This will Kill Multifamily Real Estate!!

So here is how this policy, the Kamala real estate policy, is going to kill multifamily. It's going to slow down the market. It's going to kill people's chance to become financially free and is only going to benefit the very, very, very small mom-and-pop investor or the large corporations. Middle class, you're screwed. Hello and welcome to Multifamily Strategy. I'm Christian Osgood. I have bought over 225 rental properties and growing in the last 3 years using $0 because $0 was in fact I'm here with Caleb Hommel, who started with 18 years old, $300 in his bank account. Today, almost over 100 rental properties at 21 years old, weighing in on some policy today. There are a couple things on the docket with the Kamala-Waltz proposal for the economy. One of them you guys have heard about for sure a billion times. We're going to touch on that really quick. And then there's something that I haven't seen anyone talk about that I think has a much larger impact. I think if this gets passed, They're going to destroy real estate as we know it. I'm going to explain exactly why and how you can prepare for this in this video. Stay tuned. Caleb, number one, we've seen this all over the news, the $25,000 new homebuyer credit. She's like, hey, we're going to help people get into houses. What do you think the net effect is that going to be? Being a 21-year-old with no college, uh, tell me, tell me about your—

and he had a pandemic in the middle of his education, so like 3 and a half years, no, probably 2 and a half years of high school, no college.

So he has a 10th grade education. What is your 10th grade take on that economic plan? What will that do to real estate?

Housing prices are going to go up. It doesn't take a college graduate, doesn't take a high school graduate to know that. I didn't graduate high school.

It doesn't do anything effectively. It is a policy that doesn't really matter. Housing prices go up a little bit for the rest of the Americans. Uh, it's, it's just going to be directly absorbed into the housing market. It's a worthless thing that has a minor negative impact. Basically just a non-factor policy that looks good for getting votes, in my opinion.

I was gonna say, that's exactly— if you look at something like that, that's catchy, that everybody knows about, it's probably just there as a headliner. I doubt, like, like, housing prices are going to go up $25,000. That's— that is a complete wash in most of these markets. If you're from San Diego like I am, $25,000 on a million-dollar house doesn't really mean squat.

And it's worth mentioning, I'm not a hyper-political person. This isn't a political channel. This has nothing to do with what candidate you should vote for. You should vote for the person who best represents your values.

Absolutely.

For me, you know, things like freedom of speech and there's bigger things on the ballot than real estate law. But it's important to know how these are going to affect people.

Absolutely.

I think a couple of these are really big. Here's the one that no one's talking about. The 1031 exchange. It's a like-kind exchange. If you don't know what a 1031 is, this has been this amazing program that was genius on the government's end. It's one of the few gifts that they gave us that makes sense. Experienced investors. So you start small, you sell a building. Now, instead of paying your capital gains tax on that, you can defer that gain into your next acquisition as long as it's a bigger, more expensive building. So you can scale up your portfolio. This does two things. One, this offers financial incentives for experienced landlords to continue to buy larger and larger real estate in a scaled and measurable way and have some advantage to do so, which means housing, which the government historically has been horrible at trying to do. They create slums. They allow operators to scale their businesses and compete with the BlackRocks and the US government, the two arguably some of the worst housing providers. They allow us to offer ourselves housing. It is a financial instrument that is fantastic. She wants to limit it to $500,000, which means you have a rental house, you sell it, probably going to work just fine. You're probably not getting over half a million in capital gains there in any reasonable time. Duplexes, triplexes, maybe even up to fourplexes. You have deals that might not have a half a million dollars of upside. You're going to be fine. You can roll those into your first 12-plex. The problem is what happened— like, I made $2 million on a 38-plex and I started with no money. This is what broke people can do. 38-plex. You started with a 10-plex, a 10-plex, an 8-plex, 25-plex, 26-plex. You scaled quick. Those are deals that have more than $1 million of upside. A lot of your deals make more than 7 figures.

Yes, they do.

You're losing your incentive to sell those and scale up and provide more housing. I think that it doesn't even make any sense.

Yeah, that's kind of where I'm at. A lot of things when you look at policy, at least how an uneducated 10th grader does it, is I look at it and it's like, okay, what's the motive behind this? When we're looking at a lot of government policy, specifically with housing, it is to provide more housing. Example, Section 8. Example, Section 42, just to name a few of them. It doesn't really make sense when you're thinking 1031. The whole goal of it is to keep properties in experienced operators' hands and allow them to operate bigger properties and provide better housing for people.

And that's what it was designed to do. That's what it does. So here is how this policy, the Kamala real estate policy, is going to kill multifamily. Guess who doesn't do a whole lot of selling? The largest companies that couldn't 1031 if they wanted to. You're a BlackRock, you own a 1,000-unit building. What the heck do you scale up to? There is no 1031. There's not a bigger building to roll to, you know, by like an island. Exactly. Which wouldn't make sense to their business. The way that this works is the only one who benefits are the super mega corporations that are going to buy and hold everything forever, which is what we're trying to fight. And when they take away these middle-class tax incentives, the 1031 is for people who are scaling, growing. That is for mid-sized multifamily deals, small to medium-sized commercial deals. That is the best use of the 1031. You take that away, these organizations and these owners who hold these assets, including the slumlords, are just going to hold it because there's no point in selling. There's no incentive. It's going to slow down the market. It's going to kill people's chance to become financially free and is only going to benefit the very, very, very small mom-and-pop investor or the large corporations. Middle class, you're screwed.

Yeah, I mean, we're talking about who benefits, right? With this, that's exactly who. When they instituted the 1031, the whole reason was to provide better housing, to keep it in experienced landlords' hands. Now it's okay. Whose hands are we going to keep property in moving forward? And that's when you look at policy, is there's always something behind the curtain is kind of what a stupid 10th grader has found at this point. But yeah, I think it— I mean, at your point, it would literally kill multifamily. There are certain deals we would look a lot differently at selling. Yeah, there would be certain deals I would just hold. I wouldn't sell anything. I still have not sold anything, don't plan to in the immediate future. It's like, okay, I would not sell this building then even if a great offer came in. It's like, okay, what am I going to pay? Bazillion dollars in capital gains. I'm good. Thanks.

Here's the good news. Policy is not made by the election. It is put in place after an election if it gets passed.

Thank God.

So their plans are not a guaranteed thing. If Kamala gets into office, or stays in office, if she gets her promotion from her current position and they get these things passed, it's going to have a super detrimental effect. On multifamily real estate. However, this is the time for you to learn how to play the game. This is the time to learn how to use creative finance, whatever means are at your disposal to load up on multifamily. Because if you own that asset prior to this, you get to be in the position where you get to go, hey, well, I guess I'm not 1031ing. I'm just going to go hold this thing that's paying me every single month. By the way, we have a gift for you. There's a link in the description of this video, 15 minutes on exactly how we built our portfolios. 15 minutes going over creative finance, my backstory, how to actually on the straight line method, fewest steps possible without skipping steps, go from little to no money to a lot of real estate and quite frankly, a lot of money. It is free for you. Link below in the description.

Check it out.

Check it out. It's well worth your time. But you need to learn how to play this game now because if this happens, the game's going to change drastically, drastically, and for a long period of time. There will be a significant period of time, in my opinion, where real estate slows down because the incentive, the actual velocity of deals is just going to stagnate. And I think it's going to be a 5 to 10 year delay in the market. If you are trying to get in now, your cutoff is coming. It's not immediate. It's not going to be decided in November. But over the next 1 to 2 years, you should be preparing for what could come down the pike based on the economic plans that are presented from the candidates.

And granted, everything on there doesn't actually come to fruition. If it does come to fruition, though, I mean, as a person who's— well, that's almost— that's about 20 to 25% of my life so far, which is crazy to say. In 5 to 10 years, that changes things. That's 25 to 50% of my life moving forward. The next 5 to 10 years is really the ramping period. And if I'm trying to ramp and I'm getting pushed back on the other way, that is the— like, as a young investor trying to scale, trying to grow, that's just going to limit growth. And then I have to double down on those relationships even more. So when I have those relationships, I know who's going to sell. I know it. It's like, I'm not like looking at CREXi. They're not going to have anything. None of these listing platforms are going to have anything worth buying. You have to go build relationships. And that's going to be, I think, where the deals trade more than ever.

I agree. I think that's what's going to happen. So if you don't already know how to play the game, learn now. Prioritize it right now. This is your chance. And again, there's a link below. You can register it completely for free. I will show you how this game is played, exactly how it's played, the rules of the game step by step. Click that link below. Do me a favor too, if you haven't yet, like and follow the channel.

Why not?

Yeah, why not? Dive on in. Enjoy. We appreciate your time. Again, click the link, register to watch that video. To learn from me, learn from guys like Caleb, how the game is played. We appreciate you and we'll see you on the next episode.