Title: “Sam Wegert’s Entrepreneurial Journey: From Martial Arts to Co-Living Real Estate”
Episode: 211
Do you want to know how to get into real estate in a way where you have fewer properties to obtain financial freedom?
Listen as we interview Sam Wegert in this episode of Profit First for REI podcast. He talks about co-living and making more money from the properties you already have.
Things like spending, keeping, and making more money, and lots of golden nuggets here. Enjoy the show!
Key Takeaways:
[01:05] Introducing Sam Wegert
[07:57] Getting into the real estate realms
[10:47] The co-living space
[16:25] Squeezing cash flow out of a property more than it would normally produce
[21:05] Two ways to start co-living space
[25:58] Co-living space as a legitimate business
[30:10] Connect with Sam Wegert
Quotes:
[10:05] “I got to be successful, and successful people are saying real estate.”
[10:52] “It is [Co-living] the fastest way to achieve financial freedom for the average person in real estate today.”
[29:11] “If they want to scale big, they need the right systems to manage the tenants.”
Connect with Sam:
Website: https://www.scaleyourrealestate.com/
Tired of living deal to deal?
If you are a real estate investor or business owner who is tired of living deal to deal and want to double your profits, head over here to book your no-obligation discovery call with me. Either myself or someone from my team will hop on a short call with you to get clear on your business goals, remove any obstacles holding you back, and map out a game plan to help you finally start keeping more of the money you work so hard to make. – David
Transcript:
Speaker 1 (00:00):
We’re talking way less setup than what I would consider the main competitor for the average person to achieve financial freedom, which is going to be like an Airbnb that can produce a lot of cashflow, way less setup, simpler to do more stable longer term, and not nearly as competitive as this multifamily space that people are getting into, or the self storage space that’s very, very competitive. Or the industrial space. All these are maybe longer term appreciation based plays, but we’re getting back to a straight cashflow play where in four years or three years, you could retire.
Speaker 2 (00:38):
If you’re a real estate investor who’s sick and tired of living deal to deal, then welcome home. Hear from everyday real estate investors just like you, and discover how they’ve completely transformed their business by taking a profit First approach. This is the profit first for REI podcast, where we believe revenue is vanity. Profit is sanity. It’s time to start making profit a habit in your business. So here’s your host, David Richter.
Speaker 3 (01:05):
We have Sam Wegert on today. He’s going to talk about co-living and making more money from the properties you already have or getting into real estate in a way where you have to have less properties to obtain financial freedom. So I absolutely love this because we’re all about making sure you make, spend and keep what you need to from your business. You’re making what you want to, you’re spending it in the right place and keeping what you want to. So he really helps you on making more money side. So please listen to him, listen to all the good stuff he has here, and you will walk away with a lot of gold nuggets and maybe a way to make more money for yourself. Sam, thank you for being on the Profit first. RI podcast. Excited for this episode. If you’re listening to this, you’re going to learn some things today. I’m excited to interview Sam as well, too. Sam Wegert here on the podcast. Sam, how are you today,
Speaker 1 (01:56):
Man? I’m doing good. Thanks for the honor to be on. This is a really cool opportunity and just excited to dive into a couple of really great topics around real estate investing and profit first. So I’m excited, man.
Speaker 3 (02:05):
I want to know you’re background. If someone doesn’t know you from Adam, give them the kit caboodle from, I don’t know, just whenever you started entrepreneurship to where you are now to that high level overview so they can get a little bit knowing and then going into the co-living and what you’re doing today.
Speaker 1 (02:22):
The real estate stuff. Yeah. Yeah, man. So I could take the whole episode on my background as I’m sure any of your guests could. Yes, exactly. But in short, I built, started when I was 15 years old. I had this unique upbringing. I was homeschooled. My parents wanted us to not be educated by the government, and so they decided to homeschool us. They were like hippies before being a hippie was cool. And I had this opportunity to buy a martial arts school when I was 15 years old, and my parents loan me 15 grand, and my parents were not wealthy by any stretch of the imagination. They just believed in me. They a ton. They wanted their kids to be around other mentors and role models, which was so humble of them to be able to do. So. I ended up buying martial arts school cause I was training martial arts, and I built from that point on over the next 10 years, 10 to 15 years, I built and scaled. And then as of four to five weeks ago now, I just exited a chain of martial arts schools that I built that had brick and mortar locations, but also had an online program that was teaching students in 25 states and Canada. And we just exited that completely. How old are you? I’m 32.
Speaker 3 (03:21):
Yeah. Ah, we’re the same age. Very cool. Yeah. That’s awesome. So 15, you bought it at 15 and then you just exited at 32. Very cool. Do you mind sharing the name of that chain?
Speaker 1 (03:32):
Yeah, it’s Uplevel
Speaker 3 (03:33):
Uplevel, Uplevel
Speaker 1 (03:34):
Martial Arts.
Speaker 3 (03:35):
Yeah, very cool.
Speaker 1 (03:36):
Yeah, we probably had in total, close to over the span, we’ve taught tens and tens and tens of thousands of students, but our active count was probably close to 25, 3000 students in the programs in the brick and mortar students. And so just, yeah, it was a really unique experience. Do you mind
Speaker 3 (03:52):
If I ask, I’ve got more questions there. What type of martial arts just
Speaker 1 (03:55):
Dive in? So I mean, it was TaeKwonDo based, but we mixed, we were a blended martial arts. So imagine TaeKwonDo is a lot of standup stuff. So you’re kicking, you’re punching, you’re trying to not go to the ground. But then a bunch of people were asking us, what if the fight goes to the ground? How do we handle that? So then we blended in Juujitsu and then we blended in a style that I am all about for any real estate investors. It teaches you so many lessons. It’s called Kav maga. It’s a very aggressive, I’m not saying you have to be aggressive in real estate investing, but you kind of do sometimes. It’s a very aggressive style. It’s a lot about, a lot about just neutralizing the threat as quickly as possible. There’s a lot of really cool lessons. I was a mama’s boy growing up. I was a little softer, wanted to please everybody. So taking this type of martial arch really gave me the, oh, it helped me be strong. It helped me be powerful. And so for any kids, I mean, martial arts is like everybody should do martial arts, in my opinion. And it was an amazing opportunity, man. It was an amazing experience. I don’t train as much as I want to right now, but I trained for 17 years, 18 years pretty much.
Speaker 3 (05:05):
Yeah, that’s probably baked into at this point. I did two years of Kung fu and I a hundred percent agree with you. Everyone should take martial arts at some point in their life. The mental, the toughness, getting hit and hitting something, it’s like you never know the feeling until you really do it because, okay, like you said, you grew up a mom. Well, I’m like, I grew up in the same environment. I’m not getting hit and I’m not hitting anyone else. That’s just not where I grew up. And when some people come from that background, which is totally different, but for me it’s like, okay, how do I actually, and it was great being a part of that environment and getting the physical and the mental, because someone, while I was going through that in real estate, someone asked me, what do I do for like, one of the things is martial arts. I feel like that’s one of the best self-development courses out there. Not just about the mentality and that, but it’s also physical and it’s also just all the different things. So yes,
Speaker 1 (06:02):
Imagine getting a workout without knowing you’re getting a workout. You’re actually learning a really cool skill. You’re enjoying it, you’re interacting with people. Funny man, we’re talking about this, I know this is a little bit of a tangent, but I had a call yesterday. I’ve been going through a very challenging time in my life right now, just with some relationships and some really more personal stuff going on with my family. And I was complaining to this, not complaining, I was just sharing with this friend. This was last night, literally this call was last night. I was like, man, I just feel like I’m at a nine out of 10. I feel like I’m a freaking about to explode. I need outlets, I need healthier outlets. He goes, Hey, are you doing martial arts? And he just started laughing. He’s like, I can just imagine you, I can get very intense sometimes.
(06:41):
And he said, I can just imagine you going into the, he’s like, I don’t know what it’s called because he’s not a martial arts. He’s like, it’s a mannequin. You hit the mannequin. I’m like the dummy. And he’s like, you just need to go tear that up and have an outlet for that. And I was like, I have a couple of injuries right now. So a lot of times I’ll go to weightlifting to try to get that intensity. I can’t really do that right now. Like I’ve got a wrist injury and a freaking shoulder injury and a back injury. So yeah, martial arts for anybody listening to this, martial arts is an amazing way to just be an outlet for life, to go to have some intensity. You’re not going to hurt anybody. You can yell at the pad as much as you want. You can freaking hit the pad as hard as you can, and it’s fun and you’re learning the skill too, and you feel more confident in being able to protect yourself and stand in yourself and be in your own skin. So that’s cool. I didn’t know you took a couple of years of kung fu, man. That’s awesome.
Speaker 3 (07:26):
Yeah. And yeah, I resonate with what you’re saying. It is. It’s such a great, how, so this is not the martial arts for real estate investing, but we both highly recommend if you’re listening to this and you’re wanting to get out of a funk or you want to uplevel your life and learn a great skill like you said, and work out at the same time. It’s just so many good advantages and benefits. Okay. So then you sold that earlier this year or during the course of this year. So what got you into the real estate realm?
Speaker 1 (07:57):
So when I was 18 years old, somebody told me I got introduced to Tony Robbins. So I started going to Tony Robbins seminars. I started being in that environment and someone was just like, Hey, you should buy real estate the right thing to do. There was a guy in my town and he was the, I’m from a very small town, it’s called Amherst, Virginia. Average income was like $25,000 a year, 2000 people, one stoplight, very small town. And not only was it small town, I did not go to public school. I was raised on a mini farm with eight brothers and sisters. So imagine I grew up until I was 15, 14 years old. I only knew my siblings pretty much a very sheltered environment. That’s not totally true. We had friends and the people we don’t hang with, but not a lot. And so one day I remember thinking, somehow I got it in me that I wanted to be successful.
(08:44):
That was my way to prove to the world, to my parents, to my siblings, that I could be somebody. And I went out and I just said, who’s the richest person in my town? And everybody knew the richest person in town. And I took him out for lunch. I said, I was going to take you out for lunch. And he owned this, he sold modular homes. So he had a couple of these places that sold modular homes, and I think it was really him who just instilled that idea in me of buying real estate. Like, oh, you buy the real estate. So his wife was a realtor and his wife at the time helped me buy this foreclosure that was a three bedroom, three bath condo. And I lived in one room and I rented out the other two rooms. I was single. I didn’t need the extra space.
(09:19):
And it was an apartment that was kind of set up for what we now call co-living. But back then it was just shared housing or room rentals. Each room had its own bathroom. Each room had a little desk built into it. It was honestly built for cottage kits. And so I just thought, oh, this is perfect. And I was making a little bit of money and I was living for free. It was just this really great way to live. And so that’s kind of how this whole thing got started. And then I just kept doing that. I just kept buying a property. All of these were with primary residence loan, so I’m not putting 20% down or 25% down, I’m putting 3% down, I’m putting 5% down. And so it wasn’t a big deal. I was making decent money building my martial arts chain, and it was just something that really was kind of part of my journey. And that’s how I got into it. And I can go down that road even further if you want, and kind of how it evolved. But that was the initial kind of thing was like, okay, got to be successful. And successful people are saying real estates. Lemme just go start there.
Speaker 3 (10:10):
How old were you then when you started in real estate? I think I bought
Speaker 1 (10:13):
My first property in 2011, so I would’ve been 20. I was born in 91. So
Speaker 3 (10:20):
You were doing both at the same time. You’re doing real estate. Hundred percent. And also, yeah. Okay. So very cool. Then. You’ve been in it for a while and in the real estate market, and you’ve seen the ups and downs since 2011, which was definitely downmarket back then. And starting on the rise to the next few years, what got you into what you’re doing today and what you’re promoting? I want you to have the four to talk about that for a while. The co-living
Speaker 1 (10:46):
Space. Yeah. Yeah, man. What I’m promoting today, and I know this might sound crazy, even a little exaggerated, but I believe it is the fastest way to achieve financial freedom for the average person in real estate today. I want to say that again because I think it’s really powerful, the fastest way to achieve financial freedom stably with stability in the real estate market that the average person can start doing tomorrow. And it is shared housing is what I got into. And I did not choose to get into it. I fell into it. And the story basically about how I fell into it was I started these homes and keep in mind, I’m from eight kids, so big family used to four boys, four girls. I always say the fights were even, and my parents had to break ’em all up. But I have this big family and I’m used to living with a lot of people.
(11:27):
We grew up in a 1900 square foot house, so imagine eight kids, two parents, 1900 square feet, you get the picture. So space was never a thing for me. And so what I ended up doing is I would buy these houses. I would buy this house, even the three bedroom condo I referenced earlier, and I would just rent out the rooms because I didn’t need them. And then I moved to Charlotte, North Carolina, which is where I reside now. And I bought a house and it was just too quiet. I wasn’t trying to make, it wasn’t really a big investment play. I was making decent money at the time for me in the martial arts space. And so I just bought this. But then I remember moving in just being like, it’s too quiet. I want to have some people that are home when I come home.
(12:05):
I don’t want to live in a house all by myself. I was dating a girl at the time, but she lived eight hours away. She was in Washington dc. So I was like, okay, this isn’t, so I started just renting out rooms. I put an ad up on Craigslist, had a guy move in. He was from Mexico. He was here for a year long contract at Bank of America. Him and I became best friends. We’re doing all these things. So anyway, I start having fun. I’m like renting out rooms in my home, start having fun. And then I had this big living room that none of us ever used. We’d go to our room or we’d be in the kitchen and I ended up splitting this living room up, adding a wall, adding a little bathroom and a closet, cost me a couple thousand bucks, didn’t get a permit or anything, just cost me a couple thousand dollars.
(12:40):
And I rented that out as a room too. And I remember one day, the one friend, my first friend, his name is Jason. Jason was my first friend here in Charlotte when I moved down to this new city, and he kind of took me under his wing. He was a really, really good friend to me. But he was a high powered banker for SunTrust that now merged with Truist, and he’s making six figures plus maybe even multiple six figures at this time in his career. And he basically asked me casually on a run one day, we’re going for a run, we’re out in the woods. And he says, Hey, how much are you renting that house for? And I did some quick math and I’m like, Hey, man, if I count myself as a renter, I’m renting this house for about 2,850 bucks, I think was the number.
(13:18):
And he kind of get this puzzled look, and he’s a big numbers guy. He’s just like, wow, man, I know the house you live in that would rent for 1300 bucks to a single family. It was just that. And then we had this conversation about it, and it just clicked with me. And I said, wow. Imagine what I could do if I could find a house and I could do five rooms. I was only doing four rooms in this house and the journey without me taking 30 minutes to tell a story. The journey went from four rooms to five rooms, to six to seven, to eight to nine, to the last two houses I just launched. Were both 10 rooms each. And I know some people on here that are listening to this, that sounds crazy. Can you even do that? What about legalities? What about all these things?
(13:56):
There is a legal way to operate this. But you got to keep in mind, I was raised with 10 people. This didn’t seem abnormal to me. I was just like, why is this weird? Everybody’s thinking, this is weird. 10 people sharing a house, then 10 people shared a freaking 1900 square foot house when I was growing up, and now these are 32, 34, 3500 square foot houses. I’m like, there’s more than enough space. But really this is a way to solve affordable housing because as we know, there’s, there’s 7.3 million affordable housing units short in the United States, affordable housing, homelessness is on the rise in all major cities, and affordability in general is drastically decreasing. And so we’re seeing this movement, truly a movement like companies like Pad Split or Bungalow or Homeroom or Common that are these tech platforms trying to push, even Airbnb is trying to get into it.
(14:49):
Now, Airbnb has a big weight. They’re going to have a tough time rebranding to We room rentals. That’s not their thing, but they’re trying to get more into the room rental space because when affordability decreases, we’re moving to where Europe has been for a decade or two. When my BiggerPockets episode first came out about co-living, I started talking about it, and this guy from Berlin, Germany calls me and says, Sam, you’re talking about this as this is this new concept. It’s not new. And he kind of got on me and I was like, okay, well, what’s your point? He’s like, we’ve been living like this for decades, and you’re at, man. He’s like, I build these room rentals from the ground up. We’ve whole codes just to manage room rentals, what they call. And so I was just like, well, dude, we’re headed your way. America’s headed your way. We’re printing money too. So anyway, I can go any direction you want with that, but that’s in essence how I got into it.
Speaker 3 (15:44):
Yeah, I like that a lot because if they’re a list, you’re like this first RI podcast, so I want them making more money, spending less, or spending the right place or keeping more of it. And it seems like this is a great way to take a rental and squeeze more juice out of it. We’re all trying to do that, right? You go from wholesaling, but then you’re like, oh, I could squeeze more juice out of it if I flipped it. And the rental side, it’s almost like instead of doing a single family, just straight rental, oh, well, maybe we’ll do Airbnb and we’ll do short-term, but then we could squeeze even more juice to do, okay, let’s do more of a pad split or room by the room rental, and that’s squeezing the most juice out of it. Is that the right line of thinking that I have?
Speaker 1 (16:25):
Yeah. And David Green from BiggerPockets, he’s one of the hosts of BiggerPockets. He calls that forced cashflow. He goes, you got to find real estate assets, which if you’re in the multifamily space, we know this, right? Because we look for assets in the multifamily space, you look for assets that you can increase rent. That’s one of the biggest ways to add value to a multifamily. So this is another way, exactly. You’re trying to squeeze cashflow out of a property more than it would normally produce. And you’re doing, obviously you’re trying to do that in an ethical way, in a legal way, in a way that makes sense. But this is one of the best ways, I think right now that fits the market. Now, Airbnbs are arguably another way to force cashflow on a property, but the challenge with Airbnbs is that I think it really depends, David, on what your listeners think is going to happen over the next five to 10 years.
(17:13):
If you think the next five years for the American economy are going to be amazing, amazing, amazing, and everybody’s going to have even more disposable income, then maybe you should be all in on Airbnbs because people are going to want to take bigger vacations with bigger homes with higher average rental incomes. But I personally believe the next five years is going to be, let’s call it a season of winter, a season of challenge. And I think we’re going to go through a tough season. And if we’re going to go through a tough season economically, I want to be in an asset class that’s needed, not an asset class that’s just like I want to do it. So we’ve been selling off the Airbnbs that I do have. I’ll keep a couple of the ones that are just in prime locations because I think there’ll always be a market for that.
(17:57):
But I like the stability of the cashflow of knowing I’ve got tenants. I’m not beholden to any big platform. We had an Airbnb the other day. We had a party, one of our Airbnbs in national’s, a million dollar property. It’s beautiful View sleeps 26 people. And we had this party, and we don’t allow parties, we stated very specifically, but the neighbors called the cops, cops showed up, gets reported to Airbnb, and Airbnb comes back to us and says, Hey, we don’t allow parties. You allowed a party and we are de-listing you from our platform for a month and a half.
(18:31):
And I was like, right. And so you’re beholden. So in the month of January, it’s probably a 25, $30,000 month boom, you’re off the platform. Nothing we could do about it. We appealed it a million times. We talked to you. You can’t get ahold of somebody on the phone, can’t get a hold the right person on the phone. It’s like, okay, is that what I want to put my financial stability and future in? No. And I’m not saying that there’s a place for Airbnbs, I’m just saying. But yeah, in terms of making more, we’ve got to look for things that have forced cashflow.
Speaker 3 (19:01):
So then I’d like, yeah. Oh, go ahead.
Speaker 1 (19:04):
I’d like to say one thing on the keeping more money part though. Yeah, for sure. And that is a lot of people will say, wow, the maintenance on that must be insane. Oh, you have all these people sharing a home. The maintenance must be insane. Well, here’s what I tell people. I think I really want to pit this. Let’s just say I have seven people sharing a home and I’m renting it out to seven people or seven people on a master lease. There’s all kind of legal ways to do it, but seven people, if I compare that to a seven unit apartment building, seven people having in a living apartment, I’m going to have way less expenses than that person. They’re going to have seven refrigerators, seven HVAC units, seven dishwashers, seven stoves, seven everything. I’m going to have one HVAC unit, maybe two. If it’s got two in the house, I’m going to have one, maybe two refrigerators. I’m going to have a lot less stuff that’s going to break. It’s the truth. And so there are some ways now it is more management from a tenant perspective, but it is less cost in management from an asset perspective makes I think that’s important for people to realize.
Speaker 3 (20:11):
So then do you rent these out weekly, monthly, annually? How often do you rent out on these leases?
Speaker 1 (20:17):
Yes. It’s paid for monthly and it’s a membership. The way that we legally do this is it’s a membership. They pay the membership dues and it’s a monthly membership dues. And part of their membership includes having access to a room in the house. And the main reason we do that is for legality purposes, so that we’re more like a fraternity club, or you see these places that serve alcohol, but they don’t have an A, b, C license, so you have to buy the $1 membership. That’s kind of the model that we’re following with people in the home.
Speaker 3 (20:48):
How easy is this to set up? You said this was one of the best ways for someone that’s the average person to get into real estate or So would you suggest this be one of the first exit strategies that someone’s new into real estate gets into?
Speaker 1 (21:03):
Yeah, there’s really two ways to do it. This is what I love about this strategy. If you’re going to go buy an Airbnb and you go to the bank and you say, this is going to be my primary residence, and you get a primary residence loan with three or 5% down, and then you’re lying to the bank basically because you’re not going to live in, you’re going to Airbnb it. But with this, you can authentically, legally, honestly go to a bank and say, this is going to be my primary residence and I’m going to live in one room. Or if you have a family, you can rent out the whole basement or you live in the top house and if it has a basement or if it’s got a room that’s like house hacking. But then you can just do that once a year. And these homes produce anywhere from $1,500 a month to $3,000 a month in steady cashflow.
(21:45):
So you do the math, you want to create a hundred thousand dollars a year lifestyle. If the home produces two grand a month, then you need four homes to retire. Four homes at two grand a month is eight grand a month for round figures. That’s about a hundred grand a year. So my point in saying that is most people when they think about retiring off of real estate, they’re talking like, well, I need a hundred units. I need 200 units. My multifamily guys, my multifamily friends are like, yeah, when I get to a thousand units, I’m like a thousand units. Damn man, that’s a long way away Versus what about four humps with steady cash flow with a model that’s needed and you’re solving a problem, now you have to do it right. So the setup of them, this is one way that I differ from pad split.
(22:28):
Pad split is a weekly rental. That to me seems a little bit more like short-term rentals. Now I’m friends with the guys at Pad splits pad split. I love them. I think they’re great. I think they’re out there trying to solve affordable housing. But I differ in a couple of ways. Number one, you don’t need to do weekly rentals. You can do more stable rentals, monthly rentals. Number two, they furnish every single bedroom that they do. I don’t furnish any of my bedrooms that the saying that I want people to take away from this is that. And I know I’m going to get some hate for this because all my ads online and all my talks get hate for this. They say then the new economy is coming where we’re going to own nothing and rent everything. And this is so terrible, and this is the worst situation.
(23:09):
People have to rent rooms. They can’t afford their own house now. And in some ways, I agree with them, this is terrible to some extent that the most wealthy nation on the face of the earth, the United States, people can’t afford a house. But it is what it is. And we’re, as entrepreneurs, we’re solving a problem because people do need housing. And so I want people to think of the room, a room in a house as the new apartment. So where I used to be able to go out and boom, well, okay, I can rent a room. We’re going to have to share a little bit more. We have to create community. And so if the room is the new apartment, I want you moving all your own stuff into your own. I want you moving your own stuff into your own room. And so for that standpoint, I want you to feel like it’s yours.
(23:51):
I want you stay. I’ve had people stay as long as 10 years from the first 2011, 2000, yeah, 10 years, maybe nine, nine. But year after year, after year after year, I want them to think of this as home. So we set up, we turn extra space into rooms. Of course if there’s a dining room, we’re going to turn that into a bedroom. But we keep a common space. It’s another thing that pad split doesn’t want. They don’t want you to have common space. I want you to have common space. We’re going to keep a common space so that people can connect. There can be some desks, there can be some co-working, be some community, and then we’re going to furnish only the common area. And that’s it. And that’s the setup. And that is a three to $4,000 setup. And if anybody listening on this, just to contrast, if anybody listening to this has actually done a real furnishing job on an Airbnb, that’s a 40, 50, $60,000 project.
(24:40):
So we’re talking way less setup than what I would consider the main competitor for the average person to achieve financial freedom, which is going to be an Airbnb that can produce a lot of cashflow. So way less setup, simpler to do, more stable longer term, and not nearly as competitive as this multifamily space that people are getting into, or the self storage space that’s very, very competitive or the industrial space. All these are maybe longer term appreciation based plays, but we’re getting back to a straight cashflow play where in four years or three years you could retire.
Speaker 3 (25:18):
So then let me ask this time involvement, is this something where someone could have one or two properties and they could still have a W2 job and still do something else? Or is this like, no, I’m going to go into this. I’m going to need to focus on because it’s seven people living in that house and I’m like, I’m going to have to do stuff for them or whatever. And then my other question paired with that is, do you also see this being a legitimate business that someone could be like, I do. I want to get 10 rentals and do this and build an empire of these types of houses. So I’m wondering, those two big questions are in my mind for people that are listening.
Speaker 1 (25:58):
Great questions. So I was working when I first started this game, and then it started to take off and I started to experiment with these larger and larger homes. I said, okay, this is for real. And I had a lot of doubt. I’m not going to lie. I had a lot of doubt. This was probably back in 2014, 2015. So I had a couple homes, maybe three, four homes at that point, maybe five. No, probably three. Four. And I was like, I had some money, I had some cash. I was still saving a lot using profit first type training to save from my business and to pay myself. And I went to a conference, and at that conference was this guy named Robert Kiyosaki, who I’m sure most of your listeners, if they’re in real estate, everybody knows Rich Dad, poor dad, Robert Kiyosaki. I walk up to him after the conference was over and I’m like, Hey, man, I got this question. It’s really weighing on my heart. I’m doing this room rental thing. I want to go all in, but I don’t see anybody else doing it. So am I.
(26:52):
Give me some feedback, give me some coaching. And he just gave me the ultimate confidence booster. He looks at me and he goes, Sam, that’s the wave of the future. He goes, I know people who are doing that and are starting to scale. You’re not alone. There are other people doing this. And he said, I actually know. He’s like, I’ve thought about this so much that if the economy takes a hit, which he’s very big on the economy, doing worse in the, he’s kind of doomsday right now. He’s like, I know how I’m going to split up my 6,000 square foot house into seven units. My house is basically what he told me. And I was like, well, if it’s good enough for Robert Kiyosaki, it’s good enough for me. And that was the moment I said, I’m all in and I’m all in on this strategy. And I started buying houses. So now my wife and I own, I think close to over 200 doors in this model. It is a business. It is a scale. It is what generates a lot of income. So
Speaker 3 (27:43):
You’ve proven the model.
Speaker 1 (27:44):
Yeah, it is what pays for our house right here in my mastermind, we represent over a thousand units around the United States. So end growing very rapidly. So you can now, I think there’s a cutoff point, I think when you get to five homes is where for me, I was working 60, 70, 80 hour weeks in my martial arts business as I was building this. So when I say I went all in on real estate, I was still all in on martial arts only five weeks ago from this date, December 8th, 2023. And have I sold that business? So I’ve been doing martial arts business all the way up until this point I was working, but it became a little bit unmanageable around four to five homes for me where I’d had to have someone start doing showings and handling the leads up until that point, I could handle it.
(28:28):
And so I think beyond that, when you’re going to need to have some real systems, now you have to have systems even for with one home, because this is nuanced. And so if somebody wants to have someone else manage the property for them, then they can partner with someone like me. We have partnerships all across the United States with companies that manage these. We just launched in Denver, we’re in Houston, we’re in Austin. We’re launching soon in Jacksonville, Florida, your state. So yeah, we have these partnerships where we’ll help people set them up and we’ll actually manage it for them as well. If people don’t want to do that, but they can manage it on their own. It’s not that unlike seven unit multifamily, if they want to scale big to your second question, if they want to go big and really scale, then they’re going to need the right systems to really manage the tenants. But if they have that, absolutely. I mean, pad split right now I think just is very close to 10,000 units around the United States. And so that’s not a lot when you think about how many people need housing, but it’s starting. We’re moving in the right direction.
Speaker 3 (29:36):
The wave, like you said. Okay, well that’s very cool. Then. This has been awesome. I think provided a lot of value just opening the lister’s mind to another alternative way, especially if they’re already buying these properties. This is great. It’s like another exit strategy for the real estate investor who’s already in the market. But then if this is someone new, if you’re listening to this, this might be the way to go right from the get-go to be able to squeeze this much juice from that property as possible. So how do people get in touch with you or where’s your training or however you help people with this or they want more info?
Speaker 1 (30:09):
Everybody with us, man gets started in the same way I run a company called Scale Your Real Estate. It’s really scale your co-living real estate. It’s really what it should be called, and it really helps people implement the right systems, find the right homes, not make mistakes on the rehab, get in an area where they know that they can do this, legally have the right contracts where they can do this legally in an area and just not hit a lot of the pitfalls and mistakes that I made over the last 10 years, 12 years, whatever. And so everybody gets started with the same way. I give away a free training, and it is not just a sales pitch, even though as part of it, there is an offer, but it is a lot of value. For five days we do these things called Five Day Challenges, and if anybody listening is interested in that, they just have to go to scale your realestate.com, www dot scale, your realestate.com, get on the waiting list for the next challenge, and it’s live and it’s fun. And it’s really just a community of people wanting to achieve financial freedom so they can spend more time with their families, they can spend more time with their loved ones, they can do what they want to do, not forced into a job.
Speaker 3 (31:10):
Cool. So scale your realestate.com. That’s how they can get started on that. Well, I love that. I love this. This has been great. I think this is a great way for a lot of people to be able to either get into real estate or to add to their tool belt, or especially if they’re already in, they don’t like what they’ve got going on currently with Airbnbs or their long-term rentals or whatever it might be. So I think this is awesome. If you’re also listening to this and you’re like, I want to not only make more, but I want to make sure I’m spending in the right place and keeping more of it, like Sam was talking about too, then head over to simple cfo.com, grab a CFO, or at least grab a time slot to talk with us to see how can we help you keep more of what you’re making.
(31:52):
I want you to build these types of things, the co-living space and all of that, but I want you to make sure you’re also keeping what you’re making so you can actually have the financial freedom with four properties. So that’s where it comes into play. You have to have a system on the backend for your money too. But this has been a lot of fun. I’ve enjoyed interviewing because I’ve enjoyed hearing your journey, and then obviously the talk about martial arts and just that mindset. That was another tip. Huge golden tip here from Sam is if you want a kick butt self-development course, go take martial arts. It will help you. So there’s another one there. That was really good. And then the whole thing about co-living and then the shared rooms and all of the shared housing, I really, really liked that. Get into that. That was scale your realestate.com, correct?
Speaker 1 (32:35):
Yes, sir.
Speaker 3 (32:35):
Scale your realestate.com. Head over there, Sam’s awesome, and make sure that you get a part of his challenges. Sam, thank you for being on, for being a great guest here. Then if you’re listening to this, remember to make Profit a Habit in your business.
Speaker 2 (32:51):
This episode of The Profit First for REI podcast is over, but there are plenty more where that came from. Are you ready to learn how David and his team can help implement the Profit First system in your business? Schedule a discovery call@simplecfo.com right now. We’ll see you next time on The Profit First for REI podcast with David Richter.
