409: Before You Quit Your Day Job…

SHOW NOTES FOR EPISODE 409: BEFORE YOU QUIT YOUR DAY JOB…

She was a successful engineer who loved her job and the international travel involved.  However, the realities of a new marriage and 2 children created a true conflict.  In this podcast episode, learn how engineer, real estate investor, wife and mom Pam Scamardo overcame this challenge by building a multifamily portfolio that allowed her to walk away from her job in just 2 years.

What You Will Learn

• How networking can help you find your first deal
• Why having a mentor is so important
• Finding deals on Loopnet.com
• How, even when you don’t have the money, you can still acquire a multifamily property
• Investing out-of-state but closer to home
• How to build an impressive portfolio while working full-time
• Overcome the obstacles of quitting your W2 job
• How to know when it’s the right time to leave your day job
• Managing and juggling family responsibilities as a full-time real estate investor

About Our Guest

Pam Scamardo

Pam is an “Alumni Guest” and appeared on episode # 279: Engineer Quits Job in Only 2 Years With Apartment Investing  – Jan. 28 2019

Pam Scamardo has committed the last 8 years to acquiring, managing, and repositioning apartment complexes. She specializes in maximizing passive income for partners while preserving investor capital. Pam manages a multifamily asset portfolio valued at over $5.3 million through successful syndications. Currently, Pam serves as the Founder and Managing Partner of TPK Properties LLC, a privately-held multifamily investment company that acquires, manages, and renovates medium to large sized apartment buildings in California, Arizona, Oregon, and Washington.  Prior to founding TPK Properties LLC, Pam worked as an Aeronautical and Mechanical Engineer at Lockheed Martin, Boeing, and UTC Aerospace. She managed projects that entailed detailed financial projections, new product developments, product launching, analytical testing and reports, as well as managing a global stress and design team. Pam has a B.S. degree in Aerospace and Mechanical Engineering from the University of California, Irvine and a M.S. degree in Aerospace Engineering from the University of Southern California. Pam is also an Enrolled Agent with an emphasis on real estate taxes.

More About Pam

• New baby boy – 8 month old baby
• Already had another boy already
• Started out in San Diego
• Had an engineering job that she loved
• Loved the technical aspect of engineering
• But the company kept adding on hours – from 8-hour days to 14-hour days and there was much travel as well
• As her fiance and her were looking forward to getting married and having kids, the heavy work hours were discouraging
• Started looking at other option

Exploring Real Estate

• Went to a local real estate networking club
• The presentation was on multifamily investing
• Met a guy who invested in mobile homes and he recommended that she start out calling local agents
• After listening, she was hooked on the idea of being a multifamily investor
• Went to local bookstore to check out books on real estate investing
• Found a book called Commercial Real Estate Investing for Dummies by Peter Harris and Peter Conte
• That’s where her journey began

First Property Purchase

• Found a 6-unit apartment in San Diego
• One unit was completely gutted because previous tenant flooded the entire unit
• Wants to find something close to home
• So she could get over there quick should there be a need
• She got together with 4 of her engineering co-workers to fund the purchase
• Put a plan together to share with her team
  • Shared her analysis and game plan
  • What would happen year 1, 2 & 3
  • When there would be pay-outs
  • Then went in on the project with them
• Purchased it in August 2012 for $417,000
• It was an REO, held by Wells Fargo
• They wanted to get rid of it
• It was good timing because it was a buyers market
• Wells Fargo financed
• Also worked with another lender to finance rehab costs (about $10,000)
  • Fix flooded unit
  • Re-do electrical
• It was challenging and a learning experience
• Re-financed 2 years later in 2014 and paid back partners
• Still has the property today
• Valued at $900,000 today – 10-11% return
• Every year, at the beginning of the year, she sits down to review the game plan for the year
• What are the absolute “musts”? (repairs, etc.)
• What can wait?
• Does at least one upgrade each year
• She believes in providing quality housing  as well

Finding a Mentor

• Having a mentor is really important
• It helps prevent you from making serious mistakes and wasting unnecessary time
• It’s also valuable to have guidance
• We have coaches for sports, professors, life coaches, therapists, physical trainers, etc, so why not have a coach/mentor
• Pam decided to track down Peter Harris, the author of Commercial Real Estate Investing for Dummies
• The fact that Peter was also an engineer appealed to her
• She contacted him and brought him on as a mentor to help her grow bigger
• She was having difficulty finding properties that met her investment criteria that were near her in Southern California
• Peter got her to look outside her comfort zone to other states

Investing Out-of-State

• Started investing in other states
• Keeping it mainly to the West Coast
• Her first deal was found on Loopnet
• Started calling agents that had listings that appealed to her
• Doesn’t want to fly far
• Smaller profits on West Coast but that’s the trade-off
• Her first deal was in Arizona
• Second deal in Oregon
  • Her broker there was very good
    • Started sending her off-market deals
    • Ended up buying 4 properties through that broker
• She’s currently in Oregon, Washington, Idaho, Nevada, and Arizona

Leaving Her Day Job

• After two years of investing, she was ready to quit her job full-time engineering job
• It was a very difficult decision – very scary to leave the security of a regular pay check
  • Nostalgia
  • Bitter sweet
  • Leaving her work friends
  • “Am I going to be able to survive?”
• But it was also very exciting
• What really helped her the most was the love and support of her soon-to-be husband and her personal faith
• Peter Harris also helped her feel more secure
• Her own determination was also important – hating to be stuck in a cubicle for 14 hours a day – this helped her to get through the transition
• She had a “Do or die” attitude
• There were struggles and challenges along the way but she just kept pushing forward
• She feels anyone can do it – it’s 90% mindset!
  • Practice networking with people
  • Practice analyzing properties
  • Practice a due diligence system on how to acquire a property

Preparing to Quit Your Day Job

• One of the books that helped her to prepare before quitting her full-time job was called Before You Quit Your Job by Robert Kiyosaki
• Before she did anything, she sat down and wrote all her expenses, added them up and said, “If I can make that much money (plus a little more, I know I can quit.”
• She also knew she needed a good reserve savings account that could over her for a number of months, should the need arise
• For every deal she did, she wrote on a little “post-it” that she stuck on her bathroom mirror and refrigerator door, “Just $_____ left!” And she also usually included some empowering words with it
• When she finally reached her goal, her and her husband got married, took a really long (2 month long) honeymoon to Thailand, Singapore, the Maldives

Trying to Build Your Portfolio While Working Full-Time

• She used her drives to and from work mainly for education
  • Listening to podcasts
  • Listening to Audible books, CDs
• When she had to be at work at 7am, she would wake up at 4:40 or 5am
  • Get emails out
  • Make east coast calls
• At work, on her lunch and other breaks, she would sometimes…
  • Call back lenders, title companies, property managers
  • Check emails, texts
  • It was hard because of the nature of the work she was doing, she didn’t have access to wi-fi so she couldn’t always respond when she needed to
• In the evenings, when she got home from work, she would…
  • Make return calls
  • Return emails
• Because she loved what she was doing in real estate, she didn’t dread all the extra work and time involved, she actually enjoyed it

Managing Family and Real Estate Investing

• She consolidated property managers and properties
• She now only has two property managers overseeing all of her properties
• This reduced the amount of calls and contact and allowed her to spend more time with her new baby and other year old child
• There’s still a lot of juggling but it’s not as bad
• Her husband also helps out a lot by taking on some of the “mom” responsibilities
• She just keeps moving forward

The Value of Networking

• Pam realized early on the value of networking
• Networking help her find her first deal
• She moved from San Diego to Rancho Cucamonga (in the Inland Empire of Southern California, near Riverside, Ontario, San Bernardino)
• She noticed there were very few multifamily real estate networking opportunities
• She went on MeetUp.com and created her own networking organization for people in commercial real estate
  • It’s called C.R.E.A.T.E Wealth
  • Promote training and education
  • Source where people can come to learn more under the commercial real estate umbrella
• She is also currently involved with C.R.E.W. (Commercial Real Estate Women) Inland Empire
  • She’s the Program Director
  • She sets up networking mixers, etc.
• Her goals/vision for 2020 include
  • Connecting with more people
  • Helping people to connect
  • Helping people find who they are looking for
    • Lenders
    • Tax professionals

2020 Investment Goals

• Acquire 100 units
• Acquire more than the previous year
• Open to expand to new markets
• Community outreach
  • Volunteers as a tax aide with AARP
    • She’s an enrolled agent
  • Helping low income seniors with their taxes

How to Reach Pam

• Website: TPKLLC.com
• Networking: C.R.E.A.T.E (Commercial Real Estate Association for Training and Education) Wealth Meet-up in Rancho Cucamonga, CA

DISCLAIMER:  Many of the above strategies take knowledge and have a higher degree of risk.  You need to do your research and/or work with someone who is experienced to reduce your risk.

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Additional Episode Sponsor: Meno Studio – menostudio777@gmail.com