1479: Build Generational Wealth Through Real Estate: Grow Passive Income and Long-Term Returns with Real Estate Investors and Syndication Experts Sam Farman and Joseph Escamilla

Robert Plank 0:00 Sam Farman and Joe Escamilla are the CO owners of generational wealth partners. They are a real estate syndication group that is helping to lower the barrier of entry on real estate investing. For individual investors, they strive to provide those high long term yields in an honest and principled fashion, they provide investors with voting rights on major equity decisions. So we're going to hear about these two amazing guys. It's Sam and Joe, and we have Joe in New York and Miami. We have Joe in Charleston, South Carolina, and we're gonna have to be talking about real estate, partnering, building a business, and everything that goes along with that. So Sam and Joe, glad to see you guys. How the

Joseph Escamilla 0:48 heck are you doing? Well, thank you, Robert. Appreciate the intro. Happy to be here. How you doing?

Robert Plank 0:55 I'm fabulous living the dream and doing a rare two on one session. Sometimes we do one on one, but we like to mix it up. And it's always great to talk to real estate guys, because they just, they, they exist on a plane of risk that is just insane to the rest of us. And there's all this, like forward momentum. And this is kind of like going where the actions that it's just, it's always a sometimes I don't understand half the real estate stuff that gets spoken about. But hey, someone who's listening does, and it's always just good to pick up a little bit of a scent of the the high energy and the success fumes. So it's glad to be speaking with you. And so as far as what you guys do is and your uniqueness, is there anything left out of that bio? Or what do you have to say? If someone says, okay, these guys, Sam and Joe, are they right for me? As far as real estate investing, what should people know?

Joseph Escamilla 1:48 Yeah, great question. I mean, Joe and I have known each other quite some time. We started out as college soccer teammates and we grew that relationship into a business partnership. I think the reason we work so well together is just an alignment on on morals, ethics, long term goals, all that, all those crucial things that are key for a business relationship we had from the get go and in terms of what else somebody would need to know in order to invest with us, I think everything you said with the intro hits the nail on the head. The only thing I would add is Joe and I started doing this, of course, with our own money, prior to opening it up, to raising capital from outside investors. So we did our due diligence and paid our dues, risking our own capital first and learning, you know, there were definitely highs and lows, don't get me wrong, but much more highs, I would say, to the point that we felt confident to take on outside investment.

Sam Farman 2:53 Yeah, one thing I'll add to that is, you know, Sam and I have the utmost trust for each other and between us as a partnership. I make the joke that our operating agreement is this. It's, you know, us shaking hands with each other and saying, I got your back. You got mine. We trust each other wholeheartedly to the hilt. The only reason why we actually have a formal operating agreement is because the lenders require it. That's for our personal deals, obviously, for the syndication we have, we have all that sorted for the paperwork. But my point is that having a good partner in business is paramount to anything you could have the best product, the best marketing, the best sales, all that's great. But if who you're working with is somebody that you maybe don't trust, then you're you might be in for a rude awakening. So I think that's what kind of makes us successful, is that we have that underlying faith in each other, that no one's going to slack off. We're going to pick up the work when somebody's on vacation, etc. So that's what I would say kind of makes us, you know, the best, that we can be

Robert Plank 3:59 very nice. So trust and integrity that way you don't have to be double checking, and you don't have any kind of kind of expand and go further. And so as far as you guys said, like, you you met, like, coaching soccer, and that led to other stuff. So like, can you explain that? Like, play, oh, playing soccer. All right. So like, how did one turn into the

Joseph Escamilla 4:21 other? Yeah, I mean, it's a great question. So Joe actually is a year older than me, and he got me an internship at the company he still works at today, which is a mortgage lender, and the two of us learned a lot that summer. He had already worked his second year, my first year, two of us learned a lot about, you know, background of real estate, a ton about the 2008 housing crash, and just a lot about, you know, the background of of lending and property purchasing and investing. Joe continued to work there, and still works there today. But that really started the. Seed for us, where then we realized that that was something of interest to us. Joe actually bought me a copy of Rich Dad, Poor Dad for like, I think, my 21st or 22nd birthday, and we continue to just provide each other resources, discuss property investing, discuss market trends. And it grew and grew and grew to the point where we realized, I think I was 22 when Joe was 23 we realized that there was no more time to sit on the sidelines. It was time to start actually doing this

Speaker 1 5:35 amazing and so how does, how did those first few deals go like, you know, that's one thing to kind of, like, kind of mentor each other in a way back and forth. And like, you know, recommend this book, or kind of go on there. But as far as, like, turning it into making money, that's a whole other step, right? It's one thing to have a friend, but then when money's involved, it requires even more trust. So like, what were those first few deals like? Was it like, rocky at first, or was it all just smooth sailing bromance?

Sam Farman 6:04 I would say the relationship has always been smooth sailing bromance, but the deals are a roller coaster. You know, there's going to be highs, there's going to be lows. We've learned more from our mistakes than from our successes, and we just continue to try to fail forward, you know, like, if we make a mistake, we're just pivoting to the next thing and the next thing and the next thing, the first few deals to get down to specifics. I actually did. We actually did our first couple deals separately. I bought my primary residence that I did a live and flip. So I lived in it for two, two and a half years, slowly flipped it over time and then sold it. And then Sam's first deal was an investment property. Kudos to him. He actually bought an investment property before he even bought a primary residence for himself, which is amazing. And then we combined forces and bought our first duplex together. That went very, very well. And we just kept compounding from there. And it was just like a domino effect

Joseph Escamilla 7:07 to add on, to add on. The first duplex together went extremely well. Now it was at a time where everybody was crushing it in real estate. So I don't want to tip our caps to ourselves too much, but at the same time, you had to be in the game to take take advantage of the rewards, right? So what I do commend us for is not sitting on the sidelines. And we did walk away from that property with a very, very sizable return, which we reinvested in via 1031 exchange into another property that we own still today. But then we also were able to, even before doing that, do a cash out refinance, and use that cash out to purchase another property, just to show you the power of real estate, right? Joe and I pooled our funds from our w2 jobs and used it to purchase one duplex, which we then renovated using the funds from our w2 jobs, we then were able to do a cash out refinance on that, pull the equity out of the property into cash and use that to purchase another property, and then a couple years later, sell that property and use it to buy a four unit. So we purchased an original two unit and renovated it. And excuse me, that turned into a three unit which we bought via the cash out, and a four unit which we bought via the 1031 exchange. So two units turning into seven is a pretty over two and a half years is a pretty solid trajectory of and, you know, shows you the power that real estate holds when used correctly.

Robert Plank 8:44 Oh, yeah. And along those paths, I imagine that there's been others that have tried what you've done and failed right, or made like too risky or stupid decisions. So how does someone do what you did where you kind of like expand your sprawling empire without maybe sometimes people hesitate, or they make excuses, or they get too risky. So how do you know if you're doing it correctly?

Joseph Escamilla 9:12 Go for it. Sorry to cut you off, but I think it comes back to the partnership. Joe will kill me sometimes, not actually, but just like he'll try to slow me down, where we always say, if it wasn't for Joe, I would buy anything good deal or bad deal. And if it wasn't for me, Joe would only stay on the sidelines, and then together, we only buy good properties. So Joe is, to his credit, hyper, hyper conservative. He's great with his analysis. He makes sure that we only, only purchase great deals, whereas I'm out there basically analyzing everything. And honestly, if, if it comes back even somewhat Okay, I'm ready to go and Joe then steps in and we call them our horses, and we decide to. You know, just make sure that we're extremely, extremely conservative with our numbers, because that's the best way to make sure that you're going to be in a good spot in case something goes awry.

Sam Farman 10:09 Yeah, it's a perfect balance of action and analysis. You need both. But how much do you put in the formula? You know, if you have too much action, then you might be in a bad spot, because now you're taking huge, huge risks without really putting any guardrails. I like to make the analogy that you know, your first time driving, you're not going to get in a Ferrari and drive on the side of a cliff in Italy, you know, and try to do Tokyo Drift stuff like that. Like, yeah, you're probably going to die if you do that your first time ever driving. But if you drive, I don't know, a Honda Civic in a school zone or in a parking lot, your first time, you're probably going to be fine. Worst case, maybe you hit a curb. I think you could recover from that. So I think it's just knowing your limits and also trying to push that limit further and further to an extent, but with within reason?

Robert Plank 11:08 Yeah, I like that analogy a lot the kind of pushing your limits, and that applies a lot of stuff, right? Like you're if you're driving, if you're exercising, if you're growing a business like you kind of start small that way. You're not just replicating your mistakes, but then you also have that healthy appetite to keep going for more. And you know, when you guys are talking here about kind of your dynamic, you're making me think about, like, the different they're like, there's there's, you know, romantic relationships, there's business relationships, there's, like, one year, there's 10 year, and it seems like there is the need to have the kind of the good cop, bad cop, right, the kind of the radical and the conservative to balance things out. Because if there was a clone of you, then that, that wouldn't really provide value. And then if you're too different, and that's not good, too. And sometimes, like, you know, relationships, people grow apart. So, so you guys ever, like, think about that. Like, if there was two Sam's or two Joe's, like, that wouldn't really work. It's like the extremes balancing each other's out somewhat.

Sam Farman 12:09 I mean, like Sam said, like he would buy every deal, and I would buy. I mean, I wouldn't, I wouldn't say I would speed, just sitting on the sidelines, but I would buy. I'd be too conservative where I would, you know, we wouldn't have his 24 units that we have right now. You know, maybe I would have four or six. Who knows? But we he, he pushes the envelope in a good way. That propels us forward. If there was two of HIMS, it might be too much, and to the point where, like the House of Cards falls, not saying that, but as an extreme example. But for me, yeah, as an extreme example, maybe how it'd be sitting on the sidelines if there was two of me just going back and forth, analyzing every deal too much. So I think, yeah, I can't trust it enough. The balance is important. And I

Joseph Escamilla 12:57 think the balance also plays a role in how we handle the day to day management of the portfolio, right? Like Joe is extremely, extremely good at making sure we are organized in terms of like, bills being paid on time, invoices all being correctly accounted for accounting being, you know, adding up, diligent note taking, diligent records, things like that. And I would say, you know, when, when we have an issue arise, you know, it happened today, right? Like, I'll be the one to just hop on the phone and just start, you know, yammering, trying to, trying to get it out and get it something figured out. So I think it doesn't just have to do with property analysis. Like we both have our strengths, both have our weaknesses, and together, we really have found, honestly, something special, where, where. I think that there's very few people that you talk to that don't have, like, a truly formalized agreement with who owns what. And you know, everything we own is 5050, down the middle doesn't matter. And honestly, some people will probably freak out at hearing this. So there's bank accounts that I don't even have the username or password to, Joe has it, and there's credit cards that, vice versa, yeah, have the username or password to I have it, right? Like, we have something more, you know, important. Like, I want him to succeed. I want him and his wife to succeed. I want his family to succeed. It's insane. Back towards me, to the point where it's more than just, you know, a business partnership. It's like a true friendship as well.

Robert Plank 14:35 Yeah, we got something to figure it out. And so now I'm curious about what you've then grown it into right? Because, like, you grew those senior units. And like, what's the portfolio at now? And like, what sort of growing pains did you have getting here?

Joseph Escamilla 14:49 Great question. So we currently sit on 24 units under management that should increase to. To closer to 30 by the end of this year. But of course, you know that's if things go as to planned. And it started out slow for sure. You know, a duplex, then a triplex, then a four unit, then a six unit, then another four unit, right? Excuse me, so it was slowly but surely continuing that same model of reinvesting our capital that we we would rehab a property, then take out the capital and reinvest it into another process, property and repeat the process. For those who are active in the real estate investment community, it's called the burr method, standing for buy, rehab, refinance or rent refinance repeat, excuse me, by rehab, rent refinance repeat, coined by a huge real estate investment community called bigger pockets. And they you know that method is a pretty popular one, but we were able to have a lot of success early on with recycling our capital. And it wasn't all perfect, right? Like we actually, we tried to tap into the short term rental market at one point, and it didn't go great. It didn't go horribly. We basically walked away like dead even after all was said and done, and we realized, you know what, we're not that good at this right now, let's go back to what we are good at, which is this small to medium sized multifamily

Sam Farman 16:24 investment, yep, and specifically with that Airbnb too, it's like, yeah, we we took a risk, but with guardrails like, what's the worst that happened to us? We broke even, and we learned a ton of lessons throughout the process, and we continue to push forward and then to where our business is at. Now, we're continuing to not only grow the personal portfolio, but we have this syndication where we're raising money from passive investors so that they can invest in real estate without having to do all the work or learn all the process. So we have, we've had so many people reach out to us, asking us, we love what you know? How do you do what you do? We love to see what you guys are up to. We have so many questions, and we want to get involved in real estate, but we just don't have the time or resources, etc. So that's when we started generational wealth partners. And our ethos is in the name we want to build generational wealth for people that don't want to work for the rest of their lives, you know, they don't want to work until they're 6570 years old, and then finally, be able to tap into their 401, K, they want to have other investments, but maybe they just don't have the time to do the research. You know, this is this is hard. Real Estate Investing, by design, is not passive in any way, shape or form. Even if the you invest money in the paychecks are hitting, you still have to manage your property manager. You have to manage the contractors, the realtors, the lenders you're actively working on this investment. But it can be very lucrative, and that's what we're trying to build. Well,

Robert Plank 17:58 very nice and and that's great, because, like, it's one thing to say, Okay, here's us two guys, and here's we've grown up to 24 units. And someone says, okay, but great. Like, how does, how can I get in on that? Well, now you have the syndication. And so what should people know about that? Like, if someone says, okay, like, syndication looking for investors. Like, are you looking for investors of a certain types, certain area. What should someone know? Speaking of guardrails, before pursuing this,

Sam Farman 18:26 they could be from anywhere in the country, so they don't have to be in a in a specific state at all, in the US. I think we might even have somebody investing overseas right now too, mainly because we're, you know, we we're close with them, and we trust them. But what they should be thinking about is we have this investment group that allows people to passively invest in real estate. They don't have to lift a finger, and we provide a projected return based on their investment type. We're looking at four to 10 unit, residential multifamily properties. That's kind of our bread and butter, and doing long term rentals with that. And we also give people voting rights, as you mentioned in the in the initial intro, we want to give power to our investors so that they're actually helping with some of the decisions. Now they're not going to be deciding on, you know what colors to paint the rooms, but they're going to decide on if we're going to exit and how we're going to exit. Are we going to sell? Are we going to refinance, and so on and so forth. And Sam, add in anything that I may be missing to that? No, I

Joseph Escamilla 19:33 thought that was perfect. I would say the only thing that you would also need to know as a potential investor is that you have to be comfortable with a long term holding period. Real estate is an illiquid asset class. So if you're investing, you need to be prepared to have your capital in that investment for the projected holding period, which is what we do, a projected holding period of three to five years. You need to be prepared to. Hold for that long because there's, there's not really an option to have an individual cash out, right? It's, it's an illiquid asset class, like I said. So it's not. The other thing that you would have to be comfortable with is not having it on your cell phone right and Robin, your Robin Hood portfolio, where it has all the pretty colors and things like that, and it shoots out congratulations when you make a trade and you can buy and sell at any time, you know, anytime during the market being open. It's not like that. So I think it's just a comfortability factor with with investing, with somebody else, which, you know, is very common thing. I mean, there's wealth managers and things like that, you know, that have been around for ages, but it's also being comfortable with with that whole period.

Speaker 1 20:50 Yeah, there's the rules of the game, right? And you can play checkers, you can play Monopoly, and, of course, you can have different strategies, but there's and the broader scope, there's rules that you're stuck in, like when you were doing the short term rentals, you're like, Well, based on the rules that are in place and what we have to do, and the money in, the money out, like, this doesn't work. I'm sure someone makes it work, but it's it's not our strength. So we'll multiply more of our strengths, not our weaknesses. And what I'm getting from our conversation is is this is America, right? In America, we have unlimited possibilities and choices, but a lot of people choose to get overwhelmed, or they get stuck in learning mode, or they kind of split the difference. They don't really take that action, they don't really do that risk. And so we need to be thinking about real estate, and you've dropped a bunch of knowledge with us, right? You mentioned Burr and the 1031 exchanges and the syndications and so much more. But you guys are the real estate experts. You're the stars of this show here, and I want to make sure that in these last few minutes of our conversation that we get to what's important to you guys. So what's the missing question in our conversation? What should I be asking Mr. Sam, Mr. Joe, I just don't know what to ask both of you.

Sam Farman 22:05 For me, I would say the question to ask, maybe for someone to ask themselves, is, why haven't I gotten started on on achieving my dreams? Why haven't I gotten started on pursuing my goals? And I think the answer to that that we're all searching for, I don't think anyone's really fully mastered it, but a lot of it is behind fear of failure and fear of the unknown. And starting can look like you're trying to climb Mount Everest, when all you have to do is just put one foot in front of the other. We started with, I started with a single family. Sam started with the single family, then together, we did our first deal as a duplex together. If we sat down and thought, how do we get 24 units in four years, we would have been like dumbfounded. We would have, would not have known where to start. So it starts with one, put one foot in front of the other, and before you know it, when you look up, you'll be a quarter halfway, all the way up the mountain.

Robert Plank 23:05 What do you have? Mr. Sam,

Joseph Escamilla 23:07 I thought that was great. I was gonna leave it at that. I thought he answered for both of us. But I guess the question that a friend of mine, who I've worked closely with has a great answer to the question, which is like, what are the two keys, two key things that you need in order to have success in real estate? And the answer is patience and persistence. And this is a friend of mine who's coined that, but he is right. Real estate is a long term game. It's a long term asset class, and it's a very, very powerful long term asking class. So you have to be patient, and then you also have to be persistent. There's so many things that can come up. There's so many, you know, on a daily basis, Joe and I deal with with daily things. Some some are minor, some are major. We've we've had pipes burst, we've had problem tenants, and we've had to pick a stupid color to repaint the bedroom right, like some, obviously, some are major and some are minor, but you have to make sure that you're showing up every day and pushing through. I think there's a lot of people on social media right now who, you know, sell this dream of, like, buying a, you know, two duplexes, and then you're gonna be a gazillionaire and retire like, you know, like that. It's not the case. But if you are willing to be persistent and patient, you can make something incredible happen.

Robert Plank 24:29 Very nice, patience and persistence. And you're saying, from from Joe, manage the fear, and if you're hesitating, like, figure out why that is, and find a way to proceed. And I hear about this a lot where there's, like, a lot of these people that are successful in real estate. They're teachers, they're doctors. They don't say, Okay, I'll just, I'll have such I'll have career number one, and then when I get to a stopping point, then I'll switch to real estate. It's like the time is of the essence, right? We can't wait until things to be perfect for the start of so long, it'll never. Happen. So this whole like, oh, well, I'm not a full time real estate investor. I don't have 24 units yet. Well, it's not an excuse to not take the first step, if that double negative made sense. And so yeah, we've been speaking with Sam Farman and Joe Escamilla from GWP assets common is that a logical next step? Or where should people go if they like what they heard and they want to contact you and talk about the syndication possibilities, or talk to you real estate? What's the call to action?

Joseph Escamilla 25:33 I would say, for me, it's just LinkedIn, Sam farming. You'll see GWP in the bio, and Joe, I'll let you give yours.

Sam Farman 25:43 I would say, just honestly, reach out to us, invest at GWP assets.com we both share that email. So if you want to connect with us, invest at GWP assets.com and we'd be happy to help. And I know we didn't really touch on it that much. But Sam has a lot of experience as a property manager as well, and I have experience as a mortgage lender. So if anyone listening out there has questions about that stuff as well, be more specific in real estate, we'd be happy to shed some light on it.

Speaker 1 26:15 Very nice. So two sides of the coin, right? You got the property manager and you got the mortgage lender. It's Joe Escamilla and Sam Farman, and that email address that we mentioned is invest at G, W, P assets.com and as we're typing in that email, or we're checking out Sam and or Joe on LinkedIn, it's time for the scary part of the show you guys, where I like to usually stop my guest, put them on the spot and ask them about a funk or interesting quote or lesson. But since it's double time tag team, I guess we'll get two quotes or lessons. So an interesting quote or lesson,

Speaker 2 26:50 I'll go first Sam. I'll let you you think about yours. I need to think one quote that stuck with me, that I love repeating, hopefully I get get this right, is, don't judge each day by the harvest that you reap, but by the seeds that you plant. That's That's all I got. I think it's Robert Lewis Stevenson,

Joseph Escamilla 27:20 powerful. That was, yeah, this is a tough act to follow. I gotta think

Sam Farman 27:32 you'll never walk alone Liverpool,

Joseph Escamilla 27:33 yeah, good one. I would say I did. I did read something recently in a book by Saho bloom about it was something about those who can tolerate the most uncertainty are going to be the ones who eventually succeed or eventually win. I can't remember if it's succeed or win, but the gist of the quote is that business and life in general have a lot of uncertainty, and you have to just be able to tolerate that and move forward and again, be persistent in achieving your goals. There's not always the clearest path, but if you just continue to take each step one at a time, you'll get to the finish line.

Robert Plank 28:15 And that, both of those quotes tell me just how much of a mental game that this is right. And you hear about the like things that say, like Warren Buffett says, or just, you know that just that there's, there's something to be said about the the persistence and how much you put in, and the lag time, and some, some days will just be really rough and no reward, and others, then you reap what you're sowing. You say, Well, I didn't even work that hard today with all this, this deals, or all this other work I've been putting in the last few months now, it finally paid off, and it messes with you, and it's so important to not be stuck in a box and not go it alone, and to have our mentors, have our masterminds, and especially with you guys, you I'm sure that you've had those moments or those times when you relied on the other just to, like, get the sanity back, right, or to have the additional perspective. And so it seems like you guys have figured out the magic, right? You guys found a great partnership, which, no, we don't always have that right, or sometimes the partnerships fail. So you got something special. And you can find out more about the amazing adventures Sam and Joe are on by going to G, W, P, assets.com, that's generational wealth partners, cash flow and forced equity through long term multi family real estate investments in the Northeast. Such a blast chatting with you guys right about life and business and real estate in general. Thanks for both of you showing up and being here.

Sam Farman 29:38 Thank you, Robert, yeah, that was a ton of fun. Thanks for having me. I might steal that from you the amazing adventures of Sam and Joe. Do it.