Multifamily Strategy is live! Caleb and Christian from TX!

Apparently we're going horizontally and not vertically.

You mean, yeah, we're the other way.

Flip that. Yeah, flip that. We're live, so mistakes are going to be made. Fortunately everyone's loading in right now, so people only see that on the recap. Guys, we're in the Texas house. If it's a little echoey, we're in my theater room. I'm still building the studio that's going to be decked out, but you're probably gonna have to wait, I guess, probably a month or so before you see that. But we're in, we're moved, I'm in Texas. I'll be back in Washington for the last time next week., and then officially on the 26th, I'm in Texas.

You're here. Ah, we did that. I've been here, dude. Isn't it weird?

It's like we're actually like finally in the same state.

Yeah, for what, 2 and a half, 3 years?

We have purchased— let me think about this— we have purchased how many units together? We purchased, purchased 51 together. Oh, we own another 28.

Yeah, 79 total, and then buying some more this week.

Yeah, let's talk about that deal. So, uh, if you're trying to buy real estate, I want to show you just how easy it is. Caleb found this deal, uh, just like he did, um, deal. So 51 units, Caleb was when he found it. We got together and funded it. We run them together. He found this deal, 44 units, Stephenville, Texas. Notice that's the same town that we already bought 51 units in. So we're going to be sitting here at 95 units going under contract tomorrow, tomorrow Sunday, so probably Monday. Going on, going under contract on Monday for 44 more units in Stephenville, Texas. Talk to us a little bit about that deal. That one's unique.

Yeah, this is the first on-market deal we've actually done in a while. This is unique due to the fact it's a low-income housing tax credit deal. The icon for this is LIHTC. LIHTC is what you're mostly going to hear. And this is super unique. Took us about, what would you say, about 3 months of going back and forth in deliberation on how to actually structure this so we could get approved by the Texas government to provide low-income housing tax credits.

For the type of LLC that we're putting together and the type of entity that needs to purchase it, uh, it's called a CHDO. The prior owners need to hold it for at least 5 years, so— and they have seized it for a lot more than that, which is good, so qualifies. You then have to partner with a nonprofit group. They only have to own 1% of the deal, but they actually manage and document all of the low-income things. So they're actually going to take into account everyone's income, make sure that's in compliance, which is really cool. They actually do so for a flat fee. So really, We have 99% of the equity. We own basically everything. We control everything. We get all of the cash flow. We are a for-profit. We're partnered with a nonprofit to offer lower-income housing. I think this is a fantastic program. The trade-off, we get a little benefit on the taxes. What does, uh, what does the government give us exactly?

Uh, we get half of our property taxes wiped, but the consequence for that is when you partner with— it's called a CHDO, C-H-D-O— you have to pay them a flat fee like Christian mentioned. This flat fee is not nothing. You're at least looking at We've gotten quoted $20,000 as a bare minimum. The nice thing is, as you buy bigger deals like this, that number doesn't exactly change because they're still doing the same amount of work, maybe a little bit more. So we're buying a 44-unit. If you buy a 150-unit LIHTC deal, you're not going to be paying much more than that. So that's when you— the bigger you buy with these things, the more revenue and the more split you're going to see, which is fantastic.

So again, in Texas, they're called a CHDO or a chodo, who is My favorite hobbit.

Community Housing Development Organization.

Chodo. Don't wear the ring. I'm really excited about this deal. It is one of the— oh, by one of the, I mean, it will be the nicest building in my portfolio or Caleb's portfolio.

I think it'll be the newest building we own. This or Trinity are going to be— I think they might be built in the same year.

Yeah, I think they're both 2003.

Yeah, 2003, 2004. They're the same age as I am.

That's crazy. But really big buildings, all single level but tall buildings, gorgeous paved parking, community center, the whole nine.

This is the first building I'm buying with the community center and leasing office on site. I think it actually is a fitness center on site too.

So this is the first thing I'm buying with any of that, which isn't half bad. Yeah. By the way, huge apology for not going live Wednesday. I always do Whiteboard Wednesday. This week I moved to Texas. It took us an extra 2 days to set up internet, so I have no service here, no Wi-Fi, nothing until very recently. So thanks guys for hanging in there. Um, let's see, I got a question here from Danny. I'm wearing my daddy shirt. Yes, I have achieved all of my original goals as far as, uh, retired the wife built the dream house. We're in the, uh, we're in the movie theater room right now. See you guys around.

I'll give you guys a quick, uh, picking up the phone or picking up the stand?

Yeah, I'm just going to pick up the stand here.

Yeah, I think the stand's probably the way to go. Just pick up—

I'll give you a little 360 here. We're in not the hugest of all rooms, but we're in my studio room house, which I'm very excited— not studio, sorry, the theater room. Had a nice background for this, building the studio as we speak. Uh, the kiddo managed to stay in there an extra day or few days, which is good. Hopefully. Yeah, that's the hope. So, uh, kid almost came, however he's hanging out in there. So not a dad yet, but I am wearing my shirt. Uh, it's actually someone from Multifamily Strategy got me this shirt. So, uh, you know, one of the mentees sent this to me, which I really appreciate. So I wear it all the time. Well, oversized daddy shirt. Uh, let's see here, what's the last one? Oh, I don't know, whenever we go— rules for the comments on YouTube: if you go vertically, you get a different audience than if you go horizontally.

Really?

Yeah, I get weirder comments every time I go this direction. Phenomenal. Uh, and we got the real weirdo in here, All Nighter Hider. Hey man, it's good to see you. All Nighter is in basically everyone. We can't start— that's the rule.

Being a limited participant, All Nighter Hider is one of the people I know.

So things to look for— I'm, by the way, I'm gonna go live on Instagram a little bit later here. Um, if you guys want to see a little bit more of the house, I'll choose a different room. You guys can see something just the You know, other than a black wall, we're in Texas. We're setting some new goals because I'm just about to knock out all of mine. All I've started a family, retired the wife, built the dream house. This thing is huge. When we are doing this, things to look forward to. Yes, we're going to well over 100 units in Texas. We're also taking out a 72-unit under a similar program. And by similar, I mean the same program. So we're going to be at like 200-ish units in Texas here pretty darn fast.

Under contract, then probably hopefully the next 2 weeks on all that.

I've officially sold Kensho Property Management. That transaction finalized on the 15th, um, so I don't own that property management company anymore. However, I do own a Texas property management company with this guy right here, Apex Asset Management. Apex Asset Management. We are so excited for this venture. I've noticed that there is a huge lack of the quality that I'm used to offering of property management in Texas, which is what you found in Central Washington at the same time you went there too. Absolutely. I don't know what's really cool is that the group that actually picked this up is a group who is more— I actually think they're going to take my old property management company to another level. They couldn't have built it from the ground up the way I did. They didn't have the resources to go ground up, but for them to take their existing systems and take my property management company, they're— Yakima, which is a county adjacent to Grant County, they're actually going to make my PM better. They're offering more services, even higher level of accounting. I'm really excited for that. That opens up the doors for me to focus my time on Apex, to be the best manager in Texas possible, and to build our portfolio down here.

Yeah, if you have anything from— gosh, what am I gonna say— north of Waco, west to Abilene, anywhere in the west side of Metroplex, choose to text or call, be happy to chat more about everything we offer.

Just nothing south of Waco, um, and nothing too far like Denton, Texas, which is the tip of where we're at.

It didn't be a little far, and then nothing crazy like You've got a house in the boonies in a town that has 10 people in it, we're probably gonna pass on that.

Yes. So, uh, that's what to look forward to though. There's gonna be a whole lot more. Uh, Danny will be sharing on Instagram all of the general, like, home design stuff that we did because she loves it. She loves that piece and we're having a blast. So we'll share the actual personal story for what it looks like to actually hit the goal through real estate and how we did that. As always, the channel content is going to be the same. I'm just going to have a bigger, nicer studio with more equipment, more space, better backgrounds.

I'll be in studio more often as well.

We'll see you more. Because we're rocking projects together now. Uh, really, really excited for the adventure, excited to share it with you all. So wanted to bring you guys a quick live as an apology for not going live this Wednesday, uh, but also to answer any questions you have here. So if you guys have any questions in the chat, ask them now. Otherwise, we'll go live on Instagram in a little bit. We'll call that it for streaming. I'll be back in Washington for a week and then a permanent resident of the great state of Texas, which I am loving.

Everybody come to the promised land, state of Texas.

We're here. Yeah, all nighter said, uh, congrats on the sale. Thank you so much. By the way, seller financed, so So you guys may know I'm a big fan of creative finance. I've never actually been on the selling side. The company I sold for $3 million, $250,000, they put $110,000 down. I bought out my two minority partners. I have two 10% partners. I'm buying them out in cash. So they're getting cashed out. I'll net about $45,000, $50,000 out of the sale now. And then they pay off $50,000 at the end of every year for the next three years. So I basically just got a $50,000 income for four years.

Could be worse.

Could be worse. I got paid $5,000 a month while I ran that company, and I ran it for 2 years, so not a ton of money, but, uh, was paid a salary to run the company and then was paid about an equal amount to not run the company.

Yeah, a little over $4,000 right there.

Yeah, it's a little more than $50,000 because I also have like $500-ish a month payments for their interest. So I think I get paid about the same for 4 years as I did for the 2 years I ran the company. Not a horrible deal.

Let's get that last comment and then we'll wrap this up.

Congratulations on the first kid. Oh, I'm so excited for it. Uh, it'd be the best thing you ever experienced. I am really, really, really excited. I'm excited to meet the little dude. He's gonna be awesome. And yeah, thank you for all the congratulations. All Nighter does have a question here. Now that you have seller experience, do you think you learned a lot more or pretty much what you expected? It was about what I expected. In fact, the person who bought the company from me, his name was Matt, he owns a lending company. I've actually worked with him several times before. So going through the process, I've done this paperwork so many times and I've bought companies on creative terms, not just real estate. So buying real estate, buying companies, buying partners in and out, it was pretty similar to what I expected. It is, it is different when you get lump sums of cash going into your account instead of out as you're doing the acquisition phase. We do that more, doing a little bit of, doing a little bit of disposition. Caleb, to answer your question, yes, we just see a little bit more. But 3 years in, I sold the systems that I use to run my existing portfolio. I was able to bring on a few extra clients, get the value of that up to about $300 $200,000, sold at a little discount for $250,000. I found a buyer who's going to actually do a better job managing my portfolio, I think, than I would be able to from Texas. So I put my portfolio in great hands, I secured my systems, I allowed myself to expand, and I got paid to do it. So if you're ever looking at doing these things, I just realized that as you're buying real estate, you may accidentally build a business that's actually worth something. I mean, $250,000, I mean, that's like— that's not nothing. That, that's not nothing. That's, that's like a a couple of really good single-family flips, maybe 2 or 3 really great single-family flips, except I needed to do what I did. I just sold the systems that I had to build. It's kind of a fun story. Anyone can do this. It's a huge bonus. Well, now a lot of construction experience relates to other similar trades too. Yeah, it's funny how these things come together. You just, you get pieces as you play business, which is why I'm just like, hey, if you're going to go for this, just go for it all the way. Caleb, Caleb actually has a really good example of creating a company out of just like doing things.

Yeah, Dango Sales literally was just doing DoorDash. Basically, you just needed more people on just sales. People needed some sales. And so I just went as a contractor making $500 a month off DoorDash, then $500 a month or first month almost make 5 figures. Decided we're not going to go back to DoorDash ever again and we're going to run with the idea. So that's kind of— I think people, when they get like the idea of like, I'm going to create a business, it's like, okay, they have all these images on a whiteboard. It's like, Man, just do what you're good at. You kind of almost stumble into it, and then you kind of just go from there. Same thing with Apex. We're actually looking at that. The whole reason our property management company came to fruition is it's— who else in town could manage this? Um, nobody up to our standards, so we're just gonna go ahead and do it ourselves.

The biggest property man— I'm not gonna throw anyone on the bus, but the biggest property manager in the town that we are buying in, by far the biggest— I mean, this is like the person everyone goes to— they were telling us on the building we bought, because they managed that building, that it was going to be impossible to get rents of $650 or higher. Like, they're like, you can't do it.

I'll share the good news on that. And after they told us that, we just signed two leases last week at $900.

So they were renting at $450.

And this is a big reason with any property management company you work with, they're going to tell you something and that might not always be true. And it's always important, like, for us on our own company, we're going to test the waters and we're going to push the needle and see what we can get to. And if we need to come down, our expectations are already lower. But now the deal's already proven it's going to do more than we even than we thought, and this is already on pace to be our best deal ever.

Absolutely. Uh, Andrew asked a question about the mentorship, speaking of, because you started Daygo Sales. I actually had a couple mentees. I have this available again, by the way, but there's an affiliate system where it's like, hey, if you have buddies you want to join, I just pay you 20%, which is awesome. Caleb took that and ran with it. He's like, hey, what if I just brought in like 25 people? And then he did, and I wrote him a big check. And he's like, what if I just do this all the time?

And what if I never DoorDash again?

So instead of DoorDashing, Caleb just brought people into the community and he built a whole business out of it. He does it for— you have like 5 or 6 other major clients now.

Yeah, like that up right now.

Caleb and I actually partnered on that company, so now we actually work on that together. We take all the systems from Multifamily Strategy, and once again, all of the systems have just become their own company.

I think that's something that's super underrated that I never understood getting into business was how important systems are. Even now we have conversations all the time. Christian very much, hey, let's slow down, Caleb. I'm like, we're just going to sprint a million yards ahead and figure it out. And it's adding that base, adding that foundation, adding the systems is what's going to allow you to scale in the future. If we didn't add the systems we're adding right now, or we've added the last few months, we wouldn't be able to go where we're going. We wouldn't be able to take down this 44 unit, this 72 unit. You have to go and drill your foundation so then you can build something incredible. This is something I did not understand whatsoever until we had a few heart-to-heart conversations about this where there's a lot of frustration, like, why aren't we going faster? Why are we going faster? It in fact takes time.

It does take time. Andrew has the question here. Is there a way to buy these like a starter program for a smaller amount before going into the mentorship program? Yes. The course is designed to go with the mentorship. I'm not a big solo course, guys. I think there's a million people out there. Course is like, hey, this is my systems. That being said, it's a 250-video course. We put a ton into it. I'm releasing new videos all the time.

I was going to say, I actively firsthand get the experience of you and Miss Dani out there working on adding stuff to this all the time.

Yes, the video course is fantastic. It's $2,000. If you want to upgrade to the mentorship later, you just pay the— which is $3,000. So you just upgrade from one or the other. So if you want to get started, you want to learn the basics, do that. It is designed to go with the mentorship. So have the intention of joining the community because once you're in there, you're actually engaged, you're in community, you're like— I'm there 3 times a week helping coach you. You move a lot faster when you do the mentorship. If you're trying to get started or some money thing, starting the course is fine. If it's just the money thing, reach out to me on Instagram @ChristianOsgood. If it's just a, like, let's just set up a payment plan thing, or like, hey, I need to spread this out over time, just let me know. I'm happy to work with you. Turns out I'm a creative finance guy. If we need to get a little creative, let's just get that done. I do not want anyone held back because of money, because that, like, I got stuck on that for 8 years.

You don't— done's better than perfect, baby.

Yep. So we'll do the best that we can there. So Andrew, if that's something that you want to do, or you have questions, or we need to work together, just hit me up on Instagram @ChristianOsgood. I will have a conversation with you there. And that goes for everyone.

And then, yeah, Haider, completely agree. Everybody— the big people in the game talk about this a lot.

Yeah, the business— really understanding business functionality and takes time. Corporate structure, it does take time. It's hard. But having the basis of like what things need to be their own silo, what can be rolled into another thing, how to— the actual architecture of your business, just like an architecture of a real estate deal. When you design it correctly, it's actually worth quite a lot. If there's one skill set to really develop outside of, I would say, sales and marketing, which all businesses run on— outside of sales and marketing skills, I think the biggest skill that any investor, business owner can do is like, okay, let's learn how business works. How does the accounting work? How employment work, if you can build your business skills, you can make a ton of money, even sometimes on accident. Like the quarter million that I made now, I never planned to sell this company, um, but boy, I'll tell you, if you're moving into a house and having a kid, extra quarter million out of nowhere, really helpful.

Less pieces the better at that time. Let's finish up, we got a question, Luke Divine, and then we'll wrap on Luke and we'll go to Instagram.

Um, would you— a property, I assume it's going to be buy— would you buy a property, uh, $650K with, uh, uh, $170K down, 4.5% interest only, 10-year with no inspection.

These are hilarious just because every deal is dependent. Um, with no inspection, I would not.

I'm gonna throw—

unless you really— it depends, right? Like, when is it built? If it was built yesterday, I'd still not do without an inspection.

Must have an inspection. Now, now, with no inspection contingency, that's what I was talking— I can look at that.

I can look at like, okay, well, I'm still gonna inspect it, but if they're—

the contingency is the important part there. Yeah, it depends on how much the earnest money is too. I would like to see a contingency on everything, but if it's a deal that looks amazing and you really believe in it, um, I would do it without an inspection contingency if I had to. But again, that'd be kind of a weird request because I'm like, well, what would you be hiding where I can't inspect the building I'm buying? That's not normal. So, um, buying something without inspecting it, I would never do that for, for any reason.

I wouldn't, I wouldn't take a free building because you just never know what's wrong. Let's wrap up on Michael's question.

Michael, whatever, I'm not sure how to pronounce that. Michael, if you have— if you get a property under contract and worst-case scenario you aren't able to find funding, what happens? Just lose the property? I would—

I'll actually take this one. I think a big misunderstanding too with people getting started in real estate is how easy it is to actually find the money. We've been in pinches with less than 12 hours to go and we found hundreds of thousands of dollars. And I'm not saying that's the case for everybody, not gonna say you're gonna pull that out, I'm not gonna say you're gonna get in situation. But it is truly the easiest part of the process. If you find a good deal, the funding is going to come. I mean, a multifamily strategy—

how many people have you seen miss out on deals? It's never happened. Um, everyone who has found a deal— like, deals have fallen out of contract. Often it's in the inspection phase or it's in somewhere due diligence, like, hey, uh, the numbers aren't actually panning out the way that we were originally told. That happens. But there's never been a deal where someone's like, hey, we want to move forward and they haven't closed because of funding. It's never happened. In 3 years, no one has ever failed to fund a deal that they wanted to close. That being said, yes, if you failed to find the funding, uh, you would fail your part of the contract. You just wouldn't get the property. Typically, you want to read this because I've actually seen some really sneaky ones. There are buyer's and seller's remedy. You're to perform—

I was thinking the next thing. This is exactly where I was going to go.

So as a buyer, most typically you can sue for specific performance.. It does take a little bit over a year in most cases. But if the seller just doesn't sign— and I've had this happen before, they actually held up $130,000 of earnest money— hey, we actually just don't want to sell anymore, but we do want to keep the earnest money. I had to go to court for over a year to get the earnest money back, and even then we settled for $100,000. They got to keep $30,000 because I needed $100,000 for another project and it was just worth it to stop paying legal fees. We lost $30,000 even though we had every legal right to the money back. Title would not release it without sign-off of all parties. So they stole $30,000. That's happened. However, I have seen contracts where there is a specific performance requirement to the buyer. Now, how you can actually enforce forcing a buyer to buy a deal, especially if you don't qualify, you don't have the cash, I don't know. I haven't gone through that because if I see that in the contract, I wipe that immediately. I don't want to be sued to be forced to buy a property I don't even know what that would look like in damages. No idea.

I think we wrap up there. Let's go to Instagram.

Yep. So, uh, we're going to continue the conversation on Instagram here shortly. Um, I have about 5 minutes out. I'm gonna make a cup of coffee and I'll see you guys in another room of my house. I'll show you guys, uh, some of the living—

Israel, come to Instagram. We'll ask—

we'll answer the question there.

Yep.

I'll see you guys on Instagram at Christian Osgood. I'll, uh, I'll join you on soon.