Puyallup and made a lot of money. And he used that money to fund the deal, and I used that money to pay off a loan. Turns out if you start with no money, you do have to pay off your debts eventually. So, uh, I didn't get to keep any of that cash. And then the third one, definitely didn't have a relationship established. I mean, we'd met up a couple times, but that was it.

Do you guys use any software?

Yeah, we just use Excel.

That's it. Very basic, uh, very basic download. We share that too on, of course, I am mentorship, but we, and we have that on all of our stuff. Very, very simple. Your basics— you need to figure out all your expenses, and income minus expenses is your cash flow. Your deals have to cash flow on long-term debt. The math is not hard to learn here, so Excel is a super easy way to track that. And I need to hop off onto an investor call, so I'm gonna do that. Adios, we'll talk soon. Peace. I'll carry us the last mile, everyone. By the way, hour and a half live. Thank you for keeping the questions running. This has been a fun live. I noticed we've been going live a lot more, so sometimes I have less total people, but we get a lot of content, so I really appreciate it. By the way, I'm planning on doing a bonus live tomorrow. I know, more lives, but this one's only about maintenance. I'm bringing the smartest maintenance person I know onto the channel. I think he might actually record from my house here, so I'll, I'll launch a thing on that for my Instagram. So check that out on Instagram, uh, @ChristianOsgood. Very excited for that. All right, let's finish these off. If you guys have more questions, post them now though, because we're almost done. We got like questions left. I will check Instagram for some questions too because I see that we have a chat going over there. But, um, let's see here. What are your guys' goals this year and within the next 10? Oh, that's so funny, right? As Cody hops off, he asked— I read this one. But, um, my goal this year, I'm moving to Texas. I want to get that house moved into, get it furnished. To do that, I need to stabilize, uh, property management needs to be stabilized. I have a few systems that are expensive that we're going to cut down on a little bit. I've run property management at the end of the year at a slight loss to get us all the systems we need. So we need to continue to scale that up. Buying the 33-unit and the 25-unit and doing mild, mild, mild increases across our property management portfolio for our management fee, which— I mean, by mild, I mean like $5 a month— has fixed that. So getting everything stable throughout the universe and finishing some projects. And then for me, moving within the next 10 years. Multifamily strategy is my baby. I love teaching, and my favorite thing in the world to do is to fly to other markets and meet people in the mentorship program who have bought real estate, walk their deals with them. It is really fun now to be able to fly around after doing this for 2 and a half years and actually just like No matter where we land in the country, someone has watched our channel or been through the program, has bought something seller financed. It is so cool to be able to network with people all over the country. Later this month, I'm flying to Atlanta. I'll be there the 27th speaking, also meeting with some of our mentees who have bought real estate down there. Later, I'll be in New York, so I'm meeting with a couple of our New Jersey folks. But that is— I want to scale that to a ridiculous level. I think there are some programs out there that are just ridiculous. I think they're either lame, they're a bad strategy, they're gimmicky, or they're subbing out the coaches for their program, which is my biggest pet peeve. I don't think that's something that people have to do. So as we move forward, my biggest goal is I want Multifamily Strategy to be the premier place for people to learn how to buy real estate without adding steps. If I can knock that out, that is the mark I want to leave on the world. How do you guys decide how much to pay yourselves? We've paid ourselves a $5,000 a month salary since we started. Everything else gets reinvested into the real estate. I love rerolling. MrBeast is the largest YouTuber. I believe he's the largest YouTuber. He built his channel by every time he makes money, he 100% reinvests it back into the channel. And he's still like a vast majority of their proceeds reinvested in the next video. Just 100% reroll again and again and again, building your brand. That is what we do. We renovate, we buy another building, we expand, we expand, we expand. I want to keep pushing and scaling. So $60,000 does it for me. My Texas house happens to cost more than my rented house. I will increase my salary to $10,000 a month. Month. When we need to do distributions, there's usually one time a year Cody and I will do a one-time $100,000 distribution. At least we did last year because we had excess in the portfolio. Just, there was enough excess cash after projects where it was appropriate to like, you know what, there's an extra $200,000 here. I think we pay ourselves and say, good job, you had a successful year. That's how we pay ourselves, and that's how much we've been paying ourselves through the portfolio through the years. What days do you go live? Um, make posts, schedule for— okay, so every Wednesday, 3 PM, I go live. That is scheduled. Occasionally I just get people who are like, hey, I'm around. I'm like, we should go live together, we should talk about this. I love spontaneous lives. It's kind of fun to see different people pop in at unscheduled times, so I'm going to keep everyone on their toes sometimes. Just look for the live button because I'm usually live doing a specific topic with specific guests. And sometimes I'm just gonna hit the button and we're gonna appear. The scheduled lives right now are every single Wednesday, 3 PM Pacific Standard Time. And usually these calls go from 1 to 3 hours. So be here for those. Of course, I'm mentioning this an hour 40 minutes in, so anyone who actually watches this recorded who's missed the lives You have trooped it out a long time to hear that little tidbit of audio. Christian Alexander, speaking of people who are a part of our programs. Christian, I remember you because my name is Christian Alexander Osgood. Your first and last name are my first and middle name. I will have a difficult time not remembering who you are. Let's say you're wanting to buy a property. Would you prefer it to be 100% occupied or 80 to 90 since you can negotiate down? When I'm buying a property, I want it to be cash flowing however I buy it. If it's 90% occupied and it's cash flowing, awesome, we have upside on it. If it is 100% stabilized and it's full of people and it's doing well and it cash flows day one, I'm thrilled that I don't have any projects to do. The occupancy isn't the main thing I'm looking at. I'm looking at cash flow for long-term fixed rate debt. How do I buy it? How do I never lose it? So I need to know that there's enough upside in the property if I'm buying at market rate where I can refinance later and cash out any investors that I may have on it or replace any debt. But outside of that, occupancy isn't my main thing. It's, is the income higher than the expenses? And it's the day one income. Very good question though. I— we don't do a lot of targeting on properties. There's a lot of things that make a deal work. And it's all just based on how is the property performing. How do you get more deal flow during the build phase? You meet more owners.

That's it.

I, I wish I had a better answer for you. It's so simple. Caleb Hommel's done it better than Cody and I have. He moved to his market where he owned his 25-unit. Within 30 days, he met all but one major owner in his market. It. Just went all the way through them, met all of them. Mission accomplished. He has massive deal flow. Meeting the owners and not trying to buy their stuff, but just communicating what you're trying to buy and how you're moving forward and learning from them. If you do that in your market, it takes you a month to meet basically everyone. In a, in a large city, it's a submarket. In a place like where Caleb's at, population's like 20,000 people, and then there's 15,000 college students. So you have, depending on the time of year, 20,000 to 35,000 people in the town. Not that big of a town. Caleb dominates that town. He's able to do that because he met more owners. That is the way to do it. Meet the players who are playing the game. They will deal you in. What apps or services do you use to run properties? AppFolio Property Management is robust. That's the software. It is robust. It is really hard to use. Like, it's hard to learn, barrier to entry, but it does everything. Anything you can think of, they can do it. I also use a company called APM Help. To run that software because sometimes there's something where I'm like, I don't know how to log this or what this needs to look like. They help make sure that our banks stay— our bank recs stay accurate and that the properties run the way that they are supposed to. Running through the last few questions. Um, what was the software you mentioned last week for owner tracing? Um, so I don't use it, but I— it's the only one I recommend. Reonomy. It has the owner information in the pro— in the actual product. It does a really good job of tracking owner portfolios. When you're— if you want to spend money on a platform, because again, you can do this for free on Google Maps. If you want to spend money on a platform, Reonomy is the one that fits the best for Cody and my strategy, hands down. You can view the owners, you can view the debt they have on the property, you get accurate contact How would you structure a deal using a DSCR loan? Is it possible to have the seller fund the down payment? Yes, DSCR is a non-conforming loan. You can involve seller finance with DSCR. DSCR is debt service coverage ratio loan. So you structure the deal by it— what, how much debt does it service? That will tell you what you qualify for. There are a lot of lenders that put together DSCR loans. I have a lot of conventional lenders who offer DSCR products which is a non-conventional product. So, uh, private money lenders may offer them. Certain mortgage brokers may have a connection for you. But DSCR loans are awesome. A lot of them are interest-only on the front end, which makes it a lot easier to hit that debt service coverage ratio on a property where you're going to be doing improvements. They'll often give you a couple years of interest only before it goes amortized. How do you spell it for Rionami? All spelled here in the comments. Very similar to the economy. Re-on-o-me spelled completely phonetically.

Re-on-o-me.

Why would you consider a mobile home community to invest in one day? We bought one, 25 units in Mason County. We bought 25 units with an average rent of about $800. We bought it, uh, per month. We bought that for $375,000. It's worth about $1.2 million as soon as we fix the septic drain field. We thought there might be a problem with the well. Turns out there is not. So all we have to do is fix the septic, which is getting a new drain field. And this actually has 28 units. We need to remove 3 because there's too many units for that drain field. And then we have a 25-unit fully performing mobile home park for $3 75. So mobile home parks, we love them. After your home, what's next for you, Christian? I am going to start the debt hammer harder than we already are. We're already paying down some debt, but I'm going to focus all of my cash flow, all of my attention, all of my portfolio, all of my acquisitions and dispositions on getting debt-free. I want to pay off that house. I want to pay off all of the portfolio, and I don't want any partners outside of Cody. We'll keep Cody. And we'll keep my wife because she's automatically my partner. But I have a lot of buyouts that I want to execute. I have a few strategic partners that we'll probably be keeping long term. But generally speaking, the next thing for me is I've never seen anyone on YouTube or any other platform scale a large portfolio quickly and pay off all the debt. I've never seen it done online. Conceptually, this works. We've proven you can build. Without your own money. We've proven you can stabilize without having your own money. We're doing a lot of optimization and we're proving that's possible. I've never seen anyone go full proof of concept publicly on, I'm going to do all 4 phases, I'm going to make it all the way. So closing the loop on what we're telling everyone to do is the most important thing I think that I can do. I really want my mark on the world to be This is a— come up with a model to like, hey, you can break out of the rat race, do your own thing, do it in real estate, and with or without money, you can make it and be debt-free. So I'm going to go prove that that is possible by finishing this out. I think it's going to take me 10 years to do so. What's your goal for monthly income? I don't care as much about monthly income as I used to, only because I hit our goal. Cody and I wanted $25,000 a month each. We surpassed that notably. Now, I don't pay myself that. I put it back in my portfolio, but we passed that quite quickly. I don't know how to make this sound not obnoxious. I have more money than I need. We made it in real estate. The income is more than I spend by a lot. I'm a very frugal person. My house in Texas is fairly big, but it doesn't cost that much. It's still less than a million-dollar house. House. Things that I like with money: I love having a sauna. I'm going to build a bigger sauna than I have now. It's something that I enjoy. My home gym at home is about $3,000, and I love working out at home. I'd love to have a $10,000 gym. None of those things cost significantly a lot out of a $25,000 a month passive income, and we have more than that. So my income goals, I've, I've hit all the ones that I realistically need. So my goals now are let's take more money to grow the brand and build the portfolio, stabilize it, roll into more passive assets. We still have millions of dollars to spend on our portfolio to get it where it needs to be. So that's like the income's gonna get rolled in there, but my personal income goal, we're quite far past where I would realistically ever need. And Johnny, yes, that, uh, that particular, that particular property, the the mobile home park. That was a stellar— it's just a stellar deal. We won on price by so much. What do I do for hobbies? Must be very busy. How do you keep work-life balance? I do not. I, I share this all the time on this channel. I do not have work-life balance. I work about— on a lighter day, I'll work about 11 hours a day. Um, I have had many days where I'll work 20 hours a day, and yes, I realize that means I'm sleeping 4 hours. I'll do consecutive days at 4 hours of sleep with one meal to save on time. Like, I work constantly. I have 5 companies that I run, 3, 3 main ones, the acquisitions, the multifamily strategy, and the property management company, because I'm the CEO of those companies. Cody and I obviously do a lot in the portfolio together, but I spend a lot of my time on the rest of the businesses. I have other businesses as well that are smaller pieces of my universe. But I work every waking second. So work-life balance— I work with my wife. I spend 30 minutes to an hour every day working out. I do a lot of my day planning, and I write out whatever my social media plan is. I write from the sauna, which is 30 minutes that I get to myself. I read my Bible 30 minutes a day. I think that's very important. And outside of that, if I'm awake, I'm working. If you're trying to do this as fast as I did, Balance is not part of the equation. Now, later, with stabilized portfolio, finished, optimized, and large buildings, I can do whatever I want with my time. It will probably be building more businesses. I love the game. It's really fun. Get a private jet. I actually probably will at some point because I'm right next to a private airfield that was actually strategic. If my wife and I start to have kids, I just, I hate flying, and I fly a lot. We're not there yet. We're not even close to there yet. Private jets are ridiculous. You have to be making crazy money. At some point, if we continue our success, you will not see me like Grant Cardone straddling my jet on the COVID of a book. Functionally, as a tax write-off and ability to move around the country freely to do my business, we may do that. Where did you learn from? I learned who— how not to do a lot in business, uh, from an early mentor. He bought everything with or without money. He bought condos, he bought office buildings, and he consistently lost it all and got sued for bad business practices. I learned how not to build business from him, but I also learned a lot from him on great— like, the mental mentality of how do we solve deals, how do we eliminate problems, how do you manage stress. Um, my best mentor just happened to have a lack of business ethics that I also learned a lot from. So I would not be where I'm at without that individual, and I, I need to give them full credit for that. Like, I learned a lot from them, and I'm really grateful for my time with them. However, they got penalized for their bad business practices, and I learned what not to do in business very, very early. Um, so I learned that in my career. I learned that from mentors. I learned sales from the best sales manager I ever had, John Hickman. He worked for the CoStar Group. Uh, shout out to John. That guy's like 6'6", absolute titan of a man. Learned a bunch from him, but I learned a lot from the owners that we bought from in the market that we buy in. So a lot of people over a short period of time, I learned everything I could from everyone around me, the best and the worst from everyone, and I did my best to assimilate it. Which is really what multifamily strategy is about. It's— everyone's strategy is unique. You need to build your own strategy. So I learned everything that I could, and we put it in one place for everyone to learn faster than we did. Almost done with the questions here. Am I needed elsewhere? Lovely wife who was walking in the room. Okay, nope, Danny's not coming back. I was thinking she's gonna join us one more time. What are you doing hour to hour when you're working? It works. It looks completely different every single day. Uh, that is the fun piece of being an entrepreneur. Some days I'm at the Robin Hood laying floors. Sometimes I'm there running a hosting event. Sometimes I'm speaking in, like, I'll be speaking in New York, Atlanta, Dallas, and San Diego here in the next couple months. Sometimes I'm traveling and speaking. I was speaking last night in Fife, Washington. Sometimes I'm on a call with my various sales teams. Sometimes I'm on a call with marketing. So every hour by hour looks different. What I try to do is I leave flex time where my calendar looks blank, but I guarantee you I'm working every second of it. It's the time where I can sit down and go, what do I need to get done right now? I'm going to get that worked on. I then try to do some time blocking where I go, hey, every week I go live at this time, and every week I spend just on property management. Right here. And every week I have a block of time that is only spent for multifamily strategy. So that is what my hour to hour looks like. It's, it's a lot of chaos, but I do a really good job on my calendar of organizing that chaos for what I have time to do. Do you do— do you have leasing consultants under you? 200 units as a solo PM is time consuming. I have a director of property management who does the leasing consulting. And she also writes leases and she does a bulk of our showings. I'm going to be hiring what's called a porter who's going to do a lot more of the, hey, there's a small maintenance thing, can we go meet a contractor out here, deliver a key somewhere, or help with the move-in? They're going to be helping with that, taking stuff off us. My wife coordinates all the contractors, which I have a ton of, and I handle all the bookkeeping, reporting, accounting, uh, state filing. And then all PM companies are also brokerages, I also manage the brokers in my office. I don't talk about that often, but I do own a brokerage and we do decent transaction volume. Not a ton, but decent. Value time over income. Lots of income doesn't do any good unless you're busy. I absolutely agree with that. If you enjoy work a lot, then I mean, do what you love. I am here to compete. This is a board game and I understand that we only have our 3 resource pools: cash flow, liquidity, equity, and real estate. I am just trying to grow those, and you move them back and forth, you trade the pieces around, you keep them in balance. Scaling is fun, competing is fun. A lot of what I do now is based on how do I do the best that I can with the pieces that I'm given. I feel like I have a responsibility to do that. So it's not about generating money necessarily. It's about how do I take the money I have and grow it and deploy it appropriately. I have— I found that the most rewarding thing for me in real estate is providing affordable housing for people and doing it in a profitable manner. You can go through and go, how do we make sure that there's profit which is left over to take care of people and grow the businesses, but how do we do it in a way where we can keep rent somewhere and work with housing authorities and actually fight homelessness and put people who are in rough situations in excellent housing where it's a nice place to live, where they enjoy living. We can actually improve people's quality of life and get paid to do so. I love scaling that. So I play the game. I do things that are good for communities, good for local economies. We come in and buy slummy properties and we make them very, very nice. We make them fun and great places to live that are safe communities. It's rewarding. It's something to do with your time because eventually everyone's going to die. And just to me, it beats watching Netflix. Or going bowling with all the— not that I don't like bowling. There's all these things that people do that I don't find interesting. I find competing in business interesting, so I will do that. And managing money is a large piece of business. That is basically your lifeblood. You can only grow to the extent that you can circulate blood through the body. So cash flow works the same way. We can only grow to the extent that our cash allows us to. So money is meant to expand and improve and invest in communities and make a difference. That's what money's for. Once your basic needs are met, which for me was cut off at about $25,000— it's more than I spent by a lot— once your basic needs are met, money doesn't make you any happier. It doesn't do anything. It allows you to make a difference in the world, and that's what we're trying to do. Do I have an active mentor? I have many active mentors. I don't have one person I'm learning from because I've never met anyone who's done what I've done. On. Just frankly, I've never seen anyone build a portfolio this fast without money. Um, there, there's really not a map for how to do what we're doing because we took a ton of people's strategies, took the best pieces, and condensed them into as little time as humanly possible. So no, I don't have the one person who, who got us to where we're at, or is my current mentor. I will say, when I get stuck, Matthew Hawkins, Lumberjack Landlord on YouTube, most underrated and most intelligent investor ever. When I get stuck, he is the one I reach out to. Of my current group of mentors or people who guide me, that is the one I trust more than anyone else to build a portfolio the right way. Incredible investor. Ah, this is a, this is a suggestion for, uh, airlines. We'll get there. We're not there yet. We're not there yet. I will be buying a— I, I have not bought the fancy vehicle yet. I have a Tesla Model Y. It's a fairly economical car, and I only have one vehicle for my wife and I, so we, we are not big spenders on vehicles. The next vehicle when I'm in Texas will be an F-150 Raptor. I love that truck and it's heavy enough to be a write-off, so my company will buy that truck. That will be my next vehicle. We are still miles away from the plane. I'm not gonna worry about that yet. They'll build new planes before I get there. How are you feeling about the housing market so far? What do you expect interest rates to do? I think they're going to keep coming down. They actually popped up a little bit from where they're at, so they're kind of— they seem like they've more or less stabilized, but they're supposed to come down a little bit more. I think we've stabilized somewhere in the 6s, most likely. I don't think they're doing like up and down— muted myself, sorry about that. I don't think they're doing any big swings up and down from this point. I, I just don't see it happening. I think we're roughly where we're going to be. Now what we're going to see banks do is banks are reactive. So since interest rates were high, they're seeing that there were some defaults. So banks are now going to go, oh, our data says last year multifamily had a rough time, It's going to be harder to get loans moving forward for the next year or two because banks are reactive and they exist a year or two behind reality. So since they're reacting, we're going to see money tighten up, I think, over the next couple of years and then loosen up as the rates came down and things start to stabilize. I also think, though I try not to be too political on this channel, depending on which presidency we have, the executive office will actually play a role in monetary policy. If we end up— and I'm not promoting one thing or another, just on a purely economic standpoint— if we end up getting Trump back in office, I expect economic policy to lighten up and to have a better economy over the next several years. If we maintain Democratic control, they tend to be slower on economic policy and tighter on expansion. I'm trying to be apolitical here. There's pros and cons to both. There actually are. But I think with a Trump presidency, we will see short-term economic benefit that will be beneficial in the real estate sector in particular, which is to be expected having a real estate investor in the Oval Office. If that's fair to say. I think that's a pretty neutral assessment. Real estate people in power usually do stuff that benefits real estate. I think that's neutral enough to say. How would you create deal flow when starting to buy out of state? Meet owners. Even out of state, call the owners and call brokers. You do both when you're doing out of state. The broker is going to help introduce you as well. Uh, Caleb bought out of state. He is a huge contributor to Family Strategy and one of our earliest mentees. When Caleb started, he called hundreds of brokers and he got his deals done. He got started, and now he goes direct to owner. He got started with the brokers. You want to do a good healthy mix of both. How do tax benefits for affordable housing work? Uh, heard you can get all taxes wrote off. Um, there are some tax incentives with different affordable housing programs. I don't know all of them. That will be a question for my CPA, who I'm sure at some point I'll have on the channel. But for now, um, I don't get additional write-offs for my low-income housing that I'm aware of. If someone knows how to play that game better, I'm always sharpening my game. We focus on how to make things cash flow and work without it. If there's additional tax incentives for what I'm doing, uh, someone please let me know because I have not explored that piece of the tax law. Yet. We have $100K cash and our house is paid off. First of all, fantastic, well done. Currently worth about $550K. That's about what I was worth when I got started, uh, when I started buying multifamily. I was worth just a little less than half a million dollars. We have no debt. We're considering turning it into 2 units and collecting rent. Is that a move you'd do? What would you do? What I do completely depends on your goal. If you have a job that you like, an income that you're happy with, you've paid off your house, you don't need to lever up to play the game. You've Dave Ramsey'd to a point where you're in a very good spot. You don't need to jeopardize that unless you have a goal that is much bigger than where you're at, in which case I recommend lever, stabilize, optimize, and then pay off the debt again. You've already proven to yourself that you're capable of managing and paying off debt, so I actually trust you a lot more than a lot of people. To, uh, manage that appropriately. So the move I would do is gonna be different than you. I want to reach the most people possible to talk about real estate and how to play the game, because we started with no money and you're not supposed to be able to do what we did. And I've watched other people do it, so I want to share this message and the lessons we've learned on business with as many people as possible, which means I got to keep doing some big projects and I have to keep talking to marketing and speaking That's my goal. My goal is expensive. If your goal is different than that and costs less, you don't need to do that. So Taylor, I would say that the move that I would do is figure out what life do I want to be living, what are my objectives, and what does that cost on a monthly basis? For me to do all the things we do, because the spend to have a YouTube channel and a course and all the other media. Um, I mean, that's $55,000 a month to run everything that we run. Um, so for me, I'm like, uh, I really need to have businesses to run everything that I do that are kicking out $100,000 a month to be able to profit— profitably even run and manage my universe. If you're— if you have different goals and less employees and less overhead and less projects, If $20,000 a month to you personally is what you're trying to build, you can do that. I'd go a little bigger than duplex, but see if you can't knock out a 5-unit building. It's easier to control commercial real estate than it is residential. But if you can knock out a 5-unit building to 10-unit building and figure out how to put that together, even if you have to lever to do that and then pay it off as fast as humanly possible, that will probably get you to your goal. Paid off real estate's awesome. There's no better investment than a piece of paid off real estate. I would not lever the house. Um, I would take that $100K if you're comfortable and buy $1 million of real estate with it, seller finance, 10% down. That is what I would do. What you need to do is going to be based on your goal.

Minecraft.

I'm a 14-year-old aspiring entrepreneur. How do I make a lot of money online or use physical assets at a young age? So the best thing that you can do young, I believe that I actually have— I actually do have a thing for this. There's a lot of ways to make money online. If you want to be different than everyone else and make more money online than others, which I have made 7 figures, uh, online stuff, we have multiple companies that make a lot of money, do something that other people are not doing and then talk about it. If you have a plan for what you want to do— and this, it could be anything. It could be starting a brand, it could be starting a restaurant, though I recommend against that in hospitality. But determine what it is you want to do. First thing I would do is I'd start calling my shot online, because if you don't do it, no one will remember you. There's too much noise online. But if you're the one who said, I'm going to do this— Cody and I said, we're going to close this 38th, and we're going to build a 100-unit portfolio, and we're going to do it in under 2 years. And here we are, 2 and a half years with a couple hundred units, a resort. I— we hit all of our goals. We declared it online before we owned any real estate on the YouTube channel. If you go to Multifamily Strategy on YouTube, Cody and I said exactly what we were going to do, and that's exactly what we did. If you determine what it is you want to do, you tell the world, hey, I'm going to do this, and then you go do something epic, then you get to talk about it and then you get to monetize it. It. You get paid for doing the thing. A lot of people your age, 14, wants to do something online to make money, and so does everyone else your age. They're going to hear about, oh, start an Amazon store, be an affiliate marketer. There's always the newest gimmick. Be the one who does something of value that is actually unique and then talk about that. That worked really well for me. That worked well for Cody. There's someone at the CoStar Group, her name was Jamie. When she was a new rep, she won a massive contest. She got a free Tesla, she got hundreds of thousands of dollars for having the best pitch at a sales conference with 300 other reps. And she was a brand new rep. The first day they played it back on the replay every morning, they showed little clips of the event. She goes, I'm winning this event, calling my shot. And then she called her shot and she made it. That We'll build a brand online, but online game is all about having the best brand, the best marketing. Nothing beats having an awesome relatable story. So that is my advice to you. That worked for me. I've seen it work for others. Build a brand and do something unique and epic. Will you buy in Texas after you move? I have already bought in Texas. I'm not, uh, I've not been public with every single property I own in Texas. But I own multiple buildings in Texas and I will continue to expand Texas. I love that state and it is super easy to manage in. What do you do or read to stay on top of the market? I don't. I talk to owners and all the other people who watch TV. Like, I watch Netflix at night with my wife. We love that. When we go to bed, we watch 30 minutes of TV every night. I do not want to work on markets when I watch media. When I meet with owners or I go to conferences, people just tell me all these things and then I research them and I'll Google facts that I find interesting. I know what the market's doing because I talk to lenders and owners, and I buy my deals where they cash flow on today's numbers. So a lot of what goes on in the market has nothing to do with me because I negotiate my own price, my own debt product, and my own terms. The market is unrelated to that. It has nothing to do with that unless I have to refinance in a short period of time, and then I need to poke my head in and say, okay, I'm buying at this price and I'll be able to refinance at this price, we're good to go. But, um, yeah, I, I— we built a strategy that is market agnostic. So what the market is doing really has nothing to do with my business because I'm not the market. I am my own bank and my own— oftentimes, like, we structure our own debt. So basically, we're our own mortgage originator. We're negotiating our own price. We're fixing all the terms. So market has so little to do with us that I don't really follow it all that close. I'll start speeding these up a little bit so I can get to, uh, get to my dinner here. But, uh, Dylan, how do you get someone to consider 0% down? You ask. I mean, that is it. You need to come up with a plan of why they would do that. You'll rarely get 0% down. We've only done it once. But you can do lower down deals, and then you find an equity partner or additional debt to take out whatever the down payment is. Uh, you're going for low down more than no down, but no money out of pocket is finding a deal that is stellar and then being able to bring in the rest of the money from either the seller or from other individuals. Tax incentives heavily vary by state. Yes, they do. Um, and I think that was in relation to the low-income housing thing. I just don't know what my tax incentives are for Washington State, and it's not been a part of my game. There's always ways to play the game better. There are things that we could do to tighten it up or to have less expenses over here or market better for our resort. There's always things to do better. I'm sure there's a better way to play the game than I am for my taxes. I just know that I pay very low taxes on high income. Thanks for your input on everything. Mason, absolutely. I love doing these. Live is my favorite part of the week. Seriously, this is my favorite thing that we do. And I love my new software. I can put your questions on the screen. StreamYard. I'm not endorsed by them, but I should be because I love this software. Do you post the full lives? Yes, I do. The full lives are automatically posted to YouTube. So this is going live as soon as it is done., you can watch the replay immediately. I think it takes a little while for the high def to download, especially on a long live, but at some point it will go live. All right. And that is about what I have for time. So for the rest of the questions, I know I'm not quite caught up. I'm gonna go ahead and hop off and connect with everyone soon, but I appreciate the questions. We will get caught up. I apologize to those who we have uh, missed, and we will catch up soon. I'll see you guys all on the next episode.