How I Really Bought Hundreds of Rental Properties with no Money - 2 Creative Real Estate Secrets

Listen to this one closely. There are no secrets in real estate, but if there were any, I'm going to share them on this video. I'm going to share how I bought hundreds and hundreds of rentals starting with no money in a different way than I ever have. There are no secrets in real estate, but these are the things that felt like secrets for me. If you're wondering, how did this guy do it? Does he have other streams of income? Where did the money come from? How did he structure it? I'm going to share how to structure your portfolio in a similar way to what I did so you can buy infinite real estate. If you've been trying to figure out like, what's the catch? What's the secret? What's holding me back? I'm going to share a couple things that have made astronomical difference. One, how I fixed my income while scaling the portfolio. So I was making hundreds of thousands of dollars in liquidity while buying all the rental properties without giving myself a job. I was getting paid to be an investor. Number two, I'm going to talk about the contract that I put in place that allows me to own 100% of my portfolio. So while I am partnering with people and I'm starting these LLCs, if this is all looking complicated, confusing, I'm going to share one piece of paper that makes the whole thing simple, that gives me complete control of every piece of real estate I own, and eventually 100% of the equity in the entire multi-hundred unit portfolio. When I share this, I believe you're going to look at this and go like, oh my gosh, that's unbelievably simple. That's all I have to do. The answer is yes. This is the Secrets to Real Estate. Buckle in. By the way, if you guys are new to the channel, I've bought hundreds of rentals over the last 5 years. My net cash flow, and yes, the number is net Cash flow is just under $50,000 a month, $50,000 a month coming in on about $50 million of real estate, hundreds and hundreds of rentals in Washington State and in Texas. Big markets, small markets, red states, blue states, doesn't matter. This strategy works everywhere. It has worked for me fantastically. So welcome to the channel. I'm sharing exactly how to do this. So if you're joining for the first time, you picked a freaking good video. If you've been here for a while, I hope I blow your minds. First of all, let's talk about the liquidity. So yes, every deal that I purchased needs to cash flow day one and into eternity. We buy on long-term fixed-rate debt so that when I buy a deal, I'm not paying for it every single month. The deal is paying me to own it. You buy it once. I don't inject new capital. The deal is the deal. Every deal is structured this way. If you just say no to the deals that negative cash flow, every time you close, your income goes up. This principle has allowed me to move very quickly. And because it's all long-term fixed-rate debt, when the market changes, my income does not. I have stable income, and every time I close, it goes up. You should follow this model. If you see deals, you're like, oh man, I think it's an amazing property, but it starts out negative. The answer is no. Just go find another deal. This principle has carried me farther than most investors in a very short period of time because I don't violate the principle, except for the one time I did. And while I did make money, I regretted it, and it was painful, and it was frustrating. Just buy deals that move you forward financially, period. Don't go negative to buy a deal even if there's a bunch of upside. Doesn't matter. Don't go negative. So while we're buying deals and we're increasing our income, you start with $1,000 cash flow here, $2,000 there. In your first few years, you're going to build your first few thousand of cash flow. Now, while I had an 18-year-old mentee buy a deal that cash flowed $7,000 a month to him, not every single deal is going to give you that much income in one shot. By the way, he bought that $0 out of pocket, 100% seller financed. Those also will not be every single deal you do along the journey. You're going to do a lot of base hits and you might hit a few home runs along the way. So while you're slowly and steadily building this income, how are you making money? Myself, I like to buy buildings that are 12 to 75 units. That's kind of the sweet spot. I am closing on 76 right now, but you get the picture. I like that size of real estate. You don't have a ton of competition for it and it can still make millions and millions. $100,000. Your first year or so, a few thousand dollars a month of cash flow is not going to carry you all that far. It does take some time to build up that income. It will get insane. But while you're building it up, what we do is called wholesaling for yourself. You don't become a broker, you don't become a wholesaler, you don't become a property flipper, you don't become a property manager. Don't give yourself a new job other than being an investor. However, when you know how to line up a deal, and you know how to find the debt products, and if you're partnering, if you know how to raise the equity, you're putting together a lot of things on the front of a deal. If you're doing all this work on the front end, you should be paid for the work that you're doing. What I do is wholesale to myself. Now, a traditional wholesaler, what do they do? They put a deal under contract and they say, hey, I'm going to sell this contract for a premium to a new buyer. Now, I hate this method because you're taking an otherwise great deal that you should be buying and you're giving it to someone else. And if it's not a deal you should be buying, I don't think ethically you should be selling it to someone else. You should be putting together excellent deals. And if you have an excellent deal, you should be the one buying it. But if you need to get liquid, what you do is you do all this work on the front end. I put together the deal and negotiate the debt product. I put together the entire business plan and I assemble the team. For this, I usually charge 1 to 2% of the purchase price. I have it under contract and I have a great deal under contract. I control this deal. I lay out what the returns are projected to be for my investors. And then I simply charge an assignment fee that I disclose to them because of all the work I put into this. This is my full-time job. I need to get paid to do this, and this is how I'm getting you in a deal that's going to make you guys a lot of money. Here's how the deal's going to work. As part of this, I have, let's say it's a $2 million purchase. I have a 2% fee because this deal is a relationship that I've been working for a year, and there's a lot of work that's gone into this. And I found a very, very, very good debt product for us. I've aligned the right team and my management teams could be involved. I explain why I'm getting paid. So for that $2 million deal, I'll get paid about $40,000. It shows up on the final settlement statement as assignment fee to Christian Osgood. So if I'm buying it with partners in 123 LLC, that's the company we put together, 3 people joined together by this property. Well, now I'm getting paid $40,000 to change it from Christian Osgood and/or assigns to the final entity. It's been disclosed. Everyone can see it on the record. It's on the credit and debits in your final settlement statement when you close. You have been paid. Congratulations. Now, since I do 3 or 4 deals a year, that is roughly at $40,000 a pop. You know, you're looking at $120,000 to $160,000 a year in fees for the hard work that I do. For most people, that's a pretty good job that you can live on. In addition, every time I do this, I'm building equity in real estate. Every time I do this, I'm also upping my personal cash flow. So my monthly income is also going up. Difference there though, I'm not just getting paid once. The income goes up forever into eternity because we're buying on long-term cash flow. The second secret, the option contract. Like variable rate debt, that's a no-no. I don't want variables in my portfolio. Well, people tend to be a huge variable. They have different objectives, they have different emotions. Their financial situation can change partway through the deal, having nothing to do with you. So if you have all these different partners and you build all of these partnerships and get all these assignment fees and all these properties like I did, you have hundreds and hundreds of units and you have like 25 to 30 partnerships. That's a lot of people and that's going to be a lot of problem for you at some point. They're all going to have different needs and wants and there's going to be reporting. It's going to take up a lot of your time. I have the ability to own 100% of my portfolio by myself. Every time I go into a partnership, we negotiate a fixed price and a fixed period of time in which I am allowed to buy them out at that price. For example, someone puts $100,000 into one of my deals, and while we split cash flow somewhat throughout the deal, let's say maybe they're getting a modest return in cash flow through the deal. I reserve the right to buy them out at 1.75x of their money. So they put in $100,000. I have a right within, we'll call it 3 years, to buy them out for $175,000. Now, what we do when we buy our real estate is we calculate the value of the real estate today and very conservatively, what will the future value be? The goal of this is for the real estate to buy the real estate. So if I can increase the value of the real estate through the performance of that project, increasing the income, improving the building, what have you, I can refinance throughout somewhere in this loan. I can do a refinance, cash out, and the real estate will buy the real estate. I'll buy all the partners. And yes, I'm giving up some of the equity, but I built an income stream for myself. I've been paid to own this. Oftentimes I'm in the deal $0 out of pocket personally. They get a fantastic return out of the upside of the property, and I keep the cash-flowing asset and all of the future upside, and I don't have the partnership. I move it into my personal portfolio. They get an amazing return on a great deal. I get to keep the real estate and I've increased my income. I have hit my goal. They have hit their goals. It is a simple clause, but if you put an option contract in every single partnership that you have, what you're going to be able to do is control the partnerships. If there's a problem in a partnership, you now have a fixed price and a fixed period of time in which you could simply just buy them out, refinance, borrow the money, bring another partner in, whatever you have to do. You have a fixed way to buy them out. Now, yes, have great operating agreements and have great dispute resolutions, but there is nothing like the safety and security of, I have a clear path for my real estate to buy itself for me. And as I play this game, I get more and more and more equity and less and less and less partners. Partners. I have found that these are the ways to navigate real estate. You have the assignment contract where you can essentially wholesale to your own LLC that you're a member of, and you pair that with an option contract to purchase the partners out at a pre-negotiated price that everyone is happy with and agrees on at the beginning so that you get paid in the beginning of your deal and your deal will buy the real estate and the partners out. So in the end, you got paid to buy a deal. No money into the deal. Everyone is happy. Everyone has exited the deal except for you. You've kept the real estate. You've paid no money. You've been paid a lot of money. You've increased your income and you have now won capitalism. Congratulations. Those are the secrets to real estate. By the way, if you want more tactical advice on how to actually play the game at what I think is pretty much the highest level of creative finance, you need to like and subscribe to this channel. If you haven't yet, hit that like button, comment below with any questions. I answer every single one. Subscribe to the channel for more tips, and I'll see you on the next episode.