Financial Freedom Fast
Buying $46M of Real Estate with NONE of His Money w/ Sam Primm
Your ears are in for a treat! Prepare to be inspired by the extraordinary journey of Sam Prim, known in the financial world as Sam Faster Freedom. In what can only be described as a testament to the power of hard work and smart investment strategies, Sam has built a staggering $46 million rental portfolio in just five short years - a feat that will leave you hanging on his every word.
Learn from Sam's experience as he unveils the secrets of his success in the real estate market. From his unique approach to leveraging other people's money to fund real estate deals, to his expertise in various asset classes, each insight he shares is a stepping stone towards your own financial freedom. As we navigate his strategies for finding private lenders, structuring deals, and using both private and bank capital, you'll uncover a wealth of knowledge to help you forge your own path.
As we wrap up this enlightening conversation, Sam shares his views on embracing failure as a stepping stone to success. Get ready to shift your perspective as Sam reveals his unique insights on how billionaires view money and success. Whether you're an aspiring real estate investor or simply interested in learning more about financial freedom, this episode will leave you inspired and eager to tackle your financial future. So sit back, tune in, and let Sam's journey to financial freedom inspire your own.
Download my FREE E-Book on Scaling Through Partnerships NOW
CLICK HERE
Apply for mentorship with Matt and the FAST FI Coaching Community:
APPLY NOW
Follow Matt online:
Instagram
Facebook
Youtube
Your ears are in for a treat! Prepare to be inspired by the extraordinary journey of Sam Prim, known in the financial world as Sam Faster Freedom. In what can only be described as a testament to the power of hard work and smart investment strategies, Sam has built a staggering $46 million rental portfolio in just five short years - a feat that will leave you hanging on his every word.
Learn from Sam's experience as he unveils the secrets of his success in the real estate market. From his unique approach to leveraging other people's money to fund real estate deals, to his expertise in various asset classes, each insight he shares is a stepping stone towards your own financial freedom. As we navigate his strategies for finding private lenders, structuring deals, and using both private and bank capital, you'll uncover a wealth of knowledge to help you forge your own path.
As we wrap up this enlightening conversation, Sam shares his views on embracing failure as a stepping stone to success. Get ready to shift your perspective as Sam reveals his unique insights on how billionaires view money and success. Whether you're an aspiring real estate investor or simply interested in learning more about financial freedom, this episode will leave you inspired and eager to tackle your financial future. So sit back, tune in, and let Sam's journey to financial freedom inspire your own.
Download my FREE E-Book on Scaling Through Partnerships NOW
CLICK HERE
Apply for mentorship with Matt and the FAST FI Coaching Community:
APPLY NOW
Follow Matt online:
Instagram
Facebook
Youtube
The 46 million that I own. I haven't used any of my money to own it and I have $25 million in mortgages and everybody freaks out about the $25 million in mortgages but there is $21 million of equity that I would not have if I was not in debt and the assets that I buy with that debt produce cash flow to pay off that debt. So obviously there's bad ways to leverage and borrow money, but if you do it the right way, it can create so much equity, so much cash flow, so many tax benefits All these crazy things that come along with investing in real estate.
Speaker 2:Welcome to the Financial Freedom Fast Podcast, the show that teaches you how to buy back your time and live life on your terms. Learn how to confidently leave your 9 to 5 from guests who've done it themselves. Whether you want to lay on a beach, travel the world or focus on your passions, this show will give you the tools to do what you want when you want. Now here's your host, Matt Ammabiel.
Speaker 3:What is up? Financial freedom fast, fam. Such a great episode today with my buddy, sam Pram, aka Sam Fester Freedom. He's got over 2.5 million followers over all of his social media accounts and he owns over $46 million in real estate. What I love is he's actually an influencer that is out there doing the things that he is teaching people how to do. He is not someone that's just talking the talk and has never even walked the walk. He's out there doing the things that he is showing people how to do.
Speaker 3:Today we touch on leverage. Why leverage is so important how you can use other people's money to basically fund an entire real estate deal without bringing any capital down to close on that out of your own pocket. And that is pretty cool, because Sam has been able to buy over $46 million of real estate without bringing any of his own capital to get those deals done. So cool, so much experience and value being brought to the table today. My people, if you want to learn how to do this and you want my perspective on how to raise capital, bring money to the table and close deals with no money out of pocket, make sure you download my free PDF guide, which you can find in the show notes. Just click on the podcast app wherever you're listening. Click on the show notes and then I want you to click the download button to download my free PDF guide. Give it a read and learn how you can scale your investing through partnerships. Without further ado, let's jump into the pot, sam Prim. Welcome to the Financial Freedom Fast podcast. What is going on, brother?
Speaker 1:Not a whole lot, just working on that financial freedom fast part, excited to dig into some things and hopefully shed some light for people to understand that the financial freedom is not that far away.
Speaker 3:It really is not, and there's two different levers we can pull on here as far as expenses go and then income goes, and then accelerating how quick you get that passive income by using leverage all things that we're going to talk about on today's podcast. I saw you on Instagram. That is how I found you and, realistically, the thing that really lured me in the beginning as to why you would be a perfect guest for this podcast is your name is Sam Faster Freedom man. So you are all about reaching financial freedom fast, sam. For the listeners that don't know who you are one listeners you got to follow Sam on IG and everywhere that he's got social. We'll dig into that in the end. But, sam, for the listeners that don't know who you are, let's give them a 30,000 foot call it a 50,000 foot overview of who you are and what you do.
Speaker 1:Yeah for sure, appreciate that. Yeah, I'm just a normal freaking guy, nothing special. I grew up in Missouri in the middle of the lower class lower or middle of the middle class, lower part middle class, nothing fancy, didn't inherit money or anything, but I've been able to do some pretty cool shit. I was on my way to graduating college, getting a job, going into the real world, and that wasn't just quite enough for me, so I wanted to do other things, so I started investing real estate on the side, and then eventually, that real estate side hustle became my full-time hustle, and then that full-time hustle eventually became financial freedom. So I was able to do that fast financial freedom, or faster freedom, in about five years, and right now I'm sitting on a rental portfolio that's worth about $46 million.
Speaker 1:Currently, I own a house buying company here in St Louis. We buy about 250, 300 houses a year, and then I also have this education online social media platform Same faster free, as you mentioned earlier that we are creeping up on 2.5 million followers across all the platforms, which is pretty cool. That sounds cool, but the best part about all of it is about seven or eight years ago. I was literally working a job trying to figure out a way to make extra money. So it happened pretty quickly for me and I didn't inherit money or live in an entrepreneurial household growing up. I just was as normal as it gets literally headed for the path of retiring at 65. And I made a hard left and let's get into that today and help other people make that same turn.
Speaker 3:Dude, so exciting. Man, five years dude getting $46 million portfolio Dude, that's so exciting, that's so cool. Super excited to dig into how you did that. And like house buying business 250 houses, 300 houses per year, that is insane. That's a high amount of volume. Loving and excited to hear how you were able to build that up. Where I want to touch on first, though, is in the beginning, you said you were going to college and you wanted to figure out a way to create a little bit more income. Did you started buying real estate while you were in college? Is that how it began? No, no.
Speaker 1:So I graduated college and was on that path of just getting a job. That's all I was worried about in college was I was worried about having fun, worried about having fun doing other things. And then I was worried about the graduating. So I graduated college and got a job, just a normal W2 full time job, and that's when the wheel started to turn that I was looking for a little bit more. Within about two or three years of graduating college, I started to get into real estate and learning and educating myself, and then it was set my foot on the gas from then on.
Speaker 3:And what did your real estate education look like in the beginning stages?
Speaker 1:Most of it was by trial and error and just doing it. Back in 2013 and 14, when I really started to educate myself, social media was obviously a thing, but it wasn't what it is today. There wasn't all these quote unquote gurus that some of them are joker, some of them are legit. There wasn't all this like online support. There was the bigger pockets podcast. There was reading books like the Very Cliche by Rich Dad, poor Dad. There were those type of things that I did. But then learning by actually doing was where I was able to actually gain traction in doing. Figured out.
Speaker 1:My very first house I bought with my planes to flip it and put 20% down on a rental because I didn't know you could cash out refinance. I didn't know about leverage. I just knew I could borrow money and flip a house with it, like they did on Flip or Flop or the shows on HGTV, because I didn't have 20% down to put on. I didn't need to have 20% down to put on $120,000 rental. So in order to get that 20% down, I was like I'll flip a house and then I will take that profit and put it down, and during that process I learned out about the cash refinance. So I still own that house today. It was just a perfect example. I didn't know everything when I got started. I didn't know shit when I got started, but I got started anyway and learned along the way. That's it.
Speaker 3:You took the steps, you took the actions that you need to take so you can learn the lessons that you need to learn, so you can go out there and be successful in different areas, because nobody who I there is no one in the world who is super successful that can say I never failed, I never had an issue, and the failures are realistically what make us stronger and go out there. And what I love about you, sam, is like I was naturally gravitated towards your page because you are actually out there buying real estate, raising capital, finding deals, executing deals, operating deals, doing things of $46 million in real estate owned, and so your follower basis supports that. It makes sense to me. I see some other.
Speaker 3:There are gurus out there that have these huge social media followings and if you ask them or dug a bit into their portfolio or the real estate that they own or the real estate that they've maybe owned in the past, it's not there anymore, like they don't have this up. So I love that you are actually doing it and from you doing it, you have solid lessons that you can bring to the table. Man, so this refinance method, this idea of being able to pull cash out, why was that such a big light bulb for you to be able to realize this when you were going to flip this first house? And then you were like, oh, I can pull that money out. What did that do? How did that change your perspective on real estate?
Speaker 1:Initially, just on the surface of it, it showed me that I, if I wanted to buy 10 rental properties, I didn't have to buy 10 flips to buy my 10 rental properties, I could just go straight into buy rental. So it allowed things to scale a little bit quicker, because that was my original goal was to buy 10 properties for 10 years, so one property a year for 10 years. That was my original goal and through that first property process I learned about refinances that if you own the property cash, even if you borrow the money from a lender, a bank will give you a loan for up to 80% of that appraised value. And if you bought it right and fix it up and added value by repairing it, there's enough room in there you can pay back who you borrowed the money from and you could be backing into that 20% down because banks do not want to own your property. So the only reason that they lend you 80% is because they don't want to take it back. They feel that the market will not shift that much in that short of a time where they'll have to repossess the property. So you can either give them 20% down as cash or you can bring them 20% as equity. Obviously, if you don't have unlimited cash, figure out how to do with the equity route, and that's what I did. They just opened my eyes to the power of leverage.
Speaker 1:In general, we're probably not going to go down these paths too much, but this is how the world works. If it worked different, I would do something differently, but I didn't invent this. Like Elon Musk fought Twitter by borrowing money, he leveraged his Tesla stock investors and Bank of America. Jeff Bezos started Amazon by leveraging money. He borrowed to create products and to ship books. Then he took the profit from those books and the shipping company to pay off who. We borrowed the money from. Zuckerberg borrowed money from Pierre Teal to start Facebook.
Speaker 1:Like I could go on and on. But this is how the world works and I'm not going to start Amazon, I'm not going to start Facebook. I'm not going to start one of those companies. I'm not smart enough. So I just do it with real estate, because it's something that everybody needs and that I can comprehend. This is just just how work. Apple sits on $200 billion on cash every time they release their books on their quarterly statements $200 billion. Yet they borrow money out the wazoo because they understand the power of credit than the power of leverage. If you want to scale, you're going to run out of cash eventually. If you're going to use your own and if you're never running around a cash, well, you don't need to be leveraging anyway if you have enough of it. It's just the poor man's way to become a billionaire is to leverage money to buy real estate.
Speaker 3:If you want to go out and be able to buy the opportunities, buy the things that can bring you stupid cash flow, what are you going to do? You're going to save up a million dollars because that's going to take you and you might not even be able to do that in your lifetime if you're just working a job trying to save up your million dollars. If you want to go out, the reason that I love real estate is you want to go out and you want to buy. You want to buy fit a hundred thousand dollars of a stock. How much money you need? You need a hundred thousand dollars to be able to go out and to buy that stock. But if you want to buy a hundred thousand dollar rental property let's say it's a four-unit property, even if you're not going to live there and this is like an even lower you could get that with it. Let's call it. We'll call it a 20% down payment, which is way high if it's going to be your first property $20,000. You need five times less to be able to buy that hundred thousand dollars of real estate than you do to be able to buy that hundred thousand dollars of stock. And if you're using low down payment options, you could need as little as five thousand dollars, which is twenty times less than what you would need to buy a hundred thousand dollars of stock, which is crazy, guys.
Speaker 3:So leverage is this ability to be able to put yourself into a position so you can scale. And then also you can so you can buy real estate, because banks will allow you to leverage their capital, but then you can leverage other people's money if you don't have the money for that down payment, which I think is a good amount of what you've done to build up a basis of your portfolio. So let's talk about the 46 million dollars of real estate that you do own. What is that broken down into? Is it like small, multi-family, single-family? What's the breakdown of that, of that valuation there?
Speaker 1:Yeah, so the asset class is about 145ish. I don't know the exact number of single-family rentals. So a big chunk of it is single-family rentals, all here in St Louis that we've been able to acquire just over the past several years via one-off, because we buy and sell about 250 houses a year, so the ones that makes that as rental. As rentals we just sell to our other company. One company buys it but I own the other company sells it or sells it to another company that buys it. So that's one way. And then we've also bought like 42 pack of houses in the same neighborhood and a 27 pack of houses. So bigger chunks that have helped add to that.
Speaker 1:And then also apartment complexes, so six like small, the mid apartment complexes, I think it's a nine, a 12, a 19, a 27, a 29 and a 32 maybe something like mid to smaller apartment complexes, and then a couple self-storage facilities and then a. We just actually bought a hotel down in Branson, missouri, a little tourist area that we're gonna make a boutique thing that turn into a little more short-term rental route. So broken up between a few different asset classes, you diversify a little bit. But also just as good deals come across my plate I have. I struggle saying no to a good deal. I usually just figure it out as we go.
Speaker 3:Yeah, man, if it good deal. If it good deal comes, you can most likely find the money to be able to put that good deal together, even if you don't have that capital yourself. What my mindset has always been if a killer deal comes on the table, the money will come from somewhere. There will be money that gets attracted to that deal. You'll be able to put that together. I love your portfolio breakdown, man.
Speaker 3:The single families, some of the larger apartment complexes, especially in the area that you're investing, like the single families, like killer I think single families are pretty killer everywhere. But you've got the apartment complexes. You bought some bigger packs, you've got this self storage rolling and this hotel. And that just goes to show, guys, that in the beginning, like maybe you do want to focus on one particular asset class or get better at it, but as time goes on and you're becoming an experienced investor, like you can hop around. You don't have to be this hyper-neeched investor that stays all locked in on one area and keep yourself. If you find a good deal, go out and get that deal done. So, sam, let me ask you like I've this company that you have that buys and sells like 250 rentals per year. What is that company called?
Speaker 1:It's Faster House, so we got the Faster. Freedom is education, faster House is the flipping company.
Speaker 3:Faster House and now I assume that business is bringing you in like tons of different leads to be able to get that done. It is that where you pick and choose from the deals that you want to buy and want to offload.
Speaker 1:Yeah for sure. So, yeah, that company is. It's our biggest company that we have. That one's got like 22 or 23 team members on it. There's six full-time acquisition reps that we spend money on marketing to give them leads. They actually spend a majority of their time Cultivating networking leads and going out to other wholesalers and real estate agents and other law attorneys and buying at the courthouse steps and talking to contractors and just going out, getting ourselves out and about in the community, because the whole goal is to help make the community better.
Speaker 1:Yeah, no, we get. We get a couple hundred leads a month, probably through those channels and then, yeah, that is where we buy and we'll wholesale a majority of those and then do our fix and flips and there as well. And then, yeah, we pick off properties from that that company, but that doesn't go after like apartments or or bigger packages. Those are just things that we come across through our relationships that we have with people and, as we're looking to grow and expand and starting to make a little bit of a name for ourselves here in St Louis, so we're able to get provided with those opportunities. Yeah, they, all of our companies are in the real estate space and they all help each other out.
Speaker 3:They're all better together, but they also know their own as well right and have you always been like really motivated, really driven for this success? But, like your timeline, this is this and everybody always says, oh, that that happens so, so fast. Like you did that so quick, but like obviously there's so much that has gone into this. Now this is all over. Correct me if I'm wrong a five-year period of building this out. So you started right around what 2018?
Speaker 1:Yeah, so, yeah, so, clarifying that cuz I could read through that earlier. So I started investing real estate in 2015 and then on the side, and then I quit my job in 2018, you know that. 2015, so here's a quick timeline, so we everybody's clear. 2015 I went, I started investing real estate. 2018 I quit my job. In 2020 I hit that financial freedom number more active income every month and passive and yeah, more passive income than active expenses. So my car payments or house payment, or groceries or doing nice things, having fun, going out, that's all paid for at the beginning of every single month. Now I go buy a vacation house or buy another vehicle. Obviously those things will come out of pocket, but the general expenses at a pretty nice living is paid for. That was 2020, hit that number and then. So it's a little confusing. But yeah, 2015 to 2020 I did that financial freedom thing and then 2018 till now has been that full for real estate where things have. Really 95% of what I've done has been the past five years.
Speaker 3:Understood. So 2020, what was that financial freedom number that you hit there?
Speaker 1:Yeah, so that was just making. I think at the time was like 15 grand a month. So having 15 grand a month and expenses with house payments and car payments and this and that and just normal groceries, it's just normal like everyday things plus a nice thing. Or here, to be able to, my wife has a magic credit card on Amazon that just automatically gets refilled every time she buys something. So they'll kind of so those kind of things. But then the income goes up and then the expenses go up went from I don't even remember a $2,800 a month house payment to a $7,800. So now obviously I don't even know my nut, but 25 or 30,000 months probably is what my expenses are, but the income has obviously grown with that. So I tend to get something where it needs to go.
Speaker 1:And then I fell in the gap I still live at. My house is nice and beautiful. For my income I could probably afford something five times as expensive. So it's just I'm not like Getting all this money and trying to flaunt it by going buying a Lamborghini and flexing on this or that. I'd like to have nice things, but within reason.
Speaker 1:A wife has a navigator very nice car. I have a Ford Lightning very nice car, but I don't have three more cars I don't drive and I don't brag about anything on online. So we live nice and we live very whatever we want, but we're not like stupid with our money or try to be brag about it. So there's that. Part of it is the financial freedom number is always moving up because my expenses and lifestyle is moving up with it Grain it behind a little bit, but I'm never gonna exceed that to a certain point. I'm never gonna go spending money on things that I don't actively or I don't get my passive income coming in. And then I'm looking to grow and I want a freaking NBA team. So I got I'm just getting started, so I got to keep going with that. No rest for the weirier dude, I love that.
Speaker 3:I love the big goals and ambitions that you've got for yourself. One area that I have found myself get tripped up on a bit is so I graduated college in 2020 and or I guess, young cat we got a young cat on hand, young cat 2026 and I. I set this goal of getting to five thousand dollars in passive income and I got to. I just kept building, never really looked at my number and I think right around now I'm at right around seventy five hundred eight grand a month in passive income and that was good for me. I got my house hack, I don't pay any rent, I got my car paid off, all that stuff. So I hit my goal. I got there and I'm like, ah man, I'm like what is the next thing? How do you know what that next thing is? So, like, you got to your fifteen thousand dollars a month number, which grant granted. That is Freaking awesome.
Speaker 3:Five years, fifteen grand a month in passive income. A lot of people could live off of that, probably for the rest of their lives. But you had bigger things in mind. You decided I want to go bigger. How did you decide what that next thing was? Did you know it was going bigger in real estate? Or were you just out there shooting your shot and seeing what stuff?
Speaker 1:Yeah, I think more of that second one, right shooting my shot and seeing what stuck. I think when you create a certain level of success, you start to see the impact of that. I started to see the impact on my family, right. I started to see the impact on my team members, employees, shit we have. I mean, our construction manager owns 41 rental properties. One of my, one of the coaches of the mentorships, own 35 rental properties. We've got one of our acquisitions guys that owns five. Another one owns 10. We're helping those people impact. So there's that side of it that I think is just seeing the impact of success and not bringing people on and having more. Like some people want less employees. We want more employees. We want more people to create, while we want a billion dollar organization. We're gonna need a lot of people to do that.
Speaker 1:My best part are Luke's and I, who we do all this together. We just have seemed to have really big goals. I don't know where that exactly comes from. Part of it is, I don't know, maybe vanity. Part of it, maybe his insecurity. Part of it is just seeing the impact to helping more people and then just chasing something is really fun.
Speaker 1:I never thought that I'd want to own a private jet and now I want to own a private, I right. So I just don't know where it is, where it comes from. As long as I Stay grounded, continue to give back to the community, donate a ton of our money to charities and create it our own charity, so as long as I'm still doing that, I think it's. I think it's a good thing to chase money and more. But if you're chasing money and more for the long reasons, that's when I think the slope gets a little bit slippery. So that is always on the front of my mind. Took that question, went a little bit of an audible with it. I called the hook pattern on it, but that's where we're at on it dude.
Speaker 3:I love that man and almost using so I had. Who do I have on my podcast? I had Brett harboring on my podcast. He created his own, his own airline. It's called Vera jet. It's a private jet airline and he was talking about money in this way.
Speaker 3:That he looks at Money is it's not his money, it's God's money and he is just and whatever religion you are like, just relate this to you, but like it's God's money and it's just flowing through him as a conduit because he is doing the right things with it. He's giving back, he's putting it in the right places, giving it to the right people, putting it into the right circumstances. So I think if you have that in your heart and you have that belief to put your money in the right places, you're going to be able to do that. I did the same thing. I started a scholarship for, based in the name of one of my best friends that died in in High school, my sophomore year, and that's been one of the great places that I can funnel my energy, funnel my money into and give back to the community and keep my friend's name alive, which has been amazing, and different things just flow from that as well, so that's amazing.
Speaker 3:Now, diving back into the real estate aspect of things, man, you are a pretty big proponent of leverage and not even like potentially buying a deal and having None of your own money in that deal. So you go to a bank and you get capital and then you raise the capital for the actual down payment. There's a lot of people that are against that. What is your stance on that? Like, how are you executing these deals and actually making them successful deals while also Levering or leveraging out the entire deal?
Speaker 1:Yeah. So I think you made a couple good points. One is, yeah, the 46 million that I own, I haven't used any of my money to own it. So if you just take the bigger picture and you do the little flex here for a second and then we'll get into the details of it, is I own 46 million dollars worth the real estate and I have 25 million dollars in mortgages. And everybody freaks out about the 25 million dollars in mortgages, but there is 21 million dollars of equity that I would not have if I was not in debt and the assets that I buy with that debt produce cash flow to pay off that debt. So obviously there's bad ways to leverage and borrow money, but if you do it the right way, it can create so much equity, so much cash flow, so many tax benefits All these crazy things that come along with investing in real estate. It's once you understand it fully and get over that fear it like it doesn't make any sense to do anything else in my opinion. So just the it's just. It makes so much sense once you understand it and once you see it in action a few times, which is what I did, and then we really ramped it up and some of the Some of the key things to what you mentioned are making sure you're borrowing money you know from the right sources.
Speaker 1:Make sure you're buying cash, producing assets with them. Not a bad deal, not a boat, not something dumb. You're borrowing money To buy assets, to produce cash and grow in value. You have to manage it Well. You have to buy something at a discount, you have to increase it by, increase the equity, by improving that, and then you have to rent it out. So you have to check those boxes, discount check and usually that means distress, especially in today's market. So discount check me and you check and then do long term funding correctly. So as long as you do those things like, why wouldn't you keep doing it If every single family rental house I buy, I make 200 grand on the next 10 years?
Speaker 1:I've done the math. So, with property appreciation at three and a half or four percent very conservative With debt being paid down by the rent, with all expenses and vacancy and all that stuff built in, with Tax-free cash flow from the depreciation, those three things combined, I called the passive wealth trifecta Hashtag original faster freedom. But once you do that passive wealth trifecta, that's too undergrand. Very conservatively every house I buy. As long as I manage you well and do have the discipline in the team to do it Like, why would I stop doing that, especially what I'm helping the community, taking a rundown house that nobody wants to live into, making it nice, rent to get to an amazing family, increasing the values of all the houses around it, and then they want to buy it. Eventually we sell to them, or we sell to a great family as well. So it's just I don't know, maybe I'm too blind, maybe I'm too like hoodwinked on it, but it just makes so much sense. Why wouldn't I do it?
Speaker 3:Right, a little bit too optimistic, and I've thought that about myself too. I'm like these deals just make way too much, way too much sense. Where is it fake? Is someone gonna come and blindside me like? I've had People coming and like telling me like, oh, you gotta watch out for this and watch out for this and watch out for this, and I always I'm always on the look for them, but I just haven't seen something that's gonna come in blindside Be yet.
Speaker 3:Because I am very cautious in the way that I'm running my numbers. I'm making sure that there's always at least 30 to 35 percent equity in the deal when I purchase the deal and I'm always making sure that the cash flow it's going to cash flow way more than the current expenses, even if I have tons of vacancy and management expenses. If you're very conservative with those numbers, you can make sure that you're buying good deals. So that leads me to the question if somebody wants to today go out and find one of these deals that they could Leverage one the bank and then other people's capital for what are the best ways to find some of these distressed value add potential Assets that you're talking about? That can put you in a good position.
Speaker 1:Yeah. So if you're new or to investing which probably is the majority of those people that are gonna be wondering that same question the first two places I would go, as I would go to your local wholesalers and local real estate agents. Now you can spend money on Facebook ads, you can put out bandit signs, you can do direct mail, you can do all these things that will Lead to leads, but will also cost money and require systems and processes and follow-up and negotiating and Understanding everything and all the stuff. You can do that for sure, but I think if you're looking to buy ten houses a year or less, I would focus all of my time on networking with wholesalers and real estate agents. Wholesalers that's what they do. They knock on doors, they drive for dollars, they send direct mail, they put money into paid ads, they pay for leads, they do all of that stuff. They get houses at a super cheap discount and then they mark it up and sell it to you. And who cares how much they make on it, as long as your numbers are met. I love it when a wholesaler makes 20 grand on me because it's gonna be his next one and his next one, so I'm fine with that, as long as my numbers are conservatively met, like you very, very eloquently broke down earlier. Very well, that, as long as you're conservative on all of your numbers. But why would you care what somebody else makes?
Speaker 1:So wholesalers and you can find them at your local meet-ups, on your local Facebook groups. Of course those Facebook groups have knuckleheads in there and hard money, scammers from around the country and all that stuff. But there's good people in there as well. And then those being to sign see on the side of road those are wholesalers are just look it up. If you're in st Louis and look up real estate investing companies in st Louis or sell my house fast Companies, st Louis faster house will pop up there and if we don't, let me know I'll get on my marketing guy. But we'll pop up and we sell 200 to 250 of those houses we buy. We wholesale To the public for someone else to buy it and make money on it because we get it at a discount.
Speaker 1:So there's one round then real estate agents don't need to go down too much of rabbit hole here. But in general a good real estate agent is gonna do 15 to 20 transactions a year. One, maybe two will benefit you there a hoarder house. Somebody needs to move quickly. Outdated, won't pass inspection, occupancy would be a pain. The ask for them to sell. They call you, you give them a good offer, they convince their client to take it, they get paid double and you move on again.
Speaker 1:These sources take time to develop. But if you can spend the next six to twelve months getting five good wholesalers after you go through twenty crappy ones and five good real estate agents after you go through fifty crappy ones, if you get ten people and you're stable, bringing you deals we call that the gravy train here and that is probably five to ten buys a year. No money in marketing spent and they get heated you on a silver platter. So it takes six to twelve months to do that. Most people give up after six to twelve weeks. But if you split, stick with it. That can, that will be you, it and that can be you will be you.
Speaker 3:Yeah, I just got to the point like I've been investing now for I guess, three and a half years since I got out of school, and I Just got to the point where I've got the connections, where I actually feel like I have a Solid deal and lead flow coming through where I can pick through deals and pick through the best deals for myself to go and buy, and that is such a good feeling to have. In the beginning I was like man, when am I gonna get the good deal flow? Like, how do I get people to come and bring me deal? This stuff is crazy, like it's so hard to do this.
Speaker 3:But Sam is right, it's all just about consistency, networking, staying on it, making sure that you have your goals set in your mind how much lead flow do you want to have? And make sure that you're networking with the people that are gonna bring you that lead flow. I love the connections, the people, the wholesalers, the agents that can bring you these deals. So make sure that you are out there and making those connections. Sam, let's talk about raising private capital for your deals. Now I think I heard you mentioned in a podcast that in the future you may go the syndication route, but up until this point everything has been private capital. Is that correct?
Speaker 1:Yep, everything's been private private money for the most part, a little bit of hard money, but that front-end financing has been 90% private money, probably 10% hard money, and then the rest, the long term, has all been a small local banks. One of our parvats we have some Friday money with, but everything else is small local banks. So, yeah, we're just borrowing money and raising capital. We've been able to do that because I like to own a hundred percent of it, like I again, like you said, I don't want to ever close a door, but doesn't shoot really excite me to own 5% and get paid a 1% fee to syndicate a 30 million dollar apartment complex. I'd rather just figure out how to put 20% down from a private lender and own that a hundred percent. So most syndicators which is a great place to be they don't own a hundred percent of it and I like to just own my asset. So that's why I haven't quite gone that down that route yet.
Speaker 3:So you are correct in what you heard and how have you Raised your private capital major? Let's jump back to the beginning, when you first started using OPM. Where'd you find these contacts?
Speaker 1:Yeah. So most people think a private lender is like a rich parent, which, if you got a rich parent, don't shy away from it. Ask them. I did not. Most of the time it's not a rich parent or rich uncle. Most of the time it's somebody at your work or your parents boss or your grandparents Neighbor or like some person that you have an acquaintance with. So these private lenders, they're not this pie in the sky, somebody that has five million dollars in the bank. No, they're a normal ass working-class person that has an extra 50 grain, extra a hundred grain in the bank Because they don't believe in a stock market right now, or they can self-direct an IRA but they can borrow against a 401k, or they just have a money market account that they can easily pull from.
Speaker 1:So you have a Relationship with them. They have some extra money and then over time talk to them because your grandparents know them or your parents know when. You met them somewhere and over time you get to know them and then you develop a relationship and it's relational lending. Eventually you explain it to them, you give them some securities in their deal and then they lend you money and then you get them their money back, plus interest and they feel cool about that. And then they give you another loan and then by the time you've done it three times, they tell their friend because Most people hang, they have a lot extra money, hang around people, extra money. And then their friend tells their friend and then by the time you get a stable of five to six people that you have more money than to Do with.
Speaker 1:As far as the funding side goes, assuming you're not buying, keep it 100 ones, 100 properties a year. So it just gets not. I wish it was more of a hey, go here, talk to this person, check this box. Boom, you have a private lender. If it was way more people to have them. But it is just those situations where you're at the bar with some buddies and talking about real estate and somebody that they know has some extra money and just things like that is usually where it comes from. If it's got a rich parent, great, use them. But that's usually where it comes from. And in the meantime you could always wholesale, like we talked about, or you can go the hard money route because those are super easy to find.
Speaker 3:And I love the fact that you've got to always be talking about what you're doing. If you're looking to invest in real estate, or if you are currently investing in real estate, talk about it with almost everyone associate as a real estate investor. And now these are going to open up more doors to you. Everyone you know knows either someone that's involved in real estate or someone that's got some money sitting around, and these are all connections that'll be brought to you, but they'll only be brought to you if people know exactly what you're doing. How do you get people to know exactly what you're doing? You got to tell them about it. Also, like posting on social media, putting these things out there. Building this virtual resume of what you're doing can help to add some credibility to that. I know that just just from having conversations.
Speaker 3:I just raised a hundred fifty thousand for a five unit I bought, and that was all just from having the conversations with people, telling them what I'm doing, them telling them what I'm doing, how I structure capital with other people and being able to put those deals together. So how do you structure your Deals, like the capital that you do actually outside of the capital that you raise? I'll get to that question next. How do you structure your deals? Let's say there's a single family property that you're going to go buy tomorrow and I don't know what the purchase price in your market is. But like, what portion of that is private money? Is it all private money? Do you still go to banks for some portion of that? What is? How does your deal execution, capital execution go on those?
Speaker 1:Yes. So for the single family game is just a hundred percent finance purchase and rehab. Either the lines of credit from banks that we have on paid off assets or businesses we have or private lender stables that we have. The private lender will fund a hundred percent of the purchase plus the rehab, or a line of credit we have or will buy with the private lender use line of credit we have. We've been strategically paying off houses here and there with refinances and things like that, so we have paid off assets for security cash flow and then to be able to borrow against.
Speaker 1:So that's how we do the single family game and then if we're doing like a multi family something five units or over that was a longer term play will usually get twenty percent from a private lender and then eighty percent from the bank.
Speaker 1:So with our, like our hotel deal, we bought it for eight hundred and fifty grand and it needed about seven hundred grand in like complete gut for simple math, one point five million. So we borrowed twenty percent from a private lender of that whole purchase plus rehab from the private lenders in the bank Finance the other eighty percent of the purchase plus the construction is. Getting creative and building relationships with these banks is huge. So just when we do the longer term deal it's usually a two to four year play with the private lender, we use their money to buy it, to operate it, we increase efficiencies, increase the income and which increases the value, and then there's enough value increase to pay them back. So it's kind of like an extended burr is what we call it. But yeah, that that's what we do for the bigger units, and then the singles are just in and out in three, four months with private lenders.
Speaker 3:Nice and quick. So what is the capital structure that you put on with your private money? Let's talk about that hotel deal. What does what would like the private capital look like on that? Is it like a five year term, four year, two year term, x amount of interest? How do you typically structure that?
Speaker 1:Yeah, so the beautiful thing about these private lenders we talked about, as you can be flexible and all of our deals are six department complexes, are self stores, facilities, and they're all a little bit different, which I don't love, but it is what it is on this exact deal, if I remember correctly. So what we're doing is we Took the twenty percent down and where were? It's a it's a five year promissory note with options for us to pay them off at one, two, three, four and five. We're not gonna be able to do it one years, probably between two and three, but options in there when we can pay them back. And then what they get in this deal is we're giving them six percent cash flow, so six percent utilize on their money. So they give us a hundred thousand dollars, they get six thousand dollars broken up over twelve months monthly paid to them and then at the end, on the buy out with a kicker, we give them another six percent. So then at the end we take, however long it took, whatever their investment was, and we make sure analyze over those two, three years. It's six percent return. So at the end of it, the run their numbers, send it to the count. They're gonna get pretty much right at a twelve percent analyze return over those three years.
Speaker 1:So that's the beauty of private lenders. If cash flows tighter on the front end of a deal, for whatever reason, is gonna take us a while to turn it, then we'll give them three percent, four percent monthly cash flow and then we'll give them that other eight percent, nine percent on the back end, or if it's cash flow heavy now, so we can structure and move that needle, try to get them to that Eleven to thirteen percent, fourteen percent return. But we can structure how we need it for a specific deal because every deal is obviously different. Simplified it's usually just a percentage of cash flow, like a preferred interest return, and then we give them a one refinance to pay them back their full amount. That's usually when we add a little bit of extra kicker is what we call it on the end.
Speaker 3:I love that real estate is such a fun game because I think you can be creative on both ends is the creative side of actually adding value to the asset, whether you're going to do that on the on the management side, on the operation side, if you're gonna Build new apartments, make them nicer, bring it in, increase rent by doing that. But then there's also the creative side on the capital side where you can have a little bit of fun seeing like what can you get? What are the best terms that you can get, both for yourself and for your investors, to be able to get them in and out of this asset, and being able to structure different terms, because it's private money and it's money that you get to raise for yourself. So I Love how exciting real estate can be on on both ends and really make it exciting. What, how crucial has it sounds like you're partnered with? Is it is Lucas like your main partner in this, or like how crucial has partnering been there? And like splitting up responsibilities.
Speaker 1:Yeah, it's been huge. So everything, yeah, there's Luke's and I own everything 5050. We each own half of everything and it's been huge. If it's the right partner, with the right mentality, the right goals, the right values, then one plus one can equal a hundred or a billion. It's not one plus one equals two when it's the right partnership. So it's been huge for us at first. We've been friends for since middle school. So at first is yay, we're your buddy, we got your best buddy that you're doing things with on the side and buy houses and rehab. I'm going to the weekend every weekend and working on houses and you were both doubled up the work because we want to do it together.
Speaker 1:And then there came a point where we divided and conquered. Lucas is a little bit more of a Operator, a little bit more of a financial type of mindset. I'm a little more of the sales and the marketing and the outreach type of mindset. So we've been able to spread our wings each on our own and grow like I, the education company, faster for him. That's pretty much all me.
Speaker 1:Luke owns half of it, but I run the meetings, I come up with the content, I come up with the mentorship, I do that all and then on the house flipping side I help with the marketing a little bit. But other than that that go to a meeting a week, that's it for that company that buys 250 houses a year. So we divide it and conquered a little bit and it's been really awesome. Somebody that their skills are the ying to your yang as Far as your skills, but as long as you're the same and aligned on the important things, that's when you can really do some cool stuff you align on the goal, you align on the future, but you both bring something different and that makes it so you can divide these different areas that you were both killer at.
Speaker 3:Like You're this social media guy, man, you know how to run that and you kill it, man. And Maybe he's more of the operational guy on on that, on the house, buying and running business, and like your Skills add up together and even like the social media side could be great for capital raising both now and in the future. Like it's, it just all is like one big amalgamation of an amazing company that you have right now and that is forming for the future. So excited to continue and watch that, sam. I'm gonna dive into our final questions today. What is one actionable step our listeners should take today to start on their path towards financial freedom?
Speaker 1:They need to go to their local meetups. Go meet people in person that are trying to do deals or that are doing deals, talking on the phone, watching the video, listening to this podcast that's all great. But when you go to local meetup You're getting in your car, you're putting on your seatbelt, you're driving to somewhere. This is a little uncomfortable, that you don't know people that are other Action takers and other people doing that same thing. So there's more commitment level when you go meet somebody in person and usually some of the bigger companies in town are putting them on, so you your whole life can be changed at a local meetup. You can meet three wholesalers, a banker, a private lender, a hard-line lender and two contractors at the next meetup.
Speaker 3:But you got to go meet those people you got a go, and that's all. Part of taking action, too, is actually putting yourself. You might be someone who's introverted, but if you're someone who's introverted, just you know, embrace that and realize that if I want to grow as a person, I got to put myself in these positions that make me maybe a little bit uncomfortable. We'll get out there, meet the people that are doing the things that you want to do and that'll get you closer and closer to your goals. I love that tip. Last question I've got for you today, sam what is one question that you wish I would have wet, that you wish I would have asked, or one topic that you wish I would have covered, and how would you have answered that question or how would you have expanded on that topic?
Speaker 1:Yeah, there is one that was great, the one you went into. Two quick ones Is that alright? Are we okay? Check the block that produced? Or two quick ones.
Speaker 1:One of them was your talk with that gentleman that owns the private jet company. And I've talked to two billionaires in my life which is pretty cool in person and they are. Their mindset is exactly like you said. That guy, he's always way to be a billionaire if he's not already. But those people most billionaires of course there's your greedy, whatever, but in general most billionaires they're not like special because they're billionaires, the billionaires because they're special and they have this mindset and I feel like my mindset has grown over the past couple years by leaps and bounds, but they're miles, light years ahead of me as far as how they view money.
Speaker 1:Like you said, it's not good, it's not evil. It flows through people and through society and if you can figure out how to solve issues, solve problems and help people, you will make way more money than if you're just trying to make money. So that just whole take on that, I believe, was you were on par with that golf clap for you on that and the other one that my Favorite, you talked about failure and that kind of them be being a part of success, and I'll take it even in the step further. It is like necessary. You have to fail to succeed. I wish that there was a different path, but there's not.
Speaker 1:If you want to succeed, you're going to fail, and you're gonna fail a lot. Every single successful person that you know, whether they think I'm successful, whether they think you're successful, whether they think Elon Musk is successful every single successful person you know has failed, and the more successful they have been, the more they have failed. So if you avoid failure, you literally are avoiding success. That there's no simpler way to put it. You avoid failure, you're going to avoid success. So you just have to lean into that failure, learn from it, get up, fail again, learn from it and eventually you're. You know it'll be like you're falling over and Busting your head till you're just stubbing your toe, but you're still gonna fail. So just embrace failure and just keep pushing through, and that's what the wealthiest Freaking people in the world do and have ever done is they fail, but they get up.
Speaker 3:It's really that simple, and if you're not feeling you might not be doing something that's too difficult for you, you're not on the path to success, then you're down at feeling that's right. That's right. You need to push forward. Fail, forward, right. Fail, and it'll teach you something. You'll learn a lesson, you'll be stronger for the future, you'll be even better. I love it. Embrace that failure, get excited for that failure and just keep moving forward. So happy to have had this conversation with you today, sam. Sam. For our listeners and watchers that want to find out more about you, where can they find you online?
Speaker 1:Yeah, so on whatever social media platform you're on, I am probably on it. So just look up faster freedom or same faster freedom and if you frequent that app, give me a follow. I wouldn't suggest going and starting a Twitter account to follow me there. X account if you're not gonna be on there. So somewhere that you're on and you'll see it, go ahead and follow me.
Speaker 1:I got a podcast, the faster freedom show. Check it out as well. Lucas and I do that together talking about my business partner. That's the only thing only piece of content we shoot together. So that's why we don't really have guests is just kind of me and him, 25-year friends, trying to own a billion in real estate and NBA team chopping it up every week. So that's a lot of fun. So I would suggest checking that out and then got a book coming out. I don't know when this will come out, but it's called the own your freedom. Check out that. It'll be on Kindle, it'll be on. You can buy the paper back and all that on Amazon. So check that out if you're a book guy or gal. And when does that launch? It should launch here. I'm gonna do a soft launch here. Probably the first or second week of a September, but then by the end of September it'll be out.
Speaker 3:Awesome, great. I will make sure to have that link in here, because I don't. I think we're booked out on this podcast for launches until Until October, so I will have all that information in the show notes. We'll be able to get that out there and hopefully get you some more sales through that. But, sam, thank you so much for coming on the show today. So much valuable information, so much. I think that the topic of the leverage is just huge Surralli, embrace and be excited for if we're getting into real estate and from the financial freedom fast podcast. I am your host, matt Ammabiel. Today we had on Sam Frim and we are Signing off. Thanks a lot, sam, appreciate it.
Speaker 2:Thanks for listening to the financial freedom fast podcast, the show that teaches you to buy back your time and live life on your terms. Be sure to subscribe to this podcast wherever you're listening, and follow us online at Matt Ammabiel. That's Matt a, m, a, b, I, l E. Be sure to tune in Monday, wednesday and Friday for our weekly podcast drops. Thanks for listening. Let's retire together.