Christian OsgoodCEO, Multifamily Strategy · CEO at Multifamily Strategy

Should You Buy From Distressed Sellers?!

14 Aug 2023 · 2 min

Watch on YouTube

2:24

In this short video, Cody challenges the common advice that seller‑financed deals should be sourced from distressed single‑family homeowners. He argues that the most reliable seller‑financing opportunities come from cash‑rich owners of well‑maintained, mid‑size multifamily properties (typically 20‑60 units). These “mom‑and‑pop” owners have pride of ownership, disposable cash, and are more willing to finance because they are not competing with institutions and their assets are in good condition. Cody outlines how to identify such owners—look for properties with tidy lawns and good upkeep—as an indicator of financial health. He then advises a simple outreach script: call the owner, express your desire to learn from their experience, and discuss financing options. Finally, he briefly touches on portfolio‑building strategy, suggesting that acquiring several 20‑unit buildings is a realistic path to reaching a 100‑unit portfolio. The video ends with a call to subscribe and a link to a free 10‑minute course on the topic.

Chapters

You're not looking for the beat-up houses and you're not looking for the overgrown yards. Today we're talking about who you actually buy from using seller financing. Welcome back to the channel. My name's Cody and we are talking about who the heck you are talking with because on the internet everyone's saying, well, you only buy seller finance deals from distressed sellers. It's actually quite the opposite. The people that you're going to buy from that are using seller financing That's going to be with people that typically own their real estate in cash. Meaning you're not looking for that one-off house, the single-family rental owner that has the one property that's not doing so well, overgrown lawns. That's been the script for the last decade, and that's not what you're looking for. What you're looking for are the mid-sized apartment buildings, the mom-and-pop owners, even just the entry-level business people that have been in the game for a while. You're looking for the folks that maintain their properties. There's pride of ownership. Because those are the people that have the most money to actually maintain their assets. You're not looking for the beat-up properties. So when it comes down to actually building a portfolio, we look at it as if you're going to get to 100 units, quickest way to do it is buy 100 units. But realistically, you'll probably buy 5 20-unit properties. What you're looking for are people that own those type of properties, the best maintained, the best lawns. That is an indication that they have disposable cash from their assets to actually keep it up. We found that to be consistently true, and it's completely the opposite of what everyone online is saying. You're not looking for the beat-up houses, and you're not looking for the overgrown yards. Once you've established who these people are, you call them up, let them know you're trying to get into the game, and then we go through our conversation and say, "I'm trying to figure out how to do what you did." But the people that can help you do this are the people that have done what you want to do, and they're the people that own the best properties in the 20 to 60 unit range. You're not competing with the institutions. And you're not buying from the one-off homeowners that have their beat-up homes because they're probably all beat up. They don't have the disposable cash. So flip the script in your mind, flip what you're thinking about as far as where you're looking for assets, because the nicer the asset, the more money they have, the more money they have, the more likely they are to be able to sell or finance for you. Short video today, but that is what you need to do to find more of these deals. Look for the best assets with the best lawns. Best-kept, and that is where you're going to find the right owners to be talking with to buy, sell, or find deals. Make sure to hit the subscribe button, and if you want a free course on how to do all this, link below. It's 10 minutes long. Check it out.