Christian Osgood shows how to get cash at closing on a zero-down deal using assignment fees. Contract the property under your name with an "and/or assigns" clause, then assign it to an LLC before closing to pocket a fee. He scaled from broke to a 200-unit portfolio using seller financing with 5-10% down.
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If I had to start over today with no money, no contacts, no real estate, just delete the portfolio, start over with absolutely nothing, how would I do it? Well, there's one thing I would do differently. I'm going to share how to build this in the video, and it's really important to have reserves. How do you get liquid the day you close? We're going to share the strategy right here on the channel today. Welcome back. My name is Christian Osgood. I'm sharing how to play the game with no money because that is how I started. Spent all my money on 2 duplexes, got wiped out to zero cash and a little bit of cash flow. From there, scaled a 200-unit portfolio, seller finance resort, property management company, education company, this YouTube channel. We built a whole lot in about 2.5 years starting with no money. There were some problems with how we did this though. So I'm gonna share how we can actually get liquid at close. This is a strategy that you can use throughout your portfolio, and there's a reason that it works in creative finance specifically. There's a strategy you may have heard of, and we're not going to encourage you to do this, by the way. It's called wholesaling. It's important to understand though, if you want to get liquid in your own deal without wholesaling, you need to understand this concept. So in wholesaling, essentially what you're doing is you're taking a deal, you're packaging it up. So you're finding an opportunity and you don't need to be a broker for this. You're actually going to put it under contract in your own name. So Christian and/or assigns, is going to go under contract to buy a deal. Now, my mission here is I need to assign the contract to someone else for a fee. It's called an assignment fee. So when this deal closes, I'm going to get my fee. They get the deal. And so I essentially get to do a deal with fantastic pricing, get a little bit of a markup and move it down the line, sell it to a different end user, and I get my fee. Not too dissimilar from brokerage, except that I am actually one investor who is opting to assign the contract to someone else. Now, when you're buying seller finance, you're buying commercial real estate, you're almost always going to put this into an LLC. If you're me, I haven't formed every single LLC because we follow an order: deal, then debt, then equity. If I don't know my equity partners, I don't have the LLC formed when I go under contract. So how am I putting these deals under contract? I'm letting them know, every seller, hey, I'm going to be moving this to an LLC. There may or may not be another capital partner., but I will close this in a different entity. I will be on that entity because I am the buyer of this deal. So I put it under contract, Christian Osgood and/or assigns. Sometimes my business partner Cody does the same thing. We put it in their name, Cody Davis and/or assigns, and then we assign it into our joint LLC before we close. Now, if I'm starting the game and I have no money, reserves are ludicrously important. We started with a 38-unit building with $0 in reserves. That was way harder and way more expensive than it needed to be because we had to keep some vacancies while we slowly renovated out of cash flow. You need to get liquid. If you are broke, you need to get some capital into your universe. Step 1, we find an opportunity that we love. We put it under contract, your name and/or assigns. If the seller has a problem with this or is worried about you wholesaling, you can put a clause in there that actually says that you will be a member in the LLC it's assigned to. We've done this multiple times. You can actually wholesale this deal to yourself. How crazy is that? Someone told us this and I was like, wait a second, what? We can do what? Here's why it makes sense to your investor. So when you're doing a deal normally on a normal bank finance transaction, I find an opportunity. We go through the bank. Me and any capital partner are going to go through the conventional financing process. We're all going to submit financials. Bank's going to give us money. We have to put in a down payment. On a seller finance deal, we didn't just find the deal, we negotiated the debt package up front. We got the deal and the seller finance note. So we go deal and debt, and a lot of times we're doing these deals 5-10% down. So if you found 90% of the money, and if you're going to be the main operator of the deal, you've brought the opportunity, 90% of the capital, and the deal structure and you're going to help manage it, it is absolutely appropriate to go to your investor and say, hey, we're going to put this together for packaging the deal, putting it together in consideration for the fact that I'm going to be managing this. We're going to put a $10,000, $15,000, $20,000 fee into this deal when I assign it from myself into our joint LLC. If your investor is funding the LLC and doing the down payment, your investor is essentially going to fund that LLC and at closing, You are going to be paid for all of your hard work on the deal. You can actually wholesale to yourself. So if I was starting over again from the very beginning and I needed some personal liquidity, like I have no money and I need money to start running my business and to feed myself, an assignment fee for a well-structured deal is a fantastic way to do that. Anyone can find a deal in a month. Anyone can find a good deal in 30 days of trying to find a deal. We share about that strategy all over our channel, all over our course, all over Instagram @ChristianOsgood, or here on Cody and Christian Multifamily Strategy. We share how to do that. You can do this in 30 days. Find the deal. It's going to take you from the point where you go under contract 30 to 60 days typically to close the deal. So within the first quarter of opening your business, and this is what I would do, drop me in any market, this is what I'll do. I'm going to have some cash in my pocket. I'm going to have a cash flowing deal and we're going to start the business going and rolling with a little bit of capital and a little bit of cushion. Now, over time, save that cash flow, build a bigger reserve. But I think a huge mistake people make is they buy real estate with absolutely no reserves. Now, you can do that and don't let that stop you. But they focus so hard on like either, oh, I'm just going to— I started with no money, I'm going to keep cash flowing this. Or even worse, they go, hey, I have no reserves, so I'm not going to buy real estate. Come up with a plan to fix the pieces that you're missing. And then go play the game. If you're missing capital, figure out the capital. This is an excellent way to do that. If you want more tips, follow this YouTube channel, click like and subscribe. If you want to check out multifamilystrategy.com, we can teach you even more on how to play the game, how to write these contracts, and how to start with or without money.
