Sam is a managing partner at MGW Ventures focused on acquiring multifamily value add opportunities. He has a background in both the commercial real estate and start-up technology space. Working as an acquisition analyst at a REIT he was a part of acquiring over $50mm of multifamily properties. In the tech space, he has worked Fortune 500 executives to drive culture change and increased employee well-being. Here’s some of the topics we covered:
– Relationships & Influence
– The Biggest Expense In Multifamily
– Identity Statement
– Learning The Multifamily Space
– Setbacks In Finding Deals
– Going Big Quick and Raising Capital
To find out more about partnering or investing in a multifamily deal: Text Partner to 72345 or email Partner@RodKhleif.com
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Full Transcript Below
Intro
Hi. My name is Rod Khleif, and I’m the host of “The Lifetime Cash Flow Through Real Estate Investing” podcast. And every week, I interview Multifamily Rock Stars and we talk about how they built incredible wealth for themselves and their families through multifamily properties. So hit the “Like” and “Subscribe” buttons to get notified every Monday when a new episode comes out. Let’s get to it.
Rod
Welcome back to Multifamily Rock Stars. So as you guys know, this is where we interview people that are crushing it in this business. And we show you really how it’s done on the inside with multifamily investors that are just incredibly successful. They’re creating that success not just in their businesses, but in their lives. And as always, I’ve got my co-host, who is the director of our massive action team for our Warrior mentorship program, Mark Nagy on the call. Mark, what’s up, brother.
Mark
Doing really well, man. We got a guy’s familiar face from the Orlando boot camp up on stage for those who didn’t make it. And so if you didn’t make it, good to hear from him today on the podcast and listen.
Rod
Yeah. So we’ve got Sam Froerer on the podcast today, and he’s the managing partner of MGW Ventures. And he’s got some commercial real estate background. He worked for a REIT as an intern way back when. But you know what? I’m stealing his thunder. Welcome to the show, brother.
Sam
Thank you, Rod, Mark. Great to be with you both today.
Rod
Yeah, you bet. So I know you’ve got it. You closed on a nice deal in Nashville and the market. I’m jealous of that one, actually. That’s an incredible market. You’ve got, I think it’s 124 doors there. But talk a little bit about your progression into this business. You know, give us a little background, because I didn’t dig into it.
Sam
Absolutely. Happy to share. And I have to say, my background is a little different than most and that I really tried to take your advice. Listening to your podcast for a few years. And over and over, I heard go big. And so that first deal, that 124 unit we did in Nashville, we can talk a little bit more about it. But I appreciate the advice that you gave to help me do that, but to take a step back and how we got to that point. As you mentioned, I worked at a REIT, a Real Estate Investment Trust out in Utah when I was in college, but really had no idea what it was that I’d stumbled into. I was underwriting and looking at deals for apartment buildings for this company. But I would plug in the numbers and see oh, it’s a 30% IRR, and have no idea what that meant and just send it up the ladder. And what I kind of heard was that the cool and sexy place to be was Tech. And so I took a step away from real estate. I joined in Utah, where I’m from. I joined a start-up tech company. That was a great experience. We went from a couple of hundred employees to a couple of thousand employees over about four years and sold for a large amount of money to another company. I did have some equity in the company. Again, I just came in as a low-level employee. So not a life-changing amount, but was definitely the biggest check I’d ever seen in my life. And as that happened, as that event happened, I was like, wow, I just worked so hard for the past four years. Do I have to do this again for another event, for a large inflow of cash? Like, there has to be a better way for me to have my money work for me. And that’s when I started to look back into real estate, the paradigm-shifting reading of “Rich Dad Poor Dad”, and started to learn just everything I could about the space. And so fast forward a few years later, as I continued to, I moved to California and I got my real estate license out here. Didn’t do much with it, started to do meetups and then started listening, actually to your podcast, Rod, and recognized, wow, multifamily, real estate is a great place to be in. But specifically, multifamily, for a lot of reasons is a fantastic place to be in. And everyone that you interviewed said, I wish I’d gotten big sooner. And so I said, okay, maybe I can go bigger sooner. So I remember attending just last year. It’s been now a year in March, attending your virtual boot camp and recognizing this is something that could be really valuable, signing up for the mentorship program and six months later, not without a lot of hard work and teamwork put into it but finding and closing our first deal in Nashville.
Rod
Fantastic. And you did that with Lauren as well, one of the other warriors, correct?
Sam
Yes, that’s correct. I’ve got my main core partner. But as well, we brought in Lauren and actually one other warrior group as well for that.
Sam
Fantastic. Fantastic. So let me ask you this just to get a little background because I just don’t remember. Forgive me, I’ve got too many students. In the tech business, what sort of background did you have? What were you doing? I mean, what I’m looking for is the skill sets that you brought to multifamily.
Sam
Yeah, great question. And to be upfront, too, I still have that tech job.
Rod
Oh, you do? Okay.
Sam
Yeah, I do. And my goal is to continue to run that. It’s funny, there may be one day where they just say, where are you going all these hours working on real estate. But as of now, I direct the team, focused on renewing and retaining our top customers at a software company. And the company is all based on well-being. And so kind of two things that I’ve been able to bring from that background, driving well-being for the companies that are using our software, but also just focusing on that retaining our customers is being able to now write on the property management side. There’s so much that I’ve learned, and on the investor relations side, there’s so much I’ve learned about how is it that I treat people? How is it do I understand what their needs are and how I can benefit them in order for us to have really a win-win scenario. And so I’ve been very grateful for that experience. It continues to help me as I am in this space.
Rod
Sure. So there you go, guys. There’s something actually that has not come up before. It’s a relationship-based background that you bring to this and communication and influence. I’m not going to say sales, even though I suppose it could be called sales as well. But, you know, as we do these interviews, we always talk about the different hats that people can wear to come into this business, that it is a team sport and so, you know, very valuable skill set that you bring to the table with what you just described.
Sam
I was going to say I appreciate it. And I really do think that it is a huge piece, Rod. As we look at what your biggest expenses in a business and real estate, it’s turnover. And so if you’re both with your employees and your investors. And so if you think, hey–
Rod
And your tenants.
Sam
Yes, that’s what I meant to say. Yes, my tenants. That if I can give them a great experience so they’re not leaving, and then I’m retaining them year over year, it is so much easier for me to continue to make, you know, great money for my investors, but a good experience for them as I’m taking care of them year over year, and they stay. And the same with the investors. Right. If you’re able to continue, the goal is to be in this for the long haul as you’re able to take your investors from one deal to the next because of how you treated them and how the returns that you gave them, that’s going to be so much easier for you and beneficial for them in the long run.
Rod
Yes.
Mark
So, Sam, obviously, you said you went big right out of the gate, which is awesome. Where do you think you would have started if you didn’t have a team and didn’t have help getting started in this?
Sam
I think I would have started really the typical route, right, of just like, okay, what’s the BRRRR strategy, as they call it, or the single-family. Maybe the duplex or quadplex of house hacking. And even when I first started the program, I remember thinking maybe I could do ten or 20 units. And it really wasn’t until I got inundated by, you know, just all the amazing people in this group to recognize. Wow, there’s so much to be said of going for those larger doors that the deal itself, the work itself doesn’t change in some ways. It actually gets easier as you’re able to bring in full-time property management and just the nature of the scale. But recognizing, well, this feels a little uncomfortable. Actually feels very uncomfortable. But I’m going to trust that this is what everyone is saying to do. So I’m going to get out of my comfort zone and go do it.
Rod
That’s actually where I was going to go with the next question was around fear, around discomfort. You know, what did you do about the self-talk as it related to that dynamic?
Sam
Yeah, you know, it’s funny. As part of attending your boot camp, Rod, you do this affirmation statement, and I’ve literally got it. It is still on my wall from a year ago that I look at every single day of I am Sam Froerer. I am happy. I am grateful. I’m emotionally intelligent. I’m a loving husband, and a caring and responsive father. I’m a commercial real estate legend. I bless others and change lives. And I crush it in real estate investing.
Rod
Oh, that’s freaking awesome.
Sam
Thank you.
Rod
We call that an identity statement.
Sam
Identity statement.
Rod
Yes. Anything you put the words I am in front of us is an identity statement. And that is one of the exercises we do because it pulls you into that identity that you design for yourself. I mean, people spend more time planning a birthday party than they do designing their lives. You know, I’m really impressed. You know, mine is I Rod Khleif, a magnificent, amazing, passionate gift from God. I’m an incredible father. I’m an inspiring leader, I’m a loving billionaire, and I’m an amazing husband that puts smiles on the faces of children, inspires others to excellence, and rocks the world. And I have said that thousands and thousands and thousands of times, and you end up owning it. And it’s just a very, very powerful exercise that if you ever come to one of my boot camps, you will do it and you will just figure out how powerful it really is to helping you bring that into existence.
Mark
Quick tip. Real quick that I do. I have mine posted on my mirror. And while I’m brushing my teeth every morning, I read it in my head. And that’s just one thing. Or during the day, you know, you’re brushing your teeth. You have to do that every day. You might as well say something like that and start the day right and get your mindset in the right. And sometimes just get to remind yourself if you’re having a bad day or whatever it is. So small little quick tip there that works for me. And some people might like that, but I definitely want to touch– yeah, it’s awesome, man.
Sam
I was going to say too, just because I think it’s important that fear peace is so key, especially as you really are getting out of your comfort zone. And so for part of it right, even doing that, you’re still going to feel the fear. Or at least I did. Right. Just being honest because it’s very new. It’s very uncomfortable and so accepting that you’re going to feel the fear and do it anyway. And just jumping, moving forward, I think, is really key to realizing you’re going to feel that, but do it anyway. And part of how that can help is like doing what I did, finding a team of people who were above and farther ahead of where I was and understanding okay, how can I bring them value and be a part of this? So I’m not doing it all on my own.
Rod
Yeah. Love it.
Mark
Let’s talk about a little more detail on that, actually, because I know people here like, oh, you can do deals in different States. It’s a team sport, et cetera. Obviously, you live in California, done a deal across the country with the Nashville team being a big part of that. If you could give the listeners some more detail on what’s been your strategy for networking, and relationship building to help you get a deal like that.
Sam
Yeah, good question. For me, it was coming into, as I was getting into this space, both with working with Rod and the other warriors and attending local meetups in my area was first, just a lot of networking, a lot of talking, just learning the space, understanding it so that I can feel very comfortable talking to it and understanding what is a good deal, what isn’t a good deal, what’s important about it. But then I’d say the second key piece of that for me was really understanding to that point, right, of other people being maybe where I wanted to be, how can I provide them value? And so I was looking at these conversations with all these different people, trying to figure out whether it was they were looking for a deal, they were looking for capital, recognizing okay, here’s where all these people that I’m meeting and establishing relationships with are. Now, how could I potentially help them?
Rod
Yeah, I’m sure most of that was inside the Warrior group, and that actually is a fantastic approach that you took. In fact, I’m going to suggest that, just looking for where you can add value. I absolutely love it. Well, let me ask you this. What has been the most challenging part of this multi-family game for you? Or you can answer that or you can just tell us about a setback and, you know, any bumps in the road with that deal that you did in Nashville that you want to share, maybe less than you learned? Either one of those?
Sam
Yeah, I’d be happy to answer both onto the first one, quick. Finding deals is very hard.
Rod
Right.
Sam
It’s a crazy market. I’m sure you get that all the time. We underwrite deals. My partner does this full-time and is looking at deals all day, every day, and it’s hard. So that is definitely a key piece of kissing a lot of frogs to find the Princess. Another, I guess, personal story, right of just a setback was your typical deal structure when you get a deal under contract, is it set to close in 60 days. Well, we had found a lender, a bridge lender that you know, our loan brokers that have never worked with these guys before, but they seem okay. We’ve been working with them week in and week out, you know, for 55 days. Right before we were about to close, we had all the equity raised, millions of dollars sitting in the account, and they say, hey, we actually can’t loan on this asset. And it was just like that moment was like a very heart-stopping, like, oh, my goodness. It was hard for a moment. Right. We were not nervous and we knew that the financials had come back, the appraisal had actually come back $5 million over what we were buying. So we knew that we didn’t have any issues there. We didn’t have any issues with third-party reports. And so we felt comfortable that we could get another lender. But all of a sudden, we had to scramble. We luckily had within our contract the 30-day extension for additional hard money down, and we were able to write, go to our investors, and explain the situation. Quickly find another lender and expedite that process in order to close. But that was a bit of a tough setback that again, it’s pretty rare to happen. No lender is going to want to do that because it’s going to give them a black mark in the industry. But we’re thinking this particular private bridge lender was just going to have trouble funding the loan as they were looking for outside sources for it. But that was a tough moment, right? Three days before closing to say, hey, we’re out.
Rod
Wow. Yeah. With bridge lending, you’ve got to be very, very careful. In fact, that’s kind of the bell of the ball right now. We’re actually doing some bridge ourselves on a couple of assets that we’re looking at. And it’s not my first choice, but, you know, a lot of the conforming debt is very, very–you know the loan to value has really gone down in a lot of markets. So let me ask you this, kind of a follow-up to that last question. I know you’ve got a young child, a two-year-old, you know, and a family. How have you managed that work-life balance, you know because you know how much emphasis I put on, on that? And if you’ve been to any of my which you have, you know, how do you manage that? Talk about that a little bit for people that are listening, that you know, may have a W-2 job, maybe have kids, and they’re wondering how they can do this. Talk about that.
Sam
Yeah. It’s a good question and probably a familiar answer, but a very honest one. Right. It was having to take a step back and say what is most important to me and saying, okay, I’ve got these hours that I have to commit to this day job, to continue to put food on the table. My family is more important than anything, so they need time. But I truly want to grow an incredible business and bring value to others through real estate. I can’t deny myself doing that. Does that mean that I’m having to get up a little earlier and maybe go to bed a little later? Right now it is the case. And I’d say the number one thing about all of it is just being very intentional with my time. So it’s doing time blocking, it’s ensuring that you know, I never miss a dinner with my family. And I never missed that chance to spend the time with my wife and two kids because I refuse to sacrifice that. Your story really impacted me, and so I ensure that always happens. That doesn’t mean that I’m not continuing to work after the kids go down and maybe some in the morning. And it’s not going to be like that, I don’t think forever. It’s right now. Right?
Rod
Of course not.
Sam
It’s a grind and build process, but it’s accepting that’s where we’re at right now.
Rod
I’ve got a sign on my wall right now. It says “Focus, grind now, play later”. That’s it.
Sam
Love it.
Rod
Yeah.
Mark
And the one year in– sound like you know what you’re talking about. You sound like an expert, which is awesome. Just to give the listeners a little bit of context here before we go forward. Outside of the REIT, which obviously was your job. Remind me, did you have any single-family, multifamily real estate experience before this first deal?
Sam
Great question. I am actually still out in Southern California and currently renting a home. And this was my very first real estate transaction was that signing on an over $10 million loan here. So it was taking Rod’s advice and running with it.
Rod
Boom. Let me ask you this. Where do you think you got the most value out of the warrior group? Because your story is very unusual. I shouldn’t say it’s very unusual, but most people don’t start as big as you did. So speak to that for a moment, if you would.
Sam
Yeah. I think two key pieces of why it was so important for me. The first was the mindset. It was helping me realize that this is attainable, that what I focus on is what I can achieve. And so if I start focusing on going big, I can achieve that. And I know that it’s possible. And so that was the first key piece. The second was absolutely the people. Right. It was interacting with those who had done, you know, one to three to five deals, who were still looking for potential partners that I recognized. Hey, if I’m able to find a great deal or if I’m able to help raise capital that I can be a part of, you know, a great deal that I can bring to others. And I was able to find those others through the warriors.
Rod
Fantastic. By the way, guys, if you are interested, I brought up the Warrior program just because I wanted to mention this. If you are interested in applying, text the word “CRUSH” to “72345” and you can check us out and we check you out. We don’t take everybody. But again, you just text “CRUSH” so we can help you crush it in this business like we have with Sam here and just text “CRUSH” to “72345”. So let me ask you this. As you were moving along in this business, did you have any epiphanies at any point in your journey here? Any like, aha, okay, now I get it. Does anything like that come to mind? I think you mentioned one where it related to going bigger, you know, instead of you know, starting with a duplex or something. But does anything else come to mind? If not, don’t worry about it. I’m just curious.
Sam
Yeah, go big. That was absolutely one of the key ones. And I think the other is I really started to focus on– my really core focus has been on raising capital, as my partner has been the one really looking at finding the deals. It was a little bit of an intimidating thing to go do for a first time, but I came to recognize as I, you know, created a very polished presentation that I then began to share with others that again, this is something that, and no, it feels like, oh, here’s a startup company, please put your money in it and maybe it’ll work out. Maybe it won’t. Like if you’re being smart with your underwriting, looking at your deals, I came to recognize again, real estate is such a fantastic asset. Multifamily is such a fantastic asset that people were very interested and excited. And even though I didn’t have that “track record”, they were able to see the numbers of the building, they were able to see the potential of the opportunity, and people were interested and excited to be a part of it, which I think I took for granted. You know, just again, what a great space this could be and a little less scary than maybe I thought it would be of approaching others to share opportunities.
Rod
Well, it was a limiting belief, believe it or not. And then we talk about that and we all have them for all sorts of various things. And you thought it was going to be harder than it was. And it’s really just building relationships and being honest and authentic and truthful. You know, I know we also provide a deal package that you can use as an example, you know, to help in some cases. No, you’re a great communicator. You probably didn’t even need it.
Sam
Oh, no, I used it.
Rod
Did you use it? Okay. We do what’s called a sample deal package where you can just present it to somebody and say, hey, if I find a deal, you know, this is the kind of stuff we’re looking for. If we find a deal like this, are you interested? And it just starts the conversation and can, you know, just make it easier to get over that initial hump. But good for you for pushing through the fear.
Sam
Thank you.
Mark
That’s the key thing I want to mention, because people hear that, but they don’t really believe it. You know you tell somebody, hey, a guy had no experience, no prior deals. You didn’t have the track record. You went out and you raised. you know, millions of dollars for this deal. Again, just for the listeners, is there any sort of secret sauce to that? Or do you just follow the process and do what other people do?
Sam
Yeah, good question. I think really key is what Rod said of just being honest and authentic, of just presenting myself to them, presenting the deal to them. And then also, I won’t say necessarily that it was easy, but it was simple, right. That it was still talking to a lot of people. You’re still trying to line up where that person may be in their life and if it makes sense to invest in, you know, a significant amount of capital in a deal like this. And so it was a lot of work. It took a lot of time, but at the same time, to Rod’s point, build a ton of relationships. Already had a ton of relationships that helped make it very simple for those who were ready to take the plunge.
Rod
Nice. So listen, you know that I have a lot of aspiring multifamily investors. Maybe they’ve done some single-family, maybe they’ve done a duplex or a couple of them or a few, but they know they want to go bigger. What would you say to those people listening that are at that place? Or maybe they haven’t done anything yet like you initially, you know, but they know they want more for their families. They see the writing on the wall. They recognize that you know, they don’t have the freedom they want and they want to build that for themselves. Speak to those people.
Sam
Yeah. Don’t stop taking action. The first piece, right. When I was first getting started, it was as simple as just a little bit every day of learning more about the space. It was a little more of I’m going to talk to three people this week, even if I’m not sure anything’s going to come of it, I will just always keep taking action. So that would be my first thing, is just keep going. Just keep your goal in front of you. Keep moving towards it. And then the other piece. Right. If you’re wanting to go big is look at the big things. If you’re wanting to be getting in units that are, you know, 100 plus units, be looking and finding and talking to the brokers that are dealing in the 100 plus units, make sure that you’re fishing in the right pond, so to speak. And then as you work it, you’ll find it.
Rod
That’s good. So really, last question or line of questioning. What’s your driver, buddy? What’s driving you? You know, what’s the motivation for you?
Sam
Yeah, it’s at a very core level, I feel my purpose is to serve my higher power by serving others. And that’s something that is a core part of me. And figuring out, okay, how do I actually do that? And I found real estate is just something I’m so excited about. The ability to bring wealth to people, not only financially, but from a peace of mind perspective of what they can have as they grow themselves and their lives. That’s something that I really want to be able to not only give to others but build for myself. And it’s something that keeps me going every day is to fulfill that why.
Rod
Love it. And you’re providing housing. I mean, you’re providing employment in our business. There are lots of ways to serve. But the fact that you answered it that way is a great way to answer it because power moves to those who serve. You know, and that’s a recurring theme in my Warrior program of people that want to help other people. And you see it you know on the Facebook post. We have our coaching call today, and I was going through all the Facebook posts, which I do for every call. If there are any, I want to elaborate on questions and help answer questions that were asked. And good Lord, we had a ton of closings this last couple of weeks as well, but everybody congratulating everybody else. And when you’re around that kind of an environment where people are building each other up and you’ve got a group of people that want to make the world a better place, it’s pretty incredible to watch. But well, listen, my friend, I really appreciate you coming on. It’s good to see you and excited to see what’s next for you. And I don’t know if you’re able to make the Sarasota Warrior event coming up here in short order, but if not, maybe I’ll see you in Denver at the next live event.
Sam
Yeah. Hoping to be there. Thank you, Rod. Really appreciate it. And Mark, thank you as well.
Rod
All right. Take care. All right.
Outro
Rod, I know a lot of our listeners are wanting to take their multi-family investing business to the next level. Now, I know you’ve been hard at work helping our Warrior students do just that using our “ACT” methodology, which is Awareness, Close, and Transform. Can you explain to the listeners how they can get our help?
Rod
You bet. Guys, we’ve been going nonstop for three years building an amazing community of like-minded people. And our coaching students, which we call our Warriors, have had extraordinary results. They’ve purchased thousands and thousands of units, and last year we did over 1000 units with our students. And we’re looking to grow this group and take it to the next level. We’re looking for people who want to follow a proven framework that’s really step by step and then leverage our systems and network to raise equity, to find and close deals, and to build partnerships nationwide. Now our Warrior community is finding success in any market cycle. So if you’re interested in finding out more about how you can become more of our incredible network and take advantage of the incredible opportunities that are coming very soon. Apply to work with us at “MentorWithRod.com” or text “CRUSH” to “72345” and we’ll set up a call so you can check us out and we can check you out. That’s “MentorWithRod.com” or text “CRUSH” to “72345”.
