TGCI 146: Electrical Engineer turned full-time investor by elevating communities

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Episode 146: Electrical Engineer turned full-time investor by elevating communities

Copy of EP #18 - 2 Guests

Summary

In today’s show, Pancham interviews Sep Bekam – Founder and CEO of Bekam Investment Group.

A former full-time electrical engineer that’s studying for a master’s degree in robotics, Sep has been unknowingly trading time for money until his friend helped him connect his endgoals to his lifestyle. Now with a multi-million dollar portfolio of rental houses, he has been continuously innovating by uplifting neighborhoods through adding value to properties!

In this episode, we’ll unpack his journey as he shares his growth from how he failed his first investment to owning a successful real estate company. This episode will surely resonate with you as he tackles his realizations and the mindset he had when he finally took a leap of faith in investing.

 

Listen and enjoy the show!

PanchamHeadshotTGCI
Pancham Gupta
Screen Shot 2021-07-14 at 10.19.11 AM
Sep Bekam

Tune in to this show and enjoy!

Copy of Quote #00 - 1 Guest

Timestamped Shownotes:

  • 0:43 – Pancham introduces Sep to the show
  • 2:14 – How a conversation with his friend got him out of the rat race
  • 7:47 – The first steps he took to start his investing journey
  • 11:00 – On his investment with a turnkey provider that had gone wrong
  • 17:58 – His transition from electrical engineer to full-time investor
  • 22:21 – Improving a thousand neighborhoods as his long-term goal
  • 24:15 – Lessons learned from getting fired by a property manager
  • 26:54 – How waking up early increases his productivity
  • 31:28 – Taking the Leap Round
  • 31:28 – His first investment outside of Wall Street
  • 31:54 – How he overcame his negative mindset
  • 33:00 – Why his 2 duplex investments didn’t work out
  • 34:38 – Why investors should continuously look for opportunities
  • 36:16 – Where you can get his guide on interview questions to a property manager

3 Key Points:

  1. Real estate investing isn’t simply buying and renting properties but is also looking for ways on how you can add value to the property.
  2. Real estate will perform well, even with different economic issues taking place, because  it is one of the primary needs of the person to survive.
  3. Building a good relationship with the team you’re working with is vital as they will work and manage properties with you as if it’s their own.

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Read Full Transcript

Welcome to The Gold Collar Investor Podcast with your host, Pancham Gupta. This podcast is dedicated to helping the high paid professionals to break out of the Wall Street investments and create multiple income streams. Here’s your host, Pancham Gupta.



Well, Hi there. I’m Robert Helms, host of The Real Estate Guys radio program and if you want to have better results in your life, you got to put better ideas in your mind. You’re in the right place, you’re at The Gold Collar Investor Podcast.

 

Pancham Gupta Welcome to The Gold Collar Investor Podcast. This is your host, Pancham. Really appreciate you for tuning in today. Let’s get into today’s show. My guest is Sep Bekam.  He is the founder and CEO of Bekam Investment Group. He grew up in Orange County, California and started investing in real estate over a decade ago while working as an electrical engineer. Sep left his corporate job about six years ago to focus on building his real estate company. He and his partners own a multimillion dollar portfolio of rental houses nationwide. According to the National Low Income Housing Coalition, there is a shortage of 7 million rental homes, which are affordable and available to low income renters. Bekam Investment Group is focused on solving that problem by elevating the standard of living of the communities they invest in. Hey, Sep welcome to the show.

 

Sep  Hey, Pancham good to be here.

 

Pancham Gupta  It’s always so awesome to connect with you. You’re one of those people who always like to give. And it’s been a while that I’ve been around you, you know. So, I already feel like you know, it’s been a while, but you know, I feel connected with you all the time. So welcome to the show, man.

 

Sep  Likewise, and I appreciate your friendship, and it’s the mutual energy every time I get to hang out with you in person, and it’s always good conversation. So yeah, appreciate you having me on.

 

Pancham Gupta  And you know, who can VR both engineers, right. So that helps to connect. So, all right, great. So, are you ready to fire up my listener break out of Wall Street investments? 

 

Sep  I am absolutely. 

 

Pancham Gupta  Great. So, Sep, yeah, let’s start with your background, tell our listeners about your background, and more importantly, the person behind that background?

 

Sep  Sure. So, like you I’m a former electrical engineer, but we’re not really former, right? We’re always engineers at heart, you know, like, we’re problem solvers. So, if it’s solving problems on investment properties, or you know, if the, you know, electronics at home, stop working, we got to fix them, right. So, yeah, so started out as an engineer did that for a couple of years. And I had like zero, no MBA, no real estate license, I was just trying go to school, get a job, and go through that whole rat race that Robert Kiyosaki talks about. And the only thing that I knew as far as investing was investing in Wall Street. So, I, you know, right out of college, I would save my money, and I will put it into the stock market, the company’s 401k. And I had a dyad okay, results, I mean, single digits. But I remember had a coworker told me he was another engineer. He said, yeah, my uncle, he’s very successful, very rich and he’s putting all of his money into one stock. And you know, the sounds kind of like today, right? Like with GameStop and Wall Street. Yeah. All in. So, he’s like, yeah, he’s putting into this company called Washington Mutual, like, oh, that’s a big bank. Yeah, that that seems good. This is like 2008, 2009 

 

Pancham Gupta  Oh, my God

 

Sep   I sold all my stocks and put into Washington Mutual. And it goes to zero, right, it crashes. So, I put my hand on the stove. And I’m like, I don’t trust this. I mean, it was my fault, I should have known better. Then I went to a financial planner afterwards. And it was decent, but it wasn’t growing fast enough to make a difference in my life. You know, and it’s not that I needed a lot of money to be happy, but you know, I was living at home with my parents at the time and wants to move out, I, you know, want to get a new car, I want to go travel. And I didn’t want to have to keep looking at the cheapest stuff on the menu. When I go to restaurants with friends. I want to eat what I wanted to but all that cost money. So, I thought as an engineer, you know, I’d be making the big bucks earlier on, but I started working right during the Great Recession. And the economy was tough back then. So, every year when it came to, you know, getting just even like a basic wage increase, the companies would say, hey, you know, economy is not doing good. We can’t give you that 2% or 3% raise. So, you know, just, you know, hold on and then things will get better. So, I thought, okay, well, 

 

Pancham Gupta  And this was in California? 

 

Sep  This was in California. So, you know, the cost of living wasn’t getting any cheaper, right? I mean, it was deflationary with the real estate, but, you know, food and, you know, energy, insurance and everything was still getting more expensive over your rent. So, I was like, okay, well, I gotta find another way. And I thought the only solution was go back my master’s degree, so I went back for my master’s for controls and robotics. And yeah, I was, I didn’t finish it, you know. So, I had my job, it was 40 hours a week and 10 hours a week in traffic. And then I had my master’s degree, and I had to do the homework and the research for the projects and all that. So, I was burnt out, like, I did that for two years. And, you know, I was lucky if I can get five hours of sleep a night, one of my friends saw me like, kind of getting burnt out. And she’s like, you know, what is your end goal? I’m like, I just want to get off this treadmill, I want to have to stop worrying about money. I thought Wall Street was supposed to help me, you know, solve that problem, but 

 

Pancham Gupta  close 

 

Sep  Yeah, like, you know, a lot of people, they do the opposite, right? They get paid, the financial advisors get paid, even if the stock goes down, or if it goes up, right. So my friend is like, well, you know, you’re tying your goals to money and the challenge is, the more money you make, then, you know, the you have to pay more taxes, and you’re always gonna be on the treadmill, and is like that money that you think is going to have value, she’s actually explained to me, she’s like, it’s not, you know, like, look at that, she asked me to pull out $1 bill out of my pocket, and she’s like, just look at the top and it says, she said read it out loud. I said Federal Reserve Note. And she’s like, well, what is that? I’m like, well, the Federal Reserve I, I don’t know, I’m not an economist, but from what I knew at the time was like, you know, they have money, and they probably have gold in Fort Knox. And, you know, they control the money. She’s like, Seth, the Federal Reserve is not federal, and it’s not a reserve bank. And that was like the aha moment for me. I’m like, what is she saying? Like, that makes no sense. Like, how is it not federal and a thunder reserve bank, and, you know, here I am trading my time for these paper, you know, dollar bills. And it’s not even what I thought it was basically. So, she explained to me that it’s basically, she explained the concept of purchasing power, how the dollar lost its purchasing power over 90% of the last 100 years. And she recommended a book by Robert Kiyosaki called conspiracy of the rich. And just to summarize, yeah, that book, it basically took this concept further and explained how Wall Street is not going to be good hedge against inflation. Assets like gold, the name of your podcast, you know, silver, mining companies and real estate, like those are good hedges against inflation so that as the Fed keeps printing more and more money, as the government keeps printing more and more money, these investments can protect our purchasing power. So, you know, it’s not like it gets diminished over time. And that kind of led me on to the real estate journey from there.

 

Pancham Gupta  Wow. So, in the middle of the recession, you had this job and you lost money in after investing in Wall Street. And then you went from masters and met this person. And that got you to read the Robert Kiyosaki book. What happened next to that, you know, did you just go into real estate? Did you quit your job? What did you do like there?

 

Sep  I was just more shocked. It’s kind of like when the feeling of when you learn that Santa Claus is not real. And I remember specifically, I was, I don’t know, maybe I was a little bit later than a lot of people I found a Santa Claus wasn’t real when I was six, maybe some people figure that out a little bit earlier. I remember just devastated. I was like, here I am. I mean, I spent all these years, you know, seven years for the bachelors and for the masters. I mean, you know, EE is not an easy major, right. And I thought that it would lead to a better life. And I just realized that, you know, it’s like that that life that I was living was it was not you know, the freedom that I wanted out of it. I didn’t feel fulfilled, I didn’t feel like I was living my life’s purpose or adding as much value as I could be on my, my nine to five job. So, from that book, I just started getting to personal development. I read all the other rich dad books, I read another great book by one of your previous guests, Gio McGriffin, the creature from Jekyll Island, the real estate guys, as you know, equity happens and it just got into the real estate books, then started listen to some podcasts, real estate podcasts. And I eventually I, you know, I was like, okay, I gotta start buying rental property. But I live in California, and this is 2009 that I was looking for rental properties. And one of the things that Kiyosaki talks about is buy properties that cash flow, and I read kind of between the lines or buy properties that maybe they’re not cash flowing now but you can make them cash flowing with improvements, and everything I looked around in California, like in you know, Orange County, then outside of it, it just wouldn’t cash flow and it took so much money that you know, the banker has said, you know, you just started working on a college, you got to have two years of W2s, you have to have, you know, 25% down and then maybe we’ll give you $200,000 loan which will buy you a closet in Orange County, it doesn’t buy you a house in her apartment. So, I started looking at a state and then I started out in, in Phoenix and I bought through a turnkey provider. I thought, you know, what the turnkey companies do is they make it sound like they do all the hard work for you like they will find the property, they have a flipper. And then they’ll make it like they take the risk out of it. And then you just get this nice Performa, and it shows you that Income expenses and his, here’s how much cash on cash return you’re gonna get and how much cash flow you’re gonna get. Right now, this is awesome, you know this, if I just get a couple more of these and maybe in like 40 years I can retire. And I went and saw the properties, it was two four-plexes, it’s okay, this is decent, you know, it’s low income area, but it’s not bad. You know, I walked the units with the turnkey provider, and I bought them. And then I thought I was gonna be making like, I think $16,000 cash flow per year from those properties and an end up costing like $16,000- $20,000 cash flow out of my pocket to just keep them afloat, because it was eviction, after eviction. It was, you know, when we’d have a tenant on there, we’d be lucky if they’d stay for three months, and they just stopped paying rent. So, I thought it was buying a C property and under buying D class properties in the hood. And that was a lesson. So, the next property was, you know, was a property that was outside of the turnkey provider and actually ended up being better was another four Plex, but about at a better price. And you had a better value add story.

 

Rajan  Yeah. And so actually, I want to, you know, talk about that a lot of people who are listening to this, they’re getting, you know, resonated with your resonate with your story, that, hey, you know, you want to get out of the rat race and you want to invest, create some passive income streams, and like you said, retire in 40 years after buying, you know, all of these, and then you go and look at this, you physically visit with a lot of people don’t even do, but you did, and you still go ahead and buy it. And then you said it was a lesson learned, right? So maybe, you know, talk about the numbers if you can on that deal. What really excited you didn’t, you didn’t know what you didn’t know at the time. But there was something about that, that excited you after you looked at it. So, what was it that what were the numbers like? And this is we’re talking 2009? Right? You’re talking about eight units right to four-plexes, right? If you remember those numbers, that’d be if you can share that great.

 

Sep  Yeah, I remember pretty clearly. So, it was $125,000 per building. So, two buildings, it was $250,000. So, I was like, I can buy eight units, eight rental units. And the rents, the market rent at the time, I think was about $450 per unit. So, let’s say just shy of, you know, 1300, maybe $3900 per month if they were fully occupied. And I was like, well, comparing buying that out of state in Phoenix, compared to buying something in California I can buy, I can barely find a studio apartment where I could look at afford for that price. It wouldn’t rent for 3800 maybe I get maybe like $1000 bucks if that. But I also attend in terms of just the what the wholesaler did a good job. And the wholesaler, I’m sorry, the turnkey provider, what they did a good job of explaining was, yes, Phoenix got hit really hard in 2009 but it was still very diverse. As far as their employment base, the baby boomers, they like living there. They only had a couple of golf courses go into foreclosure. This is the big problem. Phoenix was that they overbuilt their housing. But you know, they kind of showed this, the, they made the case for saying that it’s going to rebound because it’s not like a Detroit where it’s like heavily dependent on one industry auto, or Vegas was heavily dependent on tourism. Like it’s you have a lot. Yeah, the tech you had, you know, the hospitality at the time, you know, there was a lot of, I think, the silicon, not silicon, but the microchip processing foundries or factories over there, too. So, it’s pretty, you know, there’s multiple stories based on multiple coin cones of employment. So, I thought it was just about the property. But what I didn’t realize is how important the operations were. So, the turnkey provider gave me a property manager. And I trusted them because I’m like, hey, they got the nice car. You know, they got they had their own podcasts. And I just mean assumption, but I didn’t know anyone who had gone full cycle with them on any of their deals. And then I realized was kind of like a dog and pony show, because what they said is if you have problems with your, your property, or your property manager will help you out. And this is what helping out look like they would send a nasty email to the provider. And then a couple months later, the provider wasn’t part of their network anymore. like okay, well, that doesn’t help me after I’ve already paid you the money, right. And the other thing, too, is like what the turnkey providers, their, their financial incentive is to get the sale done. But they don’t have any financial incentive, like a syndicator does, to see the deal from start to finish. So, it was on me to find the right team to reposition it. So, I mentioned full rent on those two, four-plexes would be like $30-100 a month. And I think average over those two years it was maybe $2000 or $2500 because it was just, you know, that we weren’t, what I was doing. I was trying to do the minimum on those properties. Like when a tenant moved out and say, let’s just get the carpet back in there. Let’s make it rentable. But we weren’t really elevating it and it wasn’t until, you know just kept educating myself. Getting around other investors going to meetup groups and, you know, hanging out with smarter and more successful investors, I realized that I have to add value to the property, like if I keep it as a D class property, I’m gonna attract D class tenants, if I bring it up to like a C class, and we’ll get maybe C class or even c plus tenants, and that’s what actually helped over time. So, I think I sold those two in 2017. 

 

Pancham Gupta  Oh wow, for almost up to eight years. 

 

Sep  Yeah, I kept them for a while. And I think I did a 1031 exchange on one of them, one of them were just sold, and the other one I sold into a portfolio of houses afterwards. And I think the sales price was about ,it was just around 200, I believe, I don’t remember the exact …

 

Pancham Gupta  200 as per building?

 

Sep  per building, yeah, 

 

Pancham Gupta  so is not that what you paid for it like, no you paid 250 for both so

 

Sep  right, it was 400 total for them, so and it wasn’t at the top of the market, I sold it because they’re probably worth, you know, probably 250 to 300. Now per building, but I looked at in terms of what we already maximize the value, we got the rents from 450 per unit up to 625 per unit, the occupancy went up, but it was just the challenge with it as it was too small for plexes in the neighborhood with a bunch of four-plexes. So, there were some Lords there were, you know, absentee owners trying to self-manage, and we can only do so much right. So, we helped improve the neighborhood. But we were always at the mercy of the other owners over there. So, it just made sense to sell it and go on with it.  So yeah, that’s kind of the story for that example,

 

Rajan  that kind of, you know, even though you didn’t hit it out of the park, but with the benefit of hindsight, given that you sold it in 2017, you kept it for eight years, you think, you know, it would have been better you sold it before or you think it was, you know, you sold it too early. I know it went up since then that not taking that into account. But overall, in your strategy. If you were to do it again, would you buy that again?

 

Sep  I wouldn’t buy it at today’s price, but I think it’s our mutual friend, the amazing Bob Helms who, you know, sadly passed away last year, he was one of the most successful real estate investors ever had the pleasure of knowing. And you know, he invested in real estate for seven different decades. And I remember when the quotes he had said is the one regret I have been investing through seven different decades, there’s selling my properties. He’s like, in hindsight, I wish I would have just found a way to keep the properties. And you know, granted, I think he said that there would be some exceptions, right? Like, if you feel like a market is changing, yeah, maybe jobs are going away, it makes sense to sell it. So, I think in hindsight, I would have found a way, I should have found a way to just keep the properties unless they got to the point where, you know, it was just too much of a time resource, but I would have kept them with the contingency that I tried to buy the other neighbors properties to try to improve those. 

 

Pancham Gupta  Got it. Okay, so let’s fast forward to today, right? Like, you know, you from there, they, you know, you were talking to one of your friends, and they talked about Federal Reserve Notes to buying a fourplex in Arizona and then buying multiple properties to where you are today. So, talk to us about are you still working a full time job or if quit? And when did you quit If you have done that?

 

Sep  Yeah, I quit in December 2014. Uh, wow. So, and right before that, I actually progressed I went from full time engineer to part time. And then I did part time for I think, was maybe about two years. And then it got to the point where it was full time. And when I quit my engineering job, it wasn’t that I was financially making much, much more than the engineering job and that there was all this money in the bank account, but it just got to the point where the amount of time that I was spending on my job, and traveling to my job, and just the emotional energy would take out of you, right, like you’re listening to, you know, audio books and all stuff, you’re getting pumped up and you go work with people who aren’t doing that it’s kind of takes away from your motivation a little bit, right, I just realized it was just costing me too much. And the opportunity cost two and a broker would call me with a deal and if I if I was in a meeting and I lose that and they give it to someone else so pretty quick from there it was able to make up for that you know that there’ll be two loss like the delta between my cash flow and the job where I frankly I wish I would have done it earlier because there I wish I would have you know just found other ways within real estate to do that because just not having to trade time for money made such a big difference, right? Like when you can actually you have a team that goes and helps manage the properties for you find the properties for you reposition the properties for you. It didn’t make sense that you just you know, checking in on o’clock, so

 

Pancham Gupta  yeah, so did you have to go through some mindset struggle to quit your job or it was very easy peasy for you like, okay, I’m gonna go tomorrow and quick.

 

Sep  Yeah, it was I mean, yeah, big time on the mindset, to this day, I still have family members that are like, what the hell do you do? Like, they still think that am I joking? Like, they still think that I, you know, it was a huge mistake to drop out of the master’s program. And what I should do is go back to the masters and finish it up and just go be an engineer again. And they don’t have an idea as far as where the portfolio is now, or, you know, what we’ve accomplished since as far as me my team, you know, investors and partners and all, but it’s just that scarcity mindset, like for some, the job is, you know, more important, right, and starting a business or investing at a state is just so risky, because everyone hears the horror story of you know, they had a friend or family member who had one rental property, they didn’t know what they were doing. They lost their money. Therefore, all real estate investing out of state is bad, right? 

 

Pancham Gupta  Yeah, exactly. Yeah, I was going to say just like a WAMU stock. Thing is that stock investing is good too, at certain point. But it’s again, it’s, it’s not for everyone. And it’s just that something that you can control, you know, in real estate you can do with stocks,

 

Sep  Right. And there’s good liquidity with stocks, right. I think it was Robert Holmes, who said that real estate is the worst bank in the world, right? Because, yeah, you know, if you if you want your equity, it’s, it’s not like you can just get it overnight. Like you have to go through process, you refinance, you sell or whatever. But I think just in the long run, there’s that, you know, you don’t need Washington Mutual stock to survive, right? Like, people in Venezuela, they don’t need their Wall Street or whatever their stock market equivalent is, right now. They need food, they need water, and they need a roof over their heads. So, like, the real estate over there is actually performed really well, even though there’s hyperinflation and then it’s the same thing and other you know, every other example throughout history is like you have the building is still there, even after the business leaves or even after the tenant leaves. Like it’s, it’s not something that’s going to be made obsolete by Apple or, or Amazon tomorrow, you know, that you still need a place to work. Your live. Yeah. So

 

Rajan  yeah. So, you know, this is great. And I still have some, you know, I get the same questions to like same what you said, I can totally resonate with you, that some family members asking you to go back to masters, finished and off. So, you know, with the hindsight, you mentioned that already that you know, you should have done this sooner. And that’s the most common theme I hear I do have people told me that that was a bad decision to quit. But most of the time, this is the number one answer that they say that number one regret that they should have done it sooner. So, let me ask you this, given that where you are today, what is one goal that you’re most inspired by and uncomfortable at the same time that you’re working towards?

 

Sep  One goal that I’m inspired by, it’s a big goal, it’s to reposition and improve a thousand neighborhoods. And that’s if we go at the current pace, it’s going to take a long time. So that requires significant changes that requires, you know, building out our corporate team, you know, having like a, just having a more systems in place as far as making it easier for our investors and, and even refinancing the properties and just to keep it going. So, I think we have the hard part. The hard part is on the operations, right? Like, I feel like that’s the most important part. I think a lot of times, I’ve seen some properties kind of get the best of syndicators. And that’s happened to me most of the time, like, you can find a really good deal. But if you have the bad team, or you have the wrong team, it’s a nightmare, right? So, if you have the right operations, and they can improve the assets and reposition it, and make it so it’s better. And then I think everything else, just it’s not going to be as bad as that. But for me, I’ve spent so much time on the operation side of it, doing these things like an investor portal and looking for a CFO and those types of things. It’s very uncomfortable. But I think those are the things that would be necessary in order for us to go make more impact on more communities.

 

Pancham Gupta  Okay, so changing, uplifting thousand neighborhoods, that’s a pretty big, hairy, audacious goal. So that’s great. All right. So, you know, let me ask you this question, then. Is there a specific failure that happened in your life that you can speak about, that set you up for later success?

 

Sep  The one that comes to mind is the first time that I got fired by my property manager,

 

Pancham Gupta  Property manager fired you?

 

Sep  Yeah. So, I wasn’t an employee. I was a client of a property management company. So, I was an investor. And I remember the email to this day, I remember with the one part of the email that he had sent me when he put in his resignation notice he said, Sep, you can’t micromanage these properties from California. You have no idea what you’re dealing with. And it was very blunt, right? And I take full responsibility for it. Like I basically brought a property manager who is used to very easy A Class properties. And I put them into a D class property like it was a, it was a large apartment complex, and I wanted him to reposition it. And it wasn’t, he wasn’t the right chef to make that recipe happen. I’ll put it that way. Yeah. So, I use that too. And it was very painful to go through, and you know, sleepless nights, but I realized, okay, it’s not just about me finding the right property manager, or me finding the right contractor, or insurance broker, or attorney, or whatever it be, I also have to be a good client for them. So, it’s a two way street. And I realized, like, when, when that happened, it’s like, you burn your hand on the stove, and you don’t want that to ever happen again. So, it’s like, what was the lessons out of that, like, you think back and reflect on it? Like, what would I have done differently? What were the signs earlier on another Bob Holmes, quote, he said, the signs of the relationship are there from the beginning, if you just accept it, right. And I was like, oh, it’s obvious now when I look back. So now, like taking that bad experience I’ve had, and I’m not, I’m not saying it to brag, but I’ve had several property management companies say, you know, Sep in his company, they’re among our favorite clients to work with. And it’s not just because I’m trying to, like, you know, kiss up to them or whatever, but I look for any way I can to add value to them, if I can refer them if I can send them any additional business, leave every single one of them Google Yelp reviews, connect them, I offer them that, hey, if you have any clients that are thinking about hiring your company, or another, and if you need me to, you know, talk to any of them, just share my experience, be authentic, you know, I’m not gonna lie, whatever question they asked, I share it. But I do that. And that helps make it easier for them to bring on more clients. So, the effect is, they manage our properties as if there were their own. And when they get a good off market deal, they’ll send it over because they want to see us be successful. So, it’s, it’s learning that it’s the team will put in as much effort into your business as you put into their business and don’t put as much Karen as vice versa as well.

 

Pancham Gupta  Wait, no, that’s a great example and great lessons. Thank you for sharing that. So, my last question for you step here before we move on to the next section of the show is do you have a morning routine that you follow? And if so, do you think that helps you, you know, be successful and attributes towards your success?

 

Sep  That’s something I’m still working on. So, this falls back into the question you asked about when I first got in my engineering job. When I first quit my engineering job, I noticed that I was sleeping in, I’d wake up at like, 10am, I’d waste a lot of time and I just didn’t have the routine. And I got frustrated and frankly, pretty depressed. Like within a couple of days, I’m like, oh my gosh, you know, I don’t I don’t have this job. So, I gotta, I gotta find this routine. So, creating a schedule, the main thing that recently has helped is actually just waking up earlier. So, waking up at 5am going to the gym doing cardio journaling every day. I’ve done meditation for a while, but I just for me, personally, I get more, it clears my mind more just working out and you know, getting out of the house. But meditation was helpful as well. And, you know, not just jumping into the emails and that’s a really hard one easier than it sounds right. Like, firstly, wake up if you want to just look at the phone and see what fires you got to put out. But all of that has helped. And also, just letting the team know too because they’re, you know, I’m on West Coast time and they’re on Central and East Coast time, depending on the markets we’re in, they let them know you know, if you if it can wait, you know, wait until like after like 9am my time before you start sending the calls and list is the emergency. And that’s helped as far as just having the right just setting the day off in the right foot you have the right energy you start up pumped versus reactive.

 

Pancham Gupta  So true. So true. My I still remember with the state when I quit my job. That’s exactly what I actually went through the same thing. I wouldn’t say I was depressed or anything, but I was an early riser, but not having a routine when you were programmed to wake up, get ready for me go take a train, go into New York City, and then come back at seven, eight in the evening. And it was you’re just on a treadmill, right like you said, and then when you certainly don’t have any of that it is so crucial to have a routine so crucial. Otherwise, the entire day goes like that. And you don’t even feel it I feel like totally unproductive and there are days where we go in the morning at 6am to 6am. Flight be back by 9pm to a city do a full due diligence on her property and be back and it’s just one day, right? It’s just crazy how you compare those two things. Thank you for sharing that Sep. We’ll be back after this message… Do you ever feel overwhelmed by the thought that you have no time after work and family time to learn about investing? Do you feel left behind that you are not putting your money to work for you? Do you want to create passive income, but you do not know where to start? If so, I have good news for you. I have created an investor club which called The Gold Collar Investor Club for accredited investors. I will be putting together investing opportunities exclusively for this crop. These are the opportunities where I have done my part of the due diligence for you and will be investing my own money alongside you. If you are interested, please sign up on thegoldcollarinvestor.com/club, I repeat, thegoldcollarinvestor.com/club. I will reach out to schedule a 30 minute phone conversation to discuss your investing goals. Once you sign up, this can be a good opportunity to diversify and take some chips off the hands of Wall Street to produce some cash flow. And in case you are wondering what an accredited investor is , accredited investor is someone who has earned more than 200,000 as filing single or more than 300,000 filing jointly for the last two years. Another way to qualify as an accredited investor is if your total net worth is more than $1 million excluding your personal home. It includes your stocks, 401k’s, IRAs, cars, etc. Just not the equity in your personal home. If this is you, I would highly encourage you to sign up…. So, let’s move on to the next section of the show which I call taking the leap round. These are the four questions I asked everyone on the show so Sep, my first question for you is when was the first time you invested outside of Wall Street? Was it that four plex, I’m sorry two-four-plexes?

 

Sep  It was, yeah, so that was December 2010. I wish I would have done it sooner. The other thing too is I wish I would have partnered or invested with the syndicator first and leverage their systems, their experience, instead of me having to go make the mistakes on my own and be a pioneer.

 

Pancham Gupta  Got it. Got it. Okay, my next question for you is that did you have any fears that you had to overcome when you bought those two out of state in Phoenix fourplexes?

 

Sep  I did. You know what are you doing? You know, this is a disaster you know that you lose all your money you’re gonna go into foreclosure all the negative self-talk, really good book that helped me get through that. And I would listen to it. You know, whenever I’d have those negative thoughts come in was Secrets of the Millionaire Mind by T Harv. Eker and it’s I look at is it’s a giant book of positive affirmations. That’s a really good one. Oh, there’s another one too by Og Mandino

 

Pancham Gupta  The Great Salesman

 

Sep  The World’s Greatest Salesman. Thank you. That’s the recent one. So those two are really good. Og Mandino’s, i think it’s the seventh scrolls. So just really good to keep the mindset because I think that and I’m borrowing this from another investor, I don’t know who said this originally but it’s not that it’s 90% technical 10% mindset with real estate investing. It’s 90% mindset and 10% of the technical. So, it’s really important to focus on that mindset and maintain a positive mindset.

 

Pancham Gupta  Great. Cool. So, my third question for you can you share with us one investment that did not go as expected?

 

Sep  So, after the first couple of, I don’t know, it was like 80 units of really low income properties and you know, they were good returns, we took that assets and made them desirable. And I was like, hey, this is taking up too much energy. I’m gonna go do something easy. So, I bought two duplexes and Phoenix and I had passive investors that came in on us private lenders. And these two duplexes they were like B as in Bravo. So, they were in good area, they’re in their Arcadia area, which is a couple miles away from, I think, from where Robert Kiyosaki was, it’s a really nice part of Phoenix. And the goal was, you know, let’s just flip this and it’d be easy money. So, as I will take it into like a B, and we’ll make it into a B plus, so spend a bunch of money on it. And the end of the day, the real estate agent ended up making more on the deal than I did. And the lesson out of it was that I was going against where my core competency was like I that’s not what my experiences, that’s not where my specialty is and taking something that’s already nice and making a nicer I get more enjoyment out of doing more like the taking something challenging something broken in providing that affordable housing. So, after that went back into the affordable housing and you know, my love it so even though it’s not the easiest asset, it’s for me, it’s the most rewarding and most enjoyable,

 

Pancham Gupta  Great, cool. I hope you didn’t lose money on that even though they’re itching them more.

 

Sep  It was positive. I think if I got a job in McDonald’s, I probably would have made more money that way.

 

Pancham Gupta  Okay, all right. So cool. My last question for you Sep is what is one piece of advice would you give to people who are thinking of investing in main street that is outside of Wall Street?

 

Sep  So just me personally, I’m a bit pessimistic on the future as far as the national debt where it’s going like $30 trillion inflation, but I’m very optimistic about the opportunities like I think that’s correct. He says there’s going to be good opportunities when the markets going up when it’s flat. And when it’s crashing down, when another investor shared with me that if you focus on solving problems, then you’re not going to have any, like shortage of deal flow. And I think if you focus on solving problems, if it’s providing affordable housing, if it’s, you know, investing in senior living, or gold mines, or whatever it is, like, find out what the market needs and serve that the market doesn’t need more Tesla stock or more, you know, Wall Street baths, or Amazon and those companies already well funded, right. But you know, there’s still a shortage of like 7 million affordable housing units for low income tenants, right. And that’s not getting all the attention that Netflix needs. There’s still 10,000 baby boomers retiring every day. So, like, there’s other industries that I think have, in my opinion, you know, more need for capital, and that can provide, you know, good investment returns to investors. So, I just, I think it would be good just, you know, do research, look outside of Wall Street, your financial planners probably not going to tell you everything that is available out there, especially if it doesn’t pay them directly. So just keep an open mind out for that. Keep listening to Pancham and you’ll come across some good opportunities.

 

Pancham Gupta  Great. Well, thank you, Sep, for sharing your knowledge and time here on the show.  I know you have put together an amazing resource for the listener where you know, all the troubles that you’ve went through, you put them in one document on interviewing property management companies, if you’re looking to hire one. Tell us more about that. And how can people get it?

 

Sep  Yeah, so the first property management company that I hired after I let go of the turnkey providers, property management company was to fourplexes, that first property management company, ask them three questions. What do you think about the property? How much do you charge and when can you start? And they said, oh, property has potential, we’re not going to charge you any leasing fees. We can start on Monday, I’m like, great, you’re hired. And they did an awful job. Like there was no incentive to manage the property or, you know, and no incentive for them to actually like, get it to where it’s fully optimized, you know, fully cash flowing and all that. So, over the years, I compounded a list of questions. And I’ve basically borrowed the questions from other syndicators, other investors. But then I hear a good question. I add it onto there. So, it’s kind of like, it’s like a working list, document. Yeah, it’s up to about 103 questions now. That seems like a lot, then these questions aren’t yes, or no questions. But it’s basically it’s a property management company interview questionnaire. And if you share that, with like five management companies, chances are three of them are going to say, this is going to take like four or five hours to fill out, I’m not gonna fill it out. And that’s exactly what you’re looking for. Because just like employees, you can’t change a bad management company, you can’t change a bad employee, like you asked questions early on an interview. So, you can do you know, do what you can to filter out the good from the bad. And this helps not only you to find a good property management companies, but they’ll also learn about you as the client and the questions that are being asked too. So, they can see that, you know, you’re in it for a long term relationship. And, you know, you care about how the property management companies making money, it’s not just about, you know, us and our properties. It’s been very effective. So, every company we’ve been using this questionnaire on for the last six years, it’s led to really great relationships, you know, they’ve done fantastic jobs with our properties. And I think it’s a lot better than just taking their word for it, that they’ll take care of the property. So happy to share that

 

Pancham Gupta Cool.  So how can people get that?

 

Sep  Sure. So, you can just go ahead and send an email to sep@thegoldcollarinvestor com and Pancham’s team, can go ahead and send you a copy of that. And I think investors even when they share that, and they try it out, they’ll have a good experience with it. So, hope it helps.

 

Pancham Gupta  Great. Yeah, absolutely. Well, thank you Sep so much.  Any parting words before we say goodbye?

 

Sep  It’s just a pleasure to be on you Pancham.  I appreciate you and what you’re doing and open (inaudible) educate your listeners. There’s a lot of opportunities out of Wall Street. There’s a lot of neighborhoods and tenants out there who need investors, there’s a shortage of syndicators and passive investors that go in and help solve all the problems out there today. So, it’s not too late and there’s still great opportunities to help out.

 

Pancham Gupta  Great. Thank you, Sep for your time and hope to meet you soon.

 

Sep  Likewise, thank you, Pancham.

 

Pancham Gupta  I hope you learn something from Sep Bekam. He is a great guy to be around with. Thank you for listening. I really appreciate you.  If you want those questions that Sep has to his property managers, do email at sep@thegoldcollarinvestor.com. With that, I’m signing off.  This is Pancham, until next time, take care.



Thank you for listening to The Gold Collar Investor Podcast. If you love what you’ve heard and you want more of Pancham Gupta, visit us at www.thegoldcollar investor.com and follow us on Facebook@thegoldcollarinvestor.  The information on this podcast are opinions.  As always, please consult your own financial team before investing.


Copy of EP #18 - 2 Guests

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