Masterclass Part 4: This ONE Shift Made Me Millions in Real Estate (No Bank Needed 💰)

It's not that hard. You just have to get used to how do I say yes to everything they want, everything I want. And instead of saying, oh, it doesn't fit, we would say, what would it need to fit and hit all of these? And then it's like a really basic puzzle. When you find that thing, you get a yes every single time. You close a ton of deals. This is how I bought $35 million of real estate starting with no money. The final part, number 4, when you actually have a deal, we're talking negotiation. Yes, all the other videos in this series play a role here. You have to book the meeting to meet the owners. You have to actually have a good meeting with them. You have to understand tonality and telling a story arc and putting a deal in negotiations. This is my favorite part. Favorite book on this, by the way, is Never Split the Difference by Chris Voss. Fantastic book, fantastic author. If you haven't read it, highly recommend. The goal, you win, the sellers win. If you have investors, your investors win. Everyone wins. I want to hit 100% of their goal and 100% of my goal. So the first thing that I do is literally hold in your mind, by the way, welcome to the channel. My name's Christian Osgood. I own a ton of rental properties. I started with no money because I built these skills. If you don't have a ton of money, you do want a ton of skills, watch this video, take notes. All right, you have a soccer pitch. Imagine it in your mind here. You have a soccer pitch. On one side, there's a goal. On the other side, there's a goal. Well, this is very much like a real estate deal. I have a goal, they have a goal. If everyone scores, we're all happy. Now granted, you don't want to tie a soccer game, But that's about as far as this analogy needs to go. The first thing that you're going to do is you're going to map out what the goals are for each member. So for me, what is it? It's long-term cash-flowing fixed-rate debt. I want to buy a piece of real estate and I want to pay it, I want it to pay me forever. So I buy it, it pays me as soon as we buy it for all time. I never have to lose this property. It's an income stream. My income's gone up. I'm now wealthier than I otherwise was. The seller. We have to map what the seller's actually looking for. Now, are they after a specific price? Are they flexible on the terms? Do they have a partnership that they're trying to break up? Do they want to roll it into a bigger building? There's a ton of motivations a seller has. Most people don't know how to ask, which by the way, it goes by asking the seller, what is your reason for selling? Like literally, people have all these crazy theories on how you do this. I just ask them, Awesome. What is a win for you? What do you want this to look like? Now, the goal here, I want to negotiate with everyone's cards on the table. I don't want to miss anything. I will show them my hand. Uh, there's so many people do this super guarded. There's a lot of methods that I just absolutely hate. Easiest way to do this, to the extent that you can, reveal as many cards as you can and ask them to do the same. At the end of the day, what is it that you are looking at for this transaction? What is a win for you? I love the building. I like the numbers. I would like to be the buyer for this deal. What does it look like for you? Oftentimes they're going to give you a price. It's like, awesome. Do you have any idea what you want terms to look like? What is your end goal? Are you trying to roll this into a new deal? Are you trying to cash out? What is it that we're trying to accomplish? Often there's more story and what I'm really trying to get out of the seller is an actual story. And if they were represented by a broker, it's a little bit harder, but you try to get the broker to get this out of them too. What is it that they're really trying to do? Often there's a pain point. You're always solving a problem when you're buying a piece of real estate. So are they having a leasing problem? Are they having a partnership problem? Are they just tired of owning the property? Are they trying to scale up to a bigger building? There's still a problem. It's like, hey, I want to be bigger. I don't want this size building anymore. I want a bigger building. Are they trying to downsize or are they trying to estate plan? There's a ton of reasons. I want to know what that reason is. If you map it correctly, if my goal is long-term cash flow and fixed rate debt, I just have to figure out how do I say yes to everything that they need. If everything they need over here is met, wow, my camera loves that symbol. If everything over here it needs met, they're going to buy, like they're, they're, they're sell in this case. Try this again. If everything they need on this side is met, if everything here is met, they're going to sell to you. You have a deal. They always say yes if you hit all of their objectives and you map it correctly. So once I know their story, that is how I'm going to close them. So whatever the story is behind the deal, log that away. I have this partnership problem. Got it. Really hard time leasing this up. Got it. I paid this off. I'm downside. Log away what the motivation is. Now figure out what the price and terms are. All right, cool. What were you thinking for price? You always want them to throw the first number. I will try everything in my arsenal not to throw the first number. Sometimes they'll negotiate against you. Don't be weird about it. If they're like, just send me an offer, be like, well, give me a ballpark. Where are the, what are you thinking in general? If they're just not going to give you a number, don't be weird about it. This is not a game of chicken. They have the property, you don't, you lose. Try to get them to throw the first number. If they do not, you have to come up with a number with the pieces that you have, which means there's probably going to be a lower offer. So I always go through with like, okay, what do we know about income? What do we know about expenses? What can you guys share? Based on what I have, I'll submit an offer and it will be soft. It'll be like, I'm thinking it will probably be priced around here. And it's going to be a lower offer. Now, as I get more information, I'm flexible on this number, but right now with the pieces I have, we're probably going to be in the ballpark of X. Say I'm willing to buy it for $800,000. Uh, you know, I may come in at like, hey, it probably works at $650,000 based on what you've told me so far. I am flexible on this. I just want to let you know that's about where I'm at. Simple. Then they'll come back. Oh, that's not going to work. Okay, give me some pieces here. Either the property's making more than I think it is, or you have a specific price, in which case I've given you my number. What are you thinking? Let me see if we can come to agreement. At the end of the day, they're going to toss a number out. Now I know what they want for price. Now if it's, hey, I want to scale another property, I need to cash out, you're probably going to get bank financing or hard money depending on how strong the cash flow is on the deal. If they have high equity in the position or if they're trying to exit and they're flexible. So say they're downsizing their portfolio, they're doing estate planning, they have a property problem that they're trying to get rid of. These are all reasons why someone might create a finance because now, okay, well, if I can't get cashed out right now, I can get payments, but I can have you solve my problem. If it is a pain point that changing management If you take over, if that fixes the problem, seller financing actually may be what they end up doing. I want to know how creative they can get because that can negotiate terms, special clauses. You can get crazy with it. If it's bank financing, you eventually are going to have to come out somewhere on the price or maybe short-term seller financing while you fix whatever the problem is in the building. But generally speaking, I want to be able to say yes to everything. In this example, let's say they say, yeah, I'm interested in seller financing. I've owned the building for a long time. I would like a price of $2 million and I realize that it's not going to work with bank financing, so I'm willing to get a little bit of creativity if I can reach my price. This happens to me all the time. In fact, it happened with the 25-unit. I bought it for $2 million. They wanted at least 5% interest, which is fine. Only problem is the rents were super, super, super low. So while it was a great price for a 25-unit building in Stephenville, Texas, and while 5% is excellent interest while rates were 7.5% at the time, The deal still didn't cash flow, which is not a goal for me. Solution. All right. We could say yes to 5%. We could say yes to your price. How do we say yes to everything? I need my payments to be lower than the interest. What does that look like? The interest, extra interest is added accrued onto the principal balance of the loan for the first 2 years. I took the rents from $550 to $1,100. We literally doubled the rent on this property. By the way, Tennis didn't pay that, the government did. That's a strategy for a different episode. We doubled the income on the property. So when we went to the full 5% payments, we were cash flowing thousands and thousands and thousands of dollars a month. We only added $50,000 to the principal balance. So it's exactly like I bought it for $2,050,000. However, however, I said yes to the price. I said yes to their terms. They got 100% yes on everything they asked for. I dictated what that looks like. And made it work for me. Goal here, goal here, deal closes 100% of the time. That is how you map out a negotiation. Everyone needs to win 100%. One might have looked at that deal and said, oh shoot, it's a great deal, but it's negative cash flow. I can't lose money on this deal. I can't do 5% and this price. That's where a little bit of creativity comes into. All you have to ask is this question. This is the magic question. How would I make this deal cash flow and still say yes to everything that they want. Another deal, 38 units, is the first large deal that I bought seller financed, 15% down. They were not wanting to seller finance, but it was a deal that needed a lot of love. It wasn't conventionally financeable based on the condition of the building. It was on market at the same price for 12 or 13 years. I think it was actually 13, 13 years on market listed. Everyone could have bought it. No one had asked what they actually want, which was, hey, we would like to retire on $10,000 a month. The property should bring in $30,000 a month gross, cash flow about $12,000. That's what it should be doing. That being said, it wasn't. So how do you say yes to $10,000 a month when the property doesn't bring in $10,000 a month? Most people would say, oh, there's no deal here. We can't do it. We're out. Goodbye. All we did is, well, how could we? What if we had no payments for the first 6 months or very low payments for the first 6 months? Then the payments went up to $10,000 a month. We want most of that to be principal so it pays down the loan. So what if we said 4% interest and then just a custom amount of principal up to the $10,000 mark? Now we pay off our loans super fast. We're cashflow positive the entire time and they get their $10,000 a month and $2 million price, which is what they wanted. It's not that hard. You just have to get used to, how do I say yes to everything they want, everything I want? And instead of saying, oh, it doesn't fit, we would say, what would it need to fit and hit all of these? And then it's like a really basic puzzle. This is like 5th grade stuff. You think about it, you're like, well, okay, here's their pieces, here's my pieces. They don't seem to fit together conventionally. What is needed to make them fit together? When you find that thing, you get a yes every single time. You close a ton of deals. This is how I bought $35 million of real estate starting with no money. I'm not smarter than anyone else. I'm not a genius. If you watch this channel for any amount of time, most of my stuff's pretty simple because this isn't all that hard to do. It's real estate. It's been around for a while. If you can get used to asking yourself how, instead of looking at a deal and saying, hey, I don't get it, get comfortable enough analyzing a deal. So when you see it, you can go, okay, I understand what the pieces are. Now I just need to be the one person who solves the how. If you can do that, you're going to buy infinite real estate. You're going to be very, very wealthy. I've made millions of dollars doing this, and that's all I do. While other people say no, I just say, how would it work? And then I put in an offer, and lo and behold, they often get accepted. All right, that's an episode. That's negotiation. That's part 4 of the series: sales, marketing, negotiation. How do you actually book appointments? Nail the appointment, find a deal, and negotiate it well. Now you know. See you on the next episode.