Why You’re NEVER Buying Multifamily Real Estate

99% of you are not going to do this. You're just not going to buy multifamily. It's not gonna happen in 2024, 2025. It's not gonna happen in 2030. It's just not gonna happen. Here's why. Welcome back to Multifamily Strategy. My name's Christian Osgood, your host of Multifamily Strategy. If you haven't yet, like, subscribe, follow, hit that notification button, do all the things because we're gonna be sharing tips for you every week on how you can fall outside of the camp of people who do not buy real estate. There are 3 main reasons people fail to do this, and I see it every single day. I was in this camp for a long time. These are going to be practical. I'm going to start with the biggest of them. I'm not going to make you wait till the end of the video or whatever everyone does. I'm going to give it to you immediately. The number one reason people will not buy real estate with or without capital is because of the money. Let me explain. One, the lack of capital— and we talk about this all the time on the channel— lack of capital is not a reason not to buy. You find a deal, you line up the debt, you do the equity, whatever it takes. If you have a deal that's going to make you a ton of money, amazingly, people tend to figure it out. A lot of people won't start because they're still waiting for the money to come in. They don't have the capital. They're worried about the capital and they're like, ah, I just don't have the money to buy real estate. If you don't have the money, that is fine. We talk about this all the time on the channel. You can do it seller finance, contract for deed, equity partner. I mean, there's a million ways you can knock these things out. With or without money, you could buy deals. The bigger thing is people are scared of the actual dollar amount, and this is common. What if something goes wrong? I don't know for sure where the money's coming from. It's not the fact that they don't have money, it's the unknowns of the money. People try to find money or raise capital before they have a deal, and you know what happens? They fail every time. If you're trying to come up to someone, say you're a new investor and you're trying to raise capital before you have a deal, what are you raising money for? I don't know what the deal is going to look like. I'm going to limit my opportunities massively. Say I find someone who's like, yeah, I'll lend money at 12%, or, oh yeah, sure, I'll be your equity partner. Now you have to find a deal to their parameters or that can support the amount of debt that you took on. You do not want to find the money before you find the real estate. Find the deal, and the deal will tell you Oh, I can do this solely as debt. This gets 20% cash on cash. I can raise expensive debt. I can buy this with a down payment raised at 12%. Is that expensive? Heck yes. Does my deal support it? Yes. I can pay 8% to buy this deal. $0 out of pocket. Totally doable. You cannot do that if you don't have the deal figured out first. You need the deal to figure out all the pieces. Line up the deal, line up the debt, line up the equity. Everyone worries about the money when you don't have money. It is normal and it's gonna kill it and you're not gonna buy real estate. You're going to absolutely shoot yourself in the foot if you start with the money. Start with the deal, start with the deal, start with the deal. That is what is going to solve your problem. I started with duplexes. I saved for them. It took me 8 years to buy 2. I made a quarter million dollars a year in sales. I was a good sales rep doing well in my career. My wife was a teacher. She wasn't making a ton of money, but together we were able to stack some cash and buy some properties. I bought 4 units in 8 years doing that. I bought 200 units in 2.5 years doing it the other way. Line up the deal, find the debt, find the equity. If you don't need an equity partner, just buy it with deal and debt. We do this all the time. I close a property about every 45 days. I'm not that smart. I'm not that special. I just have a lot of drive and I can handle the fact that I don't always know where the money's coming from. So the number 1 reason that you will not buy something this year is because you are uncomfortable with money. If you want a tip, don't be weird about money. Write that down. Don't be weird about money. All of a sudden deals start appearing. You can buy them. You make a lot more money when you're not weird about it. Reason number 2, you are reading too many books. Also was me. I read so much. This shelf behind me, Most of these books are on sales or real estate. I read and I read and I read and I watched BiggerPockets, which is a fantastic, just absolutely fantastic YouTube channel. I met with people and I learned and I learned and I learned and I learned. And I never stopped learning. I forgot the part where you actually go out and buy real estate. You want to be a real estate investor? Go buy a piece of real estate. You are not a real estate investor until you hit that. I've actually seen people go, I identify as a real estate investor, like I believe I'm there, I'm researching, I'm committed, and I'm going to do it. And all they ever do is they read another book and they come up with a new strategy and they learn the new hottest thing. You can buy things subject to. I'm going to start looking at buying, buying things at tax foreclosure. There's always a flavor of the month that people get excited about and they learn and they learn and they learn. They never implement, they never master, they never buy. If you are a bookworm, and you are just reading books, I'm not saying not to read any, but if you're just reading book after book, mentorship program after mentorship program, podcast after podcast, and your portfolio is smaller than you want it to be, you are doing this wrong. You will not buy multifamily. It's not going to happen for you. It is so uncommon that people who overstudy make it happen. The other thing that they tend to do is they read the books and they go, okay, I need to get my lawyer, my property manager. I need to build my team. I need to raise my capital. They do everything out of order. You want to be a real estate investor, buy a deal. If you complicate it past that— and granted, the deal has to have cash flow and long-term fixed rate debt— but I mean, buy an actual deal that makes you money, that you can buy and not lose. If you can check those two boxes, buy the darn deal. It will move you forward. Oftentimes we find that deal doesn't do exactly what we expected. Our buddy Caleb Hommel, who's been on the channel many times, His first 2 deals, they did well, but they didn't do as well as he expected. There were unexpected things there. He learned, and it made his next deal in Houston, Texas, a fantastic deal. It made his 4th deal, a 25-unit in Stephenville, Texas, the best deal I've ever seen in Multifamily Strategies mentorship program ever. He's able to do this because he went, I'm buying a deal. I found a deal. I believe in the deal. And all of a sudden, the money appeared and he closed the deal. In fact, his capital disappeared 3 days before close. He found new money and closed it in 3 days to raise the capital. Why? Because the deal merited the money. Don't worry about the money, to point 1. Number 2, stop trying to overlearn everything. You will not master something without practicing. You can't practice real estate without owning. You have to get in the game. Buy the first property. It could be a duplex. It could be a 50-unit building. I don't care. Find that opportunity and buy it. And now we end with reason number 3 that you're not going to buy real estate. 99% of people just really don't. I talk to people all the time. I want to get into real estate. Wanting to be in real estate doesn't get you into real estate. Buying real estate does. So what is the third thing? They literally have not set an attainable goal. They're wandering around. This was also me. Wandering around saying, I want to be a real estate investor without defining what that looks like. Now, in 2020, when everything shut down, I had time to actually sit down and think. And I wrote up my goals and I was like, you know what? I don't just want to own real estate and have more money. I want to have enough money to retire my wife from teaching and give her a chance to do something else because she was, she was feeling pretty done with the Seattle School District. I wanted to give my family a different life. That is something that mattered to me. And it was urgent to me. I had a 5-year goal of I would like to move to Texas. I've lived in Washington State for all 32 years of my life. I am ready for a change and a new adventure. And the weather and the food and the people and the culture and the real estate and the business laws are all things that resonate with me in the state of Texas. There are 2 goals that matter, and best of all, there are 2 goals that have a fixed cost. I go, okay, what does it actually cost on a monthly basis to get there? And we mapped it out and I'm like, oh, $15,000 a month is more money than I would spend to do both. So let's push it to $20,000, which happened to be the best sales commission month I'd had in a long time. I'm like, if I had one of my best months every month, my life would be fantastic. What if we could have that happen recurring every single month? From that commitment, 3 years later, my house is almost finished. My wife is retired and works in the companies with me. We love working together. It is fantastic. My life looks astronomically different. I have a 200+ unit portfolio and this isn't me being great. It's I stopped being weird about money. I went out and bought the darn deal and I set goals that actually mattered and had a defined target. How many units does it take for me in a few partnerships to get the $15,000 a month cash flow on a stabilized portfolio? We surpassed that by a lot. But we did it because I had a clear target I was aiming for. The fact that I passed it was because we kept it so simple, I was able to just continue to repeat on autopilot again and again and again. If you wanna learn how to do that, by the way, just follow this YouTube channel. If you wanna take it to the next level, multifamilystrategy.com, we'll see you in the mentorship. You have questions about it, DM me on Instagram @ChristianOsgood. But this is why you're not going to buy real estate this year. If you can overcome those 3 things, you can be the 1%. Who actually makes it. Now, when you start to buy that first deal, the second deal comes faster, the third comes faster. You become a much better investor. The only way to play this game is to get in and play the game. Buy that first property. You need help? Reach out and ask. I am here. I will help. Have questions? You want them answered for free? Last plug: we go live every week, 3 PM Pacific Standard Time, here on this channel, Multifamily Strategy. We'll see you on the next episode. I'm Christian Osgood. See you later.