Christian OsgoodCEO, Multifamily Strategy · CEO at Multifamily Strategy

How We Made Our First MILLION DOLLARS

9 May 2024 · 1 min

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Three partners bought a 38-unit apartment building for cheap because it had no financial records and wasn't making money. They fixed the management, got delinquent tenants current using government programs, and brought in proper accounting. The building's value doubled from $2 million to $4 million, giving each partner $1 million in equity within 18 months.

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How did we make our first million dollars in real estate? Well, we bought a building that could make us each a million dollars. We figured, you know what, if we want to be a millionaire, the quickest way to do that is to buy a deal big enough, which was 38 units. And it was a value-add opportunity. They did not have any books on it, so we got a decent price for what it is. However, it wasn't cash flowing because nobody was paying. We had to fix the management. We had to get people caught up. Some of that was through government programs. We had to get consistent books and great accounting so that we could actually peg valuation for an appraiser. And within 2 years, it was less than 2 years, 18 months, we doubled the valuation of that building. Bought it for 2, had to be worth a little over 4, and we each had $1 million of equity.