September 9, 2025 • 45 mins
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Ed Mathews (00:39):
Greetings and salutations, Real Estate
Undergrounders.
It is Ed Mathews with RealEstate Underground.
you so much for joining ustoday.
I'm really grateful for youmaking us a part of your day.
With me today is Sam Wegert,and Sam has a lot going on, but
we're going to talk about onereally interesting segment of
(01:00):
his set of businesses.
I'm going to let him tell thestory.
So first, welcome to the show,Sam, and I can't wait to talk
about Life Door.
Yeah, man.
Sam Wegert (01:08):
Thanks for having me on, Ed.
I'm super excited to be on andI love the name of the show.
By the way, I didn't tell youthat before we got on, but the
Real Estate Undergrounders is acool name.
There's always cool new assetclasses coming up in real estate
and I know we're going to talkabout one of.
I'm excited for that.
Ed Mathews (01:21):
Absolutely.
Yeah, you and I speak the samelanguage because this is a
multifamily play, so Iunderstand the words coming out
of your mouth, and so will ouraudience, but it's a fascinating
play.
I'm going to let you tell thestory and then I'm going to tell
you about my friend Deirdre.
So for those folks who haven'tfound you online yet or don't
know you already, why don't youtell us a little bit about who
(01:41):
you are and about your company?
Sam Wegert (01:43):
Yeah, what we're going to focus on today in this
episode is you mentionedmultifamily.
So this is an asset classthat's new, up and coming.
It's not that people haven'tbeen sharing houses for a long
time, because they have been fordecades for as long as humans
have existed, but the way to doit in a scalable way that
investors can get cash flow fromis new, and that's called
co-living.
So we're going to talk todayabout co-living and I believe
(02:07):
this asset class is where Airbnbwas in 2011, 2012, when it was
just up and coming and peoplewere having this reaction to
Airbnb.
If you remember, wait, what isthat?
Again, how do people notdestroy homes?
So there's some nuances to itthat I know we're going to
discuss in this show, but really, this is I describe it to
people as this is multifamilyincome, but on a single family
debt, which is longer fixed debt, a lot of times, better terms
and single family prices, andI'm excited to dive into that
(02:27):
and chat about that today.
Ed Mathews (02:29):
So my friend, Deirdre Vervo, does something
similar, except with seniorliving.
Right, yes, she is tremendouslysuccessful.
She has bought beautiful homesin wonderful neighborhoods.
The cost of senior health careand senior living assisted
living is astronom.
We're East Coast guys justliving.
Forget senior assisted livingis extremely expensive here on
(02:52):
the East Coast and elsewhere isalso.
But yeah, but it's to the pointwhere you know good hardworking
people can't afford to put aroof over their head in a town
that they won't send their kidsto school.
So let's talk about yourmission and let's talk about how
you execute.
Sam Wegert (03:09):
Yeah, the mission behind co-living.
I'm all into co-living becauseit creates cashflow, but I would
say there's a huge missionelement to this asset class and
it can help solve affordablehousing.
It can help solve we call itworkforce housing I think it's
the more technical term becauseit's for working professionals
that couldn't afford.
Just think about everybody thatyou go through your day, think
(03:29):
about everybody that makesbetween 15 and like $25 an hour.
So we're going to talk abouteverybody that works at Walmart
that serves you, the people thatyou go to, the convenience
workers and the people that putbaggage on your like.
They're making between 10 and25, 10 and 30 dollars an hour
after taxes.
That is just not enough toafford a studio apartment in a
(03:53):
good area, plus live Right.
And so there's a huge growingpercentage of the population,
especially in major cities, thatare looking for something
cheaper than a studio.
But a studio is normally thecheapest thing on the market.
So what's cheaper than a studio?
But a studio is normally thecheapest thing on the market.
So what's cheaper than a studiois a room.
And so, in essence, if someonecan rent a room that has all
utilities included, so they payone price, the rent doesn't
(04:14):
fluctuate, then that can helpsolve this issue of affordable
and workforce housing.
It's not just me saying that.
The US Department for Housingand Urban Development, otherwise
known as HUD, has come out.
They put out a notice that saidhey, we believe co-living can
solve affordable housing inAmerica.
Now I'm paraphrasing a littlebit.
They didn't say it in quitethat explicit terms, but they
believe co-living can help solveaffordable housing in America.
(04:34):
And they now allow housingchoice vouchers to be used for
rooms, not just apartments orhouses or whatever.
So that's a really cooldevelopment, that kind of HUD
stamp of approval on co-living.
I think about anybody whodecides that they want to be an
investor of co-living homes.
Because in essence, what we aredoing, ed, is by doing
co-living we are inventing a newprice point that did not
(04:56):
previously exist Studios,normally the cheapest thing in
any city, and we are now puttingthat on the market in a clean,
quiet, safe place for people tolive.
And we are now putting that onthe market in a clean, quiet,
safe place for people to live.
That is 50 to 75% of what astudio apartment would go for.
So we're undercutting theentire market, having the
cheapest thing and doing it in aprofessional way, that's
professionally managed, that'sdone, really cool.
(05:17):
So it's not like a boardinghome, it's not like a rooming
home.
A lot of people think, oh Sam,what you're doing is a rooming
home.
We're doing something where ifI could have your listeners, if
your listeners are note takers,I encourage them to jot this
sentence down the room isbecoming the new apartment and
that is how Europe thinks aboutco-living.
By the way, so many people inEurope and so many people in
other countries live in thismanner.
It's only becoming necessary inthe United States because of
(05:40):
inflation, because of risingcost of housing and living
Everything going up because ofinflation, because of rising
cost of housing and livingeverything going up.
That's a little bit about themission behind it.
It's cashflow.
Of course, we can double, wecan triple, we can quadruple the
cashflow.
Ed Mathews (05:53):
We get from a normal place, but it is also
affordable housing and workforcehousing Fascinating.
And it's also similar tomedical professional housing.
Right, I know that's right.
I've got a handful of friendsthat buy houses.
They'll fix them up and theywill rent them out to traveling
nurses or traveling doctors.
Yes, Because obviously that's abig challenge in that space as
well, and a little bit differentin that you know they're paying
(06:17):
.
Those residents are payingthrough a stipend that they get,
so the money is different.
Right, it's a lot more actually, but the fact is that the
concept here is solving a majorproblem.
I live in Connecticut.
I believe you live in NorthCarolina.
We have a major workman'shousing issue in Connecticut.
We're tens of thousands ofunits behind schedule and I know
(06:40):
that's a problem all across thecountry.
Sam Wegert (06:42):
Yeah, those are like those, the niche you mentioned.
You mentioned two really coolniches, by the way.
You mentioned the kind ofsenior assisted living or
residential assisted living, Ithink they call it.
And then you mentioned themedical professionals.
Thank you, the medicalprofessionals Drew a blank there
for a second.
Those are all in my mind.
Those are all like nicheswithin the niche of co-living,
because they in essence, rentout rooms to individuals, and so
(07:02):
there's all kinds of theselittle niches.
I focus on my company.
What I think will fill yourinvestment, what will fill your
co-living house the fastest, isdefinitely marketing to the
broad, like workingprofessionals and other niches
that are in there are likeseeing you mentioned so veterans
.
Veterans is another one.
Some of my students arecreating homes and they only let
(07:24):
veterans stay in those homes.
It's a home for nursingprofessionals.
You mentioned sober living isanother one.
That's the same similar concept.
You're renting out rooms, butit's to a specific niche seniors
in general, not necessarilypeople that need assisted living
, but just like 55 plus, we'reseeing that take off because a
lot of people are on some sortof fixed income could have been
an old pension or a socialsecurity and they're like the
(07:44):
cost is going up.
I don't mind making thissacrifice, I don't mind living
with other people, but I want myown private room, my own
private space.
So we see a lot of that like 55plus happening.
So I love the way you'rethinking about it.
Those are all little nicheswithin the overall co-living
niche that all can work.
Ed Mathews (08:05):
I category of anybody who fits into needing a
cheaper place to live.
Here's the kicker, and I wantI'm going to validate this with
you because it occurred to mebefore we hit the record button
something that I have done inthe past and I'm curious if it's
applicable here.
I think it is.
I flip houses as well, Right,and so the one kind of negative
of flipping houses is taxes.
Right, you sell a house, youwant it for six months, you sell
it and you got to pay capitalgains because it's short-term
(08:26):
and it's short-term capitalgains.
So ouch, it hurts.
However, if you take that houseand you rent it and you hold it
for a period of time, talk toyour financial advisors.
You can then, when you go tosell that house, one, two, five,
10, 15 years from now, you can1031 exchange that money out and
put it into something else oflike kind of investment.
(08:48):
I'm curious if you had anythoughts about that.
Sam Wegert (08:51):
Yeah, we do a lot of 1031 exchanges whenever I go to
sell a house, for sure, ifthat's what you're specifically
asking about.
I haven't sold a lot ofproperties until about two and a
half years ago and I startedselling off.
My wife and I owned 12 Airbnbsin the Asheville area.
I saw the writing on the wall.
When it came to Airbnbs I said,okay, if we hit inflation,
that's going to mean people haveless disposable income, so
(09:12):
vacations are going to becomeand I am grateful that I was
kind of thinking ahead, becauseI really did feel like I got
ahead of the game.
Like I sold a couple of ourproperties, like some big, nice
properties at what I wouldconsider like the peak, and I
would not be able to get thattoday, even if I sold it a year
later, two years later, becauseAsheville is just the market's
kind of steady.
But yeah, all those properties Iwould not pay taxes on the
income by 1031 exchange and intomore co-living properties,
(09:35):
which is what I'm all in on,because I truly believe the next
10 years is going to be onethat's focused on affordable
housing.
I just don't see any way around.
The United States doesn't haveto put a huge amount of focus.
Would you agree with that?
I know you're buildingaffordable housing too.
Ed Mathews (09:47):
I 100% agree with that.
It is a monumentally largeproblem that very few people are
talking about, and it is beyondcritical because the fact is
that in 2008, not only did thatwhole financial crisis wipe out
a whole bunch of people who werehomeowners that whole financial
crisis wipe out a whole bunchof people who were homeowners it
also wiped out the generalcontractor class.
(10:07):
It took out about 50%, that's5-0 folks percent of the general
contractors who were buildingnew housing every year, and they
never came back.
So one of the major reasonswe're behind is because all
those GCs stopped buildinghouses, and that's a huge part
of why housing has continued toget more and more expensive,
(10:31):
both rental properties andsingle family residential
ownership type scenarios wherewe're just not building enough.
So the supply is way down andthe demand hasn't changed.
It's continuing to grow.
People keep making babies,people keep graduating from
college and don't live with momand dad.
People keep immigrating intothis country.
None of it's stopping.
(10:52):
It's all continuing.
In fact, it's all growing.
That means there are not enoughroofs for the heads of all the
people walking around in thiscountry, and so hats off to you.
Sam Wegert (11:03):
You are solving a major problem and yeah and so on
.
That note like what every cityis trying to do right now is
increase density in the city.
A great example of this isCharlotte.
Charlotte just came out withand said you could build a
duplex, triplex, quadplex on 80lot on any previously single
family lot in the city ofCharlotte, minus, like certain
zones that they X out.
But what they're trying to dois increase density.
(11:23):
They also slashed parkingrequirements for a bunch of
multiband.
Charlotte and all major citiesare like, okay, we've got to
build more density and we've gotto somehow bring the cost per
unit down as well.
So that's what they're tryingto do, right, what we do as
co-living investors.
We go into a single family home.
We increase density right, wemake it from.
This would be only be a normal.
(11:50):
This could serve one family.
Now it can serve four, five,six, seven, eight, nine, eight
people can share this home.
And we're doing that withoutany cost to the government,
without any subsidies.
We're providing a cheaperoption in a nicer area,
increasing density.
So it is really this win-win.
Politicians are getting onboard with this because they're
realizing, like, wait a second,this solves an issue in my city
or state.
No subsidies and no governmentmoney to build this stuff.
How is that not a win?
Great example of this is thegovernor of Colorado.
(12:11):
A lot of cities and towns willhave these restrictions.
They'll say you can only allowup to four unrelated people to
live in a home, or somethingcrazy like that, meaning I could
live there with 45 of mycousins, 16 of my aunts and
uncles.
It was a place to find cousin.
Exactly how far back are wegoing in the family tree?
At some point.
All of our family tree isvirgin, exactly Dude.
(12:32):
It's so crazy to think aboutsome of the old zoning laws that
come out In Atlanta.
There's this one county, up tofive unrelated, unlimited number
of related and an unlimitednumber of domestic servants.
You can just imagine what timeperiod that was written in and a
lot of these rules and lawsjust haven't been updated.
Yeah, but my point in sharingthis is I have a whole thing on
how I believe that soundsconstitutional.
There's definitely some strongparties out there that are
(12:53):
fighting like hey, you can'tregulate this one.
But the state of Colorado, thegovernor of Colorado, just came
out this was back in July oflast year, so I guess it's been
about a year now and he said I'mmaking it illegal for any local
jurisdiction to regulate thenumber of people in any home.
So he just literally said if 15adults want to get together and
they're adults and they want toshare a house together, why is
(13:14):
that our business?
That's their consenting adults.
They get to share a housetogether.
That's on them, and so that wasa huge win.
And you're seeing states likethis like Oregon did something
similar, washington didsomething similar where they're
just like hey, we get it.
Columbia can help.
We're removing any barriers.
Now we have to get a littlemore creative.
In some of these states we'reseeing kind of the gates open as
politicians start to understandwhat we're trying to do.
Ed Mathews (13:34):
Yeah, and I hear you on those laws because, like
here in my general area, newEngland, a lot of municipalities
will have similar regulationsand laws, and it's fighting
airbnbs and it's fightingcollege kids living together,
because in rhode island, forinstance, near university of
rhode island, narragansett,which is a beach town beautiful
beach town is 40, 50, 60 000people.
(13:57):
Now in august, in three months,it will be a ghost town because
a huge portion of theproperties are beach homes, and
so what those folks did was theywould rent out their houses to
University of Rhode Island kids,and so the kids would come in
and do something similar aco-living situation where
(14:20):
they're living in a six bedroomhouse and none of them are
related.
And so the problem was then theneighbors that did remain
didn't like the fact that theywere living next to a college
kid house, and obvious reasons.
So that's why towns likeMassachusetts, connecticut,
rhode Island, new York havepassed similar laws to what
you're talking about.
(14:40):
I agree with you.
I'm not an attorney, but I'mpretty sure they're
unconstitutional.
Sam Wegert (14:46):
I think there's a big distinction too, ed, between
okay, these laws wereoriginally designed.
A lot of them were originallydesigned to keep out college
housing, like fraternity houses,prostitution houses and
undocumented immigrant houses.
That was the original intent alot of times behind these, and a
lot of them were colleges, likeyou said.
But what we do doesn't reallyfall in those boxes.
(15:07):
We're not college housing.
Out of the 450 tenants we havehere in Charlotte that I either
own or manage, we have maybefour, five college kids.
Like out of all of that,they're all working
professionals.
So it's just, we're sodifferent than that and we're
professionally managed.
No-transcript.
(16:07):
A home that's two things.
One, large we look at nothingless than 2,000 square feet.
If it's 2,500 or 3,000 squarefeet, that's like even better
because I can get more bedroomsout of that.
I'm looking for a home that'slarge and I'm also looking for a
home and I'm going to use aterm here we call it being it's
boxy, meaning it's not that openconcept floor plan that
everybody still desires today.
So we're looking for one with alot of walls and maybe built in
(16:27):
the 80s or the 90s or early2000s.
This boxy living room wasseparate, the dining room was
separate.
The kitchen was a separate room, because that makes it easier
for us to convert those rooms toextra bedrooms, and so what's
great about this model is thatthose homes don't fly off the
shelves anywhere.
People see them as a little notdesirable.
We get to take homes that areolder, larger and maybe not
(16:49):
super desirable and we get toturn them into something.
I can't tell you how manyco-living homes I've bought that
have been on the market for 100days, 120 days, 150 days,
couldn't move.
And then I come in and I lookat it.
I'm like, oh, actually,actually it's perfect for
co-living because, look, it'sgot all these little rooms and
it's broken up really weird.
Terrible for a single family,but perfect for co-living.
Ed Mathews (17:07):
And that's the homes we get to snag off the market,
which is really great, which isawesome.
Less competition when you'reacquiring is a beautiful thing,
yeah exactly that's the otherthing.
Sam Wegert (17:13):
Like, as the investor, I get a cheaper deal
because I'm yeah, I to give mylow ball off Right on your
approach?
Ed Mathews (17:20):
How do you approach a deal?
You find a 2,000 square footranch.
Right, that's all boxed up, nogreat room.
It's a kitchen, living room,dining room, the usual setup.
How do you approach thatproject and what are you doing
to make this a co-living?
Sam Wegert (17:37):
property.
It's really a simple process.
I'll outline it from a veryhigh level view.
First, we're looking for a fewthings in the home.
I've already mentioned some ofthose.
Is it boxy?
The more bathrooms it has, thebetter, because I always want to
keep a three to one bedroom tobathroom ratio, meaning I never
have more than three peoplesharing one bathroom.
Perfect world, two peoplesharing one bathroom.
Or, in a perfect world, oneperson only having a private,
everybody having a private bathwould be perfect, but obviously
(17:59):
that's adding a lot of bathrooms.
So you've got those things Ilook for.
I'm also going to look fornon-HOA.
I'm going to look for kind of aB minus or B plus neighborhood,
something that kind of fitsblue collar neighborhood, where
people aren't going to be superpissed off if there's an extra
car in the parking lot orsomeone's parking on the street
I'm looking for.
That's.
The other thing I look for isno-transcript, and so I'm
(18:28):
looking for those things.
And then when we go in we justbasically say and 2,000 square
foot or bigger, and then fromthat point, if it checks all
those boxes, we buy it and thenwe just convert every square
inch of the space, except forthe kitchen and one small common
area to a bedroom.
So you might say, well, are youserious?
What about the dining room?
Yep, that becomes a bedroom.
(18:49):
What about the living room?
What if there's a second livingroom downstairs?
What if there's a full basement?
I'm taking that three or fourrooms.
The way I think about it is, ifwe're in an affordability
housing crisis and tonight inAmerica, by the way, there are
600,000 people, think of howmany stadiums 600,000 people
would fill up.
That's how many homeless peoplewill be in America tonight, and
so if we have a crisis to thatlevel, you better bet I'm using
(19:11):
unused space for a bedroombecause we need it, and so
there's a huge demand, huge need, but I am going to leave the
kitchen, obviously, becausethat's a shared area, and I'm
going to leave a common area,because that's a shared area as
well, where people can eat.
I'll put some desks in therefor people to do co-working.
That'll be a cool kind ofcommunity space.
Every square inch, though,becomes either a bedroom or a
bathroom.
What about a garage, sam?
Yeah, garage too.
We always convert garageseither into two rooms, two
bedrooms, or we're going toconvert it into the common space
(19:32):
so that I can use more space inthe house that's already
obviously better heated andcooled for rooms, so rooms.
So that's in essence what I doNow.
A lot of times, if I have a2,500 or 3,000 square feet, that
means I can get nine or 10rooms out of that, and to some
people that might sound crazylike 10 people.
(19:52):
How do they not kill each other?
There's a lot of nuances on themanagement side of things that
we have to think.
You have to keep this thingclean.
You've got to keep it quiet.
Ed Mathews (20:06):
You have to keep it safe, but that's a general
overview of how we make thishappen.
Okay, so you mentionedmanagement, because that was
actually one of the questions Iwas going to ask.
How do you smash six, eight, 10people who don't know each
other into the same house wherethey're sharing a common area?
Sam Wegert (20:11):
How do you manage that?
I would say.
The answer to that question isthe number one reason.
Everybody first sees co-livingfor the cash flows.
Whoa, I can make a thousanddollars, $2,000 net on a single
family house.
That would normally negativecashflow.
Oh my gosh, that's amazing.
So, for example, one of myeight bedroom homes recently
when I did the rent appraisal,they said, hey, it'll probably
rent for 2,200 bucks.
We ended up renting out for8,500.
And it's just like that's.
(20:31):
Actually that was a 10 bedroomhouse.
So we're, you know now, granted, we pay utilities, we have
different management costs, moremaintenance.
There's what people see on thefront end, but let me pull back
the curtain and show you theback end.
The back end is it's hard.
It's hard to manage thesethings.
There is a lot of systems.
I've been doing this for adecade and a half, believe it or
not.
There's a lot of little tweaksand systems and things that have
(20:51):
to be in place and I'll sharesome of those.
Like right now, there's threethings you have to do.
One has to be clean and if it'snot consistently clean, people
won't want to stay there.
So what does that mean?
That means that people have tocontribute to the cleaning.
It means you have to havecameras in the common area to
ensure people do their disheslike simple things like do their
dishes after they put them in.
(21:11):
There has to be someaccountability around that.
There have to be some fines ifthey don't do it.
And there's professionalcleaners that come in twice a
month to clean the common areastwice a month to clean the
common areas.
There's some little systems andrules and things they have to
sign off on that just make thisasset class nuanced.
Everybody would be doing it ifit was super easy, but there's
some codes you have to crack sothat's clean.
Quiet is the next thing.
You have to have some quiethours.
People have to go to headphonesafter a certain hour in the
(21:34):
night.
Otherwise, people who workfirst shift or second shift are
just going to go crazy, havecertain noise restrictions
similar to, like an airbnb, wemight have quiet hours after 10
or something like.
You have to have that.
And then the third thing is youhave to make it safe.
If it's not safe, people won'tstay there.
So you have to have rules, likeyou can't have weapons in the
house, right, you have to andyou have to be able to enforce
those.
You have to be able to kickpeople out if they break a house
rule.
You have to have cameras on thefront.
(21:54):
We put cameras in the commonarea of these homes.
We have to be able to havethose accountability things.
We have to have individual doorlocks on all the doors so they
feel okay, this is my littleprivate space that I can lock
and I can get in and out.
And then, obviously, just howyou vet your members is just so
crucial.
Are you doing background checks?
Are you ensuring they've hadsome experience with shared
loving before?
Not that we wouldn't acceptsomeone who's brand new, but
(22:15):
setting the correct expectationsfrom the beginning is
definitely the number one thingthat sets them up for success in
the backend.
Ed Mathews (22:22):
Right on, and you mentioned something about if
they break a rule they losetheir membership.
Does that fall under evictionlaws or is there a different?
Because I've been payingattention to your language.
You don't call them tenants orresidents, you call them members
.
So walk me through the nuancethat you're dancing.
Sam Wegert (22:39):
Yeah, there is a fine line and I'll just pull
back.
I don't mind being totallytransparent, Thank you.
I used to use leases and I nowexclusively use something called
a membership agreement.
It's similar to think of likeyou join a fraternity club and
you have a membership with them,or you join a country club and
you have a membership with themand you pay dues.
That's basically how this works, and so what that allows me to
do is, if you set it upcorrectly, you are able to step
outside of normal tenantlandlord relationship.
(23:01):
Now, I'm not a lawyer.
I'm not giving your listenerslegal advice that this is how.
I'm just sharing what we do.
That does allow you to useprivate security to kick someone
out and I've done this beforeto remove their if they don't
exit when you terminate theirmembership.
So you can do that.
Now here's what we found.
We're a little bit at scale Now.
We're not at.
My community would probably2,500 of these 12-in-a-door In
my community.
My wife and I own 250 or so,and then we manage a few other
(23:25):
hundreds, Depending on the state.
We found that you can also gothrough the normal eviction
process.
So in North Carolina, 95% ofthe time we're going to go
through the normal evictionprocess.
There might be some situationswhere we forcibly remove someone
from the room and we have theability to do that with the
legal agreements.
It's not hard, it's actually avery easy process.
We're a very landlord-friendlystate.
It costs a couple hundred bucks.
So, okay, we're going to justgo through that, but you do have
(23:46):
the ability to do that.
That's why we call them members.
We have this membershipagreement.
The membership agreement alsohelps us in some of these
jurisdictions that have theserestrictions.
Technically, the way that thisworks is I'm only leasing my
house.
I'm leasing my house to oneother company, and that company
then has hundreds of membershipagreements.
If someone were to say, Sam,how many leases do you have in
your house?
The answer would be I have onelease on my house and that's it.
Ed Mathews (24:08):
Now, who holds that lease, though?
Sam Wegert (24:10):
Another company that I also maybe own, and that
company is a membership companyand it's the one leasing the
house on behalf of all thesemembers.
A few documents that are neededto set this up and that are
needed to set this up.
And we pay lawyers lots ofmoney to get creative in this
space.
But that's what's great aboutAmerica we can get creative
right.
That's literally how new stuffis formed in America.
All the time is lawyers gettogether and go.
Why don't we do it this way andthis way?
And we still follow the raw law, but we're creative.
Ed Mathews (24:32):
Yeah, and let's all keep in mind you're solving a
major problem for folks in awhole lot of trouble.
If you don't exist, right,that's okay.
So talk to me about do you takeoutside investors, or is this
done in-house, or how does thatwork?
Are you the case joint ventures?
Sam Wegert (24:53):
I've seen it done lots of ways and I can speak to
all those ways because I coachon all those ways.
But if someone asks me hey, sam, what do you do, I tell them
I'm all done on co-living, and Ibuild, I teach and I manage.
So we are in the process ofdeveloping our first two
co-living buildings that areduplexes that are built for this
model.
So a lot of bedrooms, a lot ofbathrooms.
We manage, meaning we have amanagement company, but
(25:13):
unfortunately right now I onlymanage for my students, just
because the management is soheavy.
And then I teach and so I runthe largest masterminding course
that teaches people to get intothis in a way where they don't
lose a ton of money and theyknow the nuances going into it
and they do it profitably fromthe very beginning.
There's a recipe to follow, sothat's what I do.
And then, of course, my wifeand I buy these all the time.
I don't take outside investors.
Right now We've just used ourown capital and my wife was my
(25:35):
biggest investor.
So he watched me do it for afew years and then said I've got
some money, let's buy some moreproperty.
So we just always kept it alittle bit in-house that way,
but I have some students thatare doing some syndications.
I have some students that areraising capital.
I have seen people do it everysingle way right now.
What's great about this modelmaybe as a little comparison to
(25:56):
multifamily is you can actuallykeep this in-house, meaning a
single family home.
You can get a 10% down vacationon, you can move into it and
hack it for a minute and dohouse hacking and put only 5%
down.
I mean this is great for peoplewho, like I, can keep this in
and that can go up in value.
That's how we've done it and Ilike it for that reason.
It's easy to get into.
It's a lower barrier to entrythan, say, buying a multifamily
(26:17):
deal.
Ed Mathews (26:18):
Absolutely, I know I get it, but it's interesting
because I'm thinking like you'retalking about some of the loan
products that are out there.
I'm thinking VA loans, right,where I did 3% down payment.
You can live there, you canconvert that house into a
co-living house and then moveout and do another VA loan for
your next property.
(26:38):
It's a nice way to grow yourown portfolio as you go along.
I'm sure students do.
Sam Wegert (26:43):
It gets even better than that.
You can, if you want, hackother people's loans.
So here's how some of mystudents have done it and I've
been so impressed with them.
You can go to someone and say,hey, you have a job and you can
get a primary residence loanwhich is 3% down, or a VA loan
sometimes it's 0% down and youcan say, look, I'll give you
(27:04):
free rent in a home for a year,but I'd like to use that loan,
and so they would move in andyou would.
I mean, there's some nuancesfrom the legal title side of
things of this, but that can beworked out.
There are some strategies forthat.
But in essence, you can hacksomeone else's loan because
you're only allowed one a year.
But I can go to and I've goneto my like I have a bunch of
siblings.
I'll give you 10% of this houseplus, or I'll just pay them.
I'll give you 10 grand, butyou've got to move into this
home and then the home's goingto be mine, but you get free
(27:26):
rent for a year, and so there'ssome fun strategies Right,
there's always into your firstone or two.
But here's what's great aboutthe strategy.
Let's say, you get a home andit's not uncommon.
For one of these homes Athousand dollars a month net is
the bottom line.
We won't even look at it unlessit spits out of a thousand and
I'd say there's some crazyexamples I could give you of one
home, 14 bedroom home inHouston, doing $5,000 a month
net, but it's very rare.
(27:46):
They put a lot down, but one tothree.
So let's take an average personin thousands of dollars one to
$3,000 a month in net income.
That's the range of what we'reseeing in different cities
around the United States.
So what I'm saying is you don'tneed a hundred if you're a
normal American and you need 6Ka month, which is $72,000 a year
, and that covers a lot of yourbasic expenses.
(28:08):
That's two or three homes, notthe first ones you maybe see.
You find you research.
You say no to a bunch but, likeI'm saying, that's the power of
this strategy if applied anddone correctly applied and done
correctly, thank you.
Ed Mathews (28:24):
That's why I love it .
It's like I said before westarted recording.
This is a situation, a problemthat I'm grateful that you and
other people that are doing whatyou do are solving.
I'm also really grateful thatyou're teaching other people how
to do it, because that's thefastest way to get to scale and
solve this problem.
In total and you've mentioned acouple of times and I'm going
to make you talk about it isyour school, so tell me about
(28:44):
the training you provide and howdoes that work.
Sam Wegert (28:46):
So we run a program that is two aspects it's a
course and it's a mastermind,and what that means is there's
an initial course to get youfrom zero co-living homes, even
if you've done a bunch of realestate before.
Obviously this asset, just likeindustrial, is different than
multifamily, it's different thansingle family, co-living is
different from all of those.
So there's a course that getsyou from zero co-living homes to
one co-living home and it's astep-by-step guide that walks
(29:07):
you through to get to one.
After that, two is easier,three is easier, four is easier,
everyone gets easier after that.
And then we have an ongoingmastermind that just supports
you.
So that's calls live to scale.
Yes, yeah, we've got somescaling programs as well.
One of my students recentlyjoined our program, less than a
year ago, and him and hispartner now.
Granted, he found a partner inour program and he just texted
(29:29):
me the other day and said we'reat 180 units and I was like less
than a year co-living units andI was like, dude, that is
insane.
Granted, he came in with adecent amount of capital.
He had sold some stuff, so hehad a chunk of change that he
was ready to go.
But that's what's possible inour program if you fly yourself,
and so I love doing it.
I've got a bunch of coachesthat help me out with it.
I'm really passionate about it.
We're always improving it andmaking it better and just super
(29:49):
excited for that.
Awesome Congratulations.
Yeah, if someone's interested,we do give a free resource.
If someone wants, we do a fiveday challenge, which is a deep
dive into this strategy.
It's completely free.
We don't charge a dime for it.
There's an offer on the end,but it's not a hard pitch at all
.
It's just like hey, if you guyswant to continue here, it is,
but it's a scale your realestatecom.
So if anybody's interested,scale your real estatecom, they
can just go there and get on ournext one.
(30:11):
I do one a month.
They're live, so I'm thereinteracting with you guys and
connecting and it's let's getinto the final five.
Ed Mathews (30:19):
I appreciate and I've learned a lot in this
37-minute masterclass thatyou've provided, so thank you.
But I want to know more aboutyou individually.
You wake up on Monday morningand the mortgage is paid, the
kids are taken care of, collegeis handled, no car payments, all
(30:45):
the things that a husband andwife need to do, or a couple
need to do in order to be good,right, that's all taken care of,
and yet you still go out, getout of bed and I suspect you're
that guy and yet you get out ofbed on Monday morning and go
headfirst, diving right backinto the office to continue to
build your business and helpyour students and all that I
call that purpose.
Sam Wegert (31:00):
What gets you out of bed?
What's your yeah, man?
I think it's an interestingquestion and I might give a
nontraditional answer to it,because this has been something
I've been diving into my liferecently.
I'm not going to lie.
I've been in a season of lifewhere I've been asking myself
that same question.
I'm like, what is my purpose?
Why am I here?
What do I really want to do?
And I started working when I was13 years old.
I started working 60, 70 hourweeks when I was 13 years old,
so I'm in a place where and I'vegone I'm 34 now, so I've been
(31:22):
13 to 34.
I'm like I've been going hamcrazy, Didn't go to college.
Hard work, and so I'm in pastand I'm just going to be really
honest is necessity and I don'tnecessarily mean financial
necessity and I think there'ssome value to what I'm going to
say for people who are listening, because I don't think I'd be
(31:44):
here today if there weren't alot of other people that relied
on me.
For example, I would love toquit right now, Like I'd
literally love to turn it down.
I fantasized about it for thelast two years.
I told my wife I just want togo to Mexico, this little town
in Mexico, Mizzou, that I loveand I want to go.
I have people that rely on meand they keep me going and so I
do it because there are peoplewho need me care and that I care
(32:04):
about enough that I have tokeep going, and that's what gets
me up is those people, and Ithink that's valuable, because I
think if anybody wants to getsomewhere in life, it is not
going to be.
You need external resources topush you, Like we will only do
so much just for ourselvesPurpose.
I'd love to tell you I havesome big purpose to solve
affordable housing, andsometimes I do think we will
(32:26):
actually completely solveaffordable housing with this
method and that's fun and thatdoes get me up in the morning.
Ed Mathews (32:44):
But if I had to give you the real answer, man, I
would say it's taking care ofthe people that rely on me,
taking care of the people thathave paid me, taking care of the
people that have entrusted mewith their lives, their
financial future, and I need toshow up for them.
I need to show up for my wifeand my dog, who's laying next to
me a little pissed off.
Thank you for that.
I agree with you on multiplelevels there.
With regard to mentorship,you've mentioned that people
have helped you along the way,and so I'm curious about the
best advice you ever got and whogave it to you man, I'll give
you a piece of advice.
Sam Wegert (32:58):
That may seem out there, but it's something I've
just been preaching my team.
I'm a big Tony Robbins like guyand Tony Robbins is all about
raising your standards.
But one of my mentors pulled measide one time and he said Sam,
stop trying to be Tony Robbins,you are killing yourself.
You are trying to be excellentall the time.
You're.
Basically, he was like you'retrying to be too good all the
(33:18):
time.
I was like what the heck do youmean?
Man?
He goes.
I need you to lower yourstandard.
I was like what the heck areyou talking about?
That's not me.
I'm Tony Robbins.
I'm raise your standard.
He goes.
I'm going to teach yousomething that will be very
valuable.
He said which you hit yourstandard and you have, in an
essence, raised your standardand he goes consistently good,
(33:39):
always outperforms occasionallygreat, and he goes, Sam, you're
trying so hard, You're showingup occasionally great and you
just need to be consistentlygood.
And it was a juxtaposition tomy entire life, which is like
Tony Robbins go, explode,explode.
And I just dude.
I've just been preaching thisto my team Cause like, for
example, my team built out thiswhole flow for member concerns
(33:59):
that we get from these members.
I was like guys, ain't nobodygoing to do it, it's too big,
it's too beefy, it's too this.
I said we need them to watchone video, not 20 videos, and
they lower the standard.
We raise the consistency withwhich we hit the standard and
we've, in essence, raised ourstandard, and that's frankly
what I'm trying to do in my life, because I'm the type of guy
(34:20):
that wants to make everythingperfect, everything amazing,
everything great.
It's like you can't do it, it'snot possible, it's not human.
Ed Mathews (34:25):
Chill me.
What is, professionally, amistake or a decision you'd love
to have back?
What did you do about it?
My list is very long.
Sam Wegert (34:34):
I'll give two, because one's very relevant,
one's like a bigger picture.
I like to move forward fast, sosometimes when these
wholesalers come to me withdeals, I'll buy a home sight
unseen and I've done that a lotof my career actually.
But I will never buy anotherhouse sight unseen just because
there is a difference betweenGoogle earth and Google maps,
and the video that the guy sendsme I'd seen it in person.
(34:54):
So I just bought a houserecently.
I was just like why?
Ed Mathews (34:56):
didn't I buy this house.
Sam Wegert (34:57):
I already paid cash for the entire house.
It was a wholesale deal.
So I was like and then I didthis and I was about to buy a
second house, sight unseen,because I just trusted my team
and I was like, no, I'm going tojust quickly zip out there and
see it.
I did I.
It's different.
I didn't like it.
That's like a quick littlelesson that I think even for
experienced investors isimportant.
And then the second lesson Iwould say mistake is there's a
(35:19):
great book that I recommendeverybody read.
It's called who Moved my Cheeseand it is a book about when
markets change.
People hold on to what theyknow and they need to update,
(35:40):
and so for me that was.
I was in the martial artsindustry.
I built a chain of martial artsschools for 15 years.
I hung onto it because it wascertain and it literally took an
act of God.
Like dude.
My brother, who was like myright hand guy in that business,
literally had to go to jailbecause get on drugs and do all
this crazy stuff.
That happened, and a friend hadto literally come down and be
like you must sell this businessfor me to then transition to
full-time real estate, and Ijust feel like I held onto it
about five years too long, andin life things move.
Asset classes change.
What was good two years ago isnot good.
There are just things thatadjust and I wish people would
(36:04):
be like okay, I'm moving on tothe next thing, and sometimes
that's just what has to happen.
And so if anybody struggleswith that, like I did, who moved
my cheese, a great book to belike, the cheese has moved
Rewards and the spoils are notwhere they used to be we got to
move on to something else Righton.
Ed Mathews (36:19):
And so you mentioned a book, so let's talk about
that.
How do you sharpen the saw, soto speak?
What are you reading these days?
Or, if you don't read, how doyou take in information and who
are you paying attention tothese days?
Sam Wegert (36:30):
Yeah, man, I'll be honest, Tony Robbins for sure.
And just in terms of resourcesand books, I just recently read
a book called a hundred milliondollar leads.
I haven't finished it yet, buta hundred million dollar offers,
those are two great ones.
Who else am I paying attentionto?
I'm always in a mastermind.
I'm always in a group.
I pay attention to Pace Morby'sgroup and kind of what he's
doing with the sub two community, cause I have a season of my
life where I listened to everysingle person that I possibly
could.
(36:50):
And I told you before I quit, amastermind I'd been in for 14
years, not because I thought itwas bad, but because I just
needed to hear my own voice.
I needed to hear what Samwanted and thinks.
This season of my life rightnow is actually less about
reading.
I'm journaling for an hour totwo hours a day.
I'm journaling about myrelationship and it's been.
(37:10):
Really, if no one has ever, andif you've never journaled and I
know I'm going to get somehaters for saying this, but if
you've- never journaled to.
ChatGPT.
You should Just know that itcould come up in a court case.
They can subpoena this stuff.
So be careful what you tell itor delete it.
I love old school too, ed.
I've got a notebook in front ofme, but ChatGPT has been fed
(37:35):
millions and millions oftranscripts from actual
counselors and coaches and allthis stuff.
So it does have a good format,it knows coaching and so, yeah,
you can just go to Chachibitiand be like I want you to be a
coach, I want you to be acounselor.
I want you to reflect this backto me.
What am I missing?
What am I not seeing?
Talk about anything.
And keep in mind I'm a guy whohired a Tony Robbins coach at
age 14 or 15.
So I've been in the coachingworld for a long time and some
of the things that ChachiBT willspit back to me and be like hey
(37:56):
, I think you should think aboutthis and this, I'm like it's
deep and it is good.
Surprisingly look over myshoulders.
Good, and it's instant.
I don't have to get on a call.
I can just feel like here's anemotion I'm feeling today, like
I'm feeling this and this and Ireally don't want to do this and
it'll be like no, you need tostick to your commitment because
of this and this, and here'swhat you could do.
But if you do, this is who youwould become, and this is no
like done, got it, I'm going todo.
(38:17):
It's amazing.
So I've been journaling a lotto it.
I just a lot of my friends havetoo, and they were just
experienced really great results.
Ed Mathews (38:23):
So I know some people have some weirdness about
AI, but I would highlyestablished a board of advisors
on my chat GPT account projectthat's set up.
And basically I said we've gotCar Street Academy and we're
trying to launch this and I needRussell Brunson, alex Hormozy,
(38:49):
ann Hadley, frank Kern to walkme through a launch strategy so
that we can add the most valueand all the things we want to
accomplish.
And it gave me that's awesomelaunch strategy so that we can
add the most value and all thethings we want to accomplish.
And it gave me that's awesome,and I'm going back to it now.
Hey, this is what I'm seeing inthe market.
This didn't work.
How should we react?
How should we handle this?
And boom more information.
That worked.
Okay, cool, that's resonating.
I now have a world-class boardof advisors living under the
(39:12):
umbrella of ChatGPT.
So I'm right there with you onthat one, brother.
That's amazing, dude.
I love it.
Let's talk about success,because I'm really interested to
hear how you answer this Inyour own life, and I know you're
in a specific season right now.
How do you today define success?
Sam Wegert (39:29):
Yeah, I wish I had good, nice, canned answers for
this, but I really don't.
How do I define success?
It's definitely changed.
I'll share something a littlevulnerable that I just realized
yesterday.
It might be a little too earlyto share this, but I'd say the
number one reason I chased moneygrowing up was because I wanted
to be loved by the peoplearound me and I just somehow in
(39:49):
my head I got connected.
I was like, oh, if I couldimpress my friends I was part of
this friend group that was likenever really fully accepted me
and if I could press my parents,I can press people.
I would get more attention andlove things I didn't think I did
when I was a kid by having aton of money and I accomplished
the goal by all worldlymeasurements was the youngest
(40:12):
person to join a millionairegroup, built my company to multi
millions, and so all this waslike good check marks.
But I think what happened is Irecently woke up and was like
dang, actually having more moneymeans you should have more
conflict, like fire people andhire people Like I went the
wrong way if I'm looking forlike love and acceptance in my
(40:33):
life right, and so one of thethings that I would say how I
define success.
Now it's slowly shifting.
For me Definitely used to be allby money measurement terms,
even recently, even if you'dasked me this a year ago, I'd be
like did I hit my net worthgoal?
Did I hit my net income goal?
Did I hit my net income?
Net worth, that's all I wouldmeasure.
I don't care about gross, Idon't care how much money you're
making, I don't care how muchmoney you're taking home, that's
all I care about.
(40:53):
But recently it's just shifteda little bit more.
I've had some health concerns.
My sister just passedunexpectedly, very recently.
She kind of rocked me to mycore.
I meant she was 36, and sheleft a five-year-old kid behind
and her husband.
It was just so sad.
I'm still reeling.
Am I like having fun?
I have more money in the bankaccount than I've ever had in my
(41:14):
entire life.
Is that who I want to be?
I recently spent some time inColombia, the country of
Colombia, and in Colombia theydon't care how much money you
make, they care about socialmedia.
Following it's a differentculture, and just being around
different cultures makes yourealize it's actually a very
American thing.
It's a very specificallyAmerican thing to think I'm
competing against you.
I'm better than you in money.
I have more success than you.
(41:35):
Not everybody thinks that way.
Most cultures actually don'tthink that way.
I say all that to say, I think,just like enjoyment of my life,
spending time with people thatI love and that I care about has
definitely started toinfiltrate my version of success
more than it ever has.
I'm 34.
So, you know, I think it's anatural tendency of men, maybe
young men especially to gothrough this like significance
(41:56):
phase and then they're like, ohwait, is that all there is?
And I'm like, no, is that allthere is?
And I'm sure I could learn alot from you and that as well,
but that's my journey right now,man.
That's awesome.
Ed Mathews (42:05):
That revelation for me hit about 31, I think, so
you're right on track.
Wow, I've been working at thisfor so long to accomplish this
and I just accomplished this.
Is that all there is?
It'll happen multiple times inyour life.
I'm in my mid fifties.
It's happened at least twicesince then, and that's a good
thing, that's growth.
Sam Wegert (42:25):
What's the number one piece of advice you have for
someone in that season?
Give yourself some grace.
Ed Mathews (42:30):
Give yourself some grace.
You are on a path and that pathis your own.
Don't compare it to anybodyelse, and if you're not where
you thought you would be, that'sokay.
You can't do anything aboutyesterday.
The only thing you can affectis right now and tomorrow.
Give yourself some grace and bereally as present as you
(42:51):
possibly can.
I relive them even really aspresent as you possibly can.
I relived them even, and one ofthe things that did to me was
it sabotaged things that I wasworking on because I was so
fixated on things I got right,things I got wrong, and what
happened was I'm sitting at adining room table with my two
daughters and my wife andthey're having a great
conversation, and I'm stillthinking about the mistake I
(43:11):
made and I'm not hearing any ofit.
And learning very late in lifeto give myself a little bit of
grace has been revolutionary,and I'm talking in the last
couple of years.
Sam Wegert (43:23):
That'd be.
That's brilliant.
Thank you, I received that andthat's very timely.
Ed Mathews (43:26):
Thank you.
So, sam, I've really enjoyedthis conversation.
When you're not talking aboutco-living and helping other
people achieve their dreams.
What do you like to do for fun,say?
Sam Wegert (43:36):
that last question one more time.
Ed Mathews (43:37):
When you're not saving the world from not enough
affordable housing and helpingother people achieve their
dreams, what do you like to dofor fun?
Sam Wegert (43:44):
Yeah, I'm learning a lot about fun, but I love
hiking.
I love anything outdoors, man,anything in nature.
So hiking, biking, camping,traveling, being on the water, a
, a boat, just like anythingwith my friends and my family
usually outdoor stuff is.
My most pleasurable place iskind of my home skiing.
I have a 20s deal right now soI'm not doing much of skiing or
and it's killing me, but I'mworking on that, so that's my
go-to.
Ed Mathews (44:05):
Yeah, fortunately it's august, so you got a little
bit of time to kill, and ifpeople want to learn more about
you or your companies, what'sthe best way to get in?
Sam Wegert (44:13):
man, the best way, I would just say, is going to
that website that I gave you,www.
scaleyourrealestate.
com.
If someone's interested tolearn more about co-living, or
they can just follow me onInstagram at Sam Wegert
W-E-G-E-R-T.
And connect and follow me there.
Ed Mathews (44:27):
Awesome, Sam.
Thank you so much for your timetoday.
I am blown away by you and yourbusiness.
Congratulations and continuedsuccess.
I wish you nothing but the best.
Sam Wegert (44:37):
Thank you, Ed.
Same to you, brother.
Thanks for the opportunity tobe on.
I really appreciate it.
Greetings and salutations, Real Estate
Undergrounders.
It is Ed Mathews with RealEstate Underground.
you so much for joining ustoday.
I'm really grateful for youmaking us a part of your day.
With me today is Sam Wegert,and Sam has a lot going on, but
we're going to talk about onereally interesting segment of
(01:00):
his set of businesses.
I'm going to let him tell thestory.
So first, welcome to the show,Sam, and I can't wait to talk
about Life Door.
Yeah, man.
Sam Wegert (01:08):
Thanks for having me on, Ed.
I'm super excited to be on andI love the name of the show.
By the way, I didn't tell youthat before we got on, but the
Real Estate Undergrounders is acool name.
There's always cool new assetclasses coming up in real estate
and I know we're going to talkabout one of.
I'm excited for that.
Ed Mathews (01:21):
Absolutely.
Yeah, you and I speak the samelanguage because this is a
multifamily play, so Iunderstand the words coming out
of your mouth, and so will ouraudience, but it's a fascinating
play.
I'm going to let you tell thestory and then I'm going to tell
you about my friend Deirdre.
So for those folks who haven'tfound you online yet or don't
know you already, why don't youtell us a little bit about who
(01:41):
you are and about your company?
Sam Wegert (01:43):
Yeah, what we're going to focus on today in this
episode is you mentionedmultifamily.
So this is an asset classthat's new, up and coming.
It's not that people haven'tbeen sharing houses for a long
time, because they have been fordecades for as long as humans
have existed, but the way to doit in a scalable way that
investors can get cash flow fromis new, and that's called
co-living.
So we're going to talk todayabout co-living and I believe
(02:07):
this asset class is where Airbnbwas in 2011, 2012, when it was
just up and coming and peoplewere having this reaction to
Airbnb.
If you remember, wait, what isthat?
Again, how do people notdestroy homes?
So there's some nuances to itthat I know we're going to
discuss in this show, but really, this is I describe it to
people as this is multifamilyincome, but on a single family
debt, which is longer fixed debt, a lot of times, better terms
and single family prices, andI'm excited to dive into that
(02:27):
and chat about that today.
Ed Mathews (02:29):
So my friend, Deirdre Vervo, does something
similar, except with seniorliving.
Right, yes, she is tremendouslysuccessful.
She has bought beautiful homesin wonderful neighborhoods.
The cost of senior health careand senior living assisted
living is astronom.
We're East Coast guys justliving.
Forget senior assisted livingis extremely expensive here on
(02:52):
the East Coast and elsewhere isalso.
But yeah, but it's to the pointwhere you know good hardworking
people can't afford to put aroof over their head in a town
that they won't send their kidsto school.
So let's talk about yourmission and let's talk about how
you execute.
Sam Wegert (03:09):
Yeah, the mission behind co-living.
I'm all into co-living becauseit creates cashflow, but I would
say there's a huge missionelement to this asset class and
it can help solve affordablehousing.
It can help solve we call itworkforce housing I think it's
the more technical term becauseit's for working professionals
that couldn't afford.
Just think about everybody thatyou go through your day, think
(03:29):
about everybody that makesbetween 15 and like $25 an hour.
So we're going to talk abouteverybody that works at Walmart
that serves you, the people thatyou go to, the convenience
workers and the people that putbaggage on your like.
They're making between 10 and25, 10 and 30 dollars an hour
after taxes.
That is just not enough toafford a studio apartment in a
(03:53):
good area, plus live Right.
And so there's a huge growingpercentage of the population,
especially in major cities, thatare looking for something
cheaper than a studio.
But a studio is normally thecheapest thing on the market.
So what's cheaper than a studio?
But a studio is normally thecheapest thing on the market.
So what's cheaper than a studiois a room.
And so, in essence, if someonecan rent a room that has all
utilities included, so they payone price, the rent doesn't
(04:14):
fluctuate, then that can helpsolve this issue of affordable
and workforce housing.
It's not just me saying that.
The US Department for Housingand Urban Development, otherwise
known as HUD, has come out.
They put out a notice that saidhey, we believe co-living can
solve affordable housing inAmerica.
Now I'm paraphrasing a littlebit.
They didn't say it in quitethat explicit terms, but they
believe co-living can help solveaffordable housing in America.
(04:34):
And they now allow housingchoice vouchers to be used for
rooms, not just apartments orhouses or whatever.
So that's a really cooldevelopment, that kind of HUD
stamp of approval on co-living.
I think about anybody whodecides that they want to be an
investor of co-living homes.
Because in essence, what we aredoing, ed, is by doing
co-living we are inventing a newprice point that did not
(04:56):
previously exist Studios,normally the cheapest thing in
any city, and we are now puttingthat on the market in a clean,
quiet, safe place for people tolive.
And we are now putting that onthe market in a clean, quiet,
safe place for people to live.
That is 50 to 75% of what astudio apartment would go for.
So we're undercutting theentire market, having the
cheapest thing and doing it in aprofessional way, that's
professionally managed, that'sdone, really cool.
(05:17):
So it's not like a boardinghome, it's not like a rooming
home.
A lot of people think, oh Sam,what you're doing is a rooming
home.
We're doing something where ifI could have your listeners, if
your listeners are note takers,I encourage them to jot this
sentence down the room isbecoming the new apartment and
that is how Europe thinks aboutco-living.
By the way, so many people inEurope and so many people in
other countries live in thismanner.
It's only becoming necessary inthe United States because of
(05:40):
inflation, because of risingcost of housing and living
Everything going up because ofinflation, because of rising
cost of housing and livingeverything going up.
That's a little bit about themission behind it.
It's cashflow.
Of course, we can double, wecan triple, we can quadruple the
cashflow.
Ed Mathews (05:53):
We get from a normal place, but it is also
affordable housing and workforcehousing Fascinating.
And it's also similar tomedical professional housing.
Right, I know that's right.
I've got a handful of friendsthat buy houses.
They'll fix them up and theywill rent them out to traveling
nurses or traveling doctors.
Yes, Because obviously that's abig challenge in that space as
well, and a little bit differentin that you know they're paying
(06:17):
.
Those residents are payingthrough a stipend that they get,
so the money is different.
Right, it's a lot more actually, but the fact is that the
concept here is solving a majorproblem.
I live in Connecticut.
I believe you live in NorthCarolina.
We have a major workman'shousing issue in Connecticut.
We're tens of thousands ofunits behind schedule and I know
(06:40):
that's a problem all across thecountry.
Sam Wegert (06:42):
Yeah, those are like those, the niche you mentioned.
You mentioned two really coolniches, by the way.
You mentioned the kind ofsenior assisted living or
residential assisted living, Ithink they call it.
And then you mentioned themedical professionals.
Thank you, the medicalprofessionals Drew a blank there
for a second.
Those are all in my mind.
Those are all like nicheswithin the niche of co-living,
because they in essence, rentout rooms to individuals, and so
(07:02):
there's all kinds of theselittle niches.
I focus on my company.
What I think will fill yourinvestment, what will fill your
co-living house the fastest, isdefinitely marketing to the
broad, like workingprofessionals and other niches
that are in there are likeseeing you mentioned so veterans
.
Veterans is another one.
Some of my students arecreating homes and they only let
(07:24):
veterans stay in those homes.
It's a home for nursingprofessionals.
You mentioned sober living isanother one.
That's the same similar concept.
You're renting out rooms, butit's to a specific niche seniors
in general, not necessarilypeople that need assisted living
, but just like 55 plus, we'reseeing that take off because a
lot of people are on some sortof fixed income could have been
an old pension or a socialsecurity and they're like the
(07:44):
cost is going up.
I don't mind making thissacrifice, I don't mind living
with other people, but I want myown private room, my own
private space.
So we see a lot of that like 55plus happening.
So I love the way you'rethinking about it.
Those are all little nicheswithin the overall co-living
niche that all can work.
Ed Mathews (08:05):
I category of anybody who fits into needing a
cheaper place to live.
Here's the kicker, and I wantI'm going to validate this with
you because it occurred to mebefore we hit the record button
something that I have done inthe past and I'm curious if it's
applicable here.
I think it is.
I flip houses as well, Right,and so the one kind of negative
of flipping houses is taxes.
Right, you sell a house, youwant it for six months, you sell
it and you got to pay capitalgains because it's short-term
(08:26):
and it's short-term capitalgains.
So ouch, it hurts.
However, if you take that houseand you rent it and you hold it
for a period of time, talk toyour financial advisors.
You can then, when you go tosell that house, one, two, five,
10, 15 years from now, you can1031 exchange that money out and
put it into something else oflike kind of investment.
(08:48):
I'm curious if you had anythoughts about that.
Sam Wegert (08:51):
Yeah, we do a lot of 1031 exchanges whenever I go to
sell a house, for sure, ifthat's what you're specifically
asking about.
I haven't sold a lot ofproperties until about two and a
half years ago and I startedselling off.
My wife and I owned 12 Airbnbsin the Asheville area.
I saw the writing on the wall.
When it came to Airbnbs I said,okay, if we hit inflation,
that's going to mean people haveless disposable income, so
(09:12):
vacations are going to becomeand I am grateful that I was
kind of thinking ahead, becauseI really did feel like I got
ahead of the game.
Like I sold a couple of ourproperties, like some big, nice
properties at what I wouldconsider like the peak, and I
would not be able to get thattoday, even if I sold it a year
later, two years later, becauseAsheville is just the market's
kind of steady.
But yeah, all those properties Iwould not pay taxes on the
income by 1031 exchange and intomore co-living properties,
(09:35):
which is what I'm all in on,because I truly believe the next
10 years is going to be onethat's focused on affordable
housing.
I just don't see any way around.
The United States doesn't haveto put a huge amount of focus.
Would you agree with that?
I know you're buildingaffordable housing too.
Ed Mathews (09:47):
I 100% agree with that.
It is a monumentally largeproblem that very few people are
talking about, and it is beyondcritical because the fact is
that in 2008, not only did thatwhole financial crisis wipe out
a whole bunch of people who werehomeowners that whole financial
crisis wipe out a whole bunchof people who were homeowners it
also wiped out the generalcontractor class.
(10:07):
It took out about 50%, that's5-0 folks percent of the general
contractors who were buildingnew housing every year, and they
never came back.
So one of the major reasonswe're behind is because all
those GCs stopped buildinghouses, and that's a huge part
of why housing has continued toget more and more expensive,
(10:31):
both rental properties andsingle family residential
ownership type scenarios wherewe're just not building enough.
So the supply is way down andthe demand hasn't changed.
It's continuing to grow.
People keep making babies,people keep graduating from
college and don't live with momand dad.
People keep immigrating intothis country.
None of it's stopping.
(10:52):
It's all continuing.
In fact, it's all growing.
That means there are not enoughroofs for the heads of all the
people walking around in thiscountry, and so hats off to you.
Sam Wegert (11:03):
You are solving a major problem and yeah and so on
.
That note like what every cityis trying to do right now is
increase density in the city.
A great example of this isCharlotte.
Charlotte just came out withand said you could build a
duplex, triplex, quadplex on 80lot on any previously single
family lot in the city ofCharlotte, minus, like certain
zones that they X out.
But what they're trying to dois increase density.
(11:23):
They also slashed parkingrequirements for a bunch of
multiband.
Charlotte and all major citiesare like, okay, we've got to
build more density and we've gotto somehow bring the cost per
unit down as well.
So that's what they're tryingto do, right, what we do as
co-living investors.
We go into a single family home.
We increase density right, wemake it from.
This would be only be a normal.
(11:50):
This could serve one family.
Now it can serve four, five,six, seven, eight, nine, eight
people can share this home.
And we're doing that withoutany cost to the government,
without any subsidies.
We're providing a cheaperoption in a nicer area,
increasing density.
So it is really this win-win.
Politicians are getting onboard with this because they're
realizing, like, wait a second,this solves an issue in my city
or state.
No subsidies and no governmentmoney to build this stuff.
How is that not a win?
Great example of this is thegovernor of Colorado.
(12:11):
A lot of cities and towns willhave these restrictions.
They'll say you can only allowup to four unrelated people to
live in a home, or somethingcrazy like that, meaning I could
live there with 45 of mycousins, 16 of my aunts and
uncles.
It was a place to find cousin.
Exactly how far back are wegoing in the family tree?
At some point.
All of our family tree isvirgin, exactly Dude.
(12:32):
It's so crazy to think aboutsome of the old zoning laws that
come out In Atlanta.
There's this one county, up tofive unrelated, unlimited number
of related and an unlimitednumber of domestic servants.
You can just imagine what timeperiod that was written in and a
lot of these rules and lawsjust haven't been updated.
Yeah, but my point in sharingthis is I have a whole thing on
how I believe that soundsconstitutional.
There's definitely some strongparties out there that are
(12:53):
fighting like hey, you can'tregulate this one.
But the state of Colorado, thegovernor of Colorado, just came
out this was back in July oflast year, so I guess it's been
about a year now and he said I'mmaking it illegal for any local
jurisdiction to regulate thenumber of people in any home.
So he just literally said if 15adults want to get together and
they're adults and they want toshare a house together, why is
(13:14):
that our business?
That's their consenting adults.
They get to share a housetogether.
That's on them, and so that wasa huge win.
And you're seeing states likethis like Oregon did something
similar, washington didsomething similar where they're
just like hey, we get it.
Columbia can help.
We're removing any barriers.
Now we have to get a littlemore creative.
In some of these states we'reseeing kind of the gates open as
politicians start to understandwhat we're trying to do.
Ed Mathews (13:34):
Yeah, and I hear you on those laws because, like
here in my general area, newEngland, a lot of municipalities
will have similar regulationsand laws, and it's fighting
airbnbs and it's fightingcollege kids living together,
because in rhode island, forinstance, near university of
rhode island, narragansett,which is a beach town beautiful
beach town is 40, 50, 60 000people.
(13:57):
Now in august, in three months,it will be a ghost town because
a huge portion of theproperties are beach homes, and
so what those folks did was theywould rent out their houses to
University of Rhode Island kids,and so the kids would come in
and do something similar aco-living situation where
(14:20):
they're living in a six bedroomhouse and none of them are
related.
And so the problem was then theneighbors that did remain
didn't like the fact that theywere living next to a college
kid house, and obvious reasons.
So that's why towns likeMassachusetts, connecticut,
rhode Island, new York havepassed similar laws to what
you're talking about.
(14:40):
I agree with you.
I'm not an attorney, but I'mpretty sure they're
unconstitutional.
Sam Wegert (14:46):
I think there's a big distinction too, ed, between
okay, these laws wereoriginally designed.
A lot of them were originallydesigned to keep out college
housing, like fraternity houses,prostitution houses and
undocumented immigrant houses.
That was the original intent alot of times behind these, and a
lot of them were colleges, likeyou said.
But what we do doesn't reallyfall in those boxes.
(15:07):
We're not college housing.
Out of the 450 tenants we havehere in Charlotte that I either
own or manage, we have maybefour, five college kids.
Like out of all of that,they're all working
professionals.
So it's just, we're sodifferent than that and we're
professionally managed.
No-transcript.
(16:07):
A home that's two things.
One, large we look at nothingless than 2,000 square feet.
If it's 2,500 or 3,000 squarefeet, that's like even better
because I can get more bedroomsout of that.
I'm looking for a home that'slarge and I'm also looking for a
home and I'm going to use aterm here we call it being it's
boxy, meaning it's not that openconcept floor plan that
everybody still desires today.
So we're looking for one with alot of walls and maybe built in
(16:27):
the 80s or the 90s or early2000s.
This boxy living room wasseparate, the dining room was
separate.
The kitchen was a separate room, because that makes it easier
for us to convert those rooms toextra bedrooms, and so what's
great about this model is thatthose homes don't fly off the
shelves anywhere.
People see them as a little notdesirable.
We get to take homes that areolder, larger and maybe not
(16:49):
super desirable and we get toturn them into something.
I can't tell you how manyco-living homes I've bought that
have been on the market for 100days, 120 days, 150 days,
couldn't move.
And then I come in and I lookat it.
I'm like, oh, actually,actually it's perfect for
co-living because, look, it'sgot all these little rooms and
it's broken up really weird.
Terrible for a single family,but perfect for co-living.
Ed Mathews (17:07):
And that's the homes we get to snag off the market,
which is really great, which isawesome.
Less competition when you'reacquiring is a beautiful thing,
yeah exactly that's the otherthing.
Sam Wegert (17:13):
Like, as the investor, I get a cheaper deal
because I'm yeah, I to give mylow ball off Right on your
approach?
Ed Mathews (17:20):
How do you approach a deal?
You find a 2,000 square footranch.
Right, that's all boxed up, nogreat room.
It's a kitchen, living room,dining room, the usual setup.
How do you approach thatproject and what are you doing
to make this a co-living?
Sam Wegert (17:37):
property.
It's really a simple process.
I'll outline it from a veryhigh level view.
First, we're looking for a fewthings in the home.
I've already mentioned some ofthose.
Is it boxy?
The more bathrooms it has, thebetter, because I always want to
keep a three to one bedroom tobathroom ratio, meaning I never
have more than three peoplesharing one bathroom.
Perfect world, two peoplesharing one bathroom.
Or, in a perfect world, oneperson only having a private,
everybody having a private bathwould be perfect, but obviously
(17:59):
that's adding a lot of bathrooms.
So you've got those things Ilook for.
I'm also going to look fornon-HOA.
I'm going to look for kind of aB minus or B plus neighborhood,
something that kind of fitsblue collar neighborhood, where
people aren't going to be superpissed off if there's an extra
car in the parking lot orsomeone's parking on the street
I'm looking for.
That's.
The other thing I look for isno-transcript, and so I'm
(18:28):
looking for those things.
And then when we go in we justbasically say and 2,000 square
foot or bigger, and then fromthat point, if it checks all
those boxes, we buy it and thenwe just convert every square
inch of the space, except forthe kitchen and one small common
area to a bedroom.
So you might say, well, are youserious?
What about the dining room?
Yep, that becomes a bedroom.
(18:49):
What about the living room?
What if there's a second livingroom downstairs?
What if there's a full basement?
I'm taking that three or fourrooms.
The way I think about it is, ifwe're in an affordability
housing crisis and tonight inAmerica, by the way, there are
600,000 people, think of howmany stadiums 600,000 people
would fill up.
That's how many homeless peoplewill be in America tonight, and
so if we have a crisis to thatlevel, you better bet I'm using
(19:11):
unused space for a bedroombecause we need it, and so
there's a huge demand, huge need, but I am going to leave the
kitchen, obviously, becausethat's a shared area, and I'm
going to leave a common area,because that's a shared area as
well, where people can eat.
I'll put some desks in therefor people to do co-working.
That'll be a cool kind ofcommunity space.
Every square inch, though,becomes either a bedroom or a
bathroom.
What about a garage, sam?
Yeah, garage too.
We always convert garageseither into two rooms, two
bedrooms, or we're going toconvert it into the common space
(19:32):
so that I can use more space inthe house that's already
obviously better heated andcooled for rooms, so rooms.
So that's in essence what I doNow.
A lot of times, if I have a2,500 or 3,000 square feet, that
means I can get nine or 10rooms out of that, and to some
people that might sound crazylike 10 people.
(19:52):
How do they not kill each other?
There's a lot of nuances on themanagement side of things that
we have to think.
You have to keep this thingclean.
You've got to keep it quiet.
Ed Mathews (20:06):
You have to keep it safe, but that's a general
overview of how we make thishappen.
Okay, so you mentionedmanagement, because that was
actually one of the questions Iwas going to ask.
How do you smash six, eight, 10people who don't know each
other into the same house wherethey're sharing a common area?
Sam Wegert (20:11):
How do you manage that?
I would say.
The answer to that question isthe number one reason.
Everybody first sees co-livingfor the cash flows.
Whoa, I can make a thousanddollars, $2,000 net on a single
family house.
That would normally negativecashflow.
Oh my gosh, that's amazing.
So, for example, one of myeight bedroom homes recently
when I did the rent appraisal,they said, hey, it'll probably
rent for 2,200 bucks.
We ended up renting out for8,500.
And it's just like that's.
(20:31):
Actually that was a 10 bedroomhouse.
So we're, you know now, granted, we pay utilities, we have
different management costs, moremaintenance.
There's what people see on thefront end, but let me pull back
the curtain and show you theback end.
The back end is it's hard.
It's hard to manage thesethings.
There is a lot of systems.
I've been doing this for adecade and a half, believe it or
not.
There's a lot of little tweaksand systems and things that have
(20:51):
to be in place and I'll sharesome of those.
Like right now, there's threethings you have to do.
One has to be clean and if it'snot consistently clean, people
won't want to stay there.
So what does that mean?
That means that people have tocontribute to the cleaning.
It means you have to havecameras in the common area to
ensure people do their disheslike simple things like do their
dishes after they put them in.
(21:11):
There has to be someaccountability around that.
There have to be some fines ifthey don't do it.
And there's professionalcleaners that come in twice a
month to clean the common areastwice a month to clean the
common areas.
There's some little systems andrules and things they have to
sign off on that just make thisasset class nuanced.
Everybody would be doing it ifit was super easy, but there's
some codes you have to crack sothat's clean.
Quiet is the next thing.
You have to have some quiethours.
People have to go to headphonesafter a certain hour in the
(21:34):
night.
Otherwise, people who workfirst shift or second shift are
just going to go crazy, havecertain noise restrictions
similar to, like an airbnb, wemight have quiet hours after 10
or something like.
You have to have that.
And then the third thing is youhave to make it safe.
If it's not safe, people won'tstay there.
So you have to have rules, likeyou can't have weapons in the
house, right, you have to andyou have to be able to enforce
those.
You have to be able to kickpeople out if they break a house
rule.
You have to have cameras on thefront.
(21:54):
We put cameras in the commonarea of these homes.
We have to be able to havethose accountability things.
We have to have individual doorlocks on all the doors so they
feel okay, this is my littleprivate space that I can lock
and I can get in and out.
And then, obviously, just howyou vet your members is just so
crucial.
Are you doing background checks?
Are you ensuring they've hadsome experience with shared
loving before?
Not that we wouldn't acceptsomeone who's brand new, but
(22:15):
setting the correct expectationsfrom the beginning is
definitely the number one thingthat sets them up for success in
the backend.
Ed Mathews (22:22):
Right on, and you mentioned something about if
they break a rule they losetheir membership.
Does that fall under evictionlaws or is there a different?
Because I've been payingattention to your language.
You don't call them tenants orresidents, you call them members
.
So walk me through the nuancethat you're dancing.
Sam Wegert (22:39):
Yeah, there is a fine line and I'll just pull
back.
I don't mind being totallytransparent, Thank you.
I used to use leases and I nowexclusively use something called
a membership agreement.
It's similar to think of likeyou join a fraternity club and
you have a membership with them,or you join a country club and
you have a membership with themand you pay dues.
That's basically how this works, and so what that allows me to
do is, if you set it upcorrectly, you are able to step
outside of normal tenantlandlord relationship.
(23:01):
Now, I'm not a lawyer.
I'm not giving your listenerslegal advice that this is how.
I'm just sharing what we do.
That does allow you to useprivate security to kick someone
out and I've done this beforeto remove their if they don't
exit when you terminate theirmembership.
So you can do that.
Now here's what we found.
We're a little bit at scale Now.
We're not at.
My community would probably2,500 of these 12-in-a-door In
my community.
My wife and I own 250 or so,and then we manage a few other
(23:25):
hundreds, Depending on the state.
We found that you can also gothrough the normal eviction
process.
So in North Carolina, 95% ofthe time we're going to go
through the normal evictionprocess.
There might be some situationswhere we forcibly remove someone
from the room and we have theability to do that with the
legal agreements.
It's not hard, it's actually avery easy process.
We're a very landlord-friendlystate.
It costs a couple hundred bucks.
So, okay, we're going to justgo through that, but you do have
(23:46):
the ability to do that.
That's why we call them members.
We have this membershipagreement.
The membership agreement alsohelps us in some of these
jurisdictions that have theserestrictions.
Technically, the way that thisworks is I'm only leasing my
house.
I'm leasing my house to oneother company, and that company
then has hundreds of membershipagreements.
If someone were to say, Sam,how many leases do you have in
your house?
The answer would be I have onelease on my house and that's it.
Ed Mathews (24:08):
Now, who holds that lease, though?
Sam Wegert (24:10):
Another company that I also maybe own, and that
company is a membership companyand it's the one leasing the
house on behalf of all thesemembers.
A few documents that are neededto set this up and that are
needed to set this up.
And we pay lawyers lots ofmoney to get creative in this
space.
But that's what's great aboutAmerica we can get creative
right.
That's literally how new stuffis formed in America.
All the time is lawyers gettogether and go.
Why don't we do it this way andthis way?
And we still follow the raw law, but we're creative.
Ed Mathews (24:32):
Yeah, and let's all keep in mind you're solving a
major problem for folks in awhole lot of trouble.
If you don't exist, right,that's okay.
So talk to me about do you takeoutside investors, or is this
done in-house, or how does thatwork?
Are you the case joint ventures?
Sam Wegert (24:53):
I've seen it done lots of ways and I can speak to
all those ways because I coachon all those ways.
But if someone asks me hey, sam, what do you do, I tell them
I'm all done on co-living, and Ibuild, I teach and I manage.
So we are in the process ofdeveloping our first two
co-living buildings that areduplexes that are built for this
model.
So a lot of bedrooms, a lot ofbathrooms.
We manage, meaning we have amanagement company, but
(25:13):
unfortunately right now I onlymanage for my students, just
because the management is soheavy.
And then I teach and so I runthe largest masterminding course
that teaches people to get intothis in a way where they don't
lose a ton of money and theyknow the nuances going into it
and they do it profitably fromthe very beginning.
There's a recipe to follow, sothat's what I do.
And then, of course, my wifeand I buy these all the time.
I don't take outside investors.
Right now We've just used ourown capital and my wife was my
(25:35):
biggest investor.
So he watched me do it for afew years and then said I've got
some money, let's buy some moreproperty.
So we just always kept it alittle bit in-house that way,
but I have some students thatare doing some syndications.
I have some students that areraising capital.
I have seen people do it everysingle way right now.
What's great about this modelmaybe as a little comparison to
(25:56):
multifamily is you can actuallykeep this in-house, meaning a
single family home.
You can get a 10% down vacationon, you can move into it and
hack it for a minute and dohouse hacking and put only 5%
down.
I mean this is great for peoplewho, like I, can keep this in
and that can go up in value.
That's how we've done it and Ilike it for that reason.
It's easy to get into.
It's a lower barrier to entrythan, say, buying a multifamily
(26:17):
deal.
Ed Mathews (26:18):
Absolutely, I know I get it, but it's interesting
because I'm thinking like you'retalking about some of the loan
products that are out there.
I'm thinking VA loans, right,where I did 3% down payment.
You can live there, you canconvert that house into a
co-living house and then moveout and do another VA loan for
your next property.
(26:38):
It's a nice way to grow yourown portfolio as you go along.
I'm sure students do.
Sam Wegert (26:43):
It gets even better than that.
You can, if you want, hackother people's loans.
So here's how some of mystudents have done it and I've
been so impressed with them.
You can go to someone and say,hey, you have a job and you can
get a primary residence loanwhich is 3% down, or a VA loan
sometimes it's 0% down and youcan say, look, I'll give you
(27:04):
free rent in a home for a year,but I'd like to use that loan,
and so they would move in andyou would.
I mean, there's some nuancesfrom the legal title side of
things of this, but that can beworked out.
There are some strategies forthat.
But in essence, you can hacksomeone else's loan because
you're only allowed one a year.
But I can go to and I've goneto my like I have a bunch of
siblings.
I'll give you 10% of this houseplus, or I'll just pay them.
I'll give you 10 grand, butyou've got to move into this
home and then the home's goingto be mine, but you get free
(27:26):
rent for a year, and so there'ssome fun strategies Right,
there's always into your firstone or two.
But here's what's great aboutthe strategy.
Let's say, you get a home andit's not uncommon.
For one of these homes Athousand dollars a month net is
the bottom line.
We won't even look at it unlessit spits out of a thousand and
I'd say there's some crazyexamples I could give you of one
home, 14 bedroom home inHouston, doing $5,000 a month
net, but it's very rare.
(27:46):
They put a lot down, but one tothree.
So let's take an average personin thousands of dollars one to
$3,000 a month in net income.
That's the range of what we'reseeing in different cities
around the United States.
So what I'm saying is you don'tneed a hundred if you're a
normal American and you need 6Ka month, which is $72,000 a year
, and that covers a lot of yourbasic expenses.
(28:08):
That's two or three homes, notthe first ones you maybe see.
You find you research.
You say no to a bunch but, likeI'm saying, that's the power of
this strategy if applied anddone correctly applied and done
correctly, thank you.
Ed Mathews (28:24):
That's why I love it .
It's like I said before westarted recording.
This is a situation, a problemthat I'm grateful that you and
other people that are doing whatyou do are solving.
I'm also really grateful thatyou're teaching other people how
to do it, because that's thefastest way to get to scale and
solve this problem.
In total and you've mentioned acouple of times and I'm going
to make you talk about it isyour school, so tell me about
(28:44):
the training you provide and howdoes that work.
Sam Wegert (28:46):
So we run a program that is two aspects it's a
course and it's a mastermind,and what that means is there's
an initial course to get youfrom zero co-living homes, even
if you've done a bunch of realestate before.
Obviously this asset, just likeindustrial, is different than
multifamily, it's different thansingle family, co-living is
different from all of those.
So there's a course that getsyou from zero co-living homes to
one co-living home and it's astep-by-step guide that walks
(29:07):
you through to get to one.
After that, two is easier,three is easier, four is easier,
everyone gets easier after that.
And then we have an ongoingmastermind that just supports
you.
So that's calls live to scale.
Yes, yeah, we've got somescaling programs as well.
One of my students recentlyjoined our program, less than a
year ago, and him and hispartner now.
Granted, he found a partner inour program and he just texted
(29:29):
me the other day and said we'reat 180 units and I was like less
than a year co-living units andI was like, dude, that is
insane.
Granted, he came in with adecent amount of capital.
He had sold some stuff, so hehad a chunk of change that he
was ready to go.
But that's what's possible inour program if you fly yourself,
and so I love doing it.
I've got a bunch of coachesthat help me out with it.
I'm really passionate about it.
We're always improving it andmaking it better and just super
(29:49):
excited for that.
Awesome Congratulations.
Yeah, if someone's interested,we do give a free resource.
If someone wants, we do a fiveday challenge, which is a deep
dive into this strategy.
It's completely free.
We don't charge a dime for it.
There's an offer on the end,but it's not a hard pitch at all
.
It's just like hey, if you guyswant to continue here, it is,
but it's a scale your realestatecom.
So if anybody's interested,scale your real estatecom, they
can just go there and get on ournext one.
(30:11):
I do one a month.
They're live, so I'm thereinteracting with you guys and
connecting and it's let's getinto the final five.
Ed Mathews (30:19):
I appreciate and I've learned a lot in this
37-minute masterclass thatyou've provided, so thank you.
But I want to know more aboutyou individually.
You wake up on Monday morningand the mortgage is paid, the
kids are taken care of, collegeis handled, no car payments, all
(30:45):
the things that a husband andwife need to do, or a couple
need to do in order to be good,right, that's all taken care of,
and yet you still go out, getout of bed and I suspect you're
that guy and yet you get out ofbed on Monday morning and go
headfirst, diving right backinto the office to continue to
build your business and helpyour students and all that I
call that purpose.
Sam Wegert (31:00):
What gets you out of bed?
What's your yeah, man?
I think it's an interestingquestion and I might give a
nontraditional answer to it,because this has been something
I've been diving into my liferecently.
I'm not going to lie.
I've been in a season of lifewhere I've been asking myself
that same question.
I'm like, what is my purpose?
Why am I here?
What do I really want to do?
And I started working when I was13 years old.
I started working 60, 70 hourweeks when I was 13 years old,
so I'm in a place where and I'vegone I'm 34 now, so I've been
(31:22):
13 to 34.
I'm like I've been going hamcrazy, Didn't go to college.
Hard work, and so I'm in pastand I'm just going to be really
honest is necessity and I don'tnecessarily mean financial
necessity and I think there'ssome value to what I'm going to
say for people who are listening, because I don't think I'd be
(31:44):
here today if there weren't alot of other people that relied
on me.
For example, I would love toquit right now, Like I'd
literally love to turn it down.
I fantasized about it for thelast two years.
I told my wife I just want togo to Mexico, this little town
in Mexico, Mizzou, that I loveand I want to go.
I have people that rely on meand they keep me going and so I
do it because there are peoplewho need me care and that I care
(32:04):
about enough that I have tokeep going, and that's what gets
me up is those people, and Ithink that's valuable, because I
think if anybody wants to getsomewhere in life, it is not
going to be.
You need external resources topush you, Like we will only do
so much just for ourselvesPurpose.
I'd love to tell you I havesome big purpose to solve
affordable housing, andsometimes I do think we will
(32:26):
actually completely solveaffordable housing with this
method and that's fun and thatdoes get me up in the morning.
Ed Mathews (32:44):
But if I had to give you the real answer, man, I
would say it's taking care ofthe people that rely on me,
taking care of the people thathave paid me, taking care of the
people that have entrusted mewith their lives, their
financial future, and I need toshow up for them.
I need to show up for my wifeand my dog, who's laying next to
me a little pissed off.
Thank you for that.
I agree with you on multiplelevels there.
With regard to mentorship,you've mentioned that people
have helped you along the way,and so I'm curious about the
best advice you ever got and whogave it to you man, I'll give
you a piece of advice.
Sam Wegert (32:58):
That may seem out there, but it's something I've
just been preaching my team.
I'm a big Tony Robbins like guyand Tony Robbins is all about
raising your standards.
But one of my mentors pulled measide one time and he said Sam,
stop trying to be Tony Robbins,you are killing yourself.
You are trying to be excellentall the time.
You're.
Basically, he was like you'retrying to be too good all the
(33:18):
time.
I was like what the heck do youmean?
Man?
He goes.
I need you to lower yourstandard.
I was like what the heck areyou talking about?
That's not me.
I'm Tony Robbins.
I'm raise your standard.
He goes.
I'm going to teach yousomething that will be very
valuable.
He said which you hit yourstandard and you have, in an
essence, raised your standardand he goes consistently good,
(33:39):
always outperforms occasionallygreat, and he goes, Sam, you're
trying so hard, You're showingup occasionally great and you
just need to be consistentlygood.
And it was a juxtaposition tomy entire life, which is like
Tony Robbins go, explode,explode.
And I just dude.
I've just been preaching thisto my team Cause like, for
example, my team built out thiswhole flow for member concerns
(33:59):
that we get from these members.
I was like guys, ain't nobodygoing to do it, it's too big,
it's too beefy, it's too this.
I said we need them to watchone video, not 20 videos, and
they lower the standard.
We raise the consistency withwhich we hit the standard and
we've, in essence, raised ourstandard, and that's frankly
what I'm trying to do in my life, because I'm the type of guy
(34:20):
that wants to make everythingperfect, everything amazing,
everything great.
It's like you can't do it, it'snot possible, it's not human.
Ed Mathews (34:25):
Chill me.
What is, professionally, amistake or a decision you'd love
to have back?
What did you do about it?
My list is very long.
Sam Wegert (34:34):
I'll give two, because one's very relevant,
one's like a bigger picture.
I like to move forward fast, sosometimes when these
wholesalers come to me withdeals, I'll buy a home sight
unseen and I've done that a lotof my career actually.
But I will never buy anotherhouse sight unseen just because
there is a difference betweenGoogle earth and Google maps,
and the video that the guy sendsme I'd seen it in person.
(34:54):
So I just bought a houserecently.
I was just like why?
Ed Mathews (34:56):
didn't I buy this house.
Sam Wegert (34:57):
I already paid cash for the entire house.
It was a wholesale deal.
So I was like and then I didthis and I was about to buy a
second house, sight unseen,because I just trusted my team
and I was like, no, I'm going tojust quickly zip out there and
see it.
I did I.
It's different.
I didn't like it.
That's like a quick littlelesson that I think even for
experienced investors isimportant.
And then the second lesson Iwould say mistake is there's a
(35:19):
great book that I recommendeverybody read.
It's called who Moved my Cheeseand it is a book about when
markets change.
People hold on to what theyknow and they need to update,
(35:40):
and so for me that was.
I was in the martial artsindustry.
I built a chain of martial artsschools for 15 years.
I hung onto it because it wascertain and it literally took an
act of God.
Like dude.
My brother, who was like myright hand guy in that business,
literally had to go to jailbecause get on drugs and do all
this crazy stuff.
That happened, and a friend hadto literally come down and be
like you must sell this businessfor me to then transition to
full-time real estate, and Ijust feel like I held onto it
about five years too long, andin life things move.
Asset classes change.
What was good two years ago isnot good.
There are just things thatadjust and I wish people would
(36:04):
be like okay, I'm moving on tothe next thing, and sometimes
that's just what has to happen.
And so if anybody struggleswith that, like I did, who moved
my cheese, a great book to belike, the cheese has moved
Rewards and the spoils are notwhere they used to be we got to
move on to something else Righton.
Ed Mathews (36:19):
And so you mentioned a book, so let's talk about
that.
How do you sharpen the saw, soto speak?
What are you reading these days?
Or, if you don't read, how doyou take in information and who
are you paying attention tothese days?
Sam Wegert (36:30):
Yeah, man, I'll be honest, Tony Robbins for sure.
And just in terms of resourcesand books, I just recently read
a book called a hundred milliondollar leads.
I haven't finished it yet, buta hundred million dollar offers,
those are two great ones.
Who else am I paying attentionto?
I'm always in a mastermind.
I'm always in a group.
I pay attention to Pace Morby'sgroup and kind of what he's
doing with the sub two community, cause I have a season of my
life where I listened to everysingle person that I possibly
could.
(36:50):
And I told you before I quit, amastermind I'd been in for 14
years, not because I thought itwas bad, but because I just
needed to hear my own voice.
I needed to hear what Samwanted and thinks.
This season of my life rightnow is actually less about
reading.
I'm journaling for an hour totwo hours a day.
I'm journaling about myrelationship and it's been.
(37:10):
Really, if no one has ever, andif you've never journaled and I
know I'm going to get somehaters for saying this, but if
you've- never journaled to.
ChatGPT.
You should Just know that itcould come up in a court case.
They can subpoena this stuff.
So be careful what you tell itor delete it.
I love old school too, ed.
I've got a notebook in front ofme, but ChatGPT has been fed
(37:35):
millions and millions oftranscripts from actual
counselors and coaches and allthis stuff.
So it does have a good format,it knows coaching and so, yeah,
you can just go to Chachibitiand be like I want you to be a
coach, I want you to be acounselor.
I want you to reflect this backto me.
What am I missing?
What am I not seeing?
Talk about anything.
And keep in mind I'm a guy whohired a Tony Robbins coach at
age 14 or 15.
So I've been in the coachingworld for a long time and some
of the things that ChachiBT willspit back to me and be like hey
(37:56):
, I think you should think aboutthis and this, I'm like it's
deep and it is good.
Surprisingly look over myshoulders.
Good, and it's instant.
I don't have to get on a call.
I can just feel like here's anemotion I'm feeling today, like
I'm feeling this and this and Ireally don't want to do this and
it'll be like no, you need tostick to your commitment because
of this and this, and here'swhat you could do.
But if you do, this is who youwould become, and this is no
like done, got it, I'm going todo.
(38:17):
It's amazing.
So I've been journaling a lotto it.
I just a lot of my friends havetoo, and they were just
experienced really great results.
Ed Mathews (38:23):
So I know some people have some weirdness about
AI, but I would highlyestablished a board of advisors
on my chat GPT account projectthat's set up.
And basically I said we've gotCar Street Academy and we're
trying to launch this and I needRussell Brunson, alex Hormozy,
(38:49):
ann Hadley, frank Kern to walkme through a launch strategy so
that we can add the most valueand all the things we want to
accomplish.
And it gave me that's awesomelaunch strategy so that we can
add the most value and all thethings we want to accomplish.
And it gave me that's awesome,and I'm going back to it now.
Hey, this is what I'm seeing inthe market.
This didn't work.
How should we react?
How should we handle this?
And boom more information.
That worked.
Okay, cool, that's resonating.
I now have a world-class boardof advisors living under the
(39:12):
umbrella of ChatGPT.
So I'm right there with you onthat one, brother.
That's amazing, dude.
I love it.
Let's talk about success,because I'm really interested to
hear how you answer this Inyour own life, and I know you're
in a specific season right now.
How do you today define success?
Sam Wegert (39:29):
Yeah, I wish I had good, nice, canned answers for
this, but I really don't.
How do I define success?
It's definitely changed.
I'll share something a littlevulnerable that I just realized
yesterday.
It might be a little too earlyto share this, but I'd say the
number one reason I chased moneygrowing up was because I wanted
to be loved by the peoplearound me and I just somehow in
(39:49):
my head I got connected.
I was like, oh, if I couldimpress my friends I was part of
this friend group that was likenever really fully accepted me
and if I could press my parents,I can press people.
I would get more attention andlove things I didn't think I did
when I was a kid by having aton of money and I accomplished
the goal by all worldlymeasurements was the youngest
(40:12):
person to join a millionairegroup, built my company to multi
millions, and so all this waslike good check marks.
But I think what happened is Irecently woke up and was like
dang, actually having more moneymeans you should have more
conflict, like fire people andhire people Like I went the
wrong way if I'm looking forlike love and acceptance in my
(40:33):
life right, and so one of thethings that I would say how I
define success.
Now it's slowly shifting.
For me Definitely used to be allby money measurement terms,
even recently, even if you'dasked me this a year ago, I'd be
like did I hit my net worthgoal?
Did I hit my net income goal?
Did I hit my net income?
Net worth, that's all I wouldmeasure.
I don't care about gross, Idon't care how much money you're
making, I don't care how muchmoney you're taking home, that's
all I care about.
(40:53):
But recently it's just shifteda little bit more.
I've had some health concerns.
My sister just passedunexpectedly, very recently.
She kind of rocked me to mycore.
I meant she was 36, and sheleft a five-year-old kid behind
and her husband.
It was just so sad.
I'm still reeling.
Am I like having fun?
I have more money in the bankaccount than I've ever had in my
(41:14):
entire life.
Is that who I want to be?
I recently spent some time inColombia, the country of
Colombia, and in Colombia theydon't care how much money you
make, they care about socialmedia.
Following it's a differentculture, and just being around
different cultures makes yourealize it's actually a very
American thing.
It's a very specificallyAmerican thing to think I'm
competing against you.
I'm better than you in money.
I have more success than you.
(41:35):
Not everybody thinks that way.
Most cultures actually don'tthink that way.
I say all that to say, I think,just like enjoyment of my life,
spending time with people thatI love and that I care about has
definitely started toinfiltrate my version of success
more than it ever has.
I'm 34.
So, you know, I think it's anatural tendency of men, maybe
young men especially to gothrough this like significance
(41:56):
phase and then they're like, ohwait, is that all there is?
And I'm like, no, is that allthere is?
And I'm sure I could learn alot from you and that as well,
but that's my journey right now,man.
That's awesome.
Ed Mathews (42:05):
That revelation for me hit about 31, I think, so
you're right on track.
Wow, I've been working at thisfor so long to accomplish this
and I just accomplished this.
Is that all there is?
It'll happen multiple times inyour life.
I'm in my mid fifties.
It's happened at least twicesince then, and that's a good
thing, that's growth.
Sam Wegert (42:25):
What's the number one piece of advice you have for
someone in that season?
Give yourself some grace.
Ed Mathews (42:30):
Give yourself some grace.
You are on a path and that pathis your own.
Don't compare it to anybodyelse, and if you're not where
you thought you would be, that'sokay.
You can't do anything aboutyesterday.
The only thing you can affectis right now and tomorrow.
Give yourself some grace and bereally as present as you
(42:51):
possibly can.
I relive them even really aspresent as you possibly can.
I relived them even, and one ofthe things that did to me was
it sabotaged things that I wasworking on because I was so
fixated on things I got right,things I got wrong, and what
happened was I'm sitting at adining room table with my two
daughters and my wife andthey're having a great
conversation, and I'm stillthinking about the mistake I
(43:11):
made and I'm not hearing any ofit.
And learning very late in lifeto give myself a little bit of
grace has been revolutionary,and I'm talking in the last
couple of years.
Sam Wegert (43:23):
That'd be.
That's brilliant.
Thank you, I received that andthat's very timely.
Ed Mathews (43:26):
Thank you.
So, sam, I've really enjoyedthis conversation.
When you're not talking aboutco-living and helping other
people achieve their dreams.
What do you like to do for fun,say?
Sam Wegert (43:36):
that last question one more time.
Ed Mathews (43:37):
When you're not saving the world from not enough
affordable housing and helpingother people achieve their
dreams, what do you like to dofor fun?
Sam Wegert (43:44):
Yeah, I'm learning a lot about fun, but I love
hiking.
I love anything outdoors, man,anything in nature.
So hiking, biking, camping,traveling, being on the water, a
, a boat, just like anythingwith my friends and my family
usually outdoor stuff is.
My most pleasurable place iskind of my home skiing.
I have a 20s deal right now soI'm not doing much of skiing or
and it's killing me, but I'mworking on that, so that's my
go-to.
Ed Mathews (44:05):
Yeah, fortunately it's august, so you got a little
bit of time to kill, and ifpeople want to learn more about
you or your companies, what'sthe best way to get in?
Sam Wegert (44:13):
man, the best way, I would just say, is going to
that website that I gave you,www.
scaleyourrealestate.
com.
If someone's interested tolearn more about co-living, or
they can just follow me onInstagram at Sam Wegert
W-E-G-E-R-T.
And connect and follow me there.
Ed Mathews (44:27):
Awesome, Sam.
Thank you so much for your timetoday.
I am blown away by you and yourbusiness.
Congratulations and continuedsuccess.
I wish you nothing but the best.
Sam Wegert (44:37):
Thank you, Ed.
Same to you, brother.
Thanks for the opportunity tobe on.
I really appreciate it.
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