Christian Osgood and a broker discuss managing two real estate deals simultaneously. They weigh pursuing both at once versus focusing on the stronger deal first, considering unit count goals, capital-raising capacity, and deal size when deciding whether to stagger transactions.
I'm very confident that the 21-unit in Norman will go under contract. But then I just got a text from a different broker that a 29-unit in Oklahoma City is most likely going to go under contract as well.
I love this problem. This is, this is my— this happens. So just so everyone knows, this happens all the time. No offer accepted. No offer accepted. No offer accepted. Two offers accepted at the same time happens all the time.
Should I— my goal is to get 50 units from first deal that gets under contract. So that makes sense. I don't word that very well. Do I take both of them down relatively at the same time? Do I go for the better one and then focus on the next one after I close this one?
Okay, so I've actually had to come up with a rule for that. I'll get— there's no official right or wrong answer technically, but I will tell you what is true for me and hopefully this helps you. Caleb and I have this rule because it happens to me all the time. We go into contract, we have two offers accepted at the same time. Rule of thumb, if one is materially absolutely better than the other, I'll typically do that because it's really awkward to raise for 2 deals and have to tell— how do you do that? Like, hey, I have a better deal, but until that— so everyone goes to the better deal and then like, hey guys, I have a deal that's almost as good. It makes for a really awkward capital raise. So for Caleb and I, if I'm like, hey, if they're materially different, if there's one that's clearly better, let's close that one first and then go under contract for the second. Usually that's the case if they're relatively similar. And I did this with the— of course it was $144 million and $80 million is the 2 biggest deals I've ever done.. We did them both under contract at the same time. The returns were almost carbon copy identical and they're on the same street, different owners, different deals, different structure. You look at the deals and you're like, they're the same. They're both fantastic. We have to do both. So it will be very much up to you and how much, how much pain you want to go through. If there's one that's materially absolutely the better deal, probably do that one. If they're both just really good or you want to wrap them up in one LLC, you can do both. Totally going to be up to you. Nothing wrong with knocking out both, but just be aware of that. I've tried that once before where I had a great, like, amazing deal and then a great deal, and it was just super weird. I'd pitch one and then it filled up and then everyone wanted to be in that one. I'm like, well, this deal is also amazing. The numbers are just— they're not the same. And it made for like a really awkward capital raise. So that's my two cents. That's my internal rule.
