GI156: How to Scale Commercial Real Estate with Sam Wilson

Sam Wilson is an active investor in self-storage, parking, retail, multi-family apartments, RV parks and single-family homes and participated in over $30 million in acquisitions in 2021.

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Transcript:

Announcer:
Welcome to the Global Investors Podcast, a show that focuses on helping foreign investors enter the lucrative US real estate market. Host, Charles Carillo, combined decades of real estate investing experience with a professional background in international banking to interview experts in all areas of US real estate investing. Now here’s your host, Charles Carillo.

Charles:
Welcome to another episode of the Global Investors Podcast; I’m your host Charles Carillo. Today we have Sam Wilson. Sam is an active investor in self-storage, parking, retail, multi-family apartments, RV parks and single-family homes and participated in over $30 million in acquisitions in 2021. So thank you so much for being on the show, Sam.

Sam:
Hey, thanks for having me Charles, the pleasure’s mine.

Charles:
So give us a little background on yourself. I know you I know you came from more of a contractor hands on before getting more into the investment side. So give us a little bit about your background both personally and professionally prior to getting involved in real estate investing.

Sam:
Yeah, so my family was always entrepreneurial in the sense that you know, my parents were not college educated. We nobody really family actually, as far up as I went, I think my grandfather even didn’t graduate high school until his late sixties. So it wasn’t like we came from, you know, an Aite family with lots of money. And so with that comes that you learn to work for yourself early on and grew up pretty poor. So, you know, obviously with all those things kind of tend to go hand in hand, but also learned how to, how to make a buck. And so, you know, we owned, we owned a flooring company. I got involved in the flooring business with my older brother when I was 16, ended up buying out part of that company when I was 25, we had up to 30 employees and then sold it when I was 30.

Sam:
I guess there’s 30, 30, never, never thought about that. But yeah, it was you know, it was, it was a learning experience and I just figured out early on, you know, one of the things you discover when you are in a certain industry, you wanna look at the people who are ahead of you, right? You always wanna say like, gosh, if I’m in this at the age 30, what’s the guy look like who’s age 50, that’s still in this business. And I go, I don’t wanna be here when I’m 50. I don’t wanna look like you and I don’t wanna have your lifestyle. So thanks. This is great. And I did, I learned a ton of lessons, learned a ton of lessons about people, about hiring firing, I mean and you know, and just, and just people’s skills. I mean, yeah.

Sam:
So that was great. And that’s that sold that company and then headed south because it’s warmer down here than it is up there, for those of you who aren’t aware and you live up north, it is warmer in the south <laugh> so yeah, headed south, cause I hate the cold and then fell into real estate, man. It just just was a series of, of I would say the good Lord have mercy on an idiot. And I got involved in real estate, never looked back. So that’s nice. The short of it.

Charles:
So what was your first real estate investment when you actually did your toe in?

Sam:
Yeah, it was a single family home and, and I, I went from zero. I would literally say it was, I mean, it was literally, I had no intention of investing in real estate and two hours later I owned a single family home <laugh> so that was how fast I got went from. Well, this is interesting to, I guess I’m in the business. And so I bought a house at an auction at a courthouse steps auction, and there was one me and one other bid and I won the bid cause they walked away early and I made a pile of money on it and I just kept doing it. And so that was that was the first thing we bought and I did, I did lots of single family flips you know, lease options, wholesale deals. I did everything you can do, you know, creative finance structure wise. I, I mean everything from cold calls to, you know, online cam, I just did it all. And in 2018 I said, this is enough I’ve I’ve, I’ve, I’ve run my course here. We’ve made good money and I’m tired and I, it’s not scalable. It wasn’t scalable for me. Yeah. So that’s when we docked outta that and started investing in other asset classes.

Charles:
Yeah. I’ve only met one person that really scaled the single family investment business. And the only way, when you listen to a story, it was only that they had a full-time person, they had like a hundred single family houses near each other. Right. And they had a full-time person with it, which that’s a very difficult thing to do unless you’re, you know, you’re buying LAR you know, five, 10 at a time and that person comes out and you’re kind of like the first two years or so you’re doing it before you get up to that, you know, 25 or 30 houses you are you know, you’re floating their full-time, you know what I mean? But other than that, it’s very difficult to do it. Before going into what you, interesting stuff you’re working on now, I wanna talk about auctions. You mentioned that, and I read about you doing that, and this is something for, not for novice investors and I’ve never done it myself personally. I I’ve sat stand I guess you would say stood next to my father when he did it before, but years and years back, but what are some important lessons for investors who wanna buy real estate at auctions? And you know, what are you looking? I mean, this is a very quick process and you know, you have to have money there one way or another.

Sam:
Yes. Yeah. That’s it, man. I mean, so one you gotta have, you got, you typically have to have cashier’s checks. They typically have to be in your personal name. And even if, even if you’re buying for an LLC, you still gotta go to your bank account and whatever company LLC, you own it in, take out all those checks and you’re made out to you personally. So you can then sign ’em over to the attorneys. It depends on who you’re doing it through. I mean, you know, the, the courthouse steps has been a very popular place for auctions and lately most auctions. There’s just not a, there’s not a lot of activity on that front, thankfully, you know, that’s I never, while I participated in the foreclosure auction process, it you know, it’s never good for society as a whole when lots and lots of people are losing their house.

Sam:
So it’s you know, that said, when you go to the courthouse steps, man, I mean, you have to have your title work done. You have to have at least done a preliminary inspection of the outside of the property. And by that, I mean, you drive down the street and you take a look at it from 50 feet away and go, huh. All right. Is the place look like it’s completely trashed? I mean, you’re gambling what’s on the inside typically. Yeah. I mean, and not, yeah, there’s there’s, there are people who for vacant homes will find their way in, oh, wait, the front door was open. Was it now interesting? So that’s not, you know, there are people that will do that. I don’t, that would never encourage anyone to do that. It’s just one it’s too risky. And secondly, it’s stress basing.

Sam:
So you don’t wanna do that, but so yeah, I mean, you got to have, have a, have a pretty good gut feel for what the street or what the neighborhood will support. What’s your max bid gonna be. And then you to stick to those numbers when you go to the auction. And so then when you get there, you’re at the auction and, and you know, you maybe bidding against 10 other people. The thing I’ve always said is, is when you see there’s, there’s a, you know, a, a a, I not even sure the most clean way to put this, but when there is a bid war, we’ll go there. That’s a great way to put it. When there’s a bidding war over the pro or pro or the house, let other people duke it out and then see where it lands before you start throwing in, you know, throwing in your bids, cuz it’s just, it’s just dumb.

Sam:
Otherwise. I always found that to be true. Cause a lot of times you can just save yourself the effort. The other thing is to always track when there’s postponements, cuz most of your public notices and you ask, I don’t know how detailed you want me to go on this, but I’ll just keep rambling until you tell me to shut up Charles. So you there’s always postponements. And if you don’t track the postponements, you’ll never know when they actually come back up to the surface for foreclosure, you’ll get the, you’ll get the notification in the three week window, which is required by state law. For most states it’s, you’ll get the public notice three weeks in a row and then it’ll go to auction, but you can find out that on the day before somebody filed for bankruptcy. And so then you go to the auction like, oh, Hey, this has been postponed until, you know, June 29th.

Sam:
And you’re like oh, okay. But if you’re not standing there writing down, you know, 1, 2, 3 main street, June 29th, you’ll never know when that auction goes up again. And so that’s where your money can be made is actually just tracking the postponements cuz suddenly you’re at an auction when everybody else forgot and it’s no longer publicly notified. So that’s a great way to kind of skim if you’re going to auctions. But yeah, it’s a complicated process. Not for the faint of heart. We developed systems around that. I had four I had four P upper <affirmative> properties. It was a pretty intense process. But again, it wasn’t scalable lots and lots of money flooded that space, everybody from BlackRock to more hedge funds and it just was, it was kind of a, a challenge. So we ducked out of

Charles:
That. Yeah. Yeah. I imagine you’re not able to see the inside of it. So the old rule of fun with flipping, you know, 70% after repair value, minus your expenses, all that stuff. I imagine you’re cutting that even lower because you have no idea. And you’re, you know, we used to do stuff like that. I used to do with my father when we had flip houses and it was like, you know, just put your numbers at needs, new mechanicals needs new, this new that. And you’re like, you know, you’re starting off with like $10,000 of expenses and you have no idea and then you’re later, oh we can like salvage this hot water here, whatever it is, you know what I mean? But right. It’s a, it’s a, you have to really, like you said, you have to really have a system in place when you’re, you know, doing that. And it’s, it’s not for the new investor. Mm-Hmm

Sam:
Not typically. Yeah. And, and that, that is funny. I say it’s not for the new investor. That’s exactly how I started <laugh>. I mean, I did, I didn’t know how to buy a house outside of a foreclosure a for the first four years of business. Yeah. But that’s you know, we, we, we got lucky. I’ll just say that we got lucky and, and didn’t didn’t skin, our knees too many times out of the gate and that’s again, the good Lord IM a mercy on an idiot. So <laugh>, wouldn’t recommend it.

Charles:
So Sam, what’s your firm’s current investment strategy and criteria cuz you’ve you’ve really grown out of single family into a number of different, interesting commercial real estate classes.

Sam:
Yeah. That’s a great question. So we did parking there for a couple years, which is a lot of fun that industry really got hammered in COVID mm-hmm <affirmative> we were lucky in that we were not stuck holding the bag by just, just the tune of a couple months on a variety of assets. And so that was, that was really nice to get paid in January of 2020 on some disposition and then you know, not be stuck holding anything. Yeah. So that was great. So we quit buying parking, it’s coming back and select markets, but that’s a very, very targeted investment like getting, I mean, it’s not even, it’s funny, I’ve got a, I got an old YouTube channel out there at one point I was putting some, some info out there and I hadn’t paid attention cuz it was on a, it was on a different, different LL, not different, different branding that we were going through at one point.

Sam:
And I forgot about the channel the other day I found it and there’s like 2,700 subscribers and like 500 comments. I’m like, oh oops, sorry about that. And I started, I did, I felt obligated to answer the question cuz there’s lots of great questions like, Hey, what about this? Cause they’re on 20 or 30 videos out there. And parking is interesting in that you can be 200 yards away. One could be worth, you know, a million bucks and then a service lot, 200 yards away. I wouldn’t, I mean, it’s a true story here in Memphis. It’s one of the examples I gave in one of the videos, 200 yards, the other direction I wouldn’t give ’em 15 grand for it. Like it’s just, it’s that it’s that laser focused on one lot is worth a ton and one lot isn’t because people just don’t people pay to park wherever it is they wanna park.

Sam:
And they’re not, I mean, if it’s just off the wrong corner, off the wrong street by just a couple hundred yards and suddenly it’s terrible investment. Yeah. So yeah, it’s it’s pretty funny. So you wanna go look that up? There’s there’s some parking videos out there on that. So I was parking and then we transitioned out of that and did some multi-family investments. Last year we did two multi-family investments, did a ground up boat in RV storage facility and then did a fund of funds in another self storage operators project. Last year, the boat in RV storage was a, was a kind of fun one off project, but I see great runway there. And so if you wanna dive into that, I can kind of tell you the metrics behind that.

Charles:
And also yeah, let us know. That’s a very interesting asset class as well. Right? That’s so it’s out it’s outdoor storage right? To people,

Sam:
Eh, no,

Charles:
No, this, this

Sam:
Is the, well it can be. And so here’s, here’s the project we were building and it got bought out. We just scraped the dirt basically and somebody else came in and said, Hey, we wanna buy out the project. Okay, great. So we got paid and it was fine. It, it all worked out, but it was 150 covered units. So as in, you know, giant roll up garage door, 14 foot roll up garage door 11 or 12 foot wide bays, 40 foot deep. Wow. you know, individual units with trickle chargers in the unit, all this stuff. Right. so no, those are huge, huge units. And those are, you know, you can park a class ARV and those, if you, you want or a boat or anything else, but then there was also gonna be another 66 units of pull through storage. So say you have a giant fifth wheel or something else that’s, you know, you don’t, you don’t want grandpa at 75 in there trying to, trying to wiggle his way with a, a fifth wheel into one of your, you know, 12 foot wide bays. You wanted to be able to pull in one way and then pull back out the other way with, with, you know, one entrance, one exit always never backing up program. And I forget what you even asked me. I’m just telling you about the build oh, outdoor storage. No, it’s not all outdoor. There is covered. We were, we were do covered for the pull through and then obviously bays individual bays for the actual RVs themselves.

Charles:
Nice. And how are you? We are looking at a project we’re going back and forth. And, and with this one of these owners down here in the Carolinas and on, on somebody who’s getting out of some mom and pop stuff from self storage stuff and we have extra land and we’re like, you know, planning out exactly how we would do it. And we were figuring out that we made more money. If we had done smaller self store, just regular climate controlled units compared to boat. Cause everything’s really different. You take a lot of room up when you’re doing boats, when there’s trailers, especially some guy has a 25 foot like, you know, bow rider. He is bringing it through. I mean, you know what I mean? And a lot of turning big truck to do it all kind of stuff. How are you going through or are you, are the operators you’re working with they’re making the decision of what best use per you know, the amount of space that you have the acreage there of like what’s if, when you’re, if you’re developing any of these.

Sam:
Yeah. So, I mean, we were gonna, this was self operated. So when you say operator, I mean you talk, yeah. I mean, these are things we were gonna own and operate and that’s one of the beauties of, okay. This type of investment is that it’s, I mean, it’s, it’s pretty hands off. I mean, people are there’s, there’s just not a lot of, there’s not a lot of motion in a, in an RV storage. I mean, I own an RV and luckily I don’t have to pay for storage here in Memphis, but it’s you know, the thing moves like once every four to six weeks, it’s not like there there’s no need for front office or anything like that. But yes, doing layout, I mean, you, you can certainly, you can certainly have when as part of feasibility studies and things like that, you can bring groups in that will really help you dial in that site plan.

Sam:
If you want, on this particular project, we had so much land that it really just didn’t. I mean, we were just gonna make it extra, extra big and that was the end of it. It was like, well, I mean, if you get a 70 or 80 foot wide drive aisle, I mean that’s, you ought to be. Okay. so yeah, that was, that was not a complicated math problem for us, just because again, we had a large tract of land to work with, but it, that is a problem in that it does require more land. I mean, if you, if you are constrained by the price per acre yes. You’re, you’re definitely gonna generate potentially more revenue on a square foot basis on just regular climate controlled self storage. Absolutely. I think, I think your cost of build will be lower on a boat and RV storage facility just cause there’s not as many moving pieces to it. But you know, again with that, it, it just eats up more lands. You gotta figure all that out.

Charles:
So you have several different asset classes you work with. And I always like to ask why not focus on one or two asset classes? And you said you’re operating at boat and RV. Are you partnering with any other operators that helps you get into more asset classes without having to be a, you know, expert a hundred percent on that one class? I guess a hundred

Sam:
Percent. Yes, absolutely. And that’s one of the things we did last year or actually in the, at the end of COVID or beginning of COVID was just like, okay, we shut down parking and I took five or six months and I just said, gosh, what in the world am I gonna do next? I mean, really it was, it was, you know, the world kind of panicked. Luckily we’ve got money and time and it was just like, okay, I just gotta figure out what our next steps are. And that was part of it was, and that’s how we took down multifamily deals. Last year, I just came in on the capital side. I brought a lot of key industry contacts to the table. I made our LPs a ton of money by doing that. So I’m active in the business side of it, but yet I don’t have to run the day to day deal.

Sam:
And that, that was key. And so that’s one way to do it right. And I would, I would recommend that to anybody. Like if you can go out, use your, use your slice of knowledge that you have and join a GP team, bring some money to the table and contribute your best, you know, the best parts of the deal. You can do that. I mean, cuz right now I’m not occupied time wise in multifamily. I don’t really wanna be. And that was part of the strategy was like, okay, I’ve got, I’ve got capacity here. I’ve got capacity to contribute. But yet at the same time, I don’t know that I wanna grow a multifamily investing business. These are good opportunities I saw as you probably did too Charles and you know, 10,000 multi-family opportunities last year. And there were two that came to the top that said, I wanna put my money in that.

Sam:
And then I also wanna get some of my friends money in that and we’ll bring a million bucks per deal and it’ll be great. So that’s what we did. And so how, why not focus? I am focusing. And that was part of the, part of the, kind of the revelation last year and doing this boat in RV storage facility is like, wait, there’s a lot of runway here. And I started digging into more metrics and digging into what’s going on in the industry. And there’s just some, some super compelling stats that are surrounding just RV deliveries alone. That you’re gonna go, Hey, wait, there’s the, there there’s, this thing is front loaded with incredible demand. That is just not built. Mm-Hmm <affirmative>, it’s not, it’s not there. It’s not in the marketplace. And we’re gonna need that capacity in short order back secondhand with that.

Sam:
Or secondly with that comes RV parks. So because of the surging demand in RVs alone, I don’t know. So I’ll just give you the stats. So I mean, if you want me to, so I don’t where you at? Yeah. So 2019, I, I don’t remember what the numbers were, but I know that in 2020 we had like a 33% increase in RV deliveries, brand new RV deliveries, right in 2021 and 2020 deliveries were roughly. And this is from the RV industry association, roughly 350,000 deliveries in 2020, in 2021, we had almost 600,000 brand new RV deliveries in 2022, we are slated. They’re projecting just based upon current pre-orders and stuff in the pipeline. Another 600,000 RVs will be delivered this year alone. That’s two or 1.2 million new RVs in a 24 month window that you’re gonna have to find a place to store ’em.

Sam:
I mean, how many, how many, these are allowed to stay in, in your neighborhood? HOA? Yeah, I dunno if you have an HOA, but are they allow ’em to be parked on the street or in your driveway? No, <laugh> not right. How many in most Metro, most cities you can’t do it. You just can’t do it unless you live way out in the country and you can park it in your front yard, which is also not recommended cause it’s out in the elements. And so you gotta have a place to store ’em but then, oh, the third, third compelling part of that is that the demographics have shifted. So it used to be, when you think of an RV owner, who do you think of you think of, you know, the retirees driving around from national park and national park going to see the country like, oh, okay.

Sam:
That’s cool. No, the largest group of owners of RVs in the us right now is 35 to 55 with kids. It’s like, wait. Yeah. Oh, that’s, that’s a dramatic shift, you know, by like 20 years overall in the, because I’m one of ’em man, I wouldn’t get rid of my RV for anything. Like when I go, when I leave this house with kids in the car and we’re going for more than 20 minutes, they’re in the RV cuz we’re driving four to six hours to go see family. And it’s like, it’s just, it’s one of those. And not that we have to use it there, but people are going on vacation with them, have to have a place to store ’em it’s just, there’s just a lot of unmet demand on that front. And so we’re seeing RV parks even start to trade and they’re the cap rates are compressing, but they’re still not what they, they’re still not mobile home park prices, which is, you know, oh, home park cap rates are in the, you know, now in the fives competing with multifamily on a national average, I mean your RV parks are eight to nine.

Sam:
And the reasons for that I think is that they’re operationally complex. So that’s one of the things that we are really trying to build out this year is that, you know, cuz you’ve got, you got, you have short term parkers, you have long term and that’s the other cool thing is you can buy a long term RV park, say it’s 80% occupied by long term people who use them as a seasonal second home, right? It’s like the poor man’s poor man’s vacation home. They park at one spot. The thing may never even leave. They’re gonna pay for it for 12 months. They’re only there four months of the year. So you get a better tenant. You get somebody that takes care of their property. More, their RV’s probably worth a lot more than maybe even some mobile homes are. And again, they’re only there four months outta the year and it’s like, oh wait.

Sam:
And you can buy that for a 8.75 cap where you can buy a mobile home park for a five and a half cap. And it’s like, it’s the same basic thing. It’s just with much better tenant. And, and I don’t know, just all the, all the dynamics there are just kind of teed up. I’m like, wait, there’s, there’s good things going on here and you gotta pay attention to those. So that’s why to answer your question. Like 30 minutes later is we wanna focus on RV and boat storage and RV parks in 2022. And that’s really the only place I’m going.

Charles:
Yeah, no, that’s great to, to find a niche that works and just add to that being in Florida where you put RVs, we also add in boats on that, right? Cause everybody’s got some boat and Florida, you know you’re not putting boats or RVs in HOAs, so it’s just not a thing. So anywhere in the United States, really. So this is one thing moving forward here is that I like I was, I was kinda reading up when I was preparing for this episode. And it was saying that your end goal, which is similar to mine is to be an LP passive investor, which when I talk to people, especially when you go to industry events that I imagine you and I have been to before where we’re doing, you talk a lot about doing syndications and being the general partner and all that stuff.

Charles:
But when I’ve worked before and when we’ve raised money, especially from family offices and they’re putting in large amounts of money as LPs and you look back after getting off that call and you’re like, wow, that’s, that’s the best place to be is in the LP part. And whenever I invest as a limited partner, cause I consistently invest as LP. I find out how easy it is. And for most people I tell ’em listen, you know, this is a much better track for you versus, you know, spend your time in your business, in your profession and then invest your additional money into passive investments. You’re gonna it’s cuz you become a, you become a syndicated, it’s another business that you’re starting unless you really love it. But right. I don’t think most people love that. I think they, they get sold by the passive income. It doesn’t really happen. <Laugh>

Sam:
For sure. Yeah, absolutely. Man, you gave me 20 million bucks today and I’d be like, okay, bye <laugh> like I can find, I can find a way to, to, to put a seven handle in front of whatever that passive income number is with 20 million bucks a year. And that’s that’s, that’s plenty of money for me, man. Like life is short, you know, I, I love what I do. It’s fun, but it’s not like yeah, I mean it’s, it’s a means to an end. It’s certain it’s, it’s the means to an end that’s effective. I think it’s effective and it’s proven and you know, with my skillset’s very possible, so okay, go do that. But yeah, in 10 years, man, when I’m 50, I would love to be a single or just to be a simple passive investor and be on the money side also I think is, is fun too.

Sam:
Cuz you get to, you get to experience the, a variety of deals without having to do anything other than watch the money come to your bank account or not, if you suck up picking deals <laugh> so but yeah, that’s that’s just why. Yeah. I just it’s there’s a lot of fun in being a passive investor and I’m like you, I’m a passive investor and a lot of different stuff too. And it’s like, oh that’s my favorite part. Oh, Hey wait, we doubled your money in three years. Great. Thank you. <Laugh> and I did nothing, but write you a check and collect the check when it came back in.

Charles:
Yeah, it’s also another thing I find too is that I’ll have a lot of investors that will be active investors and maybe their own deals, a duplex here or single family here, whatever it might be. And then they’re putting money into other deals and they’re really spreading their capital over doors, which is something I’m a huge proponent of, you know what I mean? I do a 90 unit dealer or 110 unit deal. And then maybe I invest in a bunch of different other passive deals. And now I’ve got a few hundred deals that this money is spread over and anybody can do that. And that’s where you go through another 2020. Right. And now you’re worried in the springtime of March, 2020, and you’re like, who’s paying rent, what’s going on. And now you have hundreds, maybe thousands of doors that your funds are crossover. Now that chances are that you’re gonna have consistent income or less volatile income let’s say in that time period is is, is pretty, you know, pretty accurate.

Sam:
Yep. Absolutely. I love that. Yeah, you’re absolutely right. Absolutely. Right.

Charles:
So what kind of mistakes do you see real estate investors make after so many years of being in the business on both sides of it? Mm

Sam:
Yeah. On all you’re talking about from the passive or active side,

Charles:
Passive active before you even gone to real estate investing. I imagine you’re dealing with them too. Like, you know,

Sam:
You know, I don’t, I, in, in these frothy times, you don’t see, you did the, the mistakes aren’t as obvious. And I think that’s the scary part in that. It’s like, oh, you know, I would rewind the tape 14 years and go back to 2008 and say that, you know, improper use of debt is a, was a mistake then. And that’s the people that got hammered, improper use of debt and not enough reserves. And that’s when they, when they couldn’t pay their bills, they lost properties that, you know, maybe even as short as two years later were worth way more than what they were worth in 2008. And they just couldn’t couldn’t service the note for 24 months. So that is a that’s, that’s something I see right now that puts me on edge, kind of takes my risk meter up. I looked at a deal yesterday, a buddy of mine sent to me cuz I’m I got some capital right now I’m looking to deploy and I’m like, oh, I just bridge debt.

Sam:
No man, I, I’m not doing, not doing seventies vintage bridge debt anymore. Like that’s snow. Like it’s just, that’s out that that’s out for me. Just because I find that to be a risky, it’s a risky proposition. One where, where do interest rates go? Two, I mean, even if you buy a, even if you buy an interest rate cap or something else, it just, it just, it just seems tricky. What if, even though you get, you may have a 3, 1, 1 with three years of IO and then two more years of extension on that debt, but in, but in 60 months or less, that bridge debt, 10, 20, 30 million bucks is gonna have to be paid off by somebody. Hey, where are we gonna be in five years? I don’t know. Can you service the debt in five years? I don’t know, like the, the, and with inflation, it’s one of those things that you know, fixate long term debt in an inflationary environment is a great way, not just to protect, but grow your wealth, borrow as much as you can against cash flowing assets. Yes. With fixed rate long term debt. When you get into bridge debt, that’s scary for me. So that’s scary from the passive side and that’s scary from the active side. And, and, and unless you have a quick out or something that really is just like, bam, bam, bam. We know that we’re gonna buy this, but in six months we can refi with, I mean, I can deal with that, but if we’re looking to refi in three to five years, not my favorite scenario.

Charles:
Yeah. Yeah. It’s also, the other thing to add on to that is you have a lot of operators that deals won’t work. It’s one thing, if you go bridge debt, but your deal might work with, you know, 10 year debt agency debt, but then you have people that are now they’re really pushing it and going 85% loan of value and getting like, now you’re getting back into the oh six type stuff. Yes. Where people were just getting crazy to make stuff work and you know, pushing returns to these crazy amounts. And I mean, you know, 85% loan to value on some, when you go to refinance it, I mean, and you’re gonna have cap rights, expand. You’re gonna have all this kinda stuff. So the value of the property’s gonna drop. So when you’re gonna do it, they’re not gonna be refinancing you at 85% loan of value. They’re gonna be financing. You maybe agencies 70, 75%, maybe they’ll be refinancing you at 65. You know what I mean? So you have to, you have to push dramatic value in that timeframe or, I mean, it’s just a much riskier thing as you said it, and I don’t think people understand the, what they’re really getting their self into.

Sam:
Yeah. That’s it that’s exactly it. Yeah. And so it becomes your fiduciary responsibility as the general partner to really smell out a lot of those terms and define the things that make for success. And again, you know, for me, I put money in everything we do and it I’m, I always equate it to the, the pilot and I’m a pilot as well, but, and I do it just recreationally, but of a pilot of a, of a, a commercial aircraft. They have a vested interest in making sure that they land safely. <Laugh> like, yeah, like, I, I don’t really care if the pilot gives a crap about me. I just want them to care about themselves. Yeah. As long as you care about yourself landing safely, I’m good to go, buddy. So that’s that’s kinda the way I look at it too, is from an investment standpoint, it’s like, I, I don’t like it. I’m not putting anybody else in it.

Charles:
Yeah. That’s a good way of putting it. That’s a total alignment of interest <laugh> right,

Sam:
Right. Total alignment of interest, a vested interest and seeing that we all land safe. Yes.

Charles:
Yeah. So what do you think are the main factors that contributed to your success, Sam?

Sam:
Oh man. That’s a, that’s an interesting question. Geez. I just keeping going, I, I can write a book on how to fail and that’s you know, I think a lot of people can write that book and it’s yeah, it’s just, it’s, it’s being hungry and keep going. I mean, that’s, that’s it, you know, don’t, don’t stop. I mean, it’s it, that’s it. You just put your head down and, and keep going and that’s I dunno how else to put it. That’s that’s all I’ve ever known is just keep moving, keep moving, man. That’s it.

Charles:
Well, so how can our listeners learn more about you and your business, Sam?

Sam:
Yeah. Two, two ways. One come on the Bo or come listen to the podcast. How to scale commercial real estate. It’s a daily real estate show you know, interview, great guys like you Charles and yeah. Have lots of fun doing that. So that’s the first way. Second way is, you know, there’s a, there’s a guide I put together on our website. It’s called how to vet a deal in 10 minutes. So if you go to Bricken B R I C K E N, investment group.com/ford/ford/guide. Yeah. I think it’s Ford slash guide anyway. Yeah. Ford slash guide. You will, it’s, it’s a guide on how to vet a deal in 10 minutes, which I spent a lot of time early on monkey around with trying to figure out how to vet deals and you’d get a dealer across your desk and you know, I’m new in the business and I’m like, oh, that’s interesting. That’s interesting. Three hours later, you’ve done your homework on the city. You’ve talked to this, you’ve talked to that. And then in the end, you’re like, you know, I don’t think that deals for me

Charles:
<Laugh>

Sam:
And you’re like, crap. Well, there went three hours and then you do it again. You do it again a hundred times sudden, you’re like, okay, this is getting stupid. So I put together a guide that literally will help you to find your criteria and go, okay, 10 minutes later. Yes, no investigate further. And you should be able to move on forward. Pretty, pretty accurately with that guide. So find that@brickandinvestmentgroup.com slash guide join investor club, whatever it is, reach out to me on my cell phone. If you’d like that’s (901) 500-6191. That is my direct phone number again, (901) 500-6191.

Charles:
Okay, awesome. I will put the links to everything in your website, into the show notes. And that guide is readily available all over the website, especially the investor club. I was just reviewing it yesterday. So make sure you check that out and thank you so much for coming on today, Sam, and looking forward to touching base with you here in the near future.

Sam:
Thank you, Charles. Appreciate the time

Charles:
I talk to you soon.

Charles:
Hi guys! It’s Charles from the Global Investors Podcast. I hope you enjoyed the show. If you’re interested in get involved with real estate, but you don’t know where to begin, set up a free 30 minute strategy call with me at schedulecharles.com. That’s schedulecharles.com. Thank you.

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Links and Contact Information Mentioned In The Episode:

Bricken Investment Group

About Sam Wilson

Sam is an active investor in self-storage, parking, retail, multi-family apartments, RV parks and single-family homes. He hosts the How to Scale Commercial Real Estate Podcast and participated in over 30mm in acquisitions in 2021. Sam holds his bachelor’s degree in business finance from the University of Memphis and holds his real estate license in Tennessee. In addition to his years of real estate experience, he also has a diverse background in business ownership, building construction, and management.

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