BiggerPockets Real Estate Podcast - 635: How an "Average Joe" Can Build a Multimillion Dollar Rental Portfolio

Episode Date: July 14, 2022

Building a rental property empire isn’t easy. Whether you dream of owning five, ten, or two hundred rental units, there is a way to get there—you just need to know what it is. It took Sam Primm seven years to figure out the smartest way to invest in real estate, and now he’s here to share it with you! Sam, like many people, didn’t hate his nine-to-five job but knew that being on some else's schedule wasn’t bearable for the rest of his life. Sam partnered up flipping a few houses here, buying a few rental units there, and wholesaling for some extra cash. Three years into his real estate side business, Sam took the leap and went full-time into investing. Since then, he’s been able to buy over $20M in real estate, totaling his portfolio to a whopping $40M. This may seem unachievable to the average real estate investor, but Sam makes it clear that he isn’t special and is just a regular guy buying rentals. Through his real estate tenure, he’s been able to define exactly what the average investor needs to do to scale their real estate portfolio. His “SCALE” system isn’t complex, but it will help you double, triple, or quadruple the amount of real estate you own in a very short amount of time. Itching to go full-time into investing like Sam did? Tune into this episode, he’ll show you exactly how he did it. In This Episode We Cover: What to know BEFORE you quit your job to go full-time into real estate investing The “SCALE” system that allows you to grow your real estate portfolio faster  The best way to meet private money lenders, investing experts, and future partners Getting your spouse on board the real estate investing train Why fear is the most important feeling for new real estate investors Using social media to grow your network so you can scale faster And So Much More! Links from the Show BiggerPockets Youtube Channel BiggerPockets Forums BiggerPockets Pro Membership BiggerPockets Bookstore BiggerPockets Bootcamps BiggerPockets Podcast Get Your Ticket for BPCon 2022 Listen to All Your Favorite BiggerPockets Podcasts in One Place Learn About Real Estate, The Housing Market, and Money Management with The BiggerPockets Podcasts Get More Deals Done with The BiggerPockets Investing Tools Find a BiggerPockets Real Estate Meetup in Your Area “On The Market” YouTube Channel Rob's BiggerPockets Profile Rob's Youtube Rob's Instagram Rob's TikTok Rob's Twitter Henry's Instagram Henry's BiggerPockets Profile Books Mentioned in the Show Rich Dad Poor Dad by Robert Kiyosaki Traction by Gino Wickman Connect with Sam: Sam's Instagram Sam's YouTube Sam's BiggerPockets Profile Click here to check the full show notes: https://www.biggerpockets.com/blog/real-estate-635 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page! Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the bigger pocket show number. Whoa, whoa, whoa, whoa, whoa. David's not here, so you just can't jump into the intro. We got to rock paper, scissors to see who does this. All right. All right, but no two out of three, all right? Whoever gets it gets it. One shot, one shot, one take, Drake.

Let's do it. All right, ready? Rock, paper, scissors, rock. Scissors. You, all right. Well, you not only, not only was like slower than you, I still picked the wrong one. I don't even know how that's possible. man.

You have to have systems if you want to grow. You know, there just needs to be some sort of systems and guidelines and processes set up at the very beginning. So it's just setting your foundation to kind of explode from there. It's not fun. I don't like doing it. That's why I partnered with somebody who's incredible at it. But it is necessary if you want to scale. If you're just doing what I did at the beginning, just doing whatever you can, buy whatever you can, figuring it out.

That's not a way to do it at any high level. you'll be able to inefficiently buy five a year. But if you can just take some extra time and set up those systems and processes and Monday morning quarterback each deal and improve it, you can do five in a month. And then maybe 10 in a month. So you can just start to grow once you're systemized and process. Well, welcome to the Bigger Pocket Show, number 635, the show where we teach you the art of the real estate dance,

which is a reference you'll understand if you make it for the very end of the episode. I'm joined here today by my friend and co-host, Henry Washington, How's it going, man? What's up, buddy? First time we get to do a show together. This is exciting. And let me just say, I think we are nailing this intro. Yeah, we're pretty much rock stars.

I don't know why we would do anything else from here on out. Right, we can just retire early today. So what's going on with you these days, man? Oh, man, we're doing good, man. Just spending some time doing some stuff with on the market. That show's doing amazing. And, you know, I like that I get a chance to, kind of get to know you a little bit. You know, we've had a chance to talk a little bit about what

you've got going on. And I think we've discovered that, uh, we have a very similar background. So it's been cool to get to share the microphone with you. Yeah, that's right, man, a bit of a bromance. Well, hopefully, uh, hopefully it all goes, comes through today. I'm a little sick, man. There's just this weird thing. When you have kids, you are sick all the time, especially if you send them to daycare. Like for me, previous to having kids two years ago, I could count on, see, and I want to cough right now, trying not to because we're on a podcast. All right, hold on. I'm going to mute. Hold on. All right. Sorry. It sounds like I've like smoked a pack a day. But before I had kids two years ago, I can count on my hand how many times I was sick. And then I had kids and yeah, now they have

perpetual runny noses and now I have a perpetual cough. And yeah, it's always just an interesting, like, what will I be sick with next week? I don't know. You are 100% preaching to the choir. I have my kid literally cough in my mouth. So yeah, I get it. Yeah, well, it started with one kid, then I got sick, then I got my other kid sick, and my wife's like, don't, don't you dare. And I'm like, I'm sorry, we live in the same house. So today we're going to be talking to Sam Prim, who's quite the impressive fellow, right? I mean, he's got a $40 million portfolio, and he's really only been in the game. I mean, not to say only, but I think only is relevant here because he's only been in the game since 2015.

I think it's pretty nuts in seven years. I think my math is correct there. Feel free to check me there. To build a $40 million portfolio. in seven years is so nuts, man. Like, what do you think about that? I mean, are you pretty close to that $40 million mark yourself? No, I'm not. No, I don't know. I am not at that $40 million market.

Yeah, that is a pretty quick time frame to scale that quickly. But what I like about him, and he, and he mentions this himself, he's just a dude, right? And we're all just people. And we are able to do great things with the right people and systems behind us. And he talks a whole lot about the systems that he had to put in place. to enable him to grow to that level. And I think that people are going to get a ton of value from it. Yeah, definitely.

So you're definitely going to want to stick around to hear his system that he calls the scale system. And, you know, what I liked about Sam was, you know, he's a self-proclaimed pretty normal dude, which I also think you and me are pretty normal dudes. And that's not a bad thing. It just means we work hard to really build what we have, right? And I think today's episode is going to be really impactful. For those of you that might have, like, between one and eight deals under your belt, and you want to just get to that next level.

And it doesn't have to be one to eight. You could have 10 or 15. But I think it's like if you're looking to double your portfolio, this episode is really going to get into some of the nuts and bolts of how you do that. 100%. Couldn't agree more. So I really encourage people to take notes if you can. If you're in a place where you can do that and just go ahead and plan ahead of time

to listen to this episode a couple of times because there's some true nuggets in here that are pretty implementable. Yeah. That's probably a word. That you can, yeah, for sure. But things you're going to hear that you can start to implement in your business right now that are going to help you start to scale to that next level. Yeah, yeah.

And we, you know, David Green has gone today. So we took the liberty to butcher his beloved Burr acronym. And we were, Sam has changed that up. We were adding on to it. There's the F now, the F Burr, there's an S in it. It's like, you know, no holds barred this episode. Yeah, we just do whatever we want. So before we get into it, though, let's get into today's quick.

So if you're looking to network and actually, you know, raise private capital, if you're looking for investors who want to invest in your project, if you want to look for people to partner up with on your first, second or third deal, consider, you know, joining a meetup. There are so many local meetups in your city. And if there isn't one, you have the power to create it yourself. You can do that by going to the bigger pockets forums, posting your, you know, about what you want to do, go to social media,

invite people in your network. But if you don't want to create one, you can actually find out about local meetups that are happening in your area by going to biggerpockets.com slash events. Absolutely. You can start a meetup. It's so much fun. We started our own Bigger Pockets meetup three years ago.

We still do it now. And it's a ton of fun. So even if there are other meetups, start one too. Man, it's a ton of fun. Yeah, I think you have one today, right? Tonight we have our Bigger Pockets Meetup. That's right.

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trip and actually earn money. Airbnb makes that possible with the co-host network. If you're away for a while or have a secondary property, you can hire a vetted local co-host with real hosting experience to handle it all. A co-host can handle guest communications. It can manage reservations and keep things running smoothly so you don't have to check your phone between beach days. That means less stress and more time enjoying your trip. You can relax, knowing guests are taken care of and your place is in good hands. You travel, your house works. Everyone wins. If you're ready to host but could use some help, find a co-host at Airbnb.com slash host. All right, well, let's get into it. Sam Prim, welcome to the Bigger Pockets podcast. How are you?

I'm doing very well. How are you gentlemen doing? Oh, we're doing good. It's always a good day over here in Bigger Pocketsland. Can you tell the audience a little bit about yourself and give us a snapshot of your portfolio? For sure. So yeah, I like to kind of say I'm about as normal as it gets. My mom was a teacher. My dad was an engineer. I grew up in the Midwest, nothing exciting, went to school, went to college, was going down that path of, you know, working for somebody else until you're 65 and retiring. And as I was kind of doing that, I just didn't get excited about it. I didn't, you know, know, enjoy the thought of retiring at 65 and handing my, you know, kids a few hundred grand when I passed away. So I started to invest in real estate. Flash forward to today, I own a $40 million rental portfolio that I bought without using my own money. I own a house flipping company that I'm going to flip 300 houses this year. And then I also do some social media stuff. So I'm pretty involved in real estate at this point. I quit my job in 2018 and it's kind

of been, you know, you know, kind of on fire since then. So you do some, uh, social media stuff, but I think we looked into it. And you got about 155,000 Instagram followers. So obviously, you know what you're talking about and people really like what you have to say. So I think it's pretty nuts, man. You said you started in 2015 and that's about seven years. And in that seven years, you've built up your portfolio to $40 million or a $40 million portfolio. So that's really, really impressive. I'm just kind of curious. Can you take us a little bit through the trajectory to get there because obviously $40 million portfolios don't happen overnight. And I'm kind of curious, you know, from year one to two, like what was that really big inflection point in your business?

For sure. Yeah. So year one, like you said, it was 2015. I think that year added a couple rentals, had a full-time job. Me, my business partner, Lucas, each had full-time jobs. So we were, we were doing it, you know, on the side, you know, from side hustle to full-time hustle to financial freedom is kind of the path that I've taken and I try to help other people take. And it's just, just, you know, a couple houses that first year, maybe, you know, eight or ten that second year. And then that third year is actually when I went full time in 2018. So that was kind of that inflection point. I quit my job that was, you know, a really good corporate job.

I was making good money. But it wasn't scratching that ish. Like I talked about earlier, I wanted to have more impact, you know, with my family as well as, you know, the community and eventually, you know, nationally, and having a job work for somebody else is going to do that. So in 2018, I quit that job. kind of scary, actually really scary, and went full time. And ever since then, it's really, really snowballed. I think that first year that I was full time, we added 63 doors. And then in the last 12 months, we've added 20 million. So it's just kind of been like literally to not be too

stereotypical. It's literally been like a snowball, kind of starting out slow and then building over time, because you build relationships with banks and lenders and people to bring you properties and brokers. It doesn't happen overnight, like you said. But if you stick with it and continue to always, try to get better and make new connections and improve, it is going to eventually snowball. And, you know, it has done that recently, like you said, to the tune of 40 million. And I honestly feel like we're kind of just getting started here. Man, that's super cool. And it's an inspiring story.

And, you know, I think Rob and I can both relate with you a little bit because we've recently gone full time, right, in the past year. So just a little over a year. And so understand totally like that leap of faith to kind of bet on yourself. can you give us some of the like what are some of the practical applications or steps or processes that you put into your business when you went full time because going full time and then being able to generate enough income for you to survive on is one thing and then having a business that flips 300 houses a year is another thing and like tell us a little bit of like what practical things did you put into place to start to help you get to the point to where you can do 300. houses in your business so the people can can kind of feel like this is this is something that that a normal guy can do bridge bridge that gap I get it and and I kind of alluded to it earlier but like I said I'm I'm as normal as it get so if I can do it you guys can both definitely and are doing it and a ton of other people can like there's there's nothing special about me I'm just a normal dude

that is willing to take chances and figure it out and got a good team with me but you know practically what we did was in 2018 my business partner and I Lucas both quit our jobs at the same time and went full time into this real estate thing. And we had a company that we partnered with. We had our own rentals and there was a local flipping company that was doing about 100 houses a year that we partnered with that gentleman and kind of took over. So like I said, it's, you know, not a super exciting story, but, you know, quitting that job, I knew that I had some active income because you're not going to get very much active income from rentals in general and especially Burr's deal. So you're not going to get a ton of active income, but you need to start to have something

to fall back on. So we had a few flips in the works and wholesales. And it was pretty strategic. It wasn't like jump in the pool, whether there's water or not head first and see what happens. Like, you know, like a Grant Cardone or somebody would tell you to do. I'm the outgoing obnoxious sales guy. Lucas is the operations guy, but still, I still wanted to have a strategic plan and having partnering on that local flipping business and taking that over, allowed me to have that income. It allowed me to have that. And if you don't have that, I think that's okay. I would just make sure you have some, you know, reserves, a comfort level with your relationships with the banks and the people bringing you deals so you know deals are still going to come

when you take that leap. But I would for sure have some type of backbone there and not just try to figure it out as you go, you know, have, you know, deals in the pipeline and such. So I kind of got lucky and good timing that I, you know, had a partner to jump into it with, but also, you know, it was a risk. I was making a quarter million dollars a year, you know, at 28 and in St. Louis, that goes a long way. And I, you know, didn't, you know, my first two years, I made less. So it was a little bit of a step backward to get that long-term wealth gain that eventually is coming. So when you say quarter million dollars at 28, was that from your corporate job or was that from a mixture? Yeah. Okay. Okay. And so you obviously saw a path where the real estate side of

things could supersede that or at least come pretty close. Like where was that line for you when you were quitting your job? Because I think that this is something that we talk about relatively, you know, often on the podcast, but we never really get into like what was that? that decision point for you whenever you did this, you know, were you already making so much more in real estate that you were like, okay, I can just lose the quarter million dollar paycheck? Or did you sort of just know that if you had 40 hours back into your life, you could really ramp up your real estate business? Yeah, kind of a combination of the two. So I definitely wasn't making a ton of money in the real estate game.

We were, you know, had been doing it for a couple years. We had a handful of rentals. 15 or 20 at the time. And we were so figuring things out. We didn't keep books very well. You know, that whole thing. I remember in 2018, in like May, I was looking at January of 2017 bank statements to try to get our taxes done, you know, way behind schedule. So we weren't super organized. We're just trying to figure it out as we went. So I didn't know how much money I was making in our rentals. Our flips were doing okay, but we had made money, lost money. So they're, in my mind, having any past income coming in through real estate was not was not even going to be an option.

It was going to be this new company and this new thing we were doing to try to replace that income with wholesales and flips and kind of going full time into that. So I just kind of made the leap. And like I said, it took me a couple of years to get back to that income. And that was just from the active income. I've still yet to touch any of my rental income, any cash flow coming from my rental properties. Now we know how much we're cash flowing and know all that. I didn't know it at the time when I quit.

I have taken some equity out of the rental portfolio and some cash out refinances. But other than that, I haven't touched the rentals, worked on the active income with the flips in the wholesale. So just kind of having a plan to have that partnership and to know that I was at least going to have some money coming in. I had some reserves built up. But yeah, I didn't ever touch any of that active income with the corporate job and still made that leap that was kind of crazy.

But looking back, it wasn't a no-brainer. But it didn't feel like it at the time. Yeah. I think this is kind of a cool, like, how I quit my job story, because most stories that I hear, it's like, I'm doing a job, I'm making decent money, real estate's making me more money now. So I quit this one. I go do the real estate and then blow it up, right? That's a traditional story. You're saying, no, I was making a quarter of a million dollars a year. I was not making that in real estate. And then I still made the leap. So talk a little bit about what maybe sacrifices you had to make from a lifestyle perspective or like any like mentality switches that you had to make or conversations with your spouse like how did you because you basically took two steps back to take 10 steps forward and I think a lot of people are scared to do that and in your proof that it can be done so kind of talk about maybe what some of the struggles of that were or how you got through those times

yeah for sure great question so as I was in I'll take it even one step further than back further back than that. As I was investing in real estate and taking my weekends away and working on the properties and the evenings away and doing all this work, my wife was like, what are you doing? We didn't have kids yet, but she's like, you make really good money. You're set. You've already been promoted. You're, you know, managing people and you're, you know, have kind of that corporate ladder already laid out for you. Why are you spending all this time doing this? I don't see the results. We're not making any money from it. So I didn't communicate with her. I just kind of did it anyway. and then eventually we got to a point where I was like,

I probably should, you know, get you on board. So what I ended up doing was PowerPoint presentations. I did about a PowerPoint presentation about once every two or three weeks for about two or three months to get her on board. Here's why I'm doing it. Here's what our rentals are looking like. Here's what the eventual value will be. Here's kind of the plan.

You know, here's the wealth that they can be created. And so I just had to get her on board. And once I did, the opportunity to quit came up about six months. months later. And honestly, the main reason I quit was I didn't want to be left behind. So like I alluded to a little bit, all of my businesses I have, I have a business partner, Lucas, and he was doing it. He hated his job. He was an engineer and he hated it. I liked my job, but he, you know, hated it. And he was going to do this with or without me. Obviously, I was still going to have ownership with him. But I felt like he was going to be doing the heavy lifting. And he was going to be doing 9% of the work because I was going

to be traveling at that W-2 job and doing that and not being able to help. as much as we each had been kind of doing it on the side. He was going to be working 50 hours a week on it. I was only going to be able to do 10. So I didn't want to left behind, and I didn't want to burden him with everything. So that was one of the bigger factors was, you know, this opportunity is coming up.

I trust myself. I trust us. We have kind of some systems and processes in place. We have some relationships built. Let's do it because, you know, it's a little more risky quitting that job, you know, then I wouldn't have been able to go back. My boss actually cried when I told him I was,

quitting. I wouldn't have been able to go back to that. I would have had to go back to a less paying job. So we didn't have to sacrifice a ton. I did pretty well. We had some reserves. I had some equity in my house. But we did not make as much money for a while. Didn't have to, you know, do anything crazy like eat ramen noodles for a month or anything. But definitely didn't didn't do as much as far as like eating out, traveling and stuff for a year or two. Yeah, totally. You know, you know what we call kind of that presentation you gave your wife? we call that a real estate intervention. Come on in, honey.

Can you have a seat on the couch? I got this presentation I've prepared for you. With the one small investment, we could be millionaires. Yeah, so that's really cool, man. I think actually, Henry and I recently talked about this on a podcast that's going to be coming out pretty soon about, yeah, how spousal approval is really important, you know, because I think real estate, people think that it's a get-rich quick scheme and it's a get-wealthy slow, you know, rendezvous, if you will, where you don't really know what's going to happen. I mean, you have a pretty good strategy and you're very consistent. But it's one of those things that can take three, four, five years to come into fruition. I've been working on my real estate portfolio for,

yeah, about five years now. And I've gotten it to a point where it's cash flowing really, really well. I mean, at its low points, you know, I think about a year ago is that $25,000 a month of just pure net cash flow on my side. And it took a very long time to get there. And it's gotten to that point. So I don't want to say quickly, but over the past four years, because I didn't spend any of that money

and I kept reinvesting in it. So I really like what you were saying about this because it's very funny how counterintuitive it is. We all say, oh, we want to quit our jobs and become a real estate professional or a real estate entrepreneur investor. We're going to make so much money from real estate, that, you know, that's how we're going to pay ourselves. But in all actuality, most of my,

most of my favorite real estate partners, entrepreneurs, or peers, they actually don't take money out of their real estate business. And I think that's the case for you too, right, Henry? That's 100% correct. I kept my job as long as possible because I absolutely did not want to touch anything. And it's funny, our story is mirror so well, Rob, and we talked a little bit about that. But like, I've been in it for about, I've been building for about five years as well. And I would say this year is my first year where I could actually say I've stabilized in my portfolio, right? Because it was buying a lot of distressed properties that take some work to fix them up and get them rented out. And this is the first year where I have, you know, mostly full units and we're not renovating.

And what people don't understand is, yes, if you've got 60 units, that's great. If half of them are under construction, then they're not making you any money. They're costing you money every month. And so, yes, it is not a get rich quick. It is a get rich for sure if you stay consistent, though. Yeah, yeah, definitely. So, Sam, I sort of want to talk about something that you sort of nonchalantly throughout there. And I think you said that you've acquired $20 million of real estate in the last, did you say three months or in the last year?

Last 12 months. Oh, last 12 months. Okay, great. I was going to say three months would be nuts. But, well, actually, you know what, 12 months is also nuts. But let's talk about that because. I got to imagine that's probably coming from some form of like a very large multifamily or a mobile home park or a syndication or fund. Can you walk us through some of the details for that, how you were able to do that or, you know, I guess, yeah, anything there so that we can kind of understand a little more context.

Because that's a very big number. Yeah, no, it is a big number. And I mean, the 40 million real estate rental portfolio is just, I don't even believe it. I just say it so much on social media that it's like second nature. but like when if I think about what I'm saying when I say it, it's almost like not even true. And same with the 20 million, because that's a lot. And it's been a culmination of things. It's been, you know, the last several years, you know,

those are third, three years of full time setting up the systems and processes and having the relationships built with private lenders and hard money lenders we've used a little bit of as well and having the right banks that are willing to, you know, get funky with some things and do some things that will make a deal work that they normally wouldn't with new investors. So it was kind of a culmination of just years of relationship building. And you were right, it was three apartment complexes. It was a 42 pack of single family rentals all in one neighborhood, which we just closed on a couple months ago.

That's a really good deal. And then a bunch of one-off, you know, one-off single-family rentals with the Burr Method and then a self-storage facility. So it was a lot. We had dipped our toes in and had a few of all of that, but we really went all in on the opportunities that presented themselves. In 2020, 2020, we didn't buy as much, but we were looking at deals. I remember looking at probably analyzing close to 100 multifamily properties, and they just didn't make sense.

But we developed a relationship with the broker, and he brought us a deal. We sent him a solid offer the day of. No contingencies. We lost out on it, but he's like, all right, you guys mean business. And he brought us his next three deals first, and we closed on all three, a 29 unit, a 27 unit, and a 19 unit. And just having those relationships built with him now, with the private lenders that we've been able to talk with, and then with the banks, I've just kind of really made it all work. It's one of those things where it's sitting for a year and a half not buying one multifamily when that was our goal was frustrating, but we didn't give up. And we continued to talk to people and analyze deals and give solid offers and build relationships.

And eventually it all just kind of happened at one time. And it was just the proof in the pudding that if you had the fundamentals and, you know, set up the right relationships, when opportunities do present themselves, you can take them. down because they were all with a couple different private lenders, you know, no syndication. Luke and I are full owners of them. So it was, it's kind of a unique way to scale that quickly without having to, you know, have small ownerships or syndicate. It was just, you know, done the, they were all burs. They're all, they are our burr deals. They're all, you know, just short term or long term bird deals. Man, that's super cool because most people, uh, when they get started investing, they, they mentally get hung up on, on two things.

The deal flow, right? So how am I going to find all these amazing opportunities that are going to me all this money, right? And then how am I going to find the money to buy those things? And so, you talked about money partners and private money. And I think generally people understand that that's out there, but get intimidated with like figuring out how exactly to go find these people with this private money. Can you give us some, you know, tips, tricks of the trade? How did you find these people? How did you present to them something that would make them feel like, hey, Yes, take all of my money and go do these things. I like it. I love it.

So I want to touch on one point you mentioned people are just kind of afraid and have that fear and apprehension to, you know, get started in real estate or to go find money, right? People just have that fear is, I think, the biggest thing that hold people back. That's part of paralysis analysis. You're trying to analyze what's going to happen around every corner, and that's fear because you don't know what's going to happen around that corner. So a couple quick things on that. And then I'll give my exact pitch. I get to the private lenders as well as the four things that I tell them to assure that. that this is the safest investment they can have with the highest return.

But just overcoming that fear, I think this is important, and I love talking about this when it kind of organically comes up. I kind of wheezzled my way into it with what you ask, but I'm going to talk about it anyway. The fear, it's just so important for people, is to overcome that fear. There's two things quickly that I tell people and that have helped me overcome fear. Number one is it's necessary. It's a step in the process.

I almost want to stay, want to change the burr method to F-BERS, like fear, then buy, then rehab, then rent you have to have that fear it's literally a stepping stone you're not going to succeed without it nobody ever has and the other part is anybody that you guys look up to um either family wise or business wise Elon Musk whoever it is they all had a lot of fear and overcame it anyway so it's just reassuring to me that the most successful people I know had fear enacted anyway so you're not alone when you have that fear so you're in good company with the fear and you have to have it to be successful um and then tactically with the private lenders. So there's kind of four things that I tell them to make them feel secure in their investment. And they're not going to get this in any other type of investment,

whether it be a CD that's super safe, a savings account, whether it be, you know, the stock market or crypto. So there's four ways that we assure our private lenders are going to get their money because we don't put any skin in the game. We don't put a down payment with them. Number one is we personally guarantee it. We put our personal names on the line, hey, I, Sam, Prim, personally guarantee that I'm going to pay you back. amount on these terms or this sliding scale, whatever it is. So I'm putting my own butt on the line aside from the LLC. The second thing is we have an LLC agreement that our LLC legally agrees to pay them. Third, we add them as an additional insured. If I got hit by a bus, the insurance company writes

the check to them and me. And then lastly, they can be listed as a part owner until we pay them back or just have a lien on the property until we pay them back. So they are as secured as it gets. You don't get that with any other type of investment. Shoot savings account are only, you know, FDIC insured up to $250,000. So it's a super secure investment. And then it's also backed by us putting our skin in the game and us guaranteeing that we're going to pay them back, you know, 8 to 12 percent, whatever it calls for. So it's just a, it's a diversification play for them.

Everybody thinks that private lenders are, you know, I don't have a rich uncle or a rich parent. That's like 1% of private lenders. Most private lenders are just normal people. One of my students yesterday just posted in the group. He's been talking to a real estate agent about finding deals, and the agent wants to invest but doesn't know how. So the agent that he doesn't really know that well offered him $250,000

as a private lender at 8%. So it just comes from people that don't have money or you wouldn't think have a ton of money. It's not someone that has $20 million in cash. It's an insurance agent that's in his 60s. It's your parents' neighbor's boss. It's just a connection of a connection. Somebody that has some extra money that wants to deliver.

diversify because the portfolio of the stock markets higher, whatever it is, they just want to use a few hundred thousand dollars or less to invest and diversify. They believe in you and they believe in real estate. You just kind of got to meet the two and show them the solid investment and give them examples and presentations and all that. But it's just everybody goes through their phone one time and says, I don't know anybody rich. I can't find a private money lender. So that's not good enough. You've got to work a little bit harder. But always in the meantime, you can wholesaler use hard money. So there's really not an excuse like people like to make it. Yeah, man, you know, I love that because especially the story about your student and the real estate agent. And what I like to tell my students and tell everyone is like, you've got to put it out there what you're doing, right? You've got to share with people what you're doing because you never know who might be your next investor. Most private money that I've found, I have found through just someone hearing that I'm being successful in my real estate journey. and me being in rooms of other investors and getting access to people who see a, yes, you're doing deals and they would like to make some money on their money. And so the easiest two tips anybody could do to find private money like that is

share with everyone what you're doing, post it on social media and talk to your friends and family, right? Sure, a lot of them are going to roll their eyes and think you're crazy, but there's a couple of them that are listening. And then as you start sewing some success, you might get a tap on the shoulder and say, hey, you know, I'd like to make some money. Right. How can I do that with you?

And then also get in the rooms. If there's investors in a room in your market, get in those rooms. Getting those rooms on a consistent basis. And the more people see you in those rooms, the more they'll associate you with success. The more they'll associate you as a mover and a shaker. And the more trust you will build with them. even if you haven't had a conversation with them, right? And so if people see you like, know, and trust you and have some money, you'll start to see more faces who you feel like you can

approach that might have some of that funding for you. I'm kind of curious there, Henry, like what exactly do you mean by get in the room? Like, I think a lot of people, that's great advice, but tactically, does that mean go to a real estate meetup? Does that mean, like, form your own meet up and, you know, be the head of it. You know, maybe I gave the answer there, but I don't know what you mean by it. Yes. It means all those things, Rob, 100%. So for me, when I got started, I didn't know how to do any of this. And so I just wanted to be around people who did so that maybe I could learn something by osmosis. And what I learned through that process is that like, yes. So tactically, I would say real estate investment meetups are a great place because as a real

estate investor, you need to build a team. And the best way to build a team of people who are in the know and in the business is in rooms that are designed around and for real estate investors. So yes, I love real estate investor meetups because you can find real estate savvy real estate agents there. You can find contractors there who are looking for work. You can find title companies there, right? You can find people who have all these associations to the team that you need to build in those rooms and there are some areas where you're not going to be able to find a meetup and that is the perfect opportunity for you to start one because if you've looked and can't find something somebody else has too and when you start your own you like give yourself this instant credibility because

now you're the leader of this this group of investors even though you may have never done a deal the fact that you've taken the step to start your own meetup will have people look at you as as expert or as somebody who is an action taker and that in itself might bring you opportunities. So yeah, you can start, you can get on bigger pockets and start your own meetup. You can set one up there, post it on bigger pockets. People can find it and come to your meetups. I have a bigger pockets meetup in my local network tonight. Oh.

I love it. And just real, real quick to piggyback off that, we have our local meetup in St. Louis. We have two to 250 people come. and the last two meetups, three people each meetup have stood up in front. We do have as and once at the beginning. If somebody has a property, they want to sell or a business that they want to promote, they can for like five minutes or, you know, five minutes total. But they stand up and say, I got extra money.

I either have, you know, money from a self-directed IRA or I have some extra funds or I know somebody. You know, each time literally three private lenders have stood up saying, I have money, come talk to me. You can find it. And we can invest and, you know, they understand real estate. So you're exactly right. Meetups are where you meet everybody.

including money. Yep. Okay. Duly noted. I took notes on that. I'm going to a meetup tonight. No, I'm just kidding. But yeah, I do need to start one. I mean, that's something I've talked about. Because I think you're right. I think the power of meetups and networking. I mean, it's really hard to, look, I think you should put yourself out there online 100%. That's actually how I got into my first couple of partnerships is I was always just talking about what I was doing in the Airbnb space. And those people on my, you know, my friends and everything, they would reach out and they'd say, hey, how do I get involved with this? And I partnered with them in that capacity because, you know,

I was an expert at that time. I mean, not that I'm like not, not an expert now, but you know, in that moment to them, they're like, this guy knows what he's talking about. And it's really easy to do that when you know somebody and they already kind of have like a, you have a rapport with them. But I think actually going out to in networking with people you don't know is going to go a lot further than kind of keeping it all online. So yeah, I would definitely suggest a meetup if you haven't done that before. So yeah, meetups, networking. You can find a lot about that just on bigger pockets.com slash events if you want to find something in your area. But moving on to just really growing your portfolio and really blowing this thing up, Sam, because obviously you're

one of the guys to talk to about this. I know one of the things you talk about is the idea of scaling. And I know that you sort of have kind of a system around scaling. Do you think you could take us through what that means for you? Yeah, for sure. So this is kind of a system that I've developed over the past few years, like you said, you know, ever since went full time and things have scaled. And this is kind of how they have scaled. And I've been able to kind of get some type of an acronym around them because we all love the Burr method, right, buy rehab, rent, refinancing, repeat. Or the F-Burr method. F-Bur method. The fear by rehab, rent, refinance, repeat. And I actually changed it again. What I've kind of done and what kind of a lot of people know me for besides the guy who

loves dead. I'm in $25 million worth of debt. Hey, look at me. That just gets people's attention, but is that scale part of it? So buy, rehab, rent, refinance, and scale rather than repeat. Repeat's great, but it just means go back and do what you did. It doesn't necessarily mean get bigger, better, faster, stronger. And I think that's what most people want. They want that financial freedom. They maybe don't want 100 properties, but they probably want five or 10 or 15, whatever will help set them up for, you know, earlier retirement or be able to quit their job if they want. but you got to have a way to do it, not just go back and do what you did. So I changed it to scale. And scale is an acronym as well, so we can kind of dig into each one. But if you want to scale,

like if your goal is financial freedom and scaling, this is a good five-step process to do it. And it kind of works in any, whether you do Airbnbs or whether you do long-term, short-term, whatever you do, it kind of works. And it honestly, kind of works in any business. So I'm pretty proud of it. I've changed it a few times and kind of narrowed it down. but this is, if you want to scale, this is what I did, and this is what I suggest any of you doing. So we'll go through it with the scale. The S stands for systems and processes. Like, you have to have systems if you want to grow.

You need to create systems around each step. It's the most boring step, but it's the first step for a reason. It's the most important step because if you want to buy more houses, you got to create systems around that B step, right? You have to create systems around networking with people or systems around marketing. You have to be efficient in the time or moment. money you spend if you want to buy more houses. And then if you want to rehab more houses and rehab them better, you got to create systems around it. You got to get scope of works. You have to have contractors on the A list, your B list in case your A list is busy. You just have to create systems

around each step of that Burr's process and not to go through each one, but tenants. It creates systems around approving really high quality tenants will allow you to scale because you won't be dealing with tenants that don't pay or that are ruining your property. You know, there just needs to some sort of systems and guidelines and processes set up at the very beginning. So it's just setting your foundation to kind of explode from there. It's not fun. I don't like doing it. That's why I partnered with somebody who's incredible at it, but it is necessary if you want to scale. If you're just doing what I did at the beginning, just doing whatever you can, buy whatever you can figuring it out. That's, not a way to do it at any high level. You'll be able to inefficiently buy five a year. But if you can

just take some extra time and set up those systems and processes in Monday morning quarterback each deal and improve it, you can do five in a month and then maybe 10 in a month. So you can just start to grow once you're systemized and processed. Does that kind of make sense? Yeah, it does. Actually, I'm kind of curious. In your opinion, what are one of those, you know, very crucial systems that you put in place first when you're really kind of getting into a burr deal? The very crucial system would be making sure you have the system set up in place to quickly offer a strong offer on a deal you get coming your way. Wholesalers or agents or even paid marketing,

whatever works, you get a deal coming your way. And if you don't have like your ARV times .75 minus repair formula figured out, you can't quickly figure out what the ARV is or the repairs. Or you don't know how to quickly figure out if it's going to cash flow or not. You're either going to put a bad offer on or you're going to wait too long to put an offer on. So just having those systems, a Google Doc or whatever it is set up to quickly analyze a deal on paper or through pictures to give a solid offer or a contingent offer is super, important rather than like, let me go look at the property and have to bring three contractors

with me and all that kind of stuff, which I know will take time at first because you might not know how much rehab costs and all that. So I know an ideal world, you have a little bit of knowledge and everything, but just getting the systems in place to put solid offers in. And I think a huge one is for rehabbing, being able to quickly and efficiently rehab. If you can rehab in 60 days rather than 120 days, you literally can do two rehabs in the same time. You could have done one if you weren't efficient and had the systems in place. So, I mean, there's systems that kind of correlate to every single step of the burst process, but just starting with something as simple as a Google Doc or something along those lines will at least get you pointing in the right direction.

Yeah, that's really practical. I mean, I have my own Google Doc for short-term rentals. And very quickly, I can tell you if something's going to pencil out in five minutes or less, you know, and that's something I do several times a day, every single day. Even if I'm not really looking to buy it, I'm just curious. So I think sharpening that particular skill set, having something like that. And then I imagine to scale that even further, what do you really do start having deal flow, especially at your level, if you're acquiring $20 million of real estate in a year, you got to start hiring people, right?

People to help you analyze and pencil out your deals and relay that information to you. A thousand percent. That's part of the systems and process is having, you know, people do things for you or having partners or whoever kind of help carry the torch with you. Because if you want to grow, you're not able to do it probably super efficiently or super quickly just by yourself. So, yeah, I mean, that can go a lot of different places, but it's just more of having the mindset that I'm going to make this. This is a business. This isn't a side hustle. Yeah, it's a side hustle, but treat it like a business. And guess what? Businesses have order of operation. They have scope of works. They have ways to invoice. They just treating it like a business. And, you know, the best part of that is the systems. And it's the least fun for me, but it's super important. Once they're in place, like your sheet you use, imagine like scratching on a sheet of paper every time you're trying to analyze an Airbnb property. So I'm sure you've improved that Google Doc over to. time. So just having that system in place allows you to just efficiently look at five deals a day

and 20 minutes rather than 20 minutes a deal. Yeah. And I, you know, I think a lot of the times when people hear systems and processes, they get somewhat overwhelmed and think like it's some, you know, big piece of software that's expensive or some long drawn out, like super analyzed, you know, series of steps and they get scared. But like just keep in mind that your systems or your process is just the way you do things or the way you feel like you can efficiently do things. And so my system for the same thing you talked about, which is analyzing deals quickly and making offers, is I have a real estate agent who runs all my comps. And I'm always asking for ARVs. And so our system is if I send you an address, so I'll get a lead. And then I will literally flip that lead to him.

And if I put in the text message or in the email, hot lead, he knows that's something he jumps on right away. I look at that in a few minutes and I'm making an offer. Right. And so it's not some super fancy system. It's just what's the most efficient way that you think you can get things done in order to help you grow and scale? And so don't get overwhelmed by the idea of a system.

It doesn't have to be this big system. Google docs work great. Like it's just think through your process. and then you'll start to see bottlenecks and then think through, how can I make this bottleneck, how can I open it up a little bit? So for me, my bottleneck was, it might take too long to get ARVs, right? And so what my realtor and I decided on was, okay, we'll just let me know which ones are the most important. This is the indicator we use, and then I get those instantly.

Love it. Doesn't have to be complicated. Right. Very easy. A set of repeatable, efficient steps that you can execute at any point to keep moving your, get the ball forward. Yep, and it doesn't happen overnight. Like you said, it can start out simple. And then, like, our Google Doc has grown like crazy since the beginning. It was just, you know, ARV formula and cash flow formula. And now there's a ton of different things in there with rehabs and,

you know, how much money, how much money's costing us, how long it's going to take insurance added. Like, it'll grow over time, but it doesn't need to be overwhelming. Just needs to be, worst case, just do a deal. And Monday morning quarterback, it looked back and see what you kind of probably could have done better, why it took so long and just try to fix that one thing next time. You don't have to create an entire app spreadsheet around it every single time. Okay, so we've got S with systems. What is the C in scale? The C is coaching and community, but mainly coaching.

You have to get a coach. It does not have to be a paid coach. You guys are coaching people right now on this incredible podcast. I'm coaching people on my social media. You guys are too. It can be a free coach with technology and what's going on today and at your local meetups, getting some type of coach. You just need to get around people that are where you want to be or, you know, where you're going and just leaning on their knowledge.

It's, it's super important to have somebody tell you, you know, what to do so you're not doing it on your own. I mentioned a few times earlier, you know, rehab can take half the time if somebody can at least point you in the right direction, you know, help you avoid these mistakes. I always use the analogy. Tom Brady is, I like him enough. I'm not like a huge Brady honk, but everybody, nobody argues he's the best quarterback ever. He has a nutrition coach. He has an arm strengthening coach. He has a head coach.

He has a offensive coordinator. He has a nutritionist coach. He has like a strength and like stretching coach. He has like eight coaches that he pays well over a million dollars a year for. And he's the best ever. Yet he still understands that I'm not going to be an expert at nutrition. So I'm going to hire somebody to help me be better at my job by them leaning on their knowledge and leveraging their time.

Can you read 25 books on nutrition? if you want and, you know, go shopping yourself and do all that stuff. Yes. Or you can just either for free or paid, lean on somebody that's been there, lean on a coach that has that experience. And it can be, you know, just somebody keeping you out of the gutters. That can save you time and sweat and blood and headaches and tears of maybe even. But just somebody that's kind of just keeping you in the right direction and just giving you a lot of advice every single day on deals or just, you know, somebody that doesn't even know you're their coach, somebody that you follow and see on social media, but just leaning on other people's knowledge is a big thing.

I almost made it scale with a K for knowledge, but scale with the C sounds a little bit better. So yeah, the coaching and just being around the coaches in the community and the knowledge of other people because learning from their mistakes and doubling down on their wins literally will save you. I mean, if you're going to do this at any level and try to scale, which I think is the point of this whole conversation, you're going to save hundreds of thousand dollars over the years just by getting pointing in the right direction or having more equity in the deal, just leaning on other people's knowledge and don't try to do it on your own because I promise you're

not going to be as efficient as you could have been. Yeah, I agree with all of that, except, you know, is Tom Brady the greatest quarterback of all time? Because, you know, there's a lot of heart out there for Patrick Mahomes at the moment. So it's kind of TBD. I'm a Missouri guy. Patrick Holmes, the baby goat. So I like Patty Mahomes. Baby goat. He's the baby goat. He may get there. He may get there and I mean, I think he's probably better, more and more talented. But yeah, I think, yeah, it's a look, we don't have to get into politics. Yeah, we don't have to do that now. And I 100% agree.

We're talking about scale. And scale implies that there's some measure of time, right, to get bigger, faster. And so if you're going to do something more efficient and faster, yes, you're going to have to leverage people who have experience so that you can avoid some of the pitfalls and mistakes that are going to slow you down or stop you from scaling. It makes absolute sense. And I think people shy away from coaches sometimes because, yeah, some of them do cost money. And it's definitely going to take some time. But, man, my business didn't start taking off until I started hiring coaches.

And I kind of shied away from that for a long time. And so I totally agree. Yeah. So, Sam, take us through what's A in this, in the scale model? Any guesses? It's action. It's got to take action. You got to do with this paralysis analysis thing of people, you know, just wanting everything to be perfect. It's never going to be perfect. You're not going to time the market. You're not going to hit, you know, had the perfect, you know, entry into the market. You know, it's about obviously time in the market, not timing the market. You got to take action now. And you just got to be okay with the consequences. You got to be okay with it not being perfect the first time. You got to be okay with maybe refinancing at 80% rather than 75% and losing a little bit of action. equity. But I teach and you guys teach and we give so much away for free. We have our paid things. Like we can give you every single thing I ever know. I can literally no holds bar whatever. I can tell you anything I've ever done. But you're still going to learn 80% of it actually taking

action. You can only learn so much through the best coaches and mentors in the world. You have to take action and you have to be okay with the consequences, failures, wins, small steps backwards, big steps forwards that are going to happen when you take action because that's really where the rubber meets the road. You have to get out there and put your butt on the line and do deals and take action. I am nothing special by any means, but like you said, I bought 20 million in real estate in the past 12 months because I'm willing to take action. And it's not perfect, but we figure it out and we move on and we continue to grow. And that's kind of how in general life works. But for real estate purposes, take action, make offers, go out and do it.

Yeah, man, I totally agree. Right. It's that saying like imperfect action beats perfect in every time, right? And I think a lot of people, especially new investors, they really get hung up on wanting to minimize the risk by knowing every step they're going to take before they take the first step. They want the whole plan laid out, right? And I think most of us would tell you that, like, we probably just kind of figured out the first step, maybe had an idea of what the second and third step looked like, but we took the first step and then maybe took the second, but that third step probably was nothing like what we expected. Like, You're never going to have the whole plan laid out in front of you. And if you do, once you start executing on it, it starts to take on a life of its own, right? The steps that you laid out, you know, are probably going to be different than what you actually thought you were going to do, especially if it's your first deal or your first couple of deals, right? And so don't be afraid to take imperfect action and leverage. But it's not complete darkness, right?

Because you're leveraging, your coaching, relationships and the mistakes they made, you're leveraging the education you've taught yourself up until this point and you're trusting in yourself and the people around you. And so it's not a complete step in the darkness, y'all. Like, it's an educated step. And then you figure out what the next one is. And most investors who saw success followed some sort of similar path. Yeah, I liken this really to kind of my former DIY self where I would think about a project all the time. say, I'm going to do it. I'm going to plan it. Now, I'm going to watch a YouTube video. All right. Now I'm going to think about it. Let me digest it. And I would never do it.

So I started getting to the point where if I was going to do something to my wall, like, you know, create something, like an accent wall or anything, just punch a hole in the wall. Have a big hole in the wall that forces me to actually take the action to actually do the DIY project that I was doing because I know that the consequences of that are if I put a big old hole in the wall, my wife's going to say, hello, why did you do that? You need to fix that because we can't have a whole, we're having guests over next week. So that would sort of force me to then take the next step of, you know, either demoing whatever that was or patching it up. And so I kind of think it's the same thing with real estate. You know, there are a lot of forms of action that you can take. One of those could be getting pre-approved by a loan officer. Another one could be making a phone call to a realtor and getting on a list or making an offer, making five offers and seeing which one gets accepted. first, knowing that there is the opportunity to walk away if it's not a good deal, you know? Don't go put out offers willy-nilly, like try to analyze it. But I think my point here is just do something that really sort of forces you into the situation

and figure out how to navigate from there versus figuring out how to navigate before you ever take action because, yeah, it's just, it's never going to pan out. Yeah, 1,000%. My first deal I bought with a thought, I didn't know about the refinance Burr method. I bought it to flip and use the profits to put 20% down. So I bought it, was going to flip it, put 20% down on the next property, and I ended up finding about the refinance step during that. So I took action and it ended up being my first rental and I still own it today.

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If you're ready to host but could use some help, find a co-host at Airbnb.com slash host. Real estate investors, the April 15th tax deadline is coming fast. If you own rental property and haven't done a cost segregation study yet, you could be handing thousands of dollars to the IRS that you don't have to. These studies let you write off as much as 25% of your building and generate huge tax deductions. Costsegregation.com is an online self-guided software that makes cost segregation fast and affordable. So it finally makes sense for smaller rental properties purchased for as low as $100,000.

With pricing under $500 and an average savings of over $25,000, it's just a no-brainer. What's more, audit support is included by the number one cost segregation company in the U.S., but you must complete it before the tax deadline. Go to costsegregation.com and use code tax deadline to get 10% off your first report. Don't overpay the IRS. Head to costsegregation.com before a price. 15th. So take us to the L in the scale, Sam. So the L is going to be lead flow. You got to increase your lead flow. Real estate's a numbers game. As you guys know, if you want to buy 10 houses, you got to

look at 100 probably. You're not going to just be able to look at 10 houses and buy 10. So you have to increase your lead flow. There's a couple of different ways to do it. You can spend money on ads and spend money on people to do it. Or you can, you know, spend the time on networking. But either way, you have to take steps to increase your lead flow, and you know you can get that through the systems that you're going to create, through the coaching, what they can teach you through taking action. So it all kind of ties together. But just doing things that will increase your lead flow,

whether it be spending time networking with the right people, with wholesalers, real estate agents, going to meetups, Facebook groups, you know, the bigger pockets network, whatever it looks like, you have to take action and increase your lead flow. Because if you, like I said, if you want to buy 10 houses, you've got to look at 100. If you want to buy 50, you got to look at, you know, at least two or 300. You just got to increase those numbers if you want it to, you know, the bottom of the funnel

as a house buy. You have to get as many in the top as you can to kind of learn the process of analyzing and buying and increasing that lead flow. And hopefully as you get more efficient with it, you will have rather than talking to 20 wholesalers that don't really, you know, bring good deals, you narrow those 20 down to three really quality wholesalers that bring you a deal a month and then agents and you get efficient with your marketing. So just doing things, spending time, spending concerted effort to increase that lead flow, obviously

will help you scale. If you want to buy more houses, you need more leads. Now, I heard, and tell me if this is incorrect, I've heard that you've done TV ads before. Is that true? Yes, that is true. Yep, we do some TV ads here in St. Louis locally. And it's more of a brainy thing. But yeah, we do it.

And I know not everybody's going to do that. But we do that here, St. Louis, to get some lead flow. That costs some money for sure. Now, I imagine you're kind of calculating and penciling out the ROI on that, but can you tell us like, how has that really worked out for you? Is it worth it for anybody to do it? Or does it only really make sense at scale? I think it probably only makes sense at scale because we're in St. Louis and we only buy on the Missouri side. Everything. My rentals and all our flips and wholesales are in Missouri, but we're each in Illinois. So we're like, we don't really know that market that well. It's

different. So, you know, the ad, the TV, you can't really control which state it goes to. It just kind of goes out. So I think it's probably, you know, that next step if you have some rentals or you want to scale and grow, because it's not cheap. You know, I'll tell you guys any numbers on anything we do, on profit, any company, anything. We spend, we spend about 35 grand a month in TV ads, and it gets out there and we're getting about a 3x return on it, so it's pretty good, but like I said, it's mainly a branding thing. We want people thinking of our flipping company Faster House when something happens because you're not going to usually find that person always right when life happens. The reason we and you guys buy houses there distress is because

something happens to somebody's life. Passing away, bankruptcy, divorce, moving into a cystic care facility, whatever it may be, something not great is happening in that person's life and they need your help. And if people know our brand and saw our commercial for the past six months, they'll think of us when life happens, trying to get in front of them exactly with, you know, either, you know, Facebook ads or direct mail, whatever it may be. It works, but you've got to be in front of them right when life happens. But with TV, it's a little more like a national, it's more of a branding thing that hopefully they'll think of you when life happens. But we're also getting a decent return on it. Yeah. So effectively, if deals aren't coming in, then deals are also

not being closed on. Right. Like you need deals. And I think you're right. You know, if you want to buy 100 houses, you're probably going to be examining four or 500 deals to get to 100 houses, as my guess. I agree. So, Sam, take us to the final step here, E. E. E. So E is extra funding. So not just like that initial funding sources that got you through your first bird deal. You need extra funding. Don't let money be the reason you can't buy a house. At that by step, get multiple private money lenders, work towards that. Obviously, that's probably not going to happen at first. This is a scale. It's something that can happen quickly, but it still takes time. So get multiple private money lenders. Get approved with a couple of hard money lenders. You know, if you have any of your own money or lines of

credit on houses you have or businesses, whatever it may be, beef up that extra funding. So when a deal comes across your plate, that's a home run deal, you don't pass on it because you already have two other deals in the works. And you need to get extra funding at that rehab step. So that, again, can be private lenders, hard money lenders or lines of credit or credit. Whatever it is, increase the amount of capital you have sitting on the sidelines at the buy, the rehab, and then also that refinance step. You want to work with multiple small local banks. small local banks or credit unions are the, you know, the banks that deal with the Burr Method. You're not going to get Bank for America.

These national banks don't want anything to do with real estate investing. They don't want to loan you money on a property unless you're living in it. They don't want to loan you on somebody else's living in, and especially something that's not repaired and fixed up. So getting multiple banks to refinance and have relationships built with will allow you to diversify that a little bit. And small local banks have legal lending limits. If you want to scale, you're going to hit how much they can lend one person. So you need to diversify that as well.

So just getting some extra funding at the proper steps will allow money to not be an issue. And you got the leads come in. You got the money there. Now it's time to go. Yeah, man. I love that because a lot of people talk about obviously getting funding for deals. But I haven't really heard being talked about as like getting extra funding, right? That extra layer of cash, whether it be yours or somebody else is to help you take down deals.

And I think that, A, that's a great tip. And B, it's a great tip, especially for the market environment that we're in today because interest rates are rising typically, right? With the things going on in the world, we're starting to see a shift in what certain money costs, right? And so if you can start to leverage the experience that you have and the relationships that you have to start lining up different kinds of funding and not just sticking to one type of funding, and not just sticking to one type of funding. it'll help you be more prepared to continue to buy good deals as the environment around us is shifting. So I love that tip. Awesome. Yeah. So I'm curious at your level, do you have a lender that you, you know, that you work with exclusively?

Or because you're doing so much volume, you sort of have like a roster of three or four lenders? Yeah, we have a roster. So we have a roster of about five or six that fund our flipping company. You know, we're going to buy about 300 houses this year. we're going to, we take down some wholesales and we do some rehabs, it's majority wholesale. But we have a roster of private lenders that do that. And then we have a roster of three or four private lenders that fund our burr deals, our long-term rentals. Yeah, our long-term rentals and our apartment complexes. So we kind of, I would say probably have about 10 people that we develop relationships

with over the past several years that, you know, are kind of repeat, repeat lenders for us. Great. Great. Okay. That makes sense. So, yeah, I mean, I think pretty much in all of real estate, it's all about having a roster for effectively everything, especially if you're looking to scale. So that's been a masterclass on scaling. We appreciate that, Zand. If you're listening to this at home, rewind, listen to this again, and take notes because I pretty much feel like this is applicable to anybody. I mean, this is particularly for those people that are kind of in that one to eight deal states that now want to double that in the next year. This whole last 20 minutes or so. So it would be very applicable to that.

So thank you very much, Sam. Yep, no problem. It's, I've proven it before I kind of put it out there that it works for me and some people I know. So, yeah, it's obviously people can make it their own, but that general guideline should help you scale if that's your end goal. Yeah, yeah, totally. All right. Well, now seems like a good time to move to our deal deep dive. I don't really have the lowest voice.

David has a much lower voice. But I try. I try. It was a valiant attempt. So now it's time for the part of the show where we dive deep into one specific deal with our guest. Remember, you can do more deals with the help of bigger pockets, tools, and resources. Sam, do you have a deal in mind? I do. I have kind of an interesting one that's kind of one of those longer, longer term,

burr deals. It's on our 32 unit apartment complex we bought in 2018. Great. Well, we're going to fire off questions to you, and then you're just going to fire right back at us, okay? Let's do it. So first question here, what kind of property is it? It is a 32-U-un apartment complex, two buildings of 16 units, one bed, one bath. Awesome. How did you find it? We found it from a local apartment complex broker that brought it to us.

And how much was it? We got it under contract. I bought it for $1.1 million. Awesome. So tell us how did you negotiate it? We didn't do a ton of negotiating because we couldn't really pull it off at first. The initial banks that we went to said no. So we had the owner kind of let us manage it.

turn it around for a year. And then 2018, we got approved to close on it with the bank. So we couldn't really do much negotiating because it was probably too big of a deal for us to take down at the time. But we just got creative with the owner. And then the bank finally said yes. And how did you fund it? We funded it with private money. We put 20% down private funds. And the other 80% was with a small local bank. Awesome. And what did you do with it? We still loaned to this day. It was a long-term BIR deal. We bought it in 2018. We closed on it. We refinanced it in 2021. It appraised for $2 million. So we were able to add value by forcing appreciation. So we took out some equity just like a bird deal, paid up back our initial lender, their initial funds plus some interests. And now we own

it full outright and have a little bigger mortgage on it. But the rent that we've been able to increase over the past few years more than covers it. So it cash flows more and we own it 100% ourselves. So typically we would say what's the outcome, but I think that that's it, right? It's a pretty good deal of the outcome. It worked out pretty well. Awesome. So what lessons did you learn from doing that deal? We learned that, you know, the power of multifamily properties enforcing appreciation, taking over a property that the police were probably at, I think they said four or five times a week to now they're there four or five times a year. So taking over a property and improving the area and then being able to improve rents. and being able to get more efficient with expenses. So I tell people all the time, we lowered expenses. Oh, you didn't take care of your tenants. That's why, no, we just have software.

The old landlord would go to the door with a gun in his back pocket and collect cash as rent. That's not very efficient. So we had software online. We got good tenants in place. So just being efficient with your expenses and properly increasing rent and improving the building, I mean, the building doubled in value almost in just a few years

in the millions because we were able to force appreciation. So just the power and scale of multifamily was a big lesson for us on this one. Not efficient, but potentially effective. There you go. Depends on what you want, right? Sometimes. Yeah, that's okay sometimes. And final question here.

Who was the hero on your team for this deal? The hero on this team for this deal was our property management team. At this time, we had a small team, and they really peeled back. We had to, unfortunately, evict 18 of the 32 people in the first six months just for lack of payment or, you know, trashing the unit. So they really went in there and got everything and got great tenants in place. And now it's our highest performing cash flowing property we have because of the time and energy we put into getting good tennis in place. Awesome.

All right. Well, that was our deal deep dive. Now let's head over to the Famous Four. Oh, wait, no, no. That's not it. It's Famous for. Harmonized on that. Sorry about that.

Famous for. Okay. I'm going to ask you four questions here. And same thing. Just fire right back at us, man. So question number one, what is your favorite real estate book? Super exciting. Rich Dad, Poor Dad. It's just a great book that got my mindset into the possibilities of not working for somebody else their whole life, my whole life. Yeah. Yeah, I think that's, I don't think that's like a pretty popular book, right? I'm not sure I've heard of that one before. I'll send you a copy. Thank you. Please sign it. Oz, what is your favorite business book?

Favorite business book is Traction by Gino Wickman. It's just a systemized way to run a small local business. Small businesses don't have a way to kind of formulate their meetings and their quarterly agendas and their yearly goals and visions and everything. So it's just a great book that kind of tactically shows you how to run a business as an operating system, you know, as a real business and not just a side hustle. Sweet. Sweet. And tell us a little bit about your hobbies. So my hobbies, I don't have a ton. I like to golf a little bit, but I just, I love hanging out with my family and I love growing businesses. So I get so much joy and pleasure and so much, you know, pride in spending time with my family and growing businesses that it's more fun than anything I could think of doing, not related to that. Eventually, hopefully, I'll start to golf a little more and have a little bit more hobbies, but my hobbies are spending time of my family and creating businesses and growing wealth for myself and my team members.

And that's more than enough for me. I get up every day excited and run to go do that because I enjoy it so much. Yeah, totally. Well, last question. What sets apart successful investors from those who give up, fail, or never get started? I think the biggest thing is understanding that you deserve more. I think a lot of people don't think that they deserve to be financially free or don't think that they deserve to be a millionaire.

They might say that they do. They might for sure say that they do and think that they do. But deep down, they don't think that they really deserve. that success for whatever reason. So just people internally realizing that they do have, you know, the capabilities and they do deserve to have a choice. You can work for somebody else your whole life if you want. There's nothing wrong with that. Take that blue pill. But there is another pill. There's that red pill over there that you can control your future and you can be financially free and do what you want when you want, but you have to believe that you deserve it first. And it's not easy.

It sounds simple, but it's not. I think that holds a lot of people back. Couldn't agree more. So tell us where people can find out more about you. Yeah, the social media, as we alluded to that earlier, I got, I have 1.6 million followers on TikTok. I don't know how. I don't do anything fancy. I don't sing. I don't dance.

I just give away free advice. So TikTok, YouTube, and Instagram, just at Sam Faster Freedom. Faster Freedom is my education brand. And my name is Sam. So at Sam Faster Freedom on TikTok, YouTube, Instagram. I'm kind of on a couple other social medias. But just pick your two or three favorite social medias. Look me up.

I got thousands of hours of free content. and if you want to chat with me, just hit me up on Instagram. I'm still the one that answers. I don't have anybody answering for me, so I answer all the messages and do all the editing myself still. Eventually, hopefully I'll hire that out. But for now, just reach out to me if you have any questions or want to know more. Well, you say you don't dance, but you do the real estate dance,

the tango, the tango of landlording and owning $40 million of real estate. So, you know, that's a type of dancing. There is a song and dance there. I point a lot. I point a lot on beat to words. That's Mike. That's what I do. Yeah, so earlier when I was like, oh, you're quite the, quite the influence with 155,000

Instagram followers. We totally neglected that you have 10 times more than that on TikTok. Yeah, I don't know how. I just literally, a couple years ago, I've only been to social media for a couple of years. I was like, I'm going to post one TikTok a day for 30 days to try and grow my Instagram and TikTok that I just, or my Instagram and YouTube that I just started. And I think my fifth video got 100,000 views when my Instagrams and YouTube were getting 50. So I was like, I'm going to do this as well as the other stuff. so it's been pretty cool. Awesome, man. Well, Henry, what about you, man? Where can people find out more about you? Yes, very similar. I'm at the Henry Washington on Instagram and TikTok. That's the best place to reach me.

Awesome. And you can find me at Rob Built on Instagram, Raw Built on YouTube, of course. And, you know, I don't dance myself on TikTok, but I also do the real estate dance. Myself, you can find me at Rob Biltow on TikTok. Well, thank you so much for coming in and showing us how you did it, man. It's very rare that we get people that are like, oh yeah, I've got this awesome, awesome portfolio and they can just speak so clearly about it and make it so applicable to everybody. So we really appreciate your time, Sam. Is there anything else that you want to leave the audience with? Any quick knowledge bombs before we turn in today? I don't think so. I really appreciate you guys having me on and spreading the word that I just want people to know that they have a choice. I think is the biggest thing. You don't have to lead the

path and be the conveyor belt of society. It kind of places you in and it puts you in. You can branch off on your own. You can do it, I promise. Way dumber people have been extremely successful than whoever's listening, I promise. So you can do it. Just got to believe in yourself and go listen to everybody that's doing it, you know, where you are and where you want to be and go take action. What about you, Henry? Any final words? I know it's going to be a tough one to top. I know. I know. And I totally agree. And so, yeah, I mean, real estate is such a powerful vehicle. and you're 100% right. Like you can choose this and you can build wealth.

I would say don't get overwhelmed with the scale that we talked about. You don't have to have 100 doors to be financially free. You don't have to have 70 doors, 60 doors. You can have a few houses, a couple of duplexes, right? Just focus on getting enough cash flow to cover one bill. And then focus on getting enough cash flow to cover another bill. And if you do that over and over again, four or five properties, you might have all your expenses covered and you're financially free. Like, don't think you have to go as big as we're talking, but you can absolutely use the methods that was covered in this to get you to whatever that magic number is for you.

Awesome. Well, I can't top either of you guys. So we'll just leave it at that. This is Rob Abasolo for Henry. David Green does is a lot better than me, Washington. And when I say, I mean, me, better than me, not better than Henry. You know, I'm still kind of figuring out this whole, like, how to end a podcast when David's not here. So I'm workshopping it. I don't know how people feel about it. But here we are. Longest ending ever. Thanks, everybody.

Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday. Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K, copywriting is by Calicoe content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www. www.com. The content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves

risk. So use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose. And remember, past performance is not indicative of future results. Bigger Pocket's LLC disclaims all liability for direct, indirect, consequential, or other damages arising from a reliance on information presented in this podcast.