Podcast Episode 140 Transcript

Episode 140: Over 100 Units With No Bank Loans with Christian Osgood & Cody Davis

folks this week on the pre-real podcast
we're joined by Cody Davis he's 23 and
Christian Osgood he's 31. they've built
this amazing story uh two young men that
have really figured out this game their
multi-family investors primarily uh
though they're starting to dip their toe
into some Hospitality stuff they've put
together about 120 unit portfolio at
this point
um they've got a real simplified
approach to real estate and I think
that's what has allowed them to execute
as effectively as possible they're the
founders of multi-family strategy some
amazing takeaways from some from from
young men in the business takeaways you
would not experience normally unless you
were seasoned in this business 15 20
years these kids really have it together
uh tremendous job and I say kids and I
shouldn't because they're they're very
very seasoned investors
so give this a list a listen it's Cody
Davis and Christian Osgood founders of
multi-family strategy it was a really
enjoyable conversation don't miss it
this week folks are you ready to bring
your real estate game to the next level
my name is James Prendamano I'm the CEO
and founder of pre-real
25 years I've closed over a billion
dollars in transactional real estate
each week a meeting with outstanding
investors High performing individuals
and Visionaries operating in the real
estate space these are the people that
are actually out there in the real
estate game right now getting it done
this podcast aims at bringing anyone's
game to the next
this is the pre-real podcast welcome
everyone to the pre-real podcast we have
got a super treat for you today uh we're
joined by Christian Osgood and Cody
Davis just to put a little perspective
folks Christians 31 Cody's 23 they are
the founders of multi-family investing
strategy
um
these are our amazing young men that
were put on my radar by one of my
younger team members that have seen the
work that you're doing uh you you've now
closed on 110 units and a resort you're
out there doing uh what we hear about
and we see all the time on these
investment channels at a really young
age uh thank you guys so much for taking
the time to join us today
thanks for having us yeah I appreciate
being here yeah look I I'd be remiss if
I didn't mention that
you guys probably have heard it but but
I don't think you can understand the
context of what it means to Young
investors and and older investors that
are just starting in the game to see uh
young faces and to see people that are
reflective of uh more more of what the
investment Community now looks like
versus what the investment Community was
as I came up through the ranks Board
Room suit and tie uh it was honestly
extremely intimidating and there was a
lot of Doubt of whether or not we ever
were gonna we're gonna make it to the
summit
um having you guys out there telling
your story has absolutely meant the
world to this uh exploding community of

investors of all different ages uh but
for folks that are just starting out to
be able to see you guys out there like I
have to say like tip of the Hat
congratulations thank you for sharing
your story it is absolutely amazing guys
appreciate that one thing yeah that I've
learned over the last three and a half
years of doing this is that the story's
worth more than the real estate and
in that uh learning curve that I have
experienced I figured we should share it
so I started doing these little YouTube
videos and it was like a minute
something long YouTube video with
probably 10 or 20 edits in it because I
was uncomfortable with the way it
sounded but I just felt the right thing
to do and a year after I started that or
so partnered with Christian on a YouTube
channel
College route versus entrepreneur and
it's been really fun to share the whole
thing since before we had anything we
actually mentioned the first building we
were going to buy together
on our first YouTube video together and
then bought it 40 Days Later
that's incredibly bold
um incredibly Brave
to put that story out there and
uh you're right the story is as valuable
and
you'll find in the years that you'll do
this that every property has a story and
it's our job to tell that property story
and those of us that can narrate that
story better than the next are the ones
that win in this business you have to
bring the asset to life and you do that
through the narrative and all of the
channels that that we're all using today
so how did you all meet how did this
come together
so we actually met we're working at the
same firm so I knew of Cody but he
worked in a different building than me
yeah real estate firm we were working in
Tacoma he was the when I first
knew he existed I knew he was the 20
year old with 24 units and I had no idea
how he got there and I was focused on
building my research call Center for
that for that org but we really hit it
off when we went to uh grant cardone's
growthcon our the owner of that firm
backed out at the last minute he's like
hey guys I have a hotel you guys are
both going
there's two beds you guys should have
room together free free room I was like
okay that sounds great freezing budget
for 20 year old Cody yep and I just left
my job to uh to start a new adventure so
I was like ah budget's low let's do it
we were room together for three days you
get all pumped up from the whole
entrepreneur thing but more than that we
talked about goals and we realized that
our goals were aligned I was trying to
figure out how to expand my real estate
so I could retire my wife from teaching
and Cody was trying to figure out how to
expand his real estate to retire his
mother so we had very similar goals we
wanted to retire the women in our lives
and
we figured at the rate that we're at
if we partnered if we get to 100 units
that all cash flow we're probably gonna
have enough and it would take two years
to do it and for pacing this was 2021.
so by the time we had gone to this event
I was 21 I had 30 Apartments Christian
had just bought his second duplex so he
had four apartments in his house and his
real estate finally paid for his real
estate
as far as uh normality goes I mean you
were doing great
yeah it was great but that's what a
six-year sales career got me is I got
two duplexes that covered the mortgage
on my house
Cody at that time you just hit 30 units
right yeah I just bought my six Flex
which is right across the street from
his duplex I bought this place and then
two duplexes came on the market
and so I sold one of them the better
deal to my friend and then I there's one
left over I was like Christian you
should buy this
and he did and he made a ton of money he
ended up selling that and buying into
one of my deals when we went all in on
the partnership we started partnering on
all the stuff I previously bought but um
that's how we got to where we're at
today we started our YouTube channel
called our shot said we're gonna buy a
38 plaques
and then shortly after that we did sell
our finance no money down and
it took a total of 11 months to hit our
goal of owning 100 units
it's fascinating so those things don't
happen without
being very intentional and having real
specific goals that are measurable that
um
goal setting is is an art form that most
people don't do it right if at all and
from what you're describing your goals
were pretty on point so let's go back in

time a little bit further and then we'll
jump forward to the Grand Cardone event
but you guys
um had some sort of real estate
background mentors in the business like
how did you get to the point where you
realized okay real estate's the pathway
this is this is where I want to spend my
time
we both had completely different ways of
getting there
yeah I'll go go first go first I like
yours 14 year old Cody
was um I was at my mom's house and my
parents split when I was
eight what was it back in 2008 it's
really easy to remember how old I am
because it just tracks with the year but
2008 my parents split and then about six
years later my mom had a friend and
he had been in real estate and through
divorce had to liquidate but he had 12
apartments and so he he gave me this
book you might have heard of it Rich Dad
Poor Dad
and so I read it and I got super excited
and I wanted to buy a duplex and then I
realized that I was 14 years old
and it was a little hard to buy real
estate at 14 years old so I put the book
back down I went on with life
and then fast forward
three-ish years three and a half years I
was 17 or 18 and I was in my last year
of high school
so this would have been 2018.
and my my teacher at the time a Civics
teacher she was teaching us about torts
and all this
he last he said last day of school you
come to school which nobody did I'll
teach you how to make money when you
sleep and I thought that was pretty cool
and one of my buddies ended up telling
me before that class he said because he
had been through it the the quarter
before
and he just said look it you just buy
these five thousand dollar houses
and you rent them out and then you get
rich
and so I was like all right I want to
know how that works so I went to school
and that's what he said he bought a 5
000 house for sale by owner it was that
real estate concept again
so I I read Rich Dad before Dad I got
interested
and I was cleaning up at um a friend of
my dad's house
they they had a place and I was pressure
washing and cleaning up outside
Landscaping because I thought that's
what I wanted to do
at the time I just had fun with it they
said you should join this Facebook group
and so I joined the Facebook group made
a post I wanted to buy duplex by 21 I
was 18.
and so I figured you know what three
years I can work a few jobs I was
applying to multiple jobs I was a
gymnastics coach for a few years
I could get enough money to buy a duplex
and someone online said hey because I
was going to college at the time at the
at this point you should just drop out
of college get your real estate license
you make a ton of money
and so I did it
and I ended up at the firm where I met
Christian
and for me getting into real estate it
was pretty simple instead of reading
Rich Dad Poor Dad I had a great real
world example my dad worked in nine to
five and hated it but it provided for us
so I didn't get a bunch of time with him
but we were really blessed that we had a
single parent who was able our one
parent's income could cover both parents
and my two siblings so while that was
awesome my dad worked a lot of 11 hour
days six seven days a week so I didn't
see enough of him
next door actually Three Doors Down uh
my friend Jake's dad John
had bought rentals fixed up houses
bought some small multi-family bought a
bunch of laundry mats
and at around I want to say he was about
35 he retired
nice house not insane house but a nice
house hot tub convertible cars I was
like wow he has some toys he has a house
and he's out of the game he just
flips a house or two a year and that was
his whole thing so that that turned me
on to real estate I took the long way to
get there though
he started as a well comparatively to
Cody uh he had the uh he started as a
banker and he saved up and he would take
his money buy a house take his money buy
a house
he wanted to get his wife into the game
uh she had just integrated from Canada
wasn't able to work here yet so he's
like well what can she do I can buy some
businesses so bought a bunch of laundry
mats
I'm like well if I'm trying to get
started I have to go start getting money
so I went to college got a sales job in
apparel
wanted to get into real estate so worked
at the co-star group at the time
lands.com they just acquired it then uh
sold for apartments.com Loop that and
co-star data core product for those who
don't know co-star is like the internet
for commercial real estate they own they
almost have a monopoly on the data it's
crazy but worked for them and I made the
mistake that being
in real estate is not the same as being
an investor I was around owners property
managers I was in but I wasn't in the
game
it wasn't until 2020 when everything
started shutting down where I realized
hey
I'm not actually where I wanted to be
I'm in a high-paying job and I have no
real estate outside of my house
so bought my first duplex
fell in love with buying real estate
quit my job right there
body another duplex and then we bought
the 38 Plex together uh not long after
that
so you you say you took the long way
um
I can tell you Christian that most
people never get there most people never
make that leap
um our Core Business was real estate
brokerage and for 20 years I struggled
with
making millionaires out of people that
just you know it was the real estate
believe me that was
really driving the portfolios it wasn't
the investor
um and for a number of reasons I was
blocked and I just was not able to make
the transition I I've bought and sold
deals at that point and I was in and out
of a number of deals but not anywhere
near my level of proficiency would have
allowed me to
um and it took actually the podcast
several years ago I was on with uh
a really talented coach and he totally
called me out like we had the show and
at the end of the show he was like
what's going on man you're miserable
like like what's this you're
talking about like you know yeah you're
at the top of your game but that that's
not your passion it's obvious it bleeds
through and it took a real slap in the
mouth for me to make that shift and now
we you know We're Off to the Races and
and we've been blessed but uh don't sell
yourself short brother you're saying you
took the long way there's a lot of folks
that get stuck out there and why I was
so excited to have you guys on because
it is an inspiration to see you guys
actually out there doing it now most
people get lost when they make this
decision and they get stuck in the
institutional world and they start
trying to figure a way to you know fit
this square peg in a round hole and how
are they going to qualify for
institutional level debt and how are
they gonna you know have this this large
deposit and how are they going to show
the experience to the bank and how are
they going to meet all the debt service
coverage ratios and how and how and how
and they analyze it to death and they
never get to the next step
how did you guys bridge the gap what was
the the step you took that said that's
probably not the way for us

our banks everyone told me I didn't have
to assume I was just told it wasn't
and so the way that my first deal popped
up
there was someone else in the office and
a broker who had MIT units in the
contract for a client seller finance is
the first time I heard about it
that buyer couldn't perform it was 300
Grand down and it was another Finance so
you didn't need a bank didn't need
approval I met her at the time so what
if you bought it I said well that'd be
great but I'm 300 000 short
and so I I can't do it it's like what if
you borrowed it from who I said I have
investors I'll put it together for you
and he was gonna make money I was gonna
make money so I was like okay seller
said no to a one-week extension that we
needed to get it close and funded
so that went away
but that was the first time heard about
seller financing
that guy that was gonna help me with my
original Mentor who's owner that real
estate brokerage we worked for
he didn't just it was gonna fall into my
lap the next deal
I thought I'd give the same way it
wasn't I actually had to to figure it
out he helped me but he didn't um just
give me the money and just give me the
deal I I went out found the deal and I'd
actually go pitch a whole bunch of
investors throughout the office but what
we found to be true for
playing this game is we keep everything
really simple
it's not for other people that's for me
because I'm not super smart
I know how to use the pieces I have I
just don't have a lot of pieces so
simplify everything and then we go in
with an objective and walk away with a
takeaway
because that keeps us intentional so we
go in with a goal for all of our
meetings
whether it's with an investor now or a
property manager or a tenant or
potential business venture partner
and then we leave it with a takeaway
a lot of people go and they just wander
through their meetings and they don't
really identify what is the number one
takeaway I got from this meeting what's
the number one thing if there was one
thing that I got out of this
conversation
and when you start identifying the one
thing and then you just become a master
of it you put it into practice until
you're an expert
eventually you start getting different
takeaways from the conversations and
that's I didn't know how to articulate
that in the beginning but that's what we
did
over and over and over every owner
meeting every investor meeting
every time I met with a tenant because I
self-managed my 30 Apartments
it was an adventure but I would go in
with an objective to learn and leave
with a takeaway and we started
implementing that amongst the
partnership and that is what allowed us
to really simplify everything
and not worry so much about the unknowns
because there's always going to be
unknowns and in line with keeping it
simple we have a rule of not adding
steps it doesn't mean you can skip steps
because you absolutely can't skip steps
but you can just won't go well yeah
exactly you start with okay where am I
actually heading so you start with what
is the goal and that's what Cody and I
ultimately did at that growthcon we're
in the hotel together we said we had
similar goals and that's what you need
for partnership is okay we're heading
the same direction we know where we're
going what would it actually take to get
there and then we don't add any steps
the one thing and it's the simplest
thing in all real estate I wish someone
had told me before I did the whole
college to get a job job to get a second
job that whole route
was you're not a real estate investor
until you buy a piece of real estate you
don't have to think too far past that if
you want to get into the game
for Codio's 12 Plex for me it was a
duplex I'm a huge proponent of
multi-family so I say duplex should
probably be the smallest you go that's
my opinion I agree but by the property
all you have to do is figure out how to
do that once you get that step out of
the way the rest of it is so much easier
if I heard anything when I started I
wish I heard that 10 years before I did
because I could have been you know Cody
was 19 when he bought his first deal I
could have been assuming I had the same
life trajectory I had could have got out
of college at 22 could have figured out
how to do this and money is the least
important part of that but back to the
investing piece if you want to own
rental property then wholesaling is off
the table
because that's the sales job flipping's
off the table because that's a sales job
there's some other weird terms that
people are trying to create just to
recreate the wheel online a lot of gurus
are recreating some of those terms into
you know ones for daisy chaining and all
that but it's not investing
it's a sales job so if you want to buy
rentals buy rentals it's just deal debt
Equity you do it in that order
the money the equity piece is the least
important part that's why it goes last
does use the smallest piece that's
usually the small one you get the deal
that's the biggest part and then as far
as the money goes the debt's usually the
biggest part of the money so you just
figure out the little piece at the end
and you can borrow it or do an equity
partner if you need to with a buyout
but people confuse that they get they
add steps to that equation there's no
extra steps well they they add steps uh
in large part because that's their
subconscious response to fear and
they're putting obstacles in their path
and they don't acknowledge that that's
what they're doing so
um be careful when you say you're not
you're not that smart
you figured this whole damn thing out at
23 years old it took me and now prior to
me launching the investment side uh you
know we've got hundreds of units now
we're in a number of different asset
classes but it took me 20 years being at
the top of my game in what I did we
brokered 100 million dollar deals we did
every type of transaction you can
imagine we had a billion dollars in
transactional real estate under our
belts before I made the jump
okay yeah
on that point
I'm really good at addition subtraction
multiplication and division and the
logic test
when I say I'm not that smart my
vocabulary sucks
Christian can verify that there's a lot
of words that I don't know what they
mean and uh when it comes to life skills
I don't have many
but I just understand very simple math
and logic and all of what I've done I've
just logiced my way through it and when
I look at a deal
you have all the income you subtract all
the expenses and then the debt and you
either have a positive number or
negative
and I logic My Way Through It Is it
feasible to put it together
and if yes then yes but the whole smart
comments just
those are the very select few things you
had a baby Yoda comment on that but oh
yeah one of our investors calls Cody
baby Yoda because he's like he doesn't I
don't really have any life skills
because he doesn't live long enough to
do anything right he hasn't lived on his
own
yeah yeah but at the time it just moved
out from his parents not that long ago
didn't know how to cook really didn't
know how any appliances work
but you put them in front of a piece of
real estate and all of a sudden it's
just
crazy he could just he could knock out
deals that no one else could figure out
how to do and it's so simple I always
call Cody the best buyer real estate I I
think he is actually the best buyer of
real estate in the country he can take
it apart and just go hey this is what's
going to make the deal work I can put
together an offer let's go and it just
gets accepted crazy so that's what I do

I got stuck on money doesn't matter
being a broker in New York City being in
that world and in that environment the
that the deck was stacked against
you making it into the the boys club it
was a totally different time and if you
didn't have the money you didn't have
the deal so here I was putting together
deal after deal after deal after deal
after deal for other people and it
wasn't until later in my career I found
out they didn't have the money either
so I was packaging these things for
people and then they were going and
doing what you figured out Cody at a
very very young age and if there is any
takeaway that you're going to take out
of this podcast folks Let It Be money
does not matter if you have the deal
you're gonna find the money
if you have the skill set to find the
deal you mentioned a billion plus
dollars of transactions that's
ridiculous that's a lot it's actually a
lot
um
the ability to do that is worth way more
than the people putting together the
capital yep because they could they
could Bridge all the money they want if
they can't buy stuff they can't figure
out the relationship piece
and they may be able to buy a nice car a
nice house but they're not getting the
real estate that we want to buy and
there's a lot more money out there than
there are great real estate deals to buy
they're not even printing it anymore
they can just add it to the digital
currency yeah
add digit s
it's not a zero yeah banquet under cool
we'll back all you guys we'll just print
it that's gonna work yep well it's
fascinating that you guys cut through
this the way you did
um I really applaud you for for how
you've accelerated this process and
you've identified and simplified the
things that you can Outsource
um and without a doubt the deal if
you've got the deal
um you've got the Golden Goose so what
was the the the experience like when you
went to uh the grand Cardone seminar was
that productive for you guys
that was fun for us I think we went to
the first two days and then enjoyed the
beach on the third day we got our
takeaways
I had I had one take away from that that
actually really funny enough launched it
wasn't the takeaway I expected but we do
review all of our takeaways all the time
uh Mike Rowe from Dirty Jobs which was
one of the very few shows that were just
fantastic on Discovery is speech
launched our career it really did he
talked about so he started in uh
infomercials that's where he got his his
start and they would put an item in
front of him that he has no idea what it
is and he has to talk about it
coherently for eight minutes
and the ability for him to talk about
anything confidently for eight minutes
allowed him to launch Dirty Jobs because
he's like hey I get thrown into
situations I know nothing about and I
just have to talk about it while the
camera's on if I can do that we're fine
and it never rolls for more than eight
minutes on the clip so I'm good
we took that skill which conveniently
YouTube algorithm I cut off his eight
minutes for when it wants to push you
but when we started talking uh online
about what we were doing the ability to
get in front of people and just go you
know what I'm going to open my mouth and
even when I don't know exactly what
direction I'm going like when I started
this sentence
I know I'm going to land where I need to
go and we applied that to our entire
career and that's our whole ability to
communicate with people coherently
came from that one speech with micro
saying hey this is what I this is the
skill that I had
we adopted that skill
and we applied that same principle
to all of real estate and it got really
ridiculous when I heard the other line
from Cardone where he said you don't
have to remember what you said if you
tell the truth so we combined this uh
the skill set of
just you don't need to remember anything
you say if you tell the truth and then
if you can talk about anything for eight
minutes you're set so we don't script
anything and I never remember what I say
I have to re-watch stuff but as long as
it's the truth I don't have to remember
it's always fun when we watch our
YouTube channel like what did we say
about this it's a it's a new experience
every time but we batch record the
YouTube channel so we have someone come
in here we write out topics and he's
like okay uh in two hours you're gonna
shoot what do we do 12 YouTube videos
and you sit down we knock them all out
we don't re-record anything
no editing minus you know sticking in an
intro and away we go yeah he does the
whole zoom in zoom out thing but if you
look at all our original stuff
eight minutes straight there was one
where Christian dropped an F-bomb and we
forgot we forgot to clip it so we
literally did start Florida video for
those who are watching but we did a
whole intro Christian made a slight
mistake he's like yeah I'm not gonna say
it but he he dropped his F-bomb and then
we just started over to the intro
exactly the same it didn't mess up so we
don't add it the ability to just do that
that was our number one takeaway from
that event and that plays so well when
you're doing the whole pitch a deal
investor meeting if you can get in those
and you just know in the back your mind
like I don't know what's gonna happen
but it doesn't matter because I know the
deal I know why we're the right buyers
for it and I know no matter where the
conversation goes I can open my mouth
and just confidently communicate it
works all over real estate and the
principle of just get your takeaway my
goodness that's everyone we met we
called our company multi-family strategy
it's only because all we do is we meet
with masters of the game
and we get one or two takeaways from
them on how they got to where they're at
when we started most the people that we
talked to who have been playing the game
for a long time who already had that 100
plus units we were after
they had low debt they've been playing
for a long time they had a few Partners
they weren't syndicating they weren't
wholesaling
few of them were part-time Brokers
because they loved brokering not because
they needed the money
and all those takeaways just like the
micro speech those little teeny pieces
you can condense time when you have
someone who's been the game for 50 years
they give you those few nuggets on how
they got there
we got to do it in two years because we
talked to 50 people who got there in 40
50 years and we applied all those little
pieces and that's that's all
multi-family strategy is about it just
who's mastering what you want to do in
your Market that's the best person to
teach you go out and meet them that's it
and that's the beauty of of today this
is truly the greatest time to to be in
real estate the tools that are available
um I found the community as I came up
through the ranks to be just it is an
amazing Community people want to help
they're happy to to pass along the
knowledge that they've they've
accumulated those who are not you
probably don't want to talk to them
anyway
um and and there's more than enough of
of us out there that are happy to sit
down and chat and talk through
um you know our takeaways and pass them
along to the the Next Generation uh it's
cathartic and it's it's something that I
I've grown to enjoy immensely I love
that you guys have this this philosophy
of like you know we're not going to
concern ourselves with all of the
potential contingency these because
number one no one can
possibly forecast everything that's
going to occur with the deal anyone who
tells you that something is not going to
go wrong with every deal is a liar
because something goes wrong with every
one of them but that's where you make
your bones that's where you separate the
experts from The Tiktok investors
right it's going through that and
understanding how to adapt and pivot and
adjust in the moment keep your cool and
still hit your marks still hit your
returns that's what matters at the end
of the day it's brilliant I absolutely
love what you guys are doing if we can
I'd love to jump in on a deal or two and
just talk about like what are your
metrics what are you guys looking for in
a deal uh what type of returns what what
are the things let me not put words in
your mouth you tell me when you're
looking for a deal what are the things
that you're looking for
you talk parameters but I'm going to
start with the first and main thing
we're looking for a long-term fixed rate
cash flowing debt Define long term
long term so two two things on it long
term I would usually call 10 years plus
however not every deal we've done gets
us there it's having a very very very
clear path to get it into long-term cash
flow and fixed rate debt and in the past
a decade plus is plenty long term for
people getting started today it's a
little different for us so if we're
doing a bank refinance we're taking it
to 10-year minimum debt and we do our
fixed rate mortgages and we're good and
that's going to be a commercial product
because we're buying commercial
residential real estate however we don't
need to do tenure day anymore long term
for us means that we can pay off the
mortgage before it's due
so we've got a three and a half million
dollar mortgage due in eight years it's
not 10 years
but we could pay it off before it's due
out of the cash flow from the asset
we've got a three-year mortgage on a
little duplex development site
we can pay it off before it's due
it doesn't take three years to pay that
off so long term in the beginning we're
talking decade plus after you build a
little portfolio
it's an asset that you can afford to
write a check for before the term is up
because that is a long enough Horizon
for you to ensure you're not going to
lose it that leads into our criteria you
need to figure out how do I buy and how
do I never lose it then the last piece
which is really not important to people
getting started is will it be fun
because it doesn't need to be fun in the
beginning you need to get started but
for us how do you buy it is you line up
your deal and your debt and your equity
how do you never lose it is long-term
fixed rate debt that cash flows with
margin
so we've been screaming for the last
three years on this podcast about what's
coming and we have seen deal after deal
come through that if there was the
slightest hiccup
you weren't able to meet your debt
service
deals where people were banking on
penetrating a new market adding 30
percent to the existing rents cutting
expenses in a new market in an
inflationary period by 20 and those were
the guys that were taking those quarter
and half Point discounts to go to
adjustable rates because otherwise the
deals didn't perform and you know we've
been screaming about it that these small
to Mid cap banks are going to get
crushed when the big guys were not
filling that vacuum uh from the
institutional side the smaller mid cap
Banks jumped in and they were given
these three-year loans and it's like if
you can't get through a cycle long term
to me is I got to be able to get to the
other side of the rainbow so wherever I
am in the economic cycle we forget that
as investors it goes up it goes down it
turns back over right you need to be
able to get to that other side where
where there is massive amounts of
institutional debt available you can
refi out into these 10 15 20 year fixed
products not at the absolute best rate
you can get in the moment because you're
not cutting your term all the way down
that's how you survive long term and
what we're starting to see now this run
on the banks is it I think this is going
to make 2008 look like tea with Mother
Teresa I think that this is going to be
a bloody year uh but it is set up where
the big banks are going to just continue
to get bigger and those small to Mid cap
banks are going to be giving even
performing notes away to stay in
compliance and it's going to be a
historic opportunity so are you guys
targeting seller financing deals only at
this point on the way in
no I mean seller financing was a means
to get in but Christian bought his first
deals without seller financing that
board of operations is deal debt equity
and that's for how do you buy it it
doesn't say deal seller finance Equity
it's deal debt Equity you have to find
the best debt product seller financing
is not the best debt product for every
deal
it's not it could be but it's not
feasible that it will be for every
opportunity so you have to line up the
best product we've bought deals with
hard money he's bought deals
conventionally now I've done
conventional deals we're working on some
conventional purchases right now I've
only done conventional refi's
but you have to line up the best debt
products so we're not just targeting
seller financing we're looking for the
opportunity because if we just targeted
seller financing
we'd be looking at debt deal equity and
then that's going to cap the deals that
we're going to be able to get our eyes
on
yeah I think the seller financing came
into play for us as the optimal debt
product for two reasons one when we were
starting we didn't qualify or at least
Cody didn't qualify for conventional
financing and for the size deals that we
were buying our first deal together
being a 38 units neither did I
so when we got started that was off the
table then as we started to actually
build some net worth
we ran into the issue of interest rates
doubled so seller financing was a
fantastic solution for a lot of these
because people who were still stuck on
their price but the bank interest rates
just wouldn't allow it to work
we're able to come in and it's like well
everything's negotiable so we were able
to play on the rules that they wanted to
play on with just completely ignoring
the shift in the market so that was a
huge Advantage now that people are
starting to accept Okay interest rates
are higher they're probably going to
stay up and people are now scared
because the banks are finally popping I
I saw two I don't I haven't looked at
the news yet this morning so I imagine
we're going to see some more fun this
week
but as we're starting to see it all
unravel it will be interesting to see
what it looks like to get lending or if
seller financing is just the way we
continue to do things because I don't
know enough not having gone like 2008
was before I was in the game we just
went Mutual three seconds ago on a
another set of Finance deal oh huzzah
okay well there we go so we're still
gonna go
sell our financing but it'll be
interesting to see what bank policy
looks like because I'm imagining it
tightens up a lot in the near future so
it's a method
it seems to be the right time to be
really good at it
so we're in an inverted curve so the big
Banks know that they'll be able to lend
their Capital at a higher rate in the
not too distant future so they're they
are going to at this point tighten the
screws down they're going to let the
smaller mid cap Banks get gobbled up in
large part by them there'll be an
opportunity to buy defaulted debt even
performing defaulted debt because the
default will be on the bank side because
they're out of Charter which is a neat
little thing but there'll be a run of
that and then the the big banks will
step back in as rates normalize and
they'll start to uh to offer fix that at
a you know reasonable term
um I would say in the next 12 to 18
months
toward the 18-month piece but that's
when we'll see that normalized but it's
going to be I think the greatest buying
opportunity of my lifetime over the next
year and a half so you know we've put
ourselves in a position to be able to
capitalize on it
um you guys are uh you took down 110
units and you took down the resort is
that the Robin Hood Village Resort is
that what that deal is
to give the audience a few minutes on
what that deal is about
yeah so that one was fun it's my
favorite property every time I go there
the first thing I say to Christian I
look around it's a Cabin Resort on the
Hood Canal and I look around and say
Christian I can't believe we did this it
is it is the coolest thing that we've
ever bought today and it's not like it's
Taj Mahal but
it's really fun it was built by John
Beckman he was the set designer who
partnered with Walt Disney way back when
for the Robin Hood movie back in the 30s
he built this and so the Robin Hood
Village Resort was built by the set
designer and partner with Walt on the
Robin Hood movie in the 30s with Errol
Flynn it's just a fun piece of History
it it's got a beautiful campus we've got
12 acres originally it was nine and a
half acres at the Robin Hood it's got a
little bit of Waterfront it's got a dog
but then there was a Triplex that came
for sale adjacent real estate two and a
half acres
and so I called them up it was on Zillow
they want to be cashed out and I said
hey would you sell or Finance this
and I said we have debt on it
but we'll we'll just pay it off we'll
sell our finance it
so they wrote a check for their debt and
uh we bought that on a contract and then
we assembled it and the fun part was
one of the prior owners of the Robin
Hood
was the person who built this house Mr
woodcox's it's a Triplex house we call
it the sauna house it's got one upstairs
and two downstairs so he built the house
so we got to actually reconnect the
campus
but my favorite part about it is beyond
a lot of the campus he didn't own the
main Pub building the uh the Nordstroms
owned it and so the prior owner that
sold to us bought from the Nordstrom so
we got to assemble this this huge campus
that hadn't been assembled before
so that that's my favorite part about
the whole story we got to put something
back together put together a piece of
History
and uh yeah it's been fun and it was all
seller financed yeah do you have a bank
loans and zero dollars out of pocket we
bought um seven million dollars of real
estate is it like a limited Hospitality
play What's the the end product here
what do you what is it that you're doing
with it yeah so it was run primarily as
a two to three days stay you come into
the hotel cabin get away you get your
hot tub you can go kayaking go see the
seals go see the wolves and through the
summer wedding venue yeah but we are
primarily using as an event space we
have our own event and we're doing a lot
of weddings we're working on getting the
writers Club there's a pnw Riders club
that hosted their event in January I
don't remember where they host I think
it was Puyallup or something but we're
gonna try and get them in next year to
fill in some winter stuff but big
country music concert that's going to be
there this year we're doing concerts
again bringing music back to Union which
is something that they've been missing
out on for a long time used to happen
we want to just Embrace what it used to
be not change change it so
that's that's the story behind the Robin
Hood
and I'm not a huge advocate for going
out of your lane like we're good at
multi-family we're good at acquisition
stabilization and we're really good at
that we can come in we have the teams to
turn a unit we make things really nice
and primarily we're entry level housing
we make it
really nice and we cut we were able to
cut down on property management fees by
starting our own property management
company and so we're able to come in
typically we're just a little bit under
Market rent for above average Market
inventory because we fix them up really
nice so we just have fantastic Leasing
and that is what we are good at we did
this one because we hit our goal 100
units
this came up and I was like this is the
adventure that we want to have
but I always I always say that on all
the podcasts if you're going to do
something it is a best practice to stay
in your lane hospitality is out of our
lane and it was really really difficult
to learn a brand new space I do not
regret it at all but that is where we
would have just been Rich how did we
know about that yeah that was a that was
a huge sacrifice it will move us forward
but that was a huge huge undertaking
that is why that rule will it be fun is
so important especially as you get
established
because we could be done instead we
decided to have an adventure and I'm
super glad we did it's it's very easy
guys to get lost and you'll you'll lift
your head up and a decade will come off
the calendar I promise you so uh we just
did it we just did a similar deal where
we took a golf course and a 1400 unit
housing complex that was at one point
together and it got bifurcated and had
its challenges we bought the two assets
independently put them back together
same thing we didn't have experience in
that space specifically but it is so
rewarding it is so fun you get to do all
the things that you're talking about you
get to bring great amenities back to the
community and you have to enjoy what
you're doing uh because if you don't I
promise you 10 years will go by and and
you'll you'll lift your head up and go
what in the hell just happened here I've
got two kids and you know I haven't
lifted my head up for the last decade uh
I love every single thing that you you
guys are doing you're winning in every
single way congratulations on absolutely
all the success where's the best way for
folks to to find you
have a YouTube channel our videos are
getting a little better than they used
to be if you watch some of our first
videos they were pretty rough however we
documented everything we documented it
all from before we owned anything
together that is Cody and Christian
multi-family strategy
so as always folks uh the links will be
below guys I I really appreciate the
time Cody Davis Christian Osgood
um founders of multi-family strategy
love what you're doing congratulations
on all the success and thanks for taking
the time
thank you absolutely best of luck guys
as always please everybody stay safe