In this video Christian Osgood presents Rule #28 of his 35‑rule real‑estate series: trust your gut. He explains that while quantitative analysis (ownership structure, cash‑flow, exit strategy) is essential, a persistent feeling that something is off should override green‑light numbers. Osgood outlines his standard analytical checklist—how to own the asset, how to never lose it, and whether the deal will be enjoyable—then shows how gut instincts surface when the deal feels wrong despite solid paperwork. He shares three concrete anecdotes: (1) a partnership with an experienced mentor who seemed promising on paper but repeatedly felt off, leading to a costly lease and eventual termination; (2) the acquisition of two triplexes that generated cash flow but added unwanted headaches and diverted attention from higher‑impact projects; (3) a capital partner who appeared aligned but later tried to redirect funds into a low‑return deal, causing friction and a costly buy‑out. Osgood differentiates true gut warnings from normal anxiety that new investors experience, urging listeners to develop the skill of recognizing the former. He advises acting on gut signals by walking away from deals, partners, or properties that feel wrong, while still confronting legitimate fear through education and experience. The video concludes with a reminder to apply this rule, references his online course (themultifamilystrategy.com), and invites viewers to like, subscribe, and watch future rule videos.
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Hey YouTube, it's Christian, and it's time for rule number 28 in our 35 rules of real estate. So this rule, again, pretty intuitive, but I wish I heard this way earlier in my career, which is trust your gut. There's going to be times when you have an amazing opportunity and it makes sense, but if you remember from earlier, just because it makes money doesn't mean that it makes sense. And sometimes an opportunity or a partnership or something that you're working on in real estate just feels wrong. I'm gonna give you a couple examples of when that's happened to us in this video and share how you can actually identify this and take action to correctly build your passive income, build your portfolio, and ultimately achieve your goals with less headache and less pain. So with trusting your gut, at the end of the day, there's a few things that we always do in analysis. We have our questions: how do we own it? How do we never lose it? We add, is this something we want to do that will be fun to that? And now you have a well-rounded, okay, what are our opportunities? What do we want to pursue? How do we actually obtain our goal? Now, when you come to your instincts, there's things that are tangible that you look at first. So for how do we own it? Well, do we have the relationship? Do we know the terms of the deal? Have we actually defined what the opportunity is and are we buying an asset or liability? Well, that's just math. And we cover that all up and down in our online course on themultifamilystrategy.com. And on a bunch of our videos. You can watch them for free on this channel. So we know how to do the math. You do two pieces of analysis when you buy a property. What is it doing day one? And that's just one set of spreadsheets. What is the cash flow? What is our potential upside? Where do we stand on day one? Then you go at the end of your, what we call the exit. Doesn't mean you're selling the property, but if you're going to sell, refinance, pay off the property, whatever that end date is when your existing financing ends, what is your plan there for how do you never lose it? Okay, so we answer those things. If you're all green lights but something feels wrong, I strongly encourage you to go with your gut. Now, one place where this really, really went wrong for Cody and I is we had an amazing opportunity with someone with a lot of business experience. On a partnership. They said they could do a whole lot of stuff for us, and they flew in out of state, and we met with them 7 or 8 times, and every time something felt off, but I couldn't put my finger on it. The things that the person brought were capital, industry experience. He had worked in several other businesses, so just general— we needed a business mentor. We hadn't had one to that point, and so that was something that we were actively looking for. And they had a lot of the same goals we did as far as expansion, learning how to develop. It all made sense on paper. We'd met again and again and again and laid out these visions. A couple little red flags where they would say something like, oh, that's a little weird, but nothing major, nothing that really indicated to me, uh-oh, this is going to be a problem, other than it just never felt right. Instead of just trusting my gut and saying no, we actually ended up leasing space from this individual. We ended up in a, in actually a fairly long-term, low-cost lease. They promised they'd do a lot of other stuff in exchange for that lease. Because we built that relationship on trust, we just did what we said we would do. The other party did not. Then they asked for more money when they weren't making enough on the lease. Even though they hadn't delivered. Long drawn-out process that I actually had to pay to eliminate. Like, to end the relationship, they asked for even more money to end the partnership that they delivered nothing on. That was really painful. So even though it made sense on paper and we did our due diligence and they had tons of experience and same goals, everything aligned, it didn't feel right. So if you're getting into a partnership and doesn't feel right, partnerships are the easiest way to burnout. Partnerships can be an absolute disaster. And if you're tied, especially something like 50/50, 33/33/33, like where they have a big chunk of the business, if something feels wrong, it is not going to get better over time. The things that feel wrong are going to feel more and more wrong the longer you let them take time. So that is one real-world example. Another deal was, uh, there's a deal that we bought a while back and we didn't really need to buy these. There's two triplexes and they make money and they make sense and they make money to this day. In fact, we're renovating one, making a one-bedroom a two-bedroom, and they're just going to be, I mean, fantastic. It's cash flowing, it's on long-term fixed-rate debt at low interest, very, very low mortgage payments, getting the top of market income. On paper, it's a great deal. However, at the time, I I was in the 80s for units. Cody was over 100 units. We bought these properties. They didn't really change anything for us. There were some minor headaches with them. I regret buying them. The paper on it was, well, we hadn't done a deal in a few months. We wanted to remind everyone, hey, we can actually do this anytime creatively financed. So on a marketing and branding standpoint, it was good to show people like, hey, it is possible. We can do this anytime in any market. We're taking a little break, but just to remind everyone, We can still do this. They do make money. They're great places to live. They're even on streets we already own. It's just, it's a little bit more headache. They don't get the amount of love they deserve, and I just, I don't pay attention to them. And I don't want to own stuff that I don't really care about. I want every single property in our portfolio to get the attention it deserves, because at the end of the day, every property you have is someone else's home. I want those to have the maximum amount of attention so the people who live there have the best possible living conditions. Those are units that don't get as much attention as I would like, and I'm not as excited to allocate money towards those as I am other projects like our 38-plex or our 12-plex or, uh, the Robin Hood Village Resort, which is a huge one. Um, they're big, exciting projects. So when we have excess money, it tends to flow towards the projects that excite me. So The gut instinct when we first signed those was, I don't know that we need to do this, but it makes sense. It's good for the brand. Just because it's a good idea, again, you want to go with what you feel. At the end of the day, your gut is going to tell you what to do. One other actual, just real-world example, we have had capital partners, and I will not name names or dollar amounts or anything to indicate who it is, but early on, I've had a capital partner that I felt weird about, my wife felt weird about, But our goals aligned perfectly. They were friends of friends and we're like, okay, this helps us close the deal. They look great on paper. They're an experienced investor, experienced operator, and let's do the deal with them. I just had a weird feeling about the capital partner. So the money came in and lo and behold, several months later, they wanted to take the money and do a totally different deal that made way less money, made absolutely no sense, and they urgently needed the money now. That is not a fun place to be. Now, still friends with that person, fantastic individual. That being said, absolutely the wrong person to partner with as a capital partner. So just going through the list of examples that we've had in the last year, Bad gut feeling about one of the partners ended up being a terribly painful and expensive experience. A bad feeling about a capital partner, it was inconvenient. We were able to cash them out. We brought in a new investor that basically just replaced them in the deal. It wasn't that hard, but it was a painful lesson that if you don't communicate well enough with the other party and your goals don't align correctly, if you don't identify that, you're going to pay for it. It felt wrong, and it was. We got a little bit too excited about closing the deal. And then on a property, if you buy properties that you don't feel right about, there's probably a reason for that. I don't have a good explanation of how your, uh, how your gut knows something that your brain doesn't, but it seems to consistently be true. If you want to play this game at the highest level, there are more opportunities that you can possibly take down. If something doesn't feel right, Just find another opportunity. Last point that we're going to make today. I want you to move forward even when, especially when you're getting started, even when it feels scary. That gut feeling of, oh, I don't feel right about this is not the same as this is new and scary and I have anxiety. You can have anxiety and you should have anxiety doing your first few deals. It is brand new. New experiences are scary. Don't listen to this and say, oh, my gut just keeps telling me not to do deals. If you're not buying anything, you have a problem of overcoming your own fear. If you are doing this and you just have a feeling you can't explain, that is, hey, this feels off, or I don't trust this individual, that's where you don't do it. So don't let it hold you back. But also be able to identify that feeling. The more deals you do, the more opportunities you take down, the more you're going to be able to tell the difference between what is just fear and what is I just don't feel that this is right. Act on one, not the other, and you should do just fine. So hope you found this helpful. I know this sounds intuitive, but I really wish someone explained this to me when I got started because I would have saved capital partners strategic partners, and property acquisitions. I would have saved problems on all 3 of those fronts in the last 12 months had I applied this myself. So it's one of our rules. Apply it to your business and you'll get farther. Like and subscribe. See you guys next Monday for our Rules of Real Estate.
