Latest / REL Freedom Podcast / Sterling Griffin - Living In A Honda Accord To Millionaire In 2 Years

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Sterling Griffin - Living In A Honda Accord To Millionaire In 2 Years · REL Freedom Podcast

• 0:05
  Speaker 1: Welcome to the Real Freedom Show, where we inspire you to pursue your passion to gain time and financial freedom through opportunities in real estate.
• 0:11
  Speaker 1: I'm your host, mike Swenson.
• 0:13
  Speaker 1: Let's get some real freedom together.
• 0:14
  Speaker 1: Hello everybody, welcome to another episode of Real Freedom, talking about building time and financial freedom through opportunities in real estate.
• 0:28
  Speaker 1: I'm your host, mike Swenson, and today we have a super exciting story to share, a rags to riches story, I guess you could say.
• 0:36
  Speaker 1: We've got Sterling Griffin here.
• 0:37
  Speaker 1: Sterling is the founder of Sterling Capital and you invest in medical real estate development and also Sterling Productions film and production company, and so you have a background in acting and I'm sure you'll share that story as well.
• 0:50
  Speaker 1: But going from homeless living in your Honda Accord to millionaire in just about two years, sold a business for seven figures and then bought $26.5 million of real estate in your first full year of investing, with no outside investors, obviously, you've got some exciting stories to share of how that happened.
• 1:08
  Speaker 1: And so, sterling, thank you so much for coming on the show.
• 1:10
  Speaker 1: We're excited to have you.
• 1:11
  Speaker 2: I'm super grateful to be here and excited to provide some value to the person listening.
• 1:16
  Speaker 1: Just kind of walk us through that story, and we'll dig in deeper from there.
• 1:19
  Speaker 2: Yeah, so my story begins about eight years ago and actually begins with me depressed in the lowest state of my life, where I was.
• 1:28
  Speaker 2: Just prior to that time I was actually an evangelical pastor.
• 1:32
  Speaker 2: So I was on staff at a couple of different churches over my early twenties and my whole mission in life was I want to help lead people to my particular faith of believing in Christianity.
• 1:44
  Speaker 2: And then, for those that already believed, I wanted to enrich their lives.
• 1:47
  Speaker 2: I want to give them tools, strategies that would bring them closer to God and live a more fulfilling life.
• 1:52
  Speaker 2: But in the process of being in seminary do you know what seminary school is, mike?
• 1:56
  Speaker 2: Yep, yes, you're familiar with that.
• 1:59
  Speaker 2: So for those that don't know, that's graduate school for ministers or people in ministry.
• 2:03
  Speaker 2: And while I was there studying for my master's degree, I actually I had a kind of a breakdown of my original faith that I had.
• 2:12
  Speaker 2: It's an ironic place for that to happen, but it did for me and I realized that wasn't what I wanted my life to be given for.
• 2:20
  Speaker 2: I didn't want that to be my career and in the process of me sort of untangling from that identity set, I didn't know what life was going to be about.
• 2:28
  Speaker 2: I didn't have a means or an idea on how I could use my gift or my desire to be of service to people in this life and to earn a living from it.
• 2:36
  Speaker 2: I mean, prior to that time, my dream, my aspiration, was to make $20,000 a year on a fundraised salary.
• 2:44
  Speaker 2: That meant success for me, just to survive, doing what I love to do.
• 2:50
  Speaker 2: But in the process of this happening, I became depressed and I couldn't keep a job.
• 2:55
  Speaker 2: On the other side of it, I slowly ran out of the little bit of money that I started with where, in October 2015, I was living in my car.
• 3:03
  Speaker 2: I was living in my Honda Accord because I could no longer afford the $250 a month rent to be the fifth in a two bedroom 400 square foot apartment where I was sleeping on the floor of the living room.
• 3:15
  Speaker 2: But what shifted it, what changed my life around from that deeply ashamed, deeply depressed space, was I discovered this little app on our phones.
• 3:25
  Speaker 2: I don't know if you've heard of it.
• 3:26
  Speaker 2: It's called the Podcasts app.
• 3:27
  Speaker 2: This is a little purple app.
• 3:29
  Speaker 2: At the time, october 2015, podcasts obviously weren't what they are now and I didn't hear people talking about it.
• 3:36
  Speaker 2: Really, it was just this free little app I'm like oh what's this Click and I started looking through the categories.
• 3:41
  Speaker 2: I see one that's called self help.
• 3:42
  Speaker 2: I'm like, well, I could sure use some help right now.
• 3:44
  Speaker 2: I'm going to that one.
• 3:46
  Speaker 2: And then I started listening to some of the episodes and I stumbled upon this guy who was easily the most charismatic, best communicator I'd ever heard, and his name was Tony Robbins.
• 3:56
  Speaker 2: At the time, tony was promoting his book for that year, which was Money Master the Games Actually, a financial mastery book read, interviewed 50 billionaires and was sharing their strategies for the average American, and in listening to him, I was so enamored.
• 4:11
  Speaker 2: Well, I started looking up his events, come to find out he's doing an event his four day and leashed the power within seminar in Los Angeles, which is, by the way, where I was living at that time.
• 4:20
  Speaker 2: And so, instead of paying for that month of rent that $250 of rent for October 2015, I decided to take that money and instead buy a ticket to go see Tony on Unleash the Power Within.
• 4:32
  Speaker 2: And the reason why was because I'm thinking to myself my life is getting worse, I don't have a strategy to make it better.
• 4:39
  Speaker 2: But Tony seems to have some answers here.
• 4:41
  Speaker 2: I mean, he was broken, now he's rich.
• 4:43
  Speaker 2: Okay, I'll take his word on what I should do next.
• 4:46
  Speaker 2: So I show up to this event.
• 4:47
  Speaker 2: And have you ever gone to an Unleash the Power Within event?
• 4:50
  Speaker 2: Have you seen Tony live before?
• 4:52
  Speaker 1: I have not seen him live, no, but I've watched many videos of his live events.
• 4:57
  Speaker 1: Yes, Great, great.
• 4:58
  Speaker 2: Well, tony's event is Unleash the Power Within is a 50 hour event over four days.
• 5:04
  Speaker 2: I mean, you're in this room.
• 5:05
  Speaker 2: It's 12 hours a day.
• 5:06
  Speaker 2: It's like a rock concert for personal development.
• 5:09
  Speaker 2: You're dancing, you're jumping around, you're getting excited, you're moving your body like crazy, and so I loved it.
• 5:15
  Speaker 2: I couldn't believe that this existed.
• 5:17
  Speaker 2: We're happy people.
• 5:18
  Speaker 2: We're focused on improving their lives.
• 5:20
  Speaker 2: Well, on day three of that event, tony, at one point, says listen, if you forget everything from this event that I've shared with you so far, but what I'm about to tell you and you use this phrase to improve your life it will be worth everything that you spent to come here.
• 5:37
  Speaker 2: All the time.
• 5:37
  Speaker 2: You will get your money's worth and so much more.
• 5:40
  Speaker 2: So Tony Grovitz says this I mean, I'm on the edge of my seat.
• 5:43
  Speaker 2: Literally, I move forward on my seat.
• 5:45
  Speaker 2: I'm like Tony, you gotta give me this answer.
• 5:47
  Speaker 2: I cannot wait, penn is ready on the paper, he leans in and he says proximity is power, and who you surround yourself with is who you become Now.
• 5:57
  Speaker 2: At the time, that was a novel idea to me, and so I was writing furiously.
• 6:01
  Speaker 2: Tony went on to say the five people that you're closest to are going to define your results in life, and it applies financially.
• 6:10
  Speaker 2: So your level of wealth will depend on the level of wealth of those around you, but it also applies in your level of physical health.
• 6:17
  Speaker 2: If you're around all overweight people, chances are you're gonna be overweight.
• 6:21
  Speaker 2: It applies emotionally.
• 6:23
  Speaker 2: If you're around depressed, unhappy people, you will also be like them, and it applies to your level of ambition.
• 6:29
  Speaker 2: If you're around people that don't crave or hunt for more in life, then no wonder you just feel stagnant or stuck in life.
• 6:36
  Speaker 2: So this was a huge.
• 6:38
  Speaker 2: I was like, oh, maybe the problem isn't that I'm just defective and can't figure out how to promote, maybe it's cause I'm around depressed people.
• 6:46
  Speaker 2: That is why I am too.
• 6:49
  Speaker 2: So it became the driving obsession of my life that I'm gonna be around people that want more.
• 6:55
  Speaker 2: These are better peers for me.
• 6:56
  Speaker 2: I'm gonna make different friends, but then also I'm gonna get mentors.
• 6:59
  Speaker 2: I'm gonna get people that have already achieved the results in life that I want and I'm just gonna mirror them.
• 7:05
  Speaker 2: As Tony says famously, success leaves clues, and if you want to achieve a result, but with less time and with less effort, just ask somebody who already has it.
• 7:15
  Speaker 2: They'll probably have something that works.
• 7:17
  Speaker 2: So over the next two years, I just I invested all my money, all my time in getting around those different brands, many of which I actually met at that event, at that Tony Robbins event and started hiring mentors for my first company, which was an online training business.
• 7:32
  Speaker 2: It was online fitness.
• 7:33
  Speaker 2: So what I was so passionate about for myself was hey, I wanna be in good shape, because being in good shape physically at that time it gave me a sense of control.
• 7:42
  Speaker 2: What I began to say later on is the state of your body is the state of your life, because when I felt like I had control over this, this was the thing that I had ultimate, true control over, because everything else involves some agreement or interactions with other people and involves their decisions, but my body is mine alone.
• 7:59
  Speaker 2: So I at first grew that business, thankfully with double mentors.
• 8:03
  Speaker 2: My first year I made $285,000 from being homeless and, by the way, I was homeless for five straight months.
• 8:09
  Speaker 2: Even after I saw Tony, my life didn't like radically change overnight.
• 8:13
  Speaker 2: I wasn't a millionaire.
• 8:14
  Speaker 2: The next day, I was homeless for five more months trying to put it together, trying to get around people that had better answers, and then, in my second year, after making that initial $285,000, then my business really took off I made $1.68 million.
• 8:28
  Speaker 2: So two years from when I was homeless, I had become a millionaire, become a net worth millionaire, and it was, I'm telling you right now, it was because I got in relationship with other people that were already doing well and I got in relationship with mentors who could just show me the way they could just do what they did.
• 8:46
  Speaker 2: So I give you that backstory first of all, for you to understand how I even became an investor, how I became capable of investing in the first place.
• 8:54
  Speaker 2: That's how I got my capital to begin.
• 8:56
  Speaker 2: But then, when I sold that business, I grew that business.
• 8:59
  Speaker 2: It eventually became a mentoring company for other online trainers.
• 9:03
  Speaker 2: I became it was more or less a business school, like an online business school that I created.
• 9:08
  Speaker 2: I sold that at the end of 2020, because, frankly, I was bored doing that.
• 9:12
  Speaker 2: I wanted a different challenge and I'd heard about real estate investing as an idea and I wanted to go full on into learning that.
• 9:20
  Speaker 2: So what did I do?
• 9:21
  Speaker 2: I did the exact same thing that I did to grow my first company, and that was I joined a real estate mastermind.
• 9:26
  Speaker 2: I didn't wanna figure it out on my own.
• 9:28
  Speaker 2: I didn't wanna scroll through websites and find deals and hopefully stumble upon something good.
• 9:33
  Speaker 2: I wanted to get in relationship with people that already had good deals and buy from them.
• 9:37
  Speaker 2: So I joined a group and maybe this is your experience, mike, if you've been in some of these firms I'm sure you have where, out of 100 people that are doing deals, 95% of them are doing multi-family deals okay, passive multi-family investment deals and for whatever reason.
• 9:53
  Speaker 2: While other people might say, oh, that's what everybody else is doing, I'll do it too.
• 9:56
  Speaker 2: In my mind it became like that seems risky to me.
• 10:01
  Speaker 2: It seems like, because it's so competitive, there are people that are so much better, so much more experienced in this.
• 10:07
  Speaker 2: They're gonna be making whatever amount of money is left over for the newbies.
• 10:12
  Speaker 2: They're gonna be making the majority of it because it's so hot.
• 10:15
  Speaker 2: There is such a thing as an investment being too hot, and I think we all experienced that.
• 10:20
  Speaker 2: If anybody lives in this bought Bitcoin and you bought it in 2021, when it was $58,000, and then it tanked and it went down to $20,000,.
• 10:28
  Speaker 2: You know and, by the way, this is one of my, this is my strategies for success If somebody that's not good at investing is telling me to invest in something, that means the investment is too hot.
• 10:38
  Speaker 2: Okay, that means it's too mainstream.
• 10:40
  Speaker 2: Like when my mom who's not an investor, and it's not an insult to her, it's just not what she focuses on is telling me I need to buy Bitcoin now, before it goes over 100,000, that was a clue.
• 10:50
  Speaker 2: I gotta sell right now.
• 10:51
  Speaker 2: Okay, if my hairstylist is telling me about buying the next coin, I'm out of that coin, so when.
• 10:58
  Speaker 1: I was in it.
• 10:59
  Speaker 2: I was like I gotta get into something else, and so the first deal that I ended up buying, the first type of deal that I discovered was really a fit for me, is what I consider triple.
• 11:07
  Speaker 2: It's not what I consider it's triple net investing.
• 11:10
  Speaker 2: So triple net investing is where you buy a commercial property.
• 11:13
  Speaker 2: There's a tenant already inside a business.
• 11:15
  Speaker 2: That is a tenant, not residents.
• 11:17
  Speaker 2: It's a business, and that business agrees to not only pay you rent but they pay for your property taxes.
• 11:22
  Speaker 2: They pay for all your maintenance on the property.
• 11:25
  Speaker 2: So if something gets messed up with the property, they'll cover it and take care of it, and then property insurance they'll pay for all of it.
• 11:30
  Speaker 2: And me coming out of a very stressful business at that time.
• 11:34
  Speaker 1: I was like look, I don't want.
• 11:36
  Speaker 2: I don't want another business that I gotta operate.
• 11:37
  Speaker 2: I want my money to truly work for me, and so when I found this, I'm like this is all I wanna do.
• 11:44
  Speaker 2: I wanna just like look at deals.
• 11:46
  Speaker 1: I wanna vet them.
• 11:46
  Speaker 2: I wanna understand them and then, once I feel it's safe, I wanna buy in.
• 11:50
  Speaker 2: So I bought my first building, which was an industrial building.
• 11:52
  Speaker 2: It's actually not too far from where you live in Minnesota, it's just outside of Madison, wisconsin.
• 11:58
  Speaker 2: And that deal was amazing because I bought it and then, a few months after I bought it, the tenant inside that building actually got bought by a big public company.
• 12:09
  Speaker 2: Okay, this was totally an accident, like it was not something I knew on the front end, it wasn't some insider information that I had, like it was literally dumb luck.
• 12:18
  Speaker 2: But that dumb luck both through that tenant extending their lease and by that bigger company buying it, where a more secure company was now responsible to pay the rent, meant that I gained a million dollars of value on my net worth doing nothing.
• 12:33
  Speaker 2: I mean, this was I had to work so hard to get a million dollars in my last business and now it just like fell into my lap.
• 12:42
  Speaker 2: But the problem from that, mike, is that it was great to make that money, but it kinda spoiled me a little bit too.
• 12:47
  Speaker 2: I'm like this is my first deal and I just this just happened maybe I can find them all like this.
• 12:52
  Speaker 2: Well, they're not so easy to find deals like that because everybody wants them.
• 12:55
  Speaker 2: So, over the next year, I start looking, I start calling, I literally called Mike, I literally call the thousand brokers looking for triple net deals that were off market and undervalued.
• 13:08
  Speaker 2: Okay, but it's not so easy to find those.
• 13:11
  Speaker 2: So, in the process of me, just like hitting my head against a wall, trying to find good deals for my capital, for my exit, to place, one day I thought of something new.
• 13:19
  Speaker 2: I was finding these medical deals, okay, these medical real estate investments, see, and first these were investments like urgent cares, emergency rooms, pain management clinics.
• 13:29
  Speaker 2: I was seeing these deals and, for whatever reason, they had better leases on them.
• 13:33
  Speaker 2: They had better tenants than the average triple net deal and they were really long-term leases as well.
• 13:41
  Speaker 2: Like, whereas in the industrial space there was maybe three, five years, max 10 years that a lease could be, I was finding medical deals that were giving me 20 year leases I mean really long-term and so I was like this seems like it makes sense.
• 13:55
  Speaker 2: And then I followed that up and, by the way, it was strange for me to discover this on my own, that nobody was talking about it.
• 14:01
  Speaker 2: It was weird.
• 14:02
  Speaker 2: It was like these deals are so good, yet nobody even like they're too scared to look at them Maybe it's too complex for them, or whatever.
• 14:09
  Speaker 2: So I started looking at more medical deals and then I started looking at the demographics of medical of as a space.
• 14:15
  Speaker 2: And in America, you may know this or you may not, but we have an aging population, okay, so we are trending towards being older as a society, and this happens in all developed countries around the world.
• 14:25
  Speaker 2: People live longer and they have fewer kids per capita on average, so that means the society gets older.
• 14:32
  Speaker 2: So here's the numbers for you In 2020, 8.5% of the population is that geriatric age.
• 14:39
  Speaker 2: Okay, so senior citizens and older, and, if you didn't know, the people that spend the most on healthcare is that segment of the population?
• 14:46
  Speaker 2: Okay, so they're the ones that are your ideal clients, so to speak.
• 14:49
  Speaker 2: Well, by 2050, that number is trending to be 16.7% of the population will be that age.
• 14:58
  Speaker 1: So what does that tell?
• 14:59
  Speaker 2: you and, by the way, I don't know if you experienced this, but in 2020, 2021, we saw the hospitals, we saw medical places get overrun.
• 15:06
  Speaker 2: There just was not enough supply to meet the demand, and that is very much going to be true unless we build a lot of new medical buildings, a lot of new places where people can get care, especially as we double that segment of the population.
• 15:20
  Speaker 2: So it was like, long-term, this is gonna make real money, but yet everybody's doing multifamily.
• 15:26
  Speaker 2: Well, I'll give you the short version of what happened.
• 15:28
  Speaker 2: Next, I discovered a strategy where I could get with a tenant, a medical tenant corporate that already had at least eight locations for their business.
• 15:36
  Speaker 2: I went to them and I said, hey, I'm gonna build you a new location, I'm gonna pay for all of it and in exchange, you're gonna sign a 20 year lease to move into that property.
• 15:47
  Speaker 2: Okay, you're gonna sign that lease, and then what I'm gonna do is I'm gonna sell that property once it's done, once it's stabilized the tenants inside, and I'm gonna sell it.
• 15:55
  Speaker 2: I'm gonna make a profit and at first I did this with my own money and thankfully I had money from my exit to where I could test that this theory would work.
• 16:02
  Speaker 2: And in that first year I bought 18 and a half million worth of properties okay, three urgent cares and one emergency room and within the same year I sold those properties for $25 million.
• 16:14
  Speaker 2: So I made if you're tracking, then I'm sure this number will make a lot of sense to you from an internal rate of return perspective, which is kind of the mother metric of how you evaluate a deal in real estate I made 40% on every single one of my medical deals with my own money, 40% internal rate of return.
• 16:34
  Speaker 2: So I made six and a half million dollars just from these four deals.
• 16:38
  Speaker 2: Now, once I did this, I started having other people ask me hey, can I look at some of these deals?
• 16:44
  Speaker 2: Can?
• 16:44
  Speaker 2: I be part of it Because I don't know if you know this, Mike, but that's not common in multifamily deals, for specifically as for the total, investment to make 40% and then as an LP, as LPs get in, what they've started targeting is in the low 30s or the high 20s, which again you're looking at.
• 17:01
  Speaker 2: Multifamily LPs are looking at 14, 15%.
• 17:04
  Speaker 2: The general manager or the general partner is gonna make their three, four percents.
• 17:09
  Speaker 2: You're gonna have a total of maybe, maybe 20% IRR over a period of time with my structure of building and then selling, building new properties and selling and doing it quickly.
• 17:19
  Speaker 2: I'm able to find, even today, even at lower leverage today, end of 2023, when it's hard to get good deals it's very hard to get good multifamily deals.
• 17:27
  Speaker 1: They're very rare.
• 17:28
  Speaker 2: I can still get over 25% IRR for my LPs and of course I don't promise any returns.
• 17:35
  Speaker 2: I can't legally do that, but I'm just saying like, when you see the math, when any investor sees the math, there is a realistic path towards that at scale, even in an high interest rate environment.
• 17:44
  Speaker 2: So that's my story.
• 17:46
  Speaker 2: I didn't give you a lot of time for questions, so I figured, lay out the whole thing for you up front.
• 17:51
  Speaker 1: That's amazing, and so congratulations on what you've been able to do for people that probably have some questions here.
• 17:56
  Speaker 1: I know you talked about surrounding yourself with the right people, but for the logistical person out there it's like okay, were you living in California at the time when you found the deal in Wisconsin?
• 18:04
  Speaker 1: I'm just kind of curious for people like how do you?
• 18:07
  Speaker 1: go find something in a place.
• 18:08
  Speaker 1: You I mean the States don't matter, but it's you're not there, you're not familiar with the area.
• 18:13
  Speaker 1: How do you go find those deals?
• 18:14
  Speaker 1: How do you network with those people?
• 18:16
  Speaker 2: Absolutely such a great question.
• 18:17
  Speaker 2: So no, I ended up moving from California to Austin, Texas.
• 18:21
  Speaker 2: That's where I live now in 2018.
• 18:23
  Speaker 2: So even before I sold my business at the end of 2020, I was here, and the reason why is because there was tax reasons associated that I'm gonna save on taxes.
• 18:31
  Speaker 2: Obviously, I had a better community of friends that were all moving out here.
• 18:34
  Speaker 2: So I was like I'm joining in, but from Texas.
• 18:37
  Speaker 2: How do you find a good deal in Wisconsin?
• 18:39
  Speaker 2: Well, the way that I did, that again is I was in that mastermind.
• 18:42
  Speaker 2: I got access to some decent deals.
• 18:44
  Speaker 2: I found a person in the group that was doing some triple-med investing.
• 18:48
  Speaker 2: He had found some deals and at one point he didn't have enough capital to purchase all of the deals that he was able to find through brokerage.
• 18:54
  Speaker 2: What happens is, once you start finding good off market deals and anyone in real estate will know this, that's been in it for a long time when you're able to find your first one, two, three good off market deals, work gets around If you're able to close on those deals, which is not always the case.
• 19:12
  Speaker 2: That someone says they're gonna buy a deal and then finishes that closes on that contract right.
• 19:16
  Speaker 2: All the time people fail for all kinds of reasons.
• 19:19
  Speaker 2: He had built up a great reputation where he bought a bunch of deals, but he still didn't have all the capital to purchase it himself.
• 19:25
  Speaker 1: So he came to me and said hey, if you wanna buy this deal.
• 19:27
  Speaker 2: I'll sell it to you at a markup from what I'm able to acquire it for, and I was happy to do that deal.
• 19:32
  Speaker 2: I mean, it was still a decent return for me.
• 19:34
  Speaker 2: And in the process, what happened is, as he offered me that deal, I accepted it on one condition, and that is that I can ask him as many questions about the industry as I can think of.
• 19:46
  Speaker 2: Okay, I wanted to learn.
• 19:48
  Speaker 2: I found that, if I'm, the best way to learn how to buy a deal is to buy a deal from somebody that buys a lot of deals.
• 19:55
  Speaker 1: So that was my thinking.
• 19:56
  Speaker 2: I can eventually go figure out how to do this on my own, but for now I don't wanna do that.
• 20:00
  Speaker 2: I'd rather just give him some extra cash for the trouble.
• 20:03
  Speaker 2: So I did that and he was based in the Midwest, so that's where he was buying a lot of his deals.
• 20:08
  Speaker 2: And I was like, listen, I'm happy to go do it.
• 20:10
  Speaker 2: To this day, I bought this in 2021.
• 20:13
  Speaker 2: To this day, I have not gone to visit the property.
• 20:15
  Speaker 2: I have not seen it.
• 20:16
  Speaker 2: It's all virtual.
• 20:17
  Speaker 2: We live in a world today where you don't need to Like.
• 20:20
  Speaker 1: I find that in my opinion.
• 20:22
  Speaker 2: I'm gonna tell you my opinion, Mike.
• 20:23
  Speaker 2: I think too many investors focus on buying a property that they can see in person.
• 20:28
  Speaker 2: Okay, and maybe that's just cause that was the old way.
• 20:31
  Speaker 2: You needed to do it that way.
• 20:32
  Speaker 2: If you've been buying a long time, let's just get into that habit, and so they just think they need to do that all the time.
• 20:37
  Speaker 2: But look, for me.
• 20:38
  Speaker 1: I was like I've got my focus over here.
• 20:41
  Speaker 2: I've got my other investments over here, I've got my family, I've got my friends, I've got my life here.
• 20:44
  Speaker 2: Why would I inconvenience myself, need to go on the road?
• 20:47
  Speaker 2: If the fundamentals are good, if the lease is good, if the financials of the tenant are good, if the location is good based on other deals that are selling for certain prices in that area, and I can get all that data and evaluate it and it checks out, then I'll need to show up in person.
• 21:01
  Speaker 2: So I bought that deal.
• 21:03
  Speaker 2: But then I did find that long-term for me, I do wanna be buying in Texas and it's not because of some magic that I, because I live here, I can go visit the properties I buy in Texas now, primarily because there's a lot of old people that live in Texas and there's a lot of old people that are still moving here, so there's a lot of medical properties that are needed here and litigation-wise, like from a legal perspective, it's a very landlord-friendly state to be investing here in Texas.
• 21:28
  Speaker 2: And so, again, I'm not alone.
• 21:30
  Speaker 2: There's a lot of people that, like Texas, that wanna invest here.
• 21:33
  Speaker 2: I mean most people that are building new stuff.
• 21:35
  Speaker 2: They're doing it a lot here.
• 21:36
  Speaker 2: Florida, tennessee, like Arizona, those are some of the markets of Utah.
• 21:40
  Speaker 2: Those are some of the markets that we wanna be in, and so I'm not an exception and it just happens that I'm here.
• 21:45
  Speaker 2: But I'll tell you even my properties that I bought here in Texas, I literally have not gone to visit them.
• 21:49
  Speaker 2: It's probably bad from a marketing perspective.
• 21:51
  Speaker 2: I'd probably benefit from taking pictures in front of them, right?
• 21:54
  Speaker 2: But I just haven't done it yet.
• 21:56
  Speaker 2: I haven't needed to.
• 21:57
  Speaker 1: Obviously, when you started, you were using your own money, that's right.
• 22:00
  Speaker 1: But you mentioned, you know, gps and LPs and all that, and for those folks that aren't familiar with syndications, that was what we're talking about.
• 22:06
  Speaker 1: So right now, then, what it sounds like is you're putting together the deals as the general partner and then offering them up to investors as a limited partner.
• 22:14
  Speaker 1: Correct?
• 22:14
  Speaker 1: That's right?
• 22:15
  Speaker 1: That's right.
• 22:15
  Speaker 2: Yes, yeah.
• 22:17
  Speaker 2: So what happens now is I teach people on my email list.
• 22:19
  Speaker 2: I have a very specific process that I use to find my off-market deals and literally anyone can learn them.
• 22:25
  Speaker 2: Anyone can do what I do, and so I teach people.
• 22:28
  Speaker 2: I have what I call my off-market medical deals street guide, and it's just across two emails I just write it out hey if you wanna find your deals on your own, this is what you would do and this is how I would make sure you do it, so that you protect your investment.
• 22:40
  Speaker 2: There are strategies from here's how you evaluate the tenant, including the financials, including their growth rate, including the operators.
• 22:45
  Speaker 2: Here's how you evaluate the location, the traffic counts, the metros, the population accounts, all that.
• 22:52
  Speaker 2: And then there's the lease.
• 22:53
  Speaker 2: Here's how you read the lease.
• 22:54
  Speaker 2: Here's what you wanna make sure these protections are there for you as the landlord.
• 22:58
  Speaker 2: Here's how you evaluate your developer if you're gonna be doing value add.
• 23:01
  Speaker 2: Here's how you wanna make sure that they have skin in the game to protect your investment.
• 23:05
  Speaker 2: So just all these things that you can look for that anyone can do, especially again, given that you have the time to do this.
• 23:11
  Speaker 2: What happens is a lot of people are like look, I love being a passive investor.
• 23:15
  Speaker 2: I'm a doctor, I'm doing operations, I'm making my good money.
• 23:18
  Speaker 2: I'd rather just place my capital with somebody else, and, for people that prefer that strategy, they can invest in me.
• 23:23
  Speaker 2: But people that wanna do it on their own, they can do it on their own with my strategy too.
• 23:27
  Speaker 1: Well, and that's what I find too, with a lot of people that are working a W-2 job, wanting to get into real estate, a great way in is to be a limited partner on a deal, to learn from somebody like yourself, and then sometimes we see a little bit of an evolution where it's like okay, I've learned a little bit on the LP side, now maybe I'd like to try to be on the GP side, put some of these deals together or even just raise money, because I have people you know, hey, I've made money on this investment.
• 23:52
  Speaker 1: All my friends are now asking me how did you make this money?
• 23:55
  Speaker 1: Okay, so now you can help fund raise, and so we've also seen a natural evolution for there.
• 23:59
  Speaker 1: So, for people that might be listening to this, there's a few different inroads here of how you could get into something.
• 24:04
  Speaker 1: What I try to help people with is the natural voice on their shoulder saying, well, I don't have the money that Sterling did right away, but the reality is, is you didn't either?
• 24:12
  Speaker 1: Right, you found a way to make the money, to be able to have the money to invest, and then now you're bringing other people in as well.
• 24:19
  Speaker 1: So there's a lot of different paths here that, if you're listening to this, wondering how do I do that, find somebody that's already investing in the thing you might want to invest in and, yeah, be the mentee to their mentor and they can show you the ropes and then eventually you can help find those deals, just like you're doing right now.
• 24:34
  Speaker 2: Exactly, and I would say, if I was starting over and I didn't have capital, what I would do is exactly what you're saying.
• 24:39
  Speaker 2: I would raise capital for another operator, so somebody else and I would say, hey, can you give me an extra boosted return for me providing that function for you?
• 24:48
  Speaker 2: And especially if it was like a minimum of, say, a million dollars, like I'll raise a million dollars and you're gonna give me this extra percentage to do it.
• 24:55
  Speaker 2: And what's happening?
• 24:56
  Speaker 2: What's been amazing for me, mike, is that I've had a number of people, obviously, since I start promoting this, I start talking about hey, I'm open to now raising capital.
• 25:03
  Speaker 2: You can now get in on a deal with me so that I'm not keeping you know from my past deals I'm not keeping the full 40% for myself, like, you can share on that with me.
• 25:10
  Speaker 2: So people are reaching out.
• 25:11
  Speaker 2: But then a number of people I didn't expect this at first, I honestly didn't A number of people are also reaching out and saying look, I've raised deals for multifamily deals and right now I'm not able to place capital into multifamily deals because there's just not many that work.
• 25:25
  Speaker 2: The deals just don't pencil anymore, as of 2023, especially, and so I've got capital that wants to be placed but just hasn't had a place.
• 25:33
  Speaker 2: To put it Like can I now move during, especially this season, to put some into your medical deals instead, and so we partner together in that way?
• 25:41
  Speaker 1: Have you ever heard the phrase?
• 25:42
  Speaker 1: You're the average of the top five people that you hang around.
• 25:44
  Speaker 1: Well, real estate agents, I'm excited to increase your five with you.
• 25:49
  Speaker 1: We're launching the real freedom investor agent tribe to help you get educated and connect with others to build your real estate investing journey and also to help you along the way as you're working with real estate investors.
• 26:02
  Speaker 1: So come, check it out on our website, realfreedomcom.
• 26:05
  Speaker 1: Go to the store.
• 26:06
  Speaker 1: We have a membership.
• 26:07
  Speaker 1: We have a mastermind group and private coaching to help you stay accountable to your real estate investing goals and to make sure that you connect with like-minded people to accelerate your progress and to cheer you on along the way.
• 26:19
  Speaker 1: Check it out realfreedomcom.
• 26:21
  Speaker 1: Click on the store.
• 26:22
  Speaker 1: That's awesome.
• 26:23
  Speaker 1: So what are you doing here?
• 26:24
  Speaker 1: Kind of moving forward?
• 26:25
  Speaker 1: Are you still thinking you're staying in that medical triple net lease space and you're just going to continue to expand on that because of the opportunity in the market in the next 30 years?
• 26:35
  Speaker 2: Yeah, exactly, Definitely, Because I think that the market is going to shift, probably in the next five years, Like people are really going to pick up on this just in the way that multi-family.
• 26:45
  Speaker 2: If people that got into multi-family and say the early 2010s, right from like 2010 to 2015, if you were in multi-family or mobile home parks, then I mean, my goodness, you crushed it or you just made really good money and it wasn't that hard because people just weren't looking for deals prior to that time as heavily in the way that they do now.
• 27:06
  Speaker 2: But then it started to get from like 2018 to 2021, it became hyper competitive.
• 27:11
  Speaker 2: Like it was just harder to find deals and now like there's a lot of people that are still thinking they can find good deals, but the deals just don't make sense from a debt perspective.
• 27:19
  Speaker 2: And so, even if you get lucky, you're going to find maybe one deal a year, right.
• 27:23
  Speaker 2: And so because, just the basic math, if you're looking at it from a rate of return perspective, even if you can find a really good deal in multi-family, you're still going to end up paying like 7% cap rate in order to get that deal If it's in a decent location and there's some value add, and then maybe you'll sell that for like a 6.5% cap rate If you're lucky.
• 27:41
  Speaker 2: Okay, even though debt is on a good day, it's 7.5% right now, like you're still.
• 27:46
  Speaker 2: It's still going to be a weird thing where people are going to buy that, expecting to lose a little bit of money over the short term, and then rates come down and they'll make it back and it'll be fine.
• 27:54
  Speaker 2: But that's only a 50 basis point spread, whereas me, on my development deals, I can buy at a total all-in cost on my medical deals of a 9.25% cap rate.
• 28:05
  Speaker 2: So my actual yield on cost is 9.25% and yet my deals sell once they're done in medical spaces is true around a 7.25% cap rate.
• 28:17
  Speaker 2: So it's a 200 basis point spread.
• 28:19
  Speaker 2: And here's the kicker Whereas in multi-family, in order to develop a deal, to get it ready for sell, you're going to need to take about three years to do that, maybe two years on the short time, but generally three years to do all, finish all that value add With me, my value add takes about 11 months, and then it takes me about three months to sell.
• 28:37
  Speaker 2: So in the same timeframe, for somebody else that does maybe one full deal cycle in a five-year time period, I can do four full deal cycles in that same amount of time.
• 28:47
  Speaker 2: We're starting with only the same initial investment amount, and so that's why my IRRs can compound in the way that other people are not able to do in that same timeframe.
• 28:56
  Speaker 2: So with that spread that exists today, there is no way, mike, that that spread is going to be there forever.
• 29:02
  Speaker 2: I mean, people are going to pick up on it.
• 29:04
  Speaker 2: They're going to be like, hey, I got to get into whatever Sterling's doing and the deal makers will come.
• 29:08
  Speaker 2: But for now, for people that want to get this good spread while it exists the next three, four years, I have this opportunity.
• 29:15
  Speaker 2: I'm going to milk it and then I'll find something else when this becomes too crowded.
• 29:18
  Speaker 1: Well, yeah, and unfortunately we're kind of at our time slot here, but that's the perfect segue, because if people are listening to this and like, oh my gosh, this guy's Sterling, he's just a ball of energy and a ball of excitement here I want to reach out to him and I want to learn more about it.
• 29:31
  Speaker 1: How can they do so?
• 29:32
  Speaker 2: The best place right now is just go to Sterling just my first name, s-t-e-r-l-i-n-g dot blog and right there you can hop onto my newsletter where, over the first couple emails, you'll get a little bit more detail in my backstory how I got here, then my street guide on how you can evaluate medical deals, how it stacks up compared to multifamily, and just really start educating yourself.
• 29:53
  Speaker 2: It's a process to be educated, but if you're looking at investing, that is the path you want to get into a place, into an environment where you can learn about these deals.
• 30:01
  Speaker 2: And again, especially if you're looking to diversify, maybe you bought some multifamily, maybe you bought some single family.
• 30:06
  Speaker 2: You're like, hey, I want to have some of this two line books.
• 30:08
  Speaker 2: Then that's the next place to go to connect with me.
• 30:10
  Speaker 1: Well, thank you so much for coming on and sharing your story I mean certainly really inspiring and congrats on all the success you've had and excited to see where you continue to grow.