Christian Osgood and 23-year-old co-owner Caleb Hommel bought a 200-unit apartment complex in Longview, Texas for $12.2 million with only a $371,000 down payment. Forty-five units filled with junk need just paint and minor repairs to lease for $850-$1,000 monthly, adding $45,000 in monthly income. Hommel started buying rentals at 18 with no credit or degree and now owns 605 units.
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It's full of junk! And you move the stuff— oh wow, that broke right off. That's $45,000 a month of increased income. What does it cost? Pair of gloves. And we're back at the 200-unit we recently closed. One of the most important things about making money in real estate is that you're actually willing to do the job yourself. Laziness gets you nowhere. I'm just as happy to raise the money for a deal, I'm just as happy to go out and sign the paperwork as I am to put the gloves on and actually get things made ready. Biggest problem that we found at this property, which is crazy, is that units aren't available to rent. It's not that they don't rent, it's that they're not available to be rented. So today I will show you what it takes to make a ton of money in real estate with honestly kind of minimal effort if you're willing to buy a pair of gloves for $7.99 at Home Depot. Oh yeah, by the way, I'm Christian Osgood. I own hundreds of rentals just like this all over the country. Uh, normal intro things. Welcome to Multifamily Strategy. Let's get to work. You would be amazed how common of a problem this is at properties. When I talk about not wanting to do heavy renovations. This is what I mean. This property is 75% occupied. A bunch of people have passed on buying it. 200 units. We picked this up for $12.2 million, which is not a lot of money out here in Longview, Texas. This is the campus. We're doing some projects, but when we're doing these, I want to show you just how simple a lot of the pieces are that are going to make us the most money. Now, the first thing you have to understand is how commercial real estate is actually valued. This is why I'm not a single-family flipper or a duplex buyer, because you can't control the value of your building in the same way. What we are doing here is we're doing the pieces that let us lease up the building. With leasing up the building, we make more income. With more net operating income, the value of the building increases. You value commercial real estate based on the net operating income, your total income less your expenses. What we are doing here today will directly one-to-one raise the income. More income means more money. More money means someone else is willing to pay more for the building. When appraiser comes out here, they will give us more money and a higher valuation. This is an example of an unrentable unit. I'm going to show you why it's unrentable. It's full of junk! That's it. This isn't an ugly unit. Look at it. This isn't bad. Walls are a fine paint color. We need to do a little bit of paint and cleanup touch-up here. That's a bit of a problem. Don't want to see that. But we have to patch some holes and clean up a whole bunch of junk. The kitchen has a whole bunch of stuff left over. Amazingly, this doesn't even smell bad. It's just the unit that is dirty. Here's the bedroom. What did they do? They moved out and just left all their junk. You can't rent this in this condition. Why is the owner not making money on this? Why did they sell the building? 'Cause no one's out here doing the blocking and tackling. This is level 1 difficulty. So here's what we're gonna do. I'm gonna give the camera to Mr. Caleb Hommel, who is a co-owner of this deal. This guy found this deal. Caleb, how old are you, by the way? How old am I? 23. He's 23 today. You own how many units after today? 605. 605 rentals. And he had all this parent money that he just plucked— no, I'm just kidding. What was your starting point? I wanna give context to this. This is important. Absolutely nothing. He had no money. He didn't have credit. It wasn't that he had bad credit. He started at 18 years old. He never had a job. He didn't get a college degree. He came out and started buying real estate. If you're like me and you did the whole college 9-to-5 thing, then you meet a guy like this, you realize, wait a second, I could have done this the whole time. This is how simple this is. Caleb, hand the camera to you. Let me show you how to make a ton of money in real estate. You take your hands and you move the stuff— oh wow, that broke right off. You awkwardly move the stuff out of the unit. There's now less junk in the unit. Watch, I can do it twice. This looks kinda heavy, but it's not. It weighs like 2 pounds. I'm gonna do this for about 15 minutes, and this is gonna move massively ahead. Then we're gonna paint the wall. And patch it. And then we can lease this. And this is gonna lease for about $850 to $1,000 depending on our unit mix. Some of them are 2 beds, some are 1 beds. This one is a 2 bed. This will lease for about $1,000 a month. We have like 45 of these to go. That's $45,000 a month of increased income. What does it cost? Pair of gloves. This is how you make money in real estate. Honestly, not that hard. We bought this $371,000 down. This is the down payment on a large house. We just got 200 of them. Scale up, buy bigger deals. This is available. This was just sitting here. Anyone could have bought this. You could have done it too.
