Property operations
Inside a 44-Unit That Brings In $40,000 a Month in Rent
A walkthrough of our 44-unit senior campus in Stephenville: the repeatable renovation spec, the zero-down structure, and why I manage by walking around.
My shoes were soaked, the parking lot at our Stephenville property was flooded, and I was checking drainage around every building in the middle of a storm. That's a part of being a rental-property owner that rarely makes it into the ads.
This is the 44-unit I've been telling you about all year. It brings in about $40,000 a month in top-line rent (yes, haters, top line) which is $480,000 a year. It cash flows about $5,000 a month today, and when the project is finished it should be closer to $16,000 a month, with roughly $2 million in additional upside. That combination is why I think it's going to be one of the best deals we've ever done. Here's what the building actually looks like, and what the work behind that number really is.
Related reading: How $5,000 Unit Turns Took Rents From $500 to $1,250
Management by Walking Around
I say this constantly and I'll keep saying it: you manage by walking around.
That means physically going through the units. Making sure your unit turn teams are doing what they're supposed to. Making sure your management and leasing teams are doing what they're supposed to. Walking the parking lots in the worst conditions you can get, which is exactly why I was out there in a flooded lot checking whether water was draining away from every building the way it's supposed to.
You don't learn all of that from a spreadsheet. During the visit, I inspected three units being made ready and completed a final check on another unit that already had a signed lease. The point was to confirm that the work met our standard before the next tenants moved in.
Matthew Wang, one of the other owners of this building, was there with me seeing Stephenville for the first time. Part of the reason for the visit was to find projects: more on that at the end.
The Renovation Spec: Clean, Simple, Repeatable
If you want to play the affordable housing game, this is the model. Renovate nicer than your competition at the same price point, and don't over-improve.
Here's what that looks like in these units:
- Laminate floors that look great and cost what they should.
- Simple, repeatable wall colors. Every unit in this building always gets the same paint, which makes turns very fast.
- Plastic shower surrounds in the bathrooms: very easy to clean, very easy to replace, and they look just fine for this level of housing.
- Clean new toilets, basic cabinets, a vanity, a mirror, a sink.
- Color-matched appliances: microwave, oven, fridge. They don't have to be stainless steel. They do all have to be the same color.
That last one is the detail most people miss, and it drives me crazy when they do. I hate walking into a unit where one appliance is stainless, one is black, and one is white. It just looks like trash. Matching white appliances in a clean unit read as new and intentional. Mixed finishes read as neglect, and they cost the same.
The units themselves have the things you actually want to buy: high ceilings, open floor plans, spacious layouts, and a lot of storage. One of the one-bedrooms I walked has an absolutely massive closet. The campus also has two-bedroom units, but every single one of those was already leased, so I couldn't show them. There's a huge backyard too.
The Amenity That Makes the Big Money
The little thing that makes us real money in these units is in-unit laundry hookups.
Notice what I said: hookups. I never provide the laundry machines. Tenants don't respect machines they don't own. They put way too much detergent in them, they break them, and you replace them constantly. It is the worst maintenance decision you can possibly make.
So here's the setup instead. You offer the hookups, and you buy a campus that also has a laundry facility. Now the tenant gets to choose. They can use the coin-op and never buy a machine, or they can bring their own washer and dryer, put it in the unit, and take it with them when they leave. It's theirs. They own it. It's their choice.
If your competition doesn't offer that option, you're already the nicer building, and it cost you a hookup instead of an appliance replacement cycle.
These units also have a dishwasher and well-kept cabinetry. Clean, simple, spacious, basic paint color, lots of storage, matching appliances. That's what a good purchase looks like.
Why Everything Is Identical (and the One Unit That Isn't)
I want every unit in this building to look the same. Unit 801 is the only exception, and the reason is a good illustration of the principle.
Its floors were in perfect condition. I like to go lighter, because it makes a space feel bigger, but you don't rip out a floor that has nothing wrong with it. The cabinets in that unit were beat up: usually we'd replace them, but these were structurally in good condition and the coloration was the only problem. So we keep a darker paint color on hand as a backup specifically for that situation. Don't replace things you don't need to replace.
Everything else in 801 matches the rest of the campus.
That consistency is not an aesthetic preference. It's an operations decision. We keep backups of all of it on site (flooring, countertop, paint, colors, all in storage at the property) so we can rapidly turn literally any unit in the building. When one unit looks like another unit looks like another unit, a turn stops being a project and becomes a checklist. That's how these get done so fast.
Keeping this property occupied is absolutely critical, and consistent replaceable parts in entry-level housing is how you do it. Run a property well and you tend to attract nicer tenants, which we have here. One of the units I inspected had a signed lease with a move-in coming, and all it had needed was some moldy trim boards addressed, a few bugs handled, and mold remediated around the bathroom. That's it.
The Numbers and the Structure
We bought this building for $1.8 million, which is a crazy price for 44 units. We slayed this one on price.
The bank had no issue giving us 80% loan to value, so we only needed to come in with a few hundred thousand dollars. Each investor put in $175,000, which covered the entire down payment plus a reserve. Today we're sitting on a little over $100,000 in the account as our reserve budget, and the property has been cash flow positive from the very beginning.
I bought this one with zero dollars out of my own pocket. I'm not the only one buying deals zero down, and you should be buying deals like this zero out of pocket too.
There's one more piece of the structure that's specific to this property. Under Texas state law, we get 50% off state taxes in exchange for spending $5,000 per unit every three years on renovations. That's an enormous benefit, and it's why we keep the renovation pipeline running.
This is a senior citizen campus, which is a big part of why we bought it: there's a huge need for senior housing. Our oldest tenant here is 94 years old, which is wild, and our youngest is 61. We have 41 of 44 units occupied with a move-in coming, so it should stay near 100% occupancy. The clubhouse doubles as our office and my base of operations for the property: 20-foot ceilings, a huge space, a nice fireplace, and a bingo hall.
The funny part of the day was that Matt and I walked the whole property trying to find projects to spend that renovation money on, and we mostly struck out. I'm not seeing much to spend money on yet. But we'll find it. Mark my words, I want that 50% off.
Key Takeaways
- Walk your properties, especially in bad conditions. Flooded parking lots tell you things a report never will.
- Renovate nicer than your competition at the same price point, and stop there. Laminate floors, one paint color, plastic shower surrounds, basic cabinets.
- Color-match your appliances. They don't need to be stainless, they need to match.
- Offer laundry hookups, not laundry machines, and buy campuses that already have a coin-op facility.
- Stock backup flooring, countertops, and paint on site so any unit can turn fast.
- Structure matters as much as the property: $1.8 million purchase, 80% LTV from the bank, $175,000 per investor, cash flow positive from day one, and zero out of my pocket.
Watch the full walkthrough to see the units, the clubhouse, and the flooded lot for yourself: it's the clearest picture I can give you of what $40,000 a month in rent actually requires.
If you want to learn how to buy deals like this, the mentorship is where we do it: a group that trains with me three times a week, with members taking down deals all over the country: over $50 million in deals closed in the first half of this year. You can book a call with my team at multifamilystrategy.com/call to talk through your market and your objectives, or watch the overview at mentorship overview. The free starter course is at multifamilystrategy.com/get-free-training, and there's a free calculator in our Skool community.
I stood in a puddle for this one. Hopefully I earned the like and subscribe.
Read the episode transcript
0:00 I'm Christian Osgood, your channel host. 0:02 I own hundreds of units just like this. 0:04 This is what it looks like to be a 0:05 landlord and this is multif family 0:06 strategy. Welcome to the channel. I'm 0:08 here drenched in water at my Stevenville 0:10 property. This is the 44 unit building. 0:12 I'm going to show you guys what it looks 0:13 like to do management by walking around 0:14 today figuring out what is going on with 0:16 your property in the worst of 0:18 conditions. My shoes are absolutely 0:19 soaked because we are at a flooded 0:21 parking lot. I'm making sure the 0:22 drainage for every building is correct 0:23 today. This is the 44 units. I've been 0:26 sharing the story with you guys bought 0:27 earlier this year. There's the 0:28 clubhouse. Here's the apartments. We're 0:30 going to be walking through three of the 0:31 units that we're getting made ready 0:32 right now in the middle of a storm. I am 0:35 so excited to show you guys what it 0:37 actually looks like to be a passive real 0:39 estate investor. Come with me. Redside, 0:42 one of the units of the 44 unit. I'm 0:44 here with Matthew Wang, who's one of the 0:46 owners of this building, visiting 0:47 Stevenville for the first time. Welcome 0:49 to the channel, Matt. Thanks for having 0:50 me, guys. This is one of my favorite 0:53 units. This We walked in here, not too 0:55 much to do. We just have to clean. And 0:57 there was some who probably smoked the 0:59 unit at some point. Smells lightly of 1:01 smoke. So, we're going to get an osnator 1:02 in here. I'll show you what this looks 1:03 like. We talk about buying nice real 1:05 estate. This is what you're looking for. 1:07 Renovate nicer than your competition at 1:09 the same price point. Don't over 1:11 improve. Laminate floors, but they look 1:13 great. Simple, repeatable wall colors. 1:16 Every unit in this building, always the 1:18 same paint. Makes it very fast to turn. 1:21 Hop over to the bathroom. Plastic shower 1:24 surrounds. Very easy to clean. Very easy 1:26 to replace. Look just fine for this 1:30 level of housing. This is nice, 1:31 affordable housing. 1:33 Clean new toilet. We just came in and 1:35 installed that basic cabinets. We have 1:38 our vanity. We have our mirror. We have 1:39 our sink. Again, clean, simple, 1:42 repeatable. That is the model if you 1:44 want to play the affordable housing 1:45 game. Now, a couple of advantages here. 1:47 You do have a absolutely 1:50 massive closet. This is one of our one 1:52 beds. We also have some two bed units. 1:54 There's a huge backyard we'll walk out 1:55 to in a little bit. Here's the little 1:57 amenities that make us the big money, 1:59 though. 2:00 You got your microwave, you got your 2:02 oven, you got your fridge. They're all 2:03 color matched. Very important. They 2:05 don't have to be stainless steel. They 2:06 do all have to be the same color. That's 2:08 a huge thing that a lot of people miss. 2:10 I hate going to one where it's like 2:12 stainless steel and it's black and it's 2:14 white and it just looks like trash. 2:16 Here's the big money maker, though. 2:17 Little thing 2:20 in unit laundry hookups. And we have a 2:22 laundry facility. What does this do? If 2:23 I provide laundry machines, which I 2:25 never do, they never respect them. They 2:28 put way too much detergent in them. They 2:30 break the machines. You replace them all 2:31 the time. It's the worst maintenance 2:33 decision you could possibly make. What 2:36 you do is you offer the hookups and you 2:38 buy a campus that also has a laundry 2:40 facility. They can choose to use the 2:41 coin op and not buy a laundry machine or 2:44 they can get their own laundry machine 2:45 and put it in the unit. They get to 2:47 leave with their laundry machine. It's 2:49 theirs. They own it. It's their choice. 2:51 If your competition doesn't offer that, 2:52 it's already nicer. And then the little 2:54 amenities. You actually have a 2:55 dishwasher in the unit. You have 2:57 well-kept cabinetry. This is what you 3:00 really want to buy when I talk about 3:02 clean and simple and spacious, high 3:05 ceilings, basic paint color, open floor 3:08 plans, lots of storage, clean 3:11 appliances. You're getting the picture. 3:13 This is what a good purchase looks like. 3:16 Today, this is unit 801 of the 44 unit. 3:18 This is the only one that will look 3:19 different from the other ones. I want 3:20 everything to look identical. However, 3:22 these floors were in perfect condition. 3:24 I like to go lighter. It makes the space 3:25 feel a little bit bigger. However, this 3:27 is what we have. Other than that, this 3:29 will look very consistent to our other 3:30 apartments, except we also had beat up 3:33 cabinets. Now, often we replace them, 3:35 but they were in good condition. The 3:37 coloration on them was trash. We keep 3:40 this as a backup paint color. So, in 3:42 this video, I'm going to talk a lot 3:43 about the consistency and how you use 3:44 replaceable pieces to keep your units 3:46 affordable, make a lot of money, and 3:47 provide an excellent place to your 3:48 tenants. In the event that you need to 3:51 repair something, and it does just take 3:53 a nice coat of paint, always have a 3:55 darker paint on hand. Don't replace 3:57 things you don't need to. But we do have 4:00 backups of all the flooring, countertop, 4:02 paint, colors, all in storage on site at 4:04 the property so that we can rapidly turn 4:06 literally every unit. But this is what 4:08 it looks like, guys. I have three one 4:10 beds available. All of our two beds 4:11 released at this campus, so I can't show 4:13 you guys any of those, but this is what 4:14 it looks like. Very consistent, very 4:16 clean, rent ready units ready to go. If 4:19 you're going to be an excellent manager, 4:20 you're going to do this. I always say 4:22 this, I'll say it again. Management by 4:24 walking around. You manage by actually 4:26 going through the units, making sure 4:28 your unit turn teams are doing what 4:29 they're supposed to. Your management and 4:30 leasing teams are doing what they're 4:31 supposed to. We're going to get these 4:32 things all online and least this next 4:34 week. This is how you play the game 4:36 quickly and efficiently. Here's a 4:38 different floor plan for another one bed 4:40 unit. This one is signed lease. We have 4:42 a movement coming in. I'm doing the 4:43 final inspection just to make sure 4:44 everything looks up to snuff. And it 4:46 does. Look at that consistency in the 4:48 property. White appliances. Everything 4:51 is new, clean, crisp, matching. 4:54 Countertops are clean. We had some moldy 4:57 trim boards in here. Few bugs. Not bad, 5:00 but definitely needed to be addressed. 5:01 That was all we had to do here. When you 5:03 run a property well, you tend to attract 5:05 nicer tenants. We have great tenants in 5:07 here. As we come in, the mold has been 5:10 remediated from around the bathroom. 5:13 There's that ugly guy in the mirror over 5:14 there. What's up? But guys, this is what 5:18 I want real estate to look like. Simple, 5:20 repeatable. When I say one unit looks 5:21 like another unit looks like another 5:22 unit looks like another, this is how you 5:24 get the units turned so darn fast. We 5:27 have three vacancies here. We just had a 5:28 few move outs. We're able to increase 5:30 rent a little bit as we lease these up. 5:33 This property staying occupied is 5:35 absolutely critical. The way that you do 5:38 that is this strategy of consistent 5:41 replaceable parts in entry-level housing 5:43 for beautiful real estate. I'm not the 5:45 only one buying deals zero down. We 5:46 bought this $0 out of pocket. You should 5:48 be buying deals like this $0 out of 5:50 pocket. You need to check out multif 5:52 family strategy. Not just the YouTube 5:53 channel, which you've already liked and 5:55 subscribed to, but the mentorship. We 5:58 have a program with people all over the 6:00 country in a group training with me 6:03 three times a week learning how to buy 6:05 deals like this and taking out deals all 6:06 over the country. Over $50 million of 6:08 deals have been done in the first half 6:11 of this year. I am so excited to share 6:13 this with you and invite you into it. If 6:14 you want to learn more about multif 6:16 family strategy, go ahead and click the 6:17 link below. You can book a call with my 6:19 team. They'll talk about you, your 6:21 market, your objectives, and if multif 6:23 family strategy is a good fit for you. 6:25 And this is the clubhouse slash our 6:28 office. This is my base of operations 6:30 for this property. Massive, massive 20ft 6:34 ceilings, huge space, nice fireplace. We 6:36 got a bingo hall cuz again it's a senior 6:39 citizen campus. Our oldest tenant here 6:42 is 94 years old, which is wild. Um, our 6:45 youngest is 61. We are mostly occupied. 6:50 We have one move in happening in the 6:52 unit that I will show you here in just a 6:53 little bit. And then we have two other 6:56 vacancies. So we have 41 of 44 units 6:59 occupied with a move in coming in. This 7:01 should stay near 100% occupancy. There's 7:04 a huge need for senior housing, which is 7:06 part of the reason that we bought the 7:07 property. Also, we just absolutely 7:09 slayed this one on price. Little bit on 7:11 deal structure. It was a million8, which 7:13 is a crazy crazy price. We're able to go 7:15 to the bank. They had no issue giving us 7:18 80% loan to value. So we only had to 7:20 come in with a few hundred,000. Uh each 7:24 investor came in with $175, giving us 7:25 the entire down payment plus a reserve. 7:28 Today, we're sitting with a little over 7:29 $100,000 in the account. As our reserve 7:32 budget, the property is running really 7:33 well. We are cash flow positive and have 7:35 been from the get- go. This is what we 7:38 want to do with great real estate. Now, 7:39 as a requirement of Texas state law, we 7:40 also get 50% 50% off of state taxes, 7:45 which is extremely helpful in exchange 7:47 for spending $5,000 per unit every 3 7:50 years in renovations. So, we're looking 7:52 at a bunch of other projects to do here 7:53 and keep all the renovations coming. 7:55 Right now, just checking out drainage 7:56 and making sure that we don't have to do 7:57 anything else. I'm on site here with my 7:59 buddy Matthew Wang, one of the other 8:00 owners. Uh, we're going to come up with 8:02 a couple of projects that we need to do 8:04 here over the next few years. So, trying 8:06 to figure out what they are. 8:07 Unfortunately for us, we kind of struck 8:08 out on that today. I'm not seeing too 8:11 much to spend money on yet, but we will 8:13 find it. Mark my words, I want that 50% 8:15 off. Once again, I'm Christian Osgood. 8:17 This is Multif Family Strategy. I am 8:19 standing in a puddle right now to 8:20 deliver you the best content online on 8:22 how to be an actual landlord, make a ton 8:24 of money in real estate, and provide 8:26 excellent housing to excellent people. 8:28 Hopefully I earned a like and subscribe 8:29 here.
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