In this conversational interview, Christian Osgood and his brother Caleb Osgood compare the realities of investing in residential real estate within their home state (Washington) versus out‑of‑state (Texas). Caleb chose Texas for its landlord‑friendly environment, abundant inventory, and higher cap rates, but faces challenges coordinating three separate property managers across different Texas markets. Christian describes the difficulties of being a landlord in Washington—strict rent controls, costly and lengthy eviction processes, and unreliable property managers—leading him to start his own property‑management company to gain control. Both discuss the strategic benefits of investing in markets with low competition (e.g., Washington’s tough landlord climate) that allow better deal negotiation and higher margins, as well as the importance of proximity for hands‑on owners. They also explore the logistical and operational considerations of relocating (Christian plans to move to Texas) and the necessity of building scalable systems, teams, and processes so a business can run without the owner’s daily involvement. Key takeaways include: landlord‑friendliness varies dramatically by state; managing out‑of‑state assets requires careful oversight of property managers; owning a proprietary management firm can mitigate risk in hostile markets; eviction costs and timelines are a major financial factor; proximity and control matter for active investors; and establishing robust, remote‑friendly operations is essential for anyone planning to move or expand across state lines.
Chapters
Sorry to tell you, but if your business needs you to work in it to survive, you still have a job and you are still in the entrepreneur's version of a 9-to-5. Hello YouTube, welcome back. I'm Christian Osgood. I am here with Caleb Osgood. Today we're talking about in-state investing versus out-of-state investing. Now I'm going to preface this with both of us live in states that are traditionally very hard to be landlords in. Caleb invest out of state in Texas, where it is traditionally easy to be a landlord. I invest in-state in Washington State, all over the state, where it is factually a horrendous place to be a landlord. We have terrible laws and the government hates us, as do the tenants. So why would we do this? Which strategy works better? And most importantly, I want to help everyone with what strategy is right for for you. So I almost called you Cody, that would be super embarrassing. Uh, Caleb, talk to me about your journey, why you first invested in Texas, and what has been like investing out of state in a traditionally landlord-friendly state.
Yeah, so when I got started, I was originally looking around some different states, didn't really know where to look. I just knew California was kind of a pain in the butt, heard a lot of horror stories, so I'm like, I kind of want to steer clear of that. So decided to go the out-of-state route and settle on Texas. Like you said, they love landlords. There was a ton of inventory on the market, and the prices weren't too bad either. Those were 3 things that were super important to me when I was getting going. It was like, okay, I'm not buying in California where it's like San Diego where I live, where it's like 2 and 3 caps. I'm buying higher cap rate, more cash flow. So that's why I originally decided on Texas.
Awesome. And how has it been operating in Texas?
Um, it's been fairly easy so far. I mean, If we're talking on the landlord friendliness part of it, I had one eviction. It was like $100-something compared to how much it is in Washington, California. That was rather a breeze. The more difficult part is just managing the property managers. That's kind of the, the major challenge with out-of-state investing, just being on them, kind of figure out the balance of being on them too much and not being on them enough. Like that whole thing, that's probably been the biggest challenge for me with out-of-state investing so far.
With your property managers, realistically, because you're also all over the state, I think this is important for out-of-area people. You're managing in 3 different markets. What has it been like managing 3 property managers?
I am in McAllen, Laredo, and Houston. Like Christian mentioned, I have 3 different property managers, one for each property. I wish the company was statewide, but it is not. And as I iterated before, the hardest part is just finding the balance of being on them too much and not being on them enough. And then multiply that balance, multiply that challenge by 3 since you're doing it 3 different property managers. It's going to be different for all three of them. Some of them will be rock stars. Some of them are going to need you kind of hold their hand and guide them through the process. Like, hey, we need this done, we need this done, we need this done. Others are just going to be right in the middle where it's like they'll let you know if something's up. You don't have to go ask, you don't have to go pry, and they're not going to be too on you. So that's the biggest challenge for me is kind of just finding the balance of managing each property manager. Just, they're all different.
Oh, and that, I guess, and that was one of the biggest headaches for me was figuring out property management in Washington State. We started with a really bad property manager, gave them all the properties, ended up in lawsuits and a whole bunch of stuff. It was awful. They were a truly terrible manager of real estate. Started my own property management company with Cody, which I eventually did buy from Cody. And we're expanding all over the state. That's what I had to do because it was so hard for me to work with other people trying to manage my stuff. I like a high level of control. Which is why we are the long-term fixed-rate guys, because I don't like variables, and other people in my portfolio is a variable that I don't like. So in or out of state, I'll talk a little bit about my experience investing in-state and what I like and don't like about it. Washington is very hard to manage properties in. People hate landlords because they think they deserve free housing. And they deserve for me to pay for it. Now, providing housing and providing affordable housing and nice spaces is my full-time job. I work mostly in the affordable sector. I buy deals where there's enough cash flow to support renovations, make the units nicer than other units in its class, but cost a little bit less than its competition. So I am not pushing market rent astronomically high. I am stabilizing properties and fixing a lot of problems. And for those who don't own real estate, a lot of these beater properties that don't have an active landlord who aren't charging enough rent, well, they can't afford to do stuff like get rid of cockroaches, bed bugs, fix leaky roofs, remediate mold. You're truly like bottom of the market pricing houses, lose too much money or don't make enough to actually make them nice. So we price them right. Where we can keep it nice for everyone and do our job, which is provide affordable and what I consider like all spaces that I would be willing to live in in their same economic condition. And that is my litmus test. If I walk into the unit, I go, if I had to live here, I would definitely live here. That is what we look for. So that's who we are in Washington State. Uh, everyone hates us. The government hates us. They, they want to control rent. They make it impossible to evict non-paying tenants. Tents— think they live for free. All of those are huge problems. Why do I like investing in state? I have two big reasons. One, I can drive to the property and I can solve the problems myself, or at least get my head around them. I use a lot of other people. There's a team of about 40 contractors who renovate our units full-time. We have a lot going on, but When I'm out there, I can actually see how is work being done. Is there something glaring that we're missing? I can actually walk on site and ask that question. Is this a place I would be willing to live? The other big one is the states where no one wants to invest in because it's hard to be a landlord. You don't have a lot of people from out of state trying to invest in them. There's not a lot of people in California and certainly not a lot of people in Texas who are looking at Washington being like, you know where I want to deploy all my capital? In that market in the middle of nowhere where the government hates you and the tenants don't have to pay rent. What that means is that you get more power to negotiate your deals because you do have less competition. And I love that because I like dominating my markets. Those are the two biggest things if you're in a difficult state that I think you have an advantage of. Proximity means you can drive to it and influence your property at a higher level. I am all about control. I'm a control freak. Great for me. The other thing, less competition. I can structure better deals, which allow me to operate with more margin. I still have to deal with all the headaches, but I do have more capital to deal with them than I believe other people do in other markets. That's been my experience. Now, you, before this call, we chatted a little bit. You said that you actually, having gone through what you've done, you wouldn't be opposed to buying California. Let me hear your thoughts there.
Yeah, just, um, the biggest reason for that is after seeing your success running a property management company and all the stuff you've done with your units, the hands-on stuff. Like, like yourself, I like being in control. I like being hands-on. I'm just doing a little differently than you right now. It's kind of being hands-on with the property managers. Some one step removed from the hands-on process, which isn't the worst thing in the world. But I— after seeing the success of managing your own units and the lack of competition in certain states, because people are like, why would I buy in like certain parts of California or Washington State? And the answer is like, nobody knows. So with that, the lack of competition and the ability of knowing how to build a good property management company definitely make it slightly more appealing if I had to do everything again and I knew what I knew now.
Sounds like since you already have a portfolio in Texas, you can do both by just moving to Texas.
That would work.
Well, in that case, I'll see you there. That's still my goal, to eventually move to Dallas, and then I will be an out-of-state owner, but I'll have established my business, which is one more thing I want to share. A lot of people do love moving. They have a goal to live somewhere else, but they built their portfolio in one location. And I've heard this question asked a lot on our channel is, hey, I'm thinking about moving in the next 2 years. Should I start investing here or where I'm moving? I have watched some business owners and people who I called friends start their businesses, decide they want to move. They don't put any leadership in charge. They don't put any structure in place. They just move and go, I'm going to run my business from out of state. And I've watched their businesses collapse and then lose their real estate. You've got to be really careful. You have to set up systems that are sustainable. And this is for all businesses everywhere. You are not a true business until you can remove yourself from the business and it will continue to run and thrive without you. Otherwise, you have a job. I'm sorry to tell you, but if your business needs you to work in it to survive, you still have a job and you are still in the entrepreneur's version of a 9 to 5. So, what I would do, what I am doing, I want to move to Texas. That will make me an out-of-state owner in Washington State. I'm setting up systems and people and employees and contractors and managers all in place so that I can move to another state, start in-state investing in Texas, and still maintain and grow my operations in Washington. All I'm saying on this is choose your strategy and just focus on making your business a business. It works in-state, it works out-of-state. There's not a right answer. There is a right answer for you. If you're not going to be hands-on with the management, in-state or out-of-state doesn't matter too much because you're not hands-on either way, right? If you are going to be really active and you're like, hey, a lot of the— like, I can make a lot of money and I enjoy saving the cost, being hands-on, being at my property, you might want to look at something closer to you or moving closer to your properties. These are just things to think about for everyone. I believe that Cody and I have made a lot of money driving out to our properties. There's been stuff where we were told the project's done, I get on site, turns out it was not done the way I would expect it to, and we need on-hands management. I'm dealing with an issue at one of our buildings where we have to drive to Moses Lake, and I'm leaving at 4:30 in the morning tomorrow to get there early, early to solve a problem that a contractor caused a mistake. And it's a big mistake, so I'm not gonna share it online yet until it's resolved. But like, there's stuff that you can do as an owner where you can influence your real estate. I do like being within driving distance. It is something that I highly prefer, but you don't have to do it to be successful. Caleb, you've built a great portfolio. What is the biggest, um, the biggest hurdle overall that you've had out of state? What is the hardest piece been?
Gosh, that's a great question. I think overall in real estate investing, especially going to Texas as my out-of-state, I think the biggest challenge has been the competition I'm facing in Texas. We've touched on it a little bit in the past, but Texas is arguably the hottest market in the country, so everybody's looking there from every single state. Everybody wants to buy there. All the properties you were calling on, other people are calling on. So getting that leg up is probably the more difficult part of the whole thing.
That being said, how long does it take you in Texas to go through a full eviction process if someone decides, hey, you know what, I'm done paying?
Gosh, a hell of a lot cheaper and a hell of a lot, um, shorter than it takes you guys. So $100-something bucks in about like 30 to 60 days, nothing crazy.
That is crazy. Washington State will cost $2,000 to $5,000 and can take anywhere from 60 days to somewhere around like 120 days if they're really a professional non-payer. You have a few different ways you can reset the clock on it, and you have to be very good at evicting. When you're getting started, you will get kicked back by the government on anything. You have a typo, you forget to mention one thing, you miss a deadline by an hour. You don't mail something out of the right county. Um, I mean, they put every single hurdle they possibly can in front of you getting people out of there. We've had non-pays. Uh, we just, just had a person who hasn't paid for 3 years, uh, finally got them evicted from a unit because they reset that clock so many times on the past owner. We came in and it still took us, it took us almost a year. So it is difficult in Washington State to operate. And, uh, it's a, it's a real cost that you have to account for because a non-paying tenant is worse than a vacancy. You have to pay to get them out and not receive any rent along the way. So there are risks. I will— I'm looking forward to doing that in Texas where we can manage and actually own the property and control the property.
That will be fun. Yeah.
Well, that's what we have for today. Unless any closing thoughts here, Caleb?
It's about it for me. Thanks for having me on. I appreciate it.
Absolutely. If you haven't yet, please like and subscribe to the channel. We're trying to pick really interesting topics. If you have any ideas what you want us to cover, let us know in the comment section. We will get to it and we'll get it filmed. Till then, see you guys all next week.
