Robert Leonard  03:52

At the end of the day, it’s a relationship business. What are the legalities around this? Is there a contract in place? What does that look like?

Gabriel Hamel  04:00

Yeah, you can do a formal contract. Usually, if there’s an agent involved, I will do a purchase agreement just like I would if I was going to make an offer on a listed property. Or if you were going to go get bank financing. But a lot of times, I’ll negotiate a deal pretty informally with the seller, especially if it’s a face to face interaction. So it might be discussing it and then sending those terms off to an agreement off to escrow or title company. And it might be emailed back and forth until we come to terms and agree on something that we can send off, but I try to keep it pretty informally until we have something pinned down that we’re both happy with.

Robert Leonard  04:35

And then when to agree on terms, is there an official note like you would have with the bank and do they have the collateral as backing that note still?

Gabriel Hamel  04:44

Yeah, exactly. So just like a bank loan, you would do a note and trust deed with the terms that you’ve agreed upon. If the property is not free and clear, there’s other ways to do that. You can wrap the mortgage, land sale contracts subject to, but in most cases, I’ll buy properties that are free and clear and so that I can take title when I close on the property.

Robert Leonard  05:04

How can you go about this if somebody hasn’t fully paid off their mortgage yet?

Gabriel Hamel  05:08

Well, there’s a few ways to do it. You can take title but you run the risk of the banks have what’s called the due on sale clause. So the risk to the seller, if you were to do that, is the bank potentially could say now it’s really rare, because banks are not there looking for it. And it’s not illegal, but the bank does have a right to say, “Hey, this change title, I want paid in full.” And give them like, however many days, 60 days to pay it in full. And so to avoid that risk for the seller, and then for you as the buyer, the bank takes property back a year without a property.

Their contract is going to be a lot stronger than your contract with the seller. And so to avoid that, typically what I would do is a land sale contract. So it’s set up very similarly, you’re just not taking title. You’re essentially making your payments to the seller and the seller is still obligated to make their payments to their bank or their financial institution until they’ve completed the terms of their loan.

Robert Leonard  06:01

Yeah, that due on sale clause is exactly what was running through the back of my mind as you were talking. It sounds like that could be a little bit more of an issue, if they still have a loan on it. So how can you go about finding people that have owned the property and don’t have a mortgage anymore? Are there any resources or tools that people can use to find those specific type of properties?

Gabriel Hamel  06:19

Honestly, almost with any property, I look at it, that’s first question I ask because there’s so much flexibility with seller financing, and I typically will ask the question, “Hey, are you in a position to carry financing?” Or I would ask, “Do you owe anything on the house?” Just basic questions like that to see if the seller, first of all, has it free and clear, but also if they know what seller financing is.

One thing I get asked a lot is how do you talk a seller into carrying financing? How do you talk or convince the seller to carry the note, to carry the terms, to carry the financing? But I’ve never had to talk or convince any seller to do that. I’ve only bought properties with seller financing from sellers that already understood the advantage to them for carrying the financing.

At one point, I thought that I would need to educate the world and all these sellers, and why they should carry financing for me or for anybody else, and I realized that every deal I had done were sellers that had already understood the advantage. So rather than spend my time trying to educate folks, why don’t I just get in front of more people who are in a position to carry the financing? A lot of times I was just asking the question to them directly, or having your agent or broker ask their agent, “Hey, are they in a position to carry financing? Would they consider seller financing?” A lot of times the answer’s no. And if it’s a seller that understands the advantage, a lot of times the answer is yes. And then it just comes down to whether the terms will work for both you and them.

Robert Leonard  07:37

What are some of those advantages for them as a seller?

Gabriel Hamel  07:40

Yeah, for a seller, they still get that level of passivity from the monthly income. And so a lot of the sellers that are interested in carrying the financing are men and women in their 60s and 70s. That they don’t want a lump sum of cash. For one, they would have to pay that capital gain up front at once, if they got that lump sum. The other problem is, then they have to go take that money and go put it back into an investment of some sort to pay them for the rest of their life.

And so with this, they’re not paying that huge capital gain up front from selling the property, and getting a cash sale or going and getting a bank loan and them getting this lump sum cash. They get that payment for every month for the rest of their life, or until the term length is over. The other advantage is, and you’d mentioned before, that it’s collateralized by the property. So it’s backed by an asset that they’re already comfortable with and have owned for a long time. So if you were to default, which I’ve never done, if someone were to default, essentially the sellers could just get the property back. And in most cases, the buyer had improved the property. And so those are a couple of the advantages to them.

Robert Leonard  08:50

A great point you made is about the seller knowing their property, the property that you’re buying, they know that property very well. Whereas with the bank, they don’t know anything about the property. I mean, they get into appraisal so they know what it might be worth. But when they’re foreclosing on it, they don’t know much about that property, really. Whereas the seller, they’ve probably owned the property for decades. They know it inside and out. So there’s much less risk for them. Because if they do have to take that asset back over, at least they know the asset they’re getting back. Now, I know this was a strategy that you implemented early on in your career, but would you recommend it to new investors today?

Gabriel Hamel  09:26

Absolutely, 100%. It just comes down to finding sellers that are in a position to do that. And so for me, it was really out of necessity that I started buying properties with seller financing. We could talk about that a little bit. You know, a deal that I’m closing on right now is also a seller financing deal. And so I’ve done it from the beginning, and I’ll continue to do it. A lot of it is just I enjoy that flexibility of financing that you just don’t get from a bank.

Robert Leonard  09:52

That’s really interesting, because obviously, since you’ve started you’ve had a lot of success since then, but you continue to do it. Is there any like jargon or just anything specific that somebody needs to know if they want to get started in seller financing, because when you think about going to a bank, that’s pretty standard, it’s more or less the same everywhere you go? But with seller financing, it sounds like there’s a lot of variables. And if you don’t understand the basics already, then it could be confusing. Where should somebody start from that aspect?

Gabriel Hamel  10:20

You know, it really depends. So, there’s going to be a lot less paperwork and legal jargon in general just by doing a seller financing contract. But if you understand the basic terms of a traditional mortgage, and can look at that and just start moving the pieces around as far as, okay, a bank says I need 20% down. What if I structured this with 5% down, or no money down, or 10% down? The bank’s telling me 5%. Well, what is it that the seller actually wants? And so it’s not so much the legal jargon.

It’s more just understanding what a typical bank note looks like, which anyone who’s going to get a mortgage should have a basic understanding of how that works. And then manipulating and changing those numbers as much as you and the seller are happy to do to make it work for you. And then there’s some little things you can do like, you know, on the note, as far as to secure, have some security for both you and the seller. You know, it just really depends how in depth you want to get with the note itself. But it can be pretty basic to just outlining downpayment, interest rate, length of the note, etc.

Robert Leonard  11:27

I think that the point you made about the downpayment is super important, and I want to go back to that, but before we do, do you think it makes sense to maybe have an agent or a lawyer even for just a couple thousand bucks? Bring them on your team and have them kind of walk through the process with you, specifically, because it’s your first deal? Maybe have them check things over? Is that a good way to spend a few thousand dollars?

Gabriel Hamel  11:49

As far as the agent side, not necessarily. I mean, most agents don’t know or don’t understand what seller financing is. And that’s both your agent that you bring in and also with a seller’s agent. So a lot of times if there’s an agent involved, the listing agent will not know if their buyer is in a position and oftentimes, they don’t even ask their seller if they’re in a position to carry financing because they don’t necessarily understand that. The attorney side, maybe for the contract, yes.

But if you have a good, a lot of title and escrow companies will have an in-house attorney, that when you give them the terms alone, they can write a note and trust deed that would be very similar to if you were to get bank financing. So maybe yes, on the attorney side. Not so much on the agent side, unless you find an agent that really understands and is willing to learn the advantages of seller financing.

Robert Leonard  12:39

Yeah, you’d likely have to find a real estate agent that’s an investor themselves, that maybe would understand it from that perspective. Otherwise, like you said, a general agent probably isn’t gonna know.

Gabriel Hamel  12:49

Which oddly enough, most agents are not investors, and they’re around properties all the time and even investment properties. And I don’t remember the statistic, but it’s a very small percentage of agents actually invest in real…

Robert Leonard  13:01

Going back to that down payment percentage, I think that’s such a key point. And I want to dive into that because I think one of the biggest hurdles for a lot of people to get started in real estate is that down payment, right? When you go to a bank, you need 20%. And a lot of times, that’s a significant chunk of money. So if you can get 5% or even no money down, if you can structure the deal right, I think that’s amazing. So talk to us a little bit about how that works with seller financing. Why might a seller not want any money down?

Gabriel Hamel  13:30

Yeah, so usually sellers are stuck on either downpayment, interest rate or price And it’s really all three. And so for me again, it was out of necessity that I just didn’t have a down payment or multiple down payments when I started buying properties. So for me, it was out of that necessity of okay, if I can’t give sellers a down payment, what if I could give them the price they want or an interest they want or something that would work for both of us, but not with the down payment?

So a lot of times the sellers are more interested in that monthly payment or the purchase price or the interest, than they are with the down payment. And so if you can structure a deal, where it still works for you and not bring in a bunch of money to the table, and they’re happy with that, it still creates that win-win scenario. Now some sellers are stuck on a huge down payment. And when I was starting out with seller financing deals, I just wasn’t in a position to do those deals. And so I found properties that the seller didn’t require very much, or in some cases, none. And in some cases, even walking away with cash at closing on some of these deals, and it just again, getting in front of enough sellers.

Robert Leonard  14:35

How can you walk away from a deal with cash?

Gabriel Hamel  14:38

Yeah, so first of all, if you do have no money down deal, your risk is limited because you have no money in you know, on the table of your own. But the other thing you can do to close and put money in your pocket is you collect the deposits, last month’s rent, and if you strategically closed early on in the month, you get the prorated rent too.

So a lot of times I would close, let’s say, December 8. And so, then I would collect almost all December’s rent at closing. I would collect the down or the deposits at closing and I would collect the last month’s rent at closing, you know, on a multifamily property, even a small multifamily property. That could add up to several thousand dollars that you walk away with at closing, and then you’re not collecting rent again until that following month. And you can even go back to the creativeness of seller financing, you can structure deals where your payment starts 2, 3, 6 months after you have closed the deal, if you can get the seller to agree to that.

Robert Leonard  15:36

There really is just so much you can do with seller financing. I mean there’s no rules really, like there’s no norm. You know, with a bank, you have your typical terms, they have their typical structure that you have to follow. But with seller financing, it’s really whatever you can come to an agreement on with the seller you know, for the downpayment. And for one of the reasons why it’s such a good strategy for new investors is that downpayment as can be less, you know, if you don’t have a big down payment, maybe you offer to pay a little bit more for the property. So if they’re asking, say, maybe 200. With, say, 20%, down, maybe you do to 225 or 230. But you only have to put three or five, maybe 10% down. That way you can get into the deal. I mean, as long as the numbers make sense, I can see that as a good way to get into a deal.

Gabriel Hamel  16:25

Yeah, that’s exactly right. You know, and you just look at each individual, each individual property individually, you know, what might work for one property, or for one seller, or what might work for you on one particular property, may not work on a different one. So just… you don’t have to go into every property with the idea that’s going to be the exact same terms. It’s really about listening to what the seller’s problem is, why they’re selling, what can you do to solve their problem, because if you can solve the seller’s problem and create that scenario for them, I’ve had sell it like I’m stoked that I just bought this property and the sellers are thanking me for buying the property, because they’re happy with the terms. I’ve gone there. They’re thanking me, they’re happy, I’m the one walking away smiling. And so it’s really is that win-win.

Robert Leonard  17:07

That really is such a great deal for both parties. Now, two of the most common excuses I hear from people for not starting to invest in real estate is that they don’t have enough money for a downpayment, and that their market is too expensive. You’ve already shown that it is definitely possible to do this without your own capital. So now walk us through how you’ve also done this in an expensive market.

Gabriel Hamel  17:31

Sure, so you can be successful in real estate and in any market, I believe. It just comes down to knowing the market. I don’t live in an inexpensive market. I live in a college town and I’m on the West Coast. It’s less expensive than some West Coast towns, but you know, medium home pricesisin the mid-three hundreds, and you’re talking you know, significantly more on multifamily.

But going back to what I said before about finding properties that are poorly managed, underrented and have deferred maintenance. You can find properties that have that upside. You create that scenario that will work and so for me, I always focused on cash flow first. I would buy in areas of town that I believe would have growth, but I made sure that the numbers fit and the property cash flow from the get go. That was really kind of out of necessity, how I had to build my portfolio of a property that wasn’t cashflow positive, from the day I bought it. It wasn’t going to work for me. So speculation or appreciation I looked at as a bonus, and second to cash flow.

Robert Leonard  18:32

With the market cycle being where it is, are you having a hard time finding deals now to do seller financing? It seems like you know, you could put a property on the MLS and sell it in a few days if not a few hours. So are you having a hard time finding seller financing deals today?

Gabriel Hamel  18:47

I’m not and I’ll tell you why. I really believe in… and people will tell you that you can’t do seller financing anymore, seller financing is dead. I closed on a commercial property with seven separate residences last year. I’m closing on a 30 unit mobile home park with seller financing. But it really comes down to relationships. My best deals have come down to just a genuine relationship. So the deal that I’m closing on now, it was a guy that I met 10 years ago. I reached out to him because he was a developer and I just really admired the work he was doing in the buildings that he was building in town.

And so I had a genuine interest in what he was doing. I wasn’t trying to buy anything from him. I wasn’t trying to sell him anything. But we’ve kept in touch throughout the years. And he had messaged me and said, “Hey, a friend of mine is selling a single family home in the town ove. Are you interested?” And I said, “No, I’m not. I’m not looking at single family. I’m looking at value-add multifamily or mobile home park.” And he said, “I have a mobile home park, actually a few mobile home parks, there’s one that I’d be willing to sell you right now.”

And I said, “Well, would you be interested in carrying the financing on?” And he said, “Yeah, I would.” And so it just goes back to the relationships and also letting people know what you’re looking for. Had I not reached out to him almost a decade bfore and if I had not told him specifically what I was looking for, I probably would not have known about this property and I definitely wouldn’t be buying it with seller financing.

Robert Leonard  20:08

So you’re not likely to find seller financing deals on the MLS, right?

Gabriel Hamel  20:12

You can. The one I bought last year was on MLS. It was listed with an agent and has gone through a couple different agents. They were packaging it as a development project. I brought my agent in who is good with people. And he went and sat down with the seller. And we talked about this to find out what the seller really needs. And let’s negotiate a deal that works. So that’s what we did. The seller was really stuck on a couple items, specifically the interest rate. And I was able to work around that and create something where he got the interest he wanted, and I was still able to get the property and make it cash flow.

Robert Leonard  20:48

Yeah, that’s really interesting. So for somebody that’s just getting started, who doesn’t have contacts from a decade ago? Where should they start? How can they start networking with real estate investors?

Gabriel Hamel  20:58

Yeah, they should go and let every single person they know what they’re looking for, that they’re interested in real estate. My second property ever, after I bought one house, I made business cards. Everybody that I knew that I was a real estate investor and I’m looking for properties. And that’s how I found my second deal. It was a friend at the gym whose dad was selling a property and I bought it below market in 2006, which was a hot market, but it was significantly below market. But had I not told anyone what i was looking for, I would never have found it.

Robert Leonard  21:27

Back then you had to use business cards, but people today, they have something way better. Everybody has a phone in their pocket. So they can use social media or BiggerPockets or just other resources like that, and they can reach thousands of people so easily, so much easier than you could back in the day with business cards.

Gabriel Hamel  21:45

There was no one in my network that I thought had money or that I knew had money or that own homes. And so a lot of people think “Oh, I don’t know anybody selling.” But it might not be your grandma or your next door neighbor, but it might be your friends, grandma’s cousin. You just never know. And if you tell enough people what you’re looking for, and you let enough people know, that’s how you start building that network. And then the other part of that is building just relationships with the agents and brokers, and trying to find the ones that really do understand investment and work with investments and are willing to write crazy offers and, you know, kind of educate themselves on specifically what you’re looking for.

Robert Leonard  22:25

Yeah, so if you find somebody that’s selling, who’s maybe open to seller financing, but they’ve never done it before, and they’re not maybe fully aware of what it is, how do you go about explaining to them the benefits?

Gabriel Hamel  22:37

I’ve never bought a deal from a seller that didn’t already understand the advantage of seller financing.

Robert Leonard  22:42

So do you just avoid those? If you come across someone who says they’re interested, but they’ve never done it, do you avoid those transactions?

Gabriel Hamel  22:50

I don’t avoid it. I would definitely consider doing that. I have not been in a position where a seller says I don’t know what that is, but explain it to me, and we’ll see if it works. I had on the very surface and then once you get into it, they feel like it’s too complicated or it’s scary. If you find the sellers that actually understand it, the conversation is less around what it means and more about alright, how do we structure this?

Robert Leonard  23:14

And do you think that’s partially because the deals on the properties you’re looking at are owned by investors and generally, investors kind of know what that is?

Gabriel Hamel  23:24

Yeah, I think that’s definitely part of it. And I found too, that some of that generation, the men and women that are in the 70s, a lot of them bought different properties with seller financing, too. So a lot of times, that’s how they acquired their property. And then just like you said, a lot of times they have multiple units, so they do understand investment to some degree.

Robert Leonard  23:44

Another interesting aspect that we haven’t even touched on yet is that there’s a whole pool of people who can’t get traditional financing, for whatever reason that may be. They could all go this route to get started as well. It’s super powerful from that perspective as well. In your experience doing these types of seller financing loans, do they show up on traditional credit report?

Gabriel Hamel  24:04

No, they typically do not.

Robert Leonard  24:07

That’s another interesting aspect. I mean, probably not a ton of huge benefits because your net cash flow is positive so that would be helping you. But it is an interesting aspect to think about.

Gabriel Hamel  24:17

Yeah. And you mentioned, you know, people that weren’t able to get approved by a bank. And that’s the situation I was in. So I back it up to my first property in 2005, during the subprime, and I went to a bank, and they approved me for a no money down deal with bank financing. And so I bought my first house, no money down with bank financing, and then again in 2006, and then 2007, it was a 5% down deal.

And so I’m going, man, I could just buy a house once a year with no money down or use the cash flow and do 5% down. This is going to be easy. So I did that in 2005, 2006, and 2007. I still own those properties, even though it was fairly traditional financing. But then in 2008, that was 2008, I went to the bank and said, “Alright, I want to buy another house.”

And they said, “Well, sorry, things have changed. You actually need income, and you actually need a down payment. And we want to see at least like 30% down.” And so I’m going, “I don’t have a down payment, I don’t have income to qualify me for another property.” And so that is why in 2009, I went after seller financing because I couldn’t get approval from a bank. And I didn’t have the capital to put 30% down on one property.

Robert Leonard  25:27

What a crazy thing that the bank would require income for a loan. To people listening to the show right now, who maybe weren’t investing back then might be listening and hearing… You did a loan with no income and no money down for a traditional financing that might you know, that might blow their mind, if they haven’t studied that time period at all. And I think it’s really interesting.

Two things. One, how you overcame adversity because you hit a roadblock and you could have just set up well, real estate investing just isn’t gonna work for me. I’ll stop at two properties, but you did not and then you continued to charge on. And the second thing is you bought, not necessarily at the peak, but you started to buy pretty late in the cycle. And I’m not a market predictor by any means. But I think we’re getting to that point now in today’s cycle. So it’s really interesting to hear that you were successful then. So that just tells me that people can do it today as well.

Gabriel Hamel  26:18

Yeah, absolutely. And it really comes down to, you know, I’ve met a lot of people that have made and lost a lot of money in that 2008 time period. And it’s most of the people… really everyone that I’ve ever met that lost money in 2008. They were speculating, they were basing everything on either what they could sell it or what the projected rents could be after a property renovated. And so one thing that I did back then that I’m still doing now is I’m really sticking to the principle of cash flow first. The property has to make sense on the day that you buy it.

Robert Leonard  26:54

And to your point, I mean, if you’re doing seller financing and you put zero down or even 5%, I mean, you have really limited risk.

Gabriel Hamel  27:01

Absolutely.

Robert Leonard  27:02

We’ve talked about structuring deals. But now let’s talk about property types. I know you have a diversified portfolio, you have single family of varying sizes, multifamily, and even some commercial property, where would you recommend a new real estate investor start?

Gabriel Hamel  27:16

You know, it’s less about where to start and more about just about starting. And so a lot of new investors are waiting for that perfect deal, and then getting that paralysis of analysis where they never pulled the trigger. And so it doesn’t necessarily matter where you start, I would say, what you’re most attracted to, start there. You know, for a lot of people that is single family houses or small multifamily because a lot of times that’s what they, you know, grew up in, or they’re comfortable with, or around, but I’ve watched people start with commercial. I have a friend that’s attracted to self storage, and so for whatever reason, he is and so it’s, hey, go do that. That might have intimidated me when I started, but whatever you’re attracted to. People have been successful in single family and multifamily and commercial and mobile home parks and warehouse space. People have been successful in all so get you know, just starting is more important.

Robert Leonard  28:13

Yeah i think that’s such a key takeaway. Just take action. I mean, the first property no matter what it is, it’s not going to make you rich. So you just need to get started and then start growing from there and once the ball starts rolling, it rolls downhill and it spirals very quickly and then next thing you know you have 100 units and you’ve reached financial freedom.

Gabriel Hamel  28:33

Yeah, and I love watching people do that. I had a friend that just waited for so long and then we ended up buying a triplex together. I said, “Hey, if you if you show me one more halfway, good deal. We’re going to buy this together because you’ve been just waiting for so long not pulling the trigger.” A couple months later, we bought another triplex, him and I, and then a couple months after that, he bought his first fourplex on his own. So he went from no units to 10 units in a really short period of time, but it took that first deal, that first three units, for him to feel comfortable and kind of go, “Okay, that wasn’t too bad. That wasn’t so painful. I can do this.” And now he’s off looking at way bigger deals.

Robert Leonard  29:08

Yeah, it’s really all just about getting started. And for me, I did something very similar at my house *inaudible, my first two deals. And then my third deal, my first rental, I was getting in that analysis paralysis a little bit. And I always told myself I will never buy a single family. I don’t want to start there. I want to start bigger. And so I was in that situation, and I couldn’t find anything. And then ultimately, one day, a good deal on a single family came across my table, and I said, “You know what, I’m just gonna do it. I just need to take that step.” And so I did, and ever since then, my portfolio has grown and it’s really just taking that action.

Gabriel Hamel  29:41

Yeah, taking that action that gives you confidence. Okay, I did this, I can do this. It’s not that hard.

Robert Leonard  29:46

There’s so much stigma around real estate, you know, just from the last couple decades. I just, I think there’s so much around it that makes people think they can’t do it. And then once you do that first deal, you just realize, I can do this and then you know, it just grows from there. Now shifting away from real estate a little bit, I know you’re a time freedom expert. So I want to dive into that a bit more. You have a quote that I really like. And you said, “Being rich is having money, being wealthy is having time.” So what is time freedom to you? And why is it so important?

Gabriel Hamel  30:18

Yeah, for me time freedom is really owning your time. Not being a slave to the clock, doing what you want to do when you want to do it, how you want to do it. And for me, it kind of kind of came to be because as I was getting into real estate, and even before I started buying properties, initially, when I was young, I had read “Rich Dad, Poor Dad,” which if any of your listeners haven’t read, they should read. And originally it was, “Oh, I’m going to get wealthy. I’m going to get rich from real estate.” And then as I started exploring my own mind and really asked myself, “Well, why am I drawn to to this? Why do I want this financial freedom?”

I realized it was less about… I didn’t want to go swimming in a pool of money. What I really wanted was to own my time. I wanted to do what I wanted to do when I wanted to do it and not have a boss. And so I realized how important time freedom was and how it’s rarely talked about.  So you hear a lot about financial freedom. And that can play a huge part of it is creating enough financial freedom so you own your time.

But I also watched a lot of people create businesses and even around real estate, where they had the ability to have financial freedom, but they never took the time to actually enjoy life. So they had built this massive amount of wealth. And they were just doing great on the investment side and their business, but they forgot why they really got into it. And almost anyone I’ve talked to when you dig deep enough, they have other reasons to get into it. Rarely is anybody wanting financial freedom, just so they can throw a bunch of money around. It’s usually about spending time with their family, spending time on their health, traveling, taking care of their parents. Something other than the money itself. And so I realized it just wasn’t a conversation people were having, and that we need to start talking about time freedom and how valuable it is to own your time.

Robert Leonard  31:15

Yeah, I mean, it’s one thing to buy a job that can make you wealthy, right. And that’s what we talked about with flipping. If you’re flipping houses a lot, that can make you very wealthy, but you’re essentially buying a job, you’re not really buying time freedom there, you’re buying a job, and you’re going to make wealth whereas with rental properties, you’re more so buying wealth, but you’re also buying time freedom. Do you see it the same way?

Gabriel Hamel  32:38

Yeah, absolutely. And it’s giving yourself more options. So if you have a job that you truly love, you don’t have to quit your job, but being in a position where you could if you wanted to, you know, I’ve met a surgeon recently. He loves what he does, but now he can do it on his own time because he’s created enough passive income and enough financial freedom. He understands the value of time that he’s not doing it because he has to keep up this lifestyle that he has. He’s doing it on his own terms when he enjoys it. It’s more about not putting yourself in a position where you are where you have to be at a job and you have to clock in to keep that lifestyle that you want.

Robert Leonard  33:19

So what tactical advice or maybe hacks do you have for someone who really wants to take more control of their life and achieve that time freedom?

Gabriel Hamel  33:28

For me, it’s just a constant check in with myself of, “Hey, does this align with the things that are most important to me?” So for me, it’s my family. It’s my health. It’s building wealth, its contribution. And so when I take on a new task, when I consider doing something, I ask myself does it align with this? When I turned my properties over to the property management company, there was the question of do I start my own property management company? Or I do I turn this over to a third party property management company?

And I realized if I started a property management company, I could create another avenue of wealth. But would that create more time? No, because I’d be managing employees and I’d be dealing with tenants directly. And I would actually be taken away from my time. When I considered syndicating deals., it was the same question, Is that going to add time to my life? Is it going to add another level of passivity? Or is it actually going to create a job for myself? It’s constantly having that on the forefront of your mind. What will the net result be? If I take on this task or take on these particular tasks in my life, maybe it will add some financial value. And there’s nothing wrong with that. Just realizing what the effect is going to be when you do that.

Robert Leonard  34:38

So do you think real estate is the best way to achieve time freedom?

Gabriel Hamel  34:42

I think real estate can be one of the greatest ways to achieve time freedom. Yes. The other extreme would be if you create enough financial freedom, then yes, you can create this level of time freedom. I mean, the other extreme would be, you know, go live off grid somewhere and plant your own food and live off the land. And sure there’s some time freedom. That would be time freedom. But I’d rather do it with financial freedom through real estate.

Robert Leonard  35:06

What strategies in real estate do you think leads to the most success in achieving time freedom?

Gabriel Hamel  35:14

I think the biggest strategies specific to real estate and time freedom would just having a clear understanding of what’s your best usage of time. And so when I first started out, and I was managing my own properties, and I was doing a lot of the handy work, which I wasn’t that handy, that would take up a lot of my time. And so I knew my time was better spent putting deals together.

In fact, I was able to work less in the business and more on the business, so to speak, because I was more efficient with finding deals than I would be if I was at someone’s house trying to fix a toilet. And so just knowing what you’re good at knowing how much time something takes, it’s easy for a lot of investors, especially if they’re very hands on and untalented that way to say, “Oh, I could do this so much less than a contractor.” That’s fine, especially starting out. But the problem with that is if all your time is spent on fixing things, you don’t leave yourself a lot of time to go put another deal together, or go focus on what your best use of time is.

Robert Leonard  36:13

Yeah, you really have to think about the opportunity cost. You could probably save 1000, maybe $2,000 by doing, say, flooring yourself, but you spent, say, 20 hours on doing that flooring, instead of spending the time doing that, you could have spent those hours finding deals, and maybe you found a new deal during that time. And maybe that would make you $10,000 or $15,000, something like that. And clearly, that would be a much more valuable use of your time rather than saving one or $2,000 doing the flooring. So you need to really make sure that it’s actually the best use of your time.

Gabriel Hamel  36:49

Exactly right. And I think people underestimate the value of having that time and the time to just think so I think thinking is very valuable time. And I think that you know, really reading and listening to audio books and podcasts are very valuable time. Or some people would say, “Oh, that’s a waste of time.” But I often get my best ideas or a solution to a problem when I’m not specifically working on a deal. It’s when I’m out on a walk, or when I’m, you know, out in nature. It’s when I’m not working in the business, I usually come up with a solution.

Robert Leonard  37:22

I personally don’t think there’s a better ROI than buying a book or listening to a podcast. And that’s not because I’m a podcaster. But because podcasts are free, and there’s a ton of valuable content available in them. And then books, they do cost money, but they’re relatively cheap. A lot of times you’re spending less than $20 per book. And because that base is so small, the ROI is just huge.

Gabriel Hamel  37:48

Yeah, I couldn’t I couldn’t agree more.

Robert Leonard  37:50

I know you’re also big on mindset and I love how you think about this. Can you talk to us about your philosophy around mindsets?

Gabriel Hamel  37:57

Yeah, I was fortunate to have a mom who told me at a young age, “Hey, you can do anything you put your mind to.” And I just believed that as a young kid, and so I just took that into every area of my life. And, you know, yes, you have to put in the work. So it’s not just aw of attraction, and I’m just going to think everything into existence. There’s definitely that take action part that’s important. Almost subconsciously, it just became a part of my life, is yeah I can do anything I put my mind to. I’ve kind of taken that attitude in every aspect of my life.

Robert Leonard  38:30

If you could go back and give one piece of advice to your 25 year old self, what would you tell yourself?

Gabriel Hamel  38:36

I’d tell myself to build more relationships, talk to more people, and build genuine relationships.

Robert Leonard  38:43

How can somebody get over the mental hurdle maybe of doing that and not seeing a quick ROI, right? Because you’re going to build a relationship and I think a key point to this is it has to be genuine. If you’re going to build a genuine relationship, that’s going to take time, right? I mean, you’re gonna have to talk to this person, and it’s just it takes time. You’re not going to see your ROI quickly. And I think in today’s day and age, probably more than ever, that’s so important because you can get anything, almost anything at the snap of your fingers with your mobile phone. So knowing how important relationships are in real estate, and then specifically the strategies we’ve talked about today, how can somebody get over that mental hurdle of not seeing that ROI right away?

Gabriel Hamel  39:21

I think just understanding yourself enough to know, “Hey, are you in this for the long term? Is this something you’re into?” And that comes down to spending time just understanding yourself. Are you in this to make a quick buck and get out? Or are you in this to build wealth over a long period of time? And so, you know, going back to just genuine relationships, I’ve met a lot of other investors and people that I’ve surrounded myself with that some may consider competition, you know? They wouldn’t want to talk real estate with them.

And I went into it with, you know, hey, maybe I could learn from them. Maybe I could help teach them something. And ultimately, maybe this will be a friendship. Maybe this will be a business opportunity down the road. Maybe it’ll just be an acquaintance, maybe it’ll go nowhere. But I would go in with a long term vision of, “Hey, I’m invested in this community, I grew up here, I plan on investing here for a long time. And these relationships are important.” If the people that are in it to make a quick buck, and to just screw someone over, they’re not going to last. They’re just not. And so just having a clear, long term vision is important.

Robert Leonard  40:26

Yeah, I couldn’t agree with that more. I think the relationships for the long term is so important. And it’s having an abundance mindset, right? Because, sure, maybe they are a competitor, in one sense, they’re real estate investor. And they’re going after the same deals as you but I actually recently had a deal where I was going after it, and my business partner on that deal and I were talking about it. I told him, I was talking to another real estate investor about it, and he’s like, “Aren’t you worried that they’re going to steal your deal?” I’m like, “No, not really. And if they do, then so be it. I’d rather build that relationship with that person. I think that’s so much more valuable than a couple thousand dollars that I might have lost out on that deal.” So the relationships, and then having an abundance mindset that there’s plenty of deals out there for you to get is so much more valuable.

Gabriel Hamel  41:09

You nailed it with the abundance mindset. And I have a great example. I met a woman years ago, and she was actually advertising to sell properties with seller financing. And I would look at multiple properties of hers that she was offering seller financing on, and we never came to terms that would work for me, and that she was happy with. And so, but we kept that conversation going, and we would talk throughout the years. And then we found ourself bidding on the same properties. We kept competing with each other.

And so after all these years, she said, “Hey, I’m, you know, you keep buying these properties. Can I finance you on the next deal you get another contract?” And I thought, “Sure, let’s do that.” And so she was happy doing that. I was happy because she financed the deal. And it was going back to that neither one of us had an alternative motive. You know, we just kept in touch, we both cheered each other on, we both believed in that abundance mindset. And years down the road, it created an opportunity for her and myself. So you just really never know.

Robert Leonard  42:02

You never know where things are going to go. You never know who they may know or who they’re going to become. I mean, just building that genuine relationship is just so invaluable.

Gabriel Hamel  42:14

And that’s why it’s important do the right thing. You know, you’re in this for the long term, your reputation is important.

Robert Leonard  42:20

Especially if you’re just getting started. Don’t worry about it, you know, if you’re going to lose a deal, if it comes down to doing the right thing, or potentially losing a deal, I, 100 out of 100 times would always recommend passing on the deal, maintaining your relationships, maintaining your personal brand, and just how you’re known in the in the real estate space, and just pass on that deal because I think that’s so much more important.

Gabriel Hamel  42:45

Yeah, hundred percent.

Robert Leonard  42:47

Gabriel, you provided a ton of value for the audience and help break down some of the hurdles that people face when wanting to get into real estate investing. Where can the audience go to connect with you?

Gabriel Hamel  42:56

I am most active on Instagram, so https://www.instagram.com/gabrielrhamel  Or if you search Gabriel Hamel, you’ll find me. You could also find me on Facebook at Gabriel Hamel and my website is hamelinvestments.com.

Robert Leonard  43:10

Awesome. I’ll be sure to put links to all of Gabriel’s resources in the show notes so you guys can go check it out. Before we wrap up today’s episode, I wanted to mention some exciting news. I’ve been working on releasing a new show focus solely on real estate. The new show is called Real Estate Investing by The Investor’s Podcast Network, and it will be available in just the next few weeks.

On the new podcast, I’ll be interviewing successful investors from various real estate investing niches to help educate you in your real estate investing journey, whether you’re just getting started or you’re looking to grow your business. So if you’ve enjoyed the episode about real estate on Millennial Investing so far, you can check out the new show to learn more about real estate investing. You can find a link to the new show in this episode’s show notes below.

And lastly, if you’ve been enjoying the show, I’d really appreciate it if you’d share it with your friends or leave a five star review on Apple Podcasts. That’s how we’re able to grow the show and continue to bring you the best guests and content each week for free. So if you know someone who you think might like the show too, just share with them and ask them to do the same. I really appreciate all of you guys. I hope this was helpful. I hope your new year is off to a great start. I’ll see you back here next week.

Outro  44:30

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