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Ep 100: One Crazy Hotel Flip! | Sam Newell
04:30 – Sam started flipping about 10 years ago. Before he got his real estate license, he was a licensed broker in Utah. He developed 4 FLEX communities with partners and he sold 100 homes in one year. He is the head of commercial at Century21.
07:25 – At the end of the day, you should never lose money, says Sam.
07:53 – Sam’s goal with his Recession Proof podcast is to help people learn how NOT to make stupid or ignorant mistakes.
09:08 – Real estate and anything in life is really a numbers game. If you want to hit big returns and be successful, it’s a numbers game.
10:08 – A hotel came across their desk from cold calling brokers and they listed it for about $1.5 million.
11:00 – Sam learned that the hotel had standing orders from the property owner to not allow police onsite. He found out that this hotel is where drug addicts and prostitutes were living.
12:39 – They put the hotel under contract for about $700,000 but it needed so much work. They also ended up doing their due diligence and ended up cancelling that contract.
13:15 – Sam and his partner ended up buying the hotel for about $500,000. Long story short, they got all those rooms. They started doing ID checks and they would run daily checks with the city for warrants. They didn’t allow people who had outstanding warrants or past offenders.
23:54 – Sam said that when you buy a hotel, no matter how good your manager is, you’ll probably be a self-managing owner for the first year.
24:34 – Moving forward, Sam said that hotels are not going to be their asset class. Right now their systems, employees, time and their knowledge base is set up for apartments.
29:39 – The biggest lesson they learned is that they thought they were above one of their main rules. The only way they will buy the deal is if they have the rehab budget funded or raised upfront and if they have six months of working capital.
31:28 – You can email Sam at sam@mficlub.com or send him a text at 801-995-2220. You can also connect with him on Facebook.
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