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SHOW NOTES FOR EPISODE 681: HOW TO DITCH THE 9-TO-5 JOB WITH MULTIFAMILY INVESTING
Are you ready to ditch your 9-5 but have no clue where to begin? Look no further. In today’s episode, real estate investor, entrepreneur and author Pam Scamardo shares how she broke free from her 9-to-5 cubicle job by investing in apartment communities!
What You Will Learn
- How it took Pam Scamardo only two years to become financially independent by investing in commercial multifamily properties
- Why your first real estate investment should be a property with 5-units or above
- How she wrote her book in only 4 hours!
- The reasons why commercial real estate investing is better than residential real estate investing
- How to quickly grow your portfolio without having to use your own money
- The importance of mindset in creating a successful real estate career
About Our Guest
Pam Scamardo
Pam is an “Alumni Guest” and has previously appeared on two episodes:
- 279: Engineer Quits Job in Only 2 Years With Apartment Investing – Jan. 28 2019
- 409: Before You Quit Your Day Job… – April 27, 2020
Respected as a leader in the multi-family investing space, Pam Scamardo is dedicated to helping the industry evolve. She is an author of Create Wealth – How to Ditch the 9-5 Job Through Multifamily Investing which was recently published on Amazon a couple weeks ago. Through her various professional and community roles, including her recent appointment as CREW Network Board Director for the 2021-2022 term, Pam has been an advocate for investors at all stages. One of the most common misconceptions in the multi-family investing space is that it is reserved for the ultra-wealthy. Over a decade ago, Pam learned first-hand that you don’t need to be a millionaire to start investing in apartments and commercial real estate. At the time, she was an aeronautical and mechanical engineer, and had been employed by highly respected companies such as Lockheed Martin, Boeing and UTC Aerospace. Through her multi-family investments, she quickly gained a new title – job optional. For Pam, this meant that her investments were sustaining her financial needs and she no longer had to work – but rather, she could choose to work. This pivotal shift led Pam to launch her first company, TPK Properties, which helps syndicate apartment building investments.
More About Pam
- Former aerospace and mechanical engineer
- Got tired of sitting in her cubicle
- Got assigned great tasks but with that came longer days, longer hours
- Found financial independence through multifamily investing
- It took two years, 3 properties and 6 investors to get financial independence
- She has grown her investments even more today
- Her success has also prompted her more to give back
- She is still acquiring properties, teaching and is now an author
Writing Her Book
- 2021, she was home sick for 14 days with Covid during the holidays
- She was quarantining home alone for Christmas and New Years
- She binge watched every show
- Cleaned the house twice
- Caught up on paperwork, bills, etc.
- She ordered food she wanted to try
- She thought, “What else can I do to be more productive?”
- She was quarantining home alone for Christmas and New Years
- She started consolidating all of her thoughts into a Word doc
- Blogs and articles she has written
- Before she knew it, she had hundreds of pages of content
- In just FOUR HOURS, she had written a book!
- Then, she started thinking, “What am I going to do with a book?”
- That’s when she started making spreadsheets on what to do next
- She started getting excited about it – fun, exciting, new and scary at the same time
- Next, she tried to find a publisher
- It was like trying to acquire a new property
- Going in and out of escrow
- Pitching investors
- She pitched herself to over 150 literary agents/publishing houses
- “I’ve got a unique real estate book from a female perspective.”
- Got all “nos”
- One person said, “Since you starting out with no track record, try self-publishing on Amazon first and then, let’s talk!”
- So she contacted a few friends that were writers/editors and they helped her!
- She self-published the book this year!
- And now she has two literary agents courting her
- It was like trying to acquire a new property
What’s in the Book?
- Peter Harris (a good friend of Pam’s and of Bill) wrote the foreword to the book
- Peter was her mentor (also was a mentor to Bill)
- He is a good friend
- A fellow real estate investor
- In the book, Pam highlights the 12 steps she took to become financially independent through multifamily investing
- Assessment
- Emotionally
- Financially
- Physically
- Education
- Group Events, Seminars, Workshops
- Networking
- Mentors/Coaches
- Should you get a mentor or coach?
- Don’t expect free hand-outs
- Partner Up
- Investment Criteria
- How she invests
- Property Search
- Lenders
- Analyze
- Offers
- Exit Strategy
- Assessment
- At the beginning of each chapter, she shares a personal story
- At the end of each chapter she gives 3 key tips
- This is for those who may not want to read word for word
- She ends the book by listing her own personal goals
How and Why She Got Started in Real Estate Investing
- Her first purchase was a 6-unit building
- The reason she chose a 6-unit is because she wanted to accelerate her growth by starting with commercial real estate
- If she bought a fourplex, it is not considered a commercial property (only 5-units and above are considered “commercial” – a fourplex is considered “residential”)
- Later, she bought a fourplex but it was a big mistake for her that she regrets now
- The reasons she chose commercial over residential
- With residential…
- …eventually you will tap out of your capital (you are only allowed 10 doors)
- …you will tap out of your credit score – the credit bureaus heavily base your score on the property performance
- With commercial, as you build your track record…
- …the lending terms are more favorable
- …they look more at the property’s performance and not at you personally
- …you can get a non-recourse loan (which means the bank won’t go after you personally if things go badly)
- …it’s less emotional – it’s all about the numbers!
- …you can scale up faster
- With residential…
- She had the 6-unit for one year and then bought the fourplex
- She bought it because it was so cheap – only $79,000
- It was a lesson learned – don’t buy with your eyes or just your pocketbook
- She bought it because it was so cheap – only $79,000
- After the fourplex she bought a…
- 10-unit
- 16-unit
- 24-unit
- and just kept going up from there
- She just wanted to buy one more unit than the previous property
Mindset is Important
- If you don’t believe in yourself, no one else will
- She had a lot of rejection starting out in real estate and even more in trying to publish her first book
- But she feels that the rejection actually helped make her stronger and more committed than ever
- Fear doesn’t disappear but you learn to work along side of it
- And always be honest
- She was honest with every lender she talked with
- She would say, “I know I’m new and just starting out but I have a plan that I’m going to stick with, I won’t give up and I’m very tenacious!”
Recent Multifamily Investment Transactions
- Right before the interest rates got hiked up, she took four existing apartment communities, re-financed, cashed-out, paid-out to all the investors in those properties and turned them into net-returns
- This means, investors no longer have their own capital sitting in the deal
- There might still have a mortgage but the mortgage is paid by your rental income
- Would she do this again with 4 re-fis? No! It was a very stressful exercise
- It took about a year to close! She started in 2020 and finished in 2022!
- She was tenacious
- Her investors were really happy!
Her Criteria
- She wants to syndicate 100units
- She wants to stay below where the institutional investors go (300-units and above)
- She no longer knows her tenants but mainly stays in contact with her property managers
- She has mostly been investing on the West Coast but is now looking at Tampa or somewhere in the Florida market
- She is working with Sharelle (and her female team), from the Netflix series “Selling Tampa”
- Also looking in Michigan and Texas
Organizations She Works With
- She is a Board Director with C.R.E.W. (Commercial Real Estate Women) that has the mission to advance women globally in the commercial real estate arena
- Not just multifamily investors
- They have members in escrow, lending, appraisal, etc.
- It’s a group that has women lifting up and supporting other women
- C.R.E.W. has over 12,000 members globally
- She was in Hawaii (during the interview) trying to launch the 78th chapter of the organization
- Not just multifamily investors
- She is also the Director of the Center for Real Estate at Cal State Fullerton
- One of the largest business programs at the college
- She is trying to help the college to get a real estate major established
- She is trying to get a real estate concentration there to help students connect with Orange County commercial and residential real estate companies
- She voluntarily works with the Dean of the College of Business and Economics
How to Get Pam’s Book
- To get Pam’s book, Create Wealth: How You Can Ditch the 9-5 Job with Multifamily Investing, click HERE!
How to Reach Pam
- Website: PamScamardo.com
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