In this YouTube episode Christian Osgood and Cody walk viewers through a systematic approach to achieving financial freedom through real‑estate investing. They begin by urging investors to "quantify your why"—assigning a concrete monthly income target that reflects the lifestyle they desire. Using a conservative 6% annual return assumption, they demonstrate how a $10,000 per month cash‑flow goal translates to a $2 million equity target. The discussion then shifts to acquisition tactics: buying cash‑flowing properties from day one, leveraging creative financing and seller‑finance deals to avoid traditional qualification hurdles, and preferring long‑term, balloon‑style debt over short‑term hard‑money loans. They explain how equity grows over time via principal paydown and property appreciation, especially in inflationary environments. A practical metric for when to start "rolling down" debt is presented—once gross passive income exceeds the target by a modest margin (e.g., $12‑13 k for a $10 k goal). They caution about leverage risk, recommend keeping leverage around 50 % and using long‑term debt to avoid frequent refinancing. Finally, they introduce a stair‑step portfolio growth model: achieve an initial income goal, secure that position, then use the equity and cash flow to fund the next tier, treating each tier like a saved checkpoint in a video game. The overall message is a disciplined, numbers‑driven pathway to building an 8‑figure real‑estate portfolio that delivers sustainable passive income.
Chapters
Hey YouTube, welcome back. I'm Christian, this is Cody, and today we are going to talk about the importance of quantifying your why. If you have a reason that you are going through real estate, either you want to retire your parents, retire your wife, you want a better life, more time, whatever your reason is, there's a certain cost that comes with owning your time. And when you are starting your journey What we consistently find is a lot of people haven't quantified that number yet. They haven't put a specific monthly cost to what does it actually cost to own my time and do what I want to do. Now, this doesn't mean this is my break-even point, or this is exactly what I need to do to cover my current cost. You need to figure out the lifestyle that you want to live. What is that standard? What is your target? And what are your goals? When you've done this You need to assign a monthly number to that. So we're going to go into a couple of examples of how you do this, but if you're looking for what is my absolute first step in investing in real estate before you even buy the property, this is it.
You need to build out your financial target because we can quantify numbers between your goals and a piece of real estate based on what it produces. Now, while it's not the end goal to just go get a bunch of money to have money, We do want to quantify our goals as we want to be able to do this. And in order to afford that opportunity or that lifestyle or that generosity level, we do have to build up the finances on the other side. And a lot of people don't like to talk about that, but that's why we're here, because if you don't talk about it, you're going to have issues with it. And when it comes to real estate, it comes to investing into just opportunities, you're typically going to get a dividend. It's typically a percentage return. Now, we're not talking about those overnight meme stocks where you can get 400% to 500% plus in a day. That's not our goal. We want consistent long-term cash flow. And typically on a real estate deal, if you're being conservative in a good market, you can make about 6% on your money. And so the way that we want to quantify this and the way that we recommend you quantify it is if you're looking to make $10,000 a month, Granted, all your returns are on an annual basis. We're going to multiply out the $10,000 a month times the amount of months in every year times 12. You're going to have $120,000. The way that we figure out how much real estate we have to own, how much equity we have to have in a deal, we're going to take the amount we want to make every year, the dividend, divide it by the percentage return you think you're going to make, in this case 6%. And if you take $120,000 divided by 6%, you're going to have $2 million. That you have to build to. Now, there's going to be people out there that say, oh, that's not reasonable or that's not realistic. I'm not here to be reasonable or realistic. I'm here to help you hit your goals. So if your goal is $10,000 a month, we need to find a way to get you to $2 million in equity paying you 6%. And that comes back to our two buying criteria. How do you buy it? How do you never lose it? This is why we love creative finance. You don't have to qualify for the traditional programs if you go build relationships with people, we just have to get you to that number paying you 6% and you've made it.
Now we're not trying to go super deep in a math video because there's a lot of factors that go into how do you build that $2 million. There's going to be debt paydown, so over time, assuming that you have some sort of amortization of your loan, there's some portion going to the principal paydown, they're going to pay down over time, so time will build your equity. In addition, traditionally in the real estate market, values go up. Now it fluctuates in the cycle, but that is why we hold for the long term. Over the long term, values always go up. In a situation like we have today, we're in very high inflation right now, about 8.5%. Now if you're watching this in the future, it may be a different number, but inflation devalues the dollar, which raises the price of other things. Your money multiplies while you wait in real estate. Your goal is to buy cash-flowing real estate that cash flows day one so that you can get paid to wait. That $2 million will come as long as you are still buying real estate on the two rules. Once you choose location, how do I buy it? How do I never lose it? If you have that cash flow to hold that real estate, that $2 million will come. We're not going to get, again, crazy deep into how that works, but the basic 101 level Debt paydown and appreciation over time will get you there as long as you are playing the game and sticking to your principles.
And again, the way to calculate this, you can do this with any number. If you want to make $1,200 a year or $12,000 a year, $1.2 million a year, you just have to take the dividends you want to get, divide it out by the return you expect to get, and that's a good way to project what you're looking to actually go achieve and accomplish.. And one of the quickest ways, and I learned this from one of my very first mentors, the quickest way to be a millionaire is to borrow $1 million and let your tenants pay it off for you. You just have to figure out, how do I buy a piece of real estate that will amortize over time, meaning that it'll pay itself off, it's going to cash flow in the meantime and build up reserves so that you don't have to keep feeding it every month. If you want to go get to $10 million, borrow $10 million on cash flowing real estate, make sure that you have an equity position so you don't get pinched. And pay it off. That is what we've done. That's how we built our 8-figure portfolio. We bought, and now we're paying it off.
Now, a sensible question at this point is, how much is enough? When do I know that I have acquired enough real estate to start rolling down? And the easiest metric is when you have hit that income that you want passively in gross income. That is not your net cash flow day one. And you need to be a little bit north of that because you are going to have continued operating expenses. You're still going to have taxes, you're still going to have insurance. But say you're trying to get to $10,000 a month. If you can get that passive income to $12,000, $13,000, you're just a little bit north of that on the gross income number. That is a good time to start rolling down the debt. If that's all you're trying to do, build to that and then stabilize it. Debt is a tool, is an instrument that we use Debt always carries risk, no matter how small that risk may be. If you have 50% leverage, it is very unlikely that your property is going to drop below 50%. Rents probably aren't going to pay— or sorry, pull back 50%. That being said, anything could happen. If you want to secure your position, at some point it may make sense when you have that gross income that you need eliminate the debt. With the debt payment gone, you've made it. You own the real estate, you have the passive income, you have hit your goal.
And that's one reason we're paying off our stuff now. We have built something that allows us to— once it's paid off, we, we're comfortable, we have the foundation, then we'll leverage again. It is a two-sided blade, right? You have to be very careful leveraging. Now in the beginning, if you're going out and doing seller finance deals like I did, my thought was Well, if I lose it, I'm just going to have some more skills. I'll have a better knowledge base and I'll start over again. Once you actually go out and you acquire a bunch of debt, granted, I recommend you do long-term debt. If you do a whole bunch of short-term debt, Dave Ramsey did some 90-day loans. It's probably not the smartest business model because if you have to keep coming up with new money every 90 days or even every year with hard money, you can get pinched. And I've been pinched. I've done the whole 9 to 12 month debt piece, and it's not the best long-term model. So if you're going to play the game and you're going to leverage up to go hit your target of $2 million and then you pay it off later, make sure that you're prioritizing having long-term balloons. And think of a balloon as an early payment. Your debt's going to pop, and if you don't have money for it, you're in trouble. So you want long-term debts. Make sure that they cash flow in great locations and through that, you're able to project for long term, get to your number, and then pay it off.
Now, we're big on not playing defense until you've done enough offense. So you need to get there on that gross number before you start worrying about how am I rolling down the debt, how are we securing everything. Make it there first, get that income. Don't sacrifice on principles. Buy cash flowing deals. Don't buy a bad deal to get enough real estate. Buy on the right principles. Acquire the real estate that you need, the passive income that you need to hit your goal. And a good illustration is imagine this like stair steps. So for our first goal, say Cody and I were going for $10,000 a month each. We're gonna get— we're partnered on a lot, so in a joint portfolio we need $20,000 a month. We start paying that first block down. There's stair 1. Once we've hit that, we're going to hit a new goal. We're going to decide where are we going next. As we pay down that first stair and start playing a little defense there, we're already starting to lever up on the next portion. We'll keep using debt, but in each step we're going to continue to secure that step. So if the worst happens, we only go back to the last place we were. Kind of like a video game, you're going to save your spot somewhere along the way. When you get further enough, save, then continue.
And I took that away from Dion McNeely, he doesn't re-leverage assets that he owns. And if you haven't checked out his channel, you should. Dion is phenomenal. But his philosophy there is, I'm not going to re-leverage and risk something I've already built. If I want new leverage to the portfolio, I'm going to just get new leverage through acquisitions. And that's something that we believe in too. We can pull out a little bit of money on real estate in the form of a loan to improve it, but we're not just going to pull cash out just to pull cash out. We do want to pay down the properties over time. And introduce new debt that is non-contingent on the current real estate that we own. But that is it for today. So if you have questions, put them in the comments below. We'll see you on next week's Whiteboard Wednesday, and have a great weekend.
