Christian OsgoodCEO, Multifamily Strategy · CEO at Multifamily Strategy

How to Hit Your Multifamily Goals Easily!

5 Mar 2023 · 1 min

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In this segment Christian Osgood outlines the two essential analyses every multifamily investor should perform when planning a major capital expenditure (CapEx) and anticipating future capital needs. First, he stresses the importance of confirming that the property generates cash flow from day one using conservative assumptions—such as higher vacancy rates and slower market performance—to ensure the investment is viable from the start. Second, he advises modeling the property’s financial performance at the next major event (e.g., roof replacement, partner cash‑out, loan balloon) using similarly conservative numbers to verify that sufficient capital can be extracted or the property can be exited successfully. By consistently applying these conservative cash‑flow checks at the outset and at each future milestone, Osgood claims investors can reliably hit their multifamily goals and have never seen a property underperform relative to their models.

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Realistically, there's two pieces of analysis that you really need to do this. If you're doing a major CapEx piece and you're going to pull capital again down the road to do that, like we did for the roof, you go, okay, what are we doing day one? Are we cash flowing day one on conservative numbers? If we assume that, say, vacancy is going to be a little bit more than we expect, the market's not going to perform as well as we're going to expect, but, uh, conservatively it's going to do really well day one, we know it's going to cash flow, we lock that down, done. When we do— when are we doing the roof, or when are we doing a major capital event like a cashing out a partner, if we have a balloon coming up, what are we doing at that point? And do conservative math for what does the property look there? And if you know you have enough money to pull out with really conservative numbers, that's how we hit these goals. It's pretty easy. Where is it day one and where is it at your next major event? If you do that, that's how we predict everything. And we have never had a property do worse than we originally mathed for.