Professional Athlete to $26mm in Acquisitions under 12 months

[Sam Tewes]

Professional Pitcher to Real Estate Investor: Sourcing $26mm in Multifamily Assets by age 26 being an ‘Ace of Acquisitions’

Professional athletics, much like entrepreneurial success, sounds like a holy grail. A lot of people wish they could do it, but give themselves a reason why they weren’t blessed enough to pursue it with a zeal completely unmatched by those around them. Some people are given a Lamborghini shell with the motor of a Prius. Others are given a ‘95 Civic shell with a V8 under the hood. My athletic career could be 100% summarized by the latter. In fact, since my freshman year of High School, I didn’t spend a calendar year competing athletically without finding myself on the Injured List at some point. Injuries forced me out of baseball earlier than I would have liked, but the game shaped a lot of who I am as a businessman and competitor. That is a crutch for a lot of people, but I think it is the best thing that ever happened to me. My relationships with players/coaches, successes, failures, and injuries have all cultivated a grit mindset, relational skills, and a motor for success. This has given direction and momentum in the early stages of my investment career.

Mindset Traits noticeable in successful entrepreneurs:

1. - Unshakeable work ethic. To reference baseball, it doesn’t matter if you are 0 for 1,000 or 500 for 1,000. You bring the same diligence, energy and integrity to work every day. You don’t ride the roller coaster of success and failure.
2. - A desire to learn from those that are performing at a higher level than you. Measure your success to those around you, not as a comparison, but as a metric to learn where and how you can grow.
3. - Coachable. Whether you’re learning directly from a mentor or you’re learning from your mistakes, progress is made. There is a balance and confidence developed by trying new things, you learn what works, and what doesn’t.

*Some books to get you started shaping a champion mindset: Shoe Dog, Essentialism, The Comfort Crisis, The 5AM Club, Zero to One, Good to Great, Principles, Rework, Contagious, Can’t Hurt me, Relentless, 48 Laws of Power.*

In 2013 as a Senior in High School I had an opportunity to sign in the 4th round of the MLB Draft. I didn’t take it. Through an abundance of fatherly wisdom and difficult conversations, I moved on to Wichita State University where I played baseball and studied Business Management. After season ending injuries in both my Sophomore and Junior campaign, the St. Louis Cardinals still bet on me and used their 8th round Draft choice in 2016 on me. A gesture I’ll forever be grateful for. In the 4 years I spent in this organization, the words my dad had been saying for so many years became abundantly clear to me, “you’re a product of your environment”. After 2 elbow surgeries, and a hip surgery, my time with the Cardinals organization came to a conclusion, and I found myself back to square one. I was now in the real world, and needed to find out what came next. I chose Real Estate Investing.


Starting your journey : Here are some things to know

1. - Everybody has an opinion on ‘what is best for you’, and ‘what route you should take’. Be honest enough with yourself to recognize your motivations and find ways to take consistent action that shape the direction of your future.
2. - Find a confidant, mentor, or support line.
3. - Be vulnerable. You are entering a new world, with a new operating system. The best way to learn it is to throw yourself into it and absorb everything you can along the way.
4. - Competence = Confidence. Educate yourself on the practices and niche aspects of the industry you want to get involved in. Creative knowledge is the currency of real estate.

*Some books to get you started with real estate focus in operations and acquisitions:

Rich Dad, Poor Dad, Multifamily Millions, ABC’s of Real Estate Investing, Skip The Flip, The Book on Managing Rental Properties, Never Split The Difference, Millionaire Real Estate Agent. ASK YOUR MENTOR/CONFIDANT for more suggestions*

After getting released from the Cardinals organization in 2020, I picked up Rich Dad, Poor Dad. That book, paired with the mindset of relentless pursuit, put me in a meeting room at an Embassy Suites two weeks later with a Rich Dad poor dad rep. A month after that I signed up for their mentorship program, kicked off the training wheels, and made a sizable investment. I was all in. When you put yourself in a position where failure isn’t an option, it strips away the distractions on the path to success very quickly. I started to utilize some of the tools I was given, but it didn’t give me the kind of action I was looking for. To be fair, I didn’t exhaust all of the resources they had given me, specifically, my mentor.

I looked in the mirror and thought, “What am I better than everyone else at?” My answer was pretty simple: People. In college, I was always able to hold conversations with a more sophisticated business class crowd, throw on my cowboy boots and yuck it up with the country boys, and 30 minutes later be the life of the party. I needed to be in acquisitions, that was my way to get a seat at the table. I attended the largest Real Estate Meetup in the state of Nebraska, went around the room, collected 13 business cards, and then went to the bathroom and wrote down notes on every single person I met with. We were mixing cocktails and conversation, and I knew if I could develop instant rapport followed up with an act of service, I could separate myself from 15 other guys walking around the room doing the same things as me.

TIPS for separating yourself as you Network with others:

1. - If you want to be different from everyone else, you need to do different. Take a risk, buy the drinks, show them a party trick, be unique. Rapport creates a fingerprint on the mind.
2. - Always be genuine. You can only hold a facade for so long before it starts to wither away and the truth becomes apparent. Express your interests, be honest. A dishonest word always finds a way to reveal itself.
3. - Play on your strengths, find a way to serve. Find value in exchange for value. As I said above, creative knowledge is the currency of Real Estate. If you understand the ins and outs of the business, the dollars will come.
   
   

The week following that meetup, I called all 13 business cards and had conversations with every one of them. There were 3 gentlemen I whittled my list down to. Collin Schwartz, Owen Dashner and Dave Bader (shoutout to these 3 as they are all high level operators in our local market). Again, I knew how important the people you surround yourself with are, so I jumped in. I nagged and nagged time after time trying to get my foot in the door, and Dave Bader was the first to give me that opportunity. We wholesaled a few houses before getting into transacting multifamily assets. This was the catalyst to my investment career. Creative knowledge is the currency in this business and it’s absolutely necessary. However, the steps to implementing that currency often come down to ‘who’. This is where partnerships become vital.

Notes for Partnerships:

1. - Find someone who is going to challenge you, and push you to do things that make you uncomfortable and grow out of necessity.
2. - Find common ground. There needs to be mutual understanding of expectation.
3. - Dating before Marriage : Don’t get contractually tied into a relationship before testing the waters.
4. - Polygamy vs. Monogamy. Don’t get weird about it. There are people in this business that function better with one partner and one partner only. That is fantastic and those relationships are rare. If you aren’t in that situation, be open to multiple partnerships and place those partnerships circumstantially to align everyone’s strengths and goals based on the deal. No two deals are the same, being flexible can be a great strength.
5. - Transparency is mandatory. From financial interest to your views on the “why” behind your business, you need to have a clear understanding of the people you’re working with. You don’t know what you don’t know - don’t let that be the reason for the collapse of a partnership.

Following a great start to 2021 on the investment side of things, I finished my hip rehab and decided that I wasn’t quite finished with baseball yet. In March, I ended up signing with the New York Mets and was on my way to Spring Training in April. During my time down in Florida, I continued to work remotely while playing ball. We bought a 39 unit apartment complex (which was my first buy and hold property) and transacted another four apartments during my time with the Mets organization. Unfortunately, I was only with this organization for 3 months after tearing my UCL for the 3rd time. I made the decision to hang up the cleats and jump into this real estate thing full time. I was home by the end of July.

The months to follow are a bit of a blur. When I got home, it was time to go. We hit a couple of “base hit” multifamily transactions, but I felt like I could be doing more. One of the gentlemen I mentioned above, Collin Schwartz, pioneered some of the multifamily syndication efforts in the Lincoln/Omaha markets. He and his partner, Chris Pomerleau, were doing the things everyone wanted to be doing. Again, referencing the point made earlier, I wanted them in my circle, and I wanted to learn from them. I talked with Collin at the next meetup, which he organized, and asked him what he needed and how I could be valuable to him. *asking someone what value you can bring to them is completely hollow without affirmative action to follow. Everyone in the room says “how can I help”, very few actually do*. After hearing a little bit of his investment criteria, the talking was over. The recipe for getting involved with the people above you is simple: Be Relational + Be Valuable. In the last quarter of 2021, I sourced $22mm for LeavenWealth (formally Park Ave) in markets outside of our home base, and had the opportunity to be a limited partner in those portfolio efforts. During that last quarter, a few partners and myself also picked up a 24 unit townhome style multifamily package down in Manhattan (my 2nd buy and hold investment ever) on the highest rated public golf course in Kansas.

How I Sourced these deals:

1. - Exhaust every ‘in person’ resource that you can. Call the brokers, call the property managers, call the For Rent signs in front of the apartment. Do anything you can to talk to someone in relation to the property.
2. - Pull lists, get as much inventory in front of you as possible.
3. -Work smarter, not harder. It’s extremely time intensive to go around and drive for dollars. However, it’s not time intensive to use google maps or other acquisition softwares. You can cover hundreds of miles in minutes. I used Reonomy to drive for dollars for about an hour/day in every midwest market I could find and built out extensive lists of target properties that fit with criteria. I would do a back of the napkin check of this by:
   1. Googling the name of the apartment complex and checking google reviews, as well as sifting through pictures to see if there was a very clear and present “value add” to be had.
   2. Skip tracing the LLC’s that owned these buildings to identify whether it was a viable target (REITs generally aren’t worth the call).
   3. Skip tracing the owners of the LLC and exhausting all resources to contact them. Email, text, phone call, handwritten letter, postcard to office, etc…
4. - Do a basic reference check of the markets you’re operating in, and learn where things are trading to give yourself an idea of how to immediately extract value and know whether you have a deal on your hands or not. The 1% rule is still a great way to measure value in a multifamily.
5. Finding the “who” on the back end. For me, I knew that I had a great relationship established with Chris and Collin, and if I brought the right deal they would pursue it. This might look different for everyone - if you are the backend, find yourself an acquisition person to bring you deals!

What isn’t shown in the “successes” listed above are the 200 failed cold calls for every 1 warm lead. The hundreds of conversations learning how to diffuse conflict and gain trust in a 10 second introduction of who you are. Learning how to structure emails and handwritten letters to both give credibility and sincerity to oneself, both as someone who can be trusted, and someone who could get the job done. For 1 minute of success - it takes 12 hours of failures. THIS is the bones of the acquisition world in real estate. There’s a famous quote that one should “be like water”. Encompassing the formless nature of it and adapting, growing, changing as circumstance suggests. The thing that people often forget about water is that it is relentless. It can destroy anything in its path, with enough time. I love this quote because of the irony it has in real estate, no one likes a leaky roof, but everyone addresses it.

A lot of high level operators will tell you that they don’t love real estate, they love the opportunities that real estate presents for generating wealth. There are a MILLION ways to become involved at a high level in the world of real estate. It truly takes all kinds of kinds. Look at yourself and ask “What am I better than everyone else at?”. That will get you a start on a.) the thing that you are naturally really good at, and b.) the things you enjoy doing. This isn’t to say that you don’t need to work on yourself. If you’re not educating yourself every day, you’re wasting your time. Be like water. Evolve, reform, adjust, so that whatever situation you find yourself in - you can maximize the opportunities that present themselves. But, most of all, be absolutely and unequivocally relentless.

Sam Tewes