Christian Osgood left his sales job in 2020 to become a full-time real estate investor. He bought a 38-unit building for $2 million using seller financing, raised the rest with four investor calls, and used the cash-out to fund $700k in renovations. In 2.5 years, he made over $1 million in profit.
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We did this over and over and over again, and that's how we were able to escape Christian's 9-to-5.
Here's how we escaped the 9-to-5. We do what we want to do in the middle of the workday. Right now it's about noon, and here we are on a Wednesday.
Welcome back to the channel. My name is Cody, this is Christian, and we are talking about how we escaped the 9-to-5. Now, how I did it— I never started the 9-to-5, so I had nothing to escape. But Christian, how the heck did you do this thing?
So I actually used to work for the CoStar Group and various other sales jobs for about 8 years. Now, I always wanted to invest in real estate, always wanted to be an entrepreneur. However, I never had the know-how or the confidence to get started. What ended up happening was, for me, 2020 happened, the entire world shut down, and that woke me up to I'm not doing what I want to do. I spent a little bit of time thinking, okay, what would it look like to get into rentals? I bought one conventional property, that standard bank loan, left my job. By the way, it was a duplex, not nearly enough money to quit your job on, and, um, committed to I'm going to become an investor. The next we did was a seller-financed 38-plex. Cody, how did we get from A to B?
Well, we started out by finding a 38-plex. It was on the market.
Important step if you want to buy a 38-unit building.
It was listed for sale. They made it easy. Number 2, we had no money, so we had to figure out the debt. So I asked them to hold a contract, which means seller finance, and they said yes. So then we had $1.7 of the $2 million we needed to buy the piece of real estate.
Now, really important thing here, when Cody says that was listed. It was listed on market at that price for 13 years. So people are saying, hey, these are unicorn deals you can't find anywhere. Uh, that was the easiest deal you could possibly find. It was everywhere for a long time.
It was listed when I was in third grade.
Insane. No one would have thought that you were the buyer back then.
Nope.
So if you're looking to sell a large building, start in the elementary schools, work your way up. No, I'm kidding. Uh, but that's Honestly, that's how easy it can be to find the right opportunity. The difference between us and everyone else who saw that deal is we looked at, are we the right person to do this project? Now on a 38-unit building, you have a smaller investor pool. A lot of people are comfortable in that duplex to fourplex range. I would immediately get comfortable with larger buildings. One, they make more money. Two, you have less competition. The other players in our market who would have been a buyer for 40, uh, we'll call it about a 40-unit building for that $25,000 to 50-unit range. Those buyers did not want this project because it's too big of a project. It needed someone who was an active investor who is willing to take on all the projects. And we're talking non-paying tenants, homeless camp on the back of the property. We had a lot of stuff to fix up on this. This deal made each of us over $1 million.
In addition to that, we were able to cash out over $1.1 million from the property, and we used that to renovate our portfolio, mainly that building. We put about $700,000 into renovations on that, all of which came from the real estate. So not only did we get to buy the real estate, we didn't really talk about the down payment yet.
Oh no, no we didn't.
But the real estate not only paid for itself, but it paid for all of the renovations, and we still get to own it to this date. Now for that down payment, how the heck do we do that? Because we didn't have $300 grand down.
Where does the money come from? And by the way, when you find the deal, the money is never the problem. You need to negotiate your deal. And so that's what we learned in this, in this opportunity. The opportunity was we can buy a deal for $2 million. There is no way a bank is possibly going to finance it. So the bank is immediately out, which really helped our career because we started learning like, okay, how would we buy these things without the bank? The down payment, let's see here, I had about $50,000. Cody, how much money did you have when we bought that? Nothing. Okay, so $300,000, one of us has $50,000, but also owns a house and has to pay their mortgage. Being married with a wife and pets costs a little bit more than being single. So how did we come up with the money? We made 4 phone calls. That's it. And 3 people said yes and invested $100,000 in the deal. Why would they do this? Because we had a unique opportunity. The problems with it, the fact that, hey, no one's wanted to buy this for 13 years, it's been on market forever, the roofs are terrible, the plumbing's bad, the electrical is almost non-existent, there's no income, and the septic sucks. So why would they invest? Because that was the whole reason we had the opportunity. We have a unique opportunity with a crazy awesome interest rate. Like, we negotiated a fantastic debt product. You can get into this opportunity for $100,000. It has a ton of upside. At the time, Cody had 30 units in this market. I had just finished a pretty sizable rental project on a duplex, uh, but I mean, I had gutted it to the studs and just done a bunch of work in this market. Between the two of us, we had the time, the energy and just enough experience to handle that size project. That was enough to get investors to put in a little bit of money. Now, $100,000 isn't nothing, but it's not the hugest raise you could ever do. We put that together, we made the ask, and the money came together. This happens all the time. When you have an opportunity and you can communicate what that opportunity is and why you are the right person to take that out, you can buy absolutely anything.
And it comes down to deal debt equity.
Yep, DDE.
We lined up a deal, we found the debt, which was seller finance. It's the easiest debt to get. And then we found the equity with 4 phone calls.
And that's one of the easiest things to pitch. When a lot of people are being reached out to as investors, you're in the process of securing a bank loan. There's a lot of variables that are still not set. When you've already found most of the money, you're only going after, in this deal, 15% of the money. You've already found 85% of the money. It's seller finance. So when you get to come and say, hey, the interest is already locked, the financing is positioned, we have most of the money, we need someone to come up with the last little bit to close this thing, and here's what we're going to do with this property— you're going to land that property pitch 19 out of 20 times when you come and say, hey, this is the opportunity, this is why we're running it, and we've already found a vast majority of the money. We've done that on deals. Our largest one is Robin Hood Village Resort. That particular deal, $4.5 million purchase. The seller's financed $3.5 million. When you can come to investors and say, look, we already found $3.5 million, we need the last one, here's what it will look like. Easy capital raise. We raised that in 7 minutes in a coffee meeting.
Now, all that to be said, we did this over and over and over again, and that's how we were able to escape Christian's 9-to-5.
We did it. And my wife's, by the way, I should add that my original goal was to retire my wife from teaching. Her school went super crazy, um, as a lot of Seattle school districts, uh, did. I'll leave it there. But, uh, one of the huge goals was to get my wife out of that and into a job that she really enjoys working with us on the portfolio. Now she's our director of maintenance. She is absolutely fantastic and she loves what she does. On top of that, I get to work with my wife every day. These are all things that you can absolutely build. For me, it took about 2.5 years to get where we're at today. It's been a phenomenal upgrade to my life, and this is something that you can absolutely do for yourself in a relatively short period of time.
Make it happen. But that's it for today's video.
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