Subscribe via:
Show Summary
In this episode of the Real Estate Pros podcast, host Erika interviews Brian Samson, a dynamic entrepreneur and real estate investor based in Hawaii. Brian shares his journey into real estate, the unique opportunities and challenges he faces in the Hawaiian market, and his strategies for generating cash flow. He emphasizes the importance of understanding the market, learning from past mistakes, and balancing business ventures with real estate investments. Brian also discusses his approach to entering new markets and the significance of building connections in the industry.
Resources and Links from this show:
-
Listen to the Audio Version of this Episode
Investor Fuel Show Transcript:
Brian Samson (00:00)
you don’t have a business unless you have a customer.go get a customer. Then you can figure all this stuff out,
And from an investing standpoint,
you’re probably not gonna be successful on your first investment. You have to understand that that’s your tuition.
Erika (01:51)
Hey everyone, welcome to the Real Estate Pros podcast. I’m your host, Erika. And today I’m excited to be joined by Brian Samson. He’s been shaking things up in the real estate world. He’s the founder of Plugg Technologies and the co-owner of two Hawaii businesses, Cleanscape and Keymasters. Brian, it’s awesome to have you on the show today.Brian Samson (02:13)
Yeah, thanks so much for the invite, Erika.Erika (02:17)
Well, I think our listeners, Brian, are really going to learn a lot from you and just how to grow and scale businesses while building your real estate. So, you know, let’s jump on in. Brian, can you share what inspired you to get involved in real estate?Brian Samson (02:32)
Yeah, you know, funny enough, I think it was probably maybe a dozen years ago and I read the book, Real Estate Investing for Dummies. That’s where I started. know, we all have like those yellow, big bright yellow books, know, like X for Dummies, like Coding for Dummies, you know, Building Furniture for Dummies. Mine was Real Estate Investing for Dummies.And that just kind of spurred it. And I think, you know, I had these other conversations in the past that you kind of gloss over the time and then you were like, oh, like that person said something really interesting 20 years ago or 30 years ago. And one of those things that kind of flashed back to me was a friend of mine in college, I remember his dad had owned a mobile trailers.
⁓ in like rural Illinois, which is where I’m from and I remember him saying like that ⁓
you know, the tenant paid the mortgage and you know, he was just like profiting, you know, like off these 30 or 40 trailers that he had. Like, wow, that’s really smart. So, you know, you’re not, you’re just kind of making all this profit every month. And it didn’t click at the time because I come from a real estate investing family. You know, I think we, my parents did the very traditional thing of they bought their home and their home is
their primary retirement asset and I think a lot of people do that. ⁓ So then I read that book, things started flooding back, then I read the Wall Street Journal version of that, it’s this other book about real estate investing. ⁓
I started to understand the cash flow elements of it and the appreciation elements of it and the tax advantages and it all started to click. So I was living in San Francisco and my very first deal was a condo in Waikiki and that kind of led to ⁓ the other ones.
Erika (05:45)
Yeah, yeah, that’s a that’s really awesome. And I know today that’s primarily where you operate in terms of investing. So Brian, can you share what kind of opportunities and challenges you’re seeing in Hawaii there?Brian Samson (05:59)
Yeah, Hawaii is the place I’ve lived the longest as an adult, which is hard to believe sometimes. You know, came from the Midwest, spent almost a decade in California, you know, more like seven or eight years, and then Hawaii had spent about nine. So I almost feel like a local here.And if you haven’t been to Hawaii, there’s really four major islands. There’s Oahu, Maui, the big island in Kauai, and there’s a couple smaller ones that not many people live on. And out of the big four, Oahu is the king. ⁓
About a million people of the 1.4 million people that live in the whole state live on Oahu. It’s known as the gathering place. It’s where Pearl Harbor is, Waikiki, the North Shore. And one thing you’ll realize right away as you fly in is there’s not a whole lot of place to build.
This is not Texas where you can just keep going, going, going big. ⁓ You know, it’s quite vertical ⁓ when you’re in town and like Waikiki and downtown. And then, you know, the West side, which is where I’m at, you get a lot of kind of newer single family developments. ⁓ So there’s a lot of attractiveness in terms of people seem to want to move to Hawaii.
Right? There’s a lot of tourism here. know, tourism and military are like the two biggest industries here. I think we’re one of only two places in the world that has every branch of the military. We have army, Navy, Marines, Air Force, Coast Guard, and Space Force. So we’ve got all six here. And so you’ve got this constant flood of
government employees that have something called BH, Basic Allowance for Housing, so that allows them to keep up with the high cost. So even if somebody’s in the military and maybe their wage isn’t that great, ⁓ they’ve got this Basic Allowance for Housing that allows them to keep up with rental rates. So you always have this like nice flood.
You know every year of new military people that are coming on island it makes about 10 % of the population here And you’re not really worried about ⁓ Getting paid as a landlord. So there’s a lot of interest in the in this ⁓ state There’s a lot of money coming in ⁓
and ⁓ there’s not a lot of new property built, so that really protects appreciation. ⁓ But the downside to that is you don’t have a lot of W-2 high income earners. And I think you need that for a healthy rental market. ⁓ The wages are pretty suppressed here. So that means that…
your often your mortgage payment, you know, just kind of breaks even with that ⁓ rental check. And then Hawaii also has something called general excise tax, a GT. So ⁓ as a landlord, four and a half percent of all your rental income goes back to the state in a GT.
Let it, know, forget if you made any profit or not. Just, you know, top, top line revenue goes to the state. So it’s, it’s not a great place to be a landlord. Um, if you want cashflow, but if you want appreciation, um, my property is all of them have dramatically risen in value.
So it’s been ⁓ an amazing store of value, just not a great cash flow operation. I have to get my cash flow from elsewhere.
Erika (10:48)
got it. Have you have you pivoted in some ways because of that that cash flow issue or you know what’s what’s your ⁓ strategy there to ⁓ you know try to help with that?Brian Samson (11:02)
Yeah, so ⁓ I think I’ve recognized, ⁓ you know, after nine years here, I guess a decade now as a property owner, ⁓ that Hawaii just isn’t it. It’s just not the place for cashflow, but that’s okay. So when I look at my broader portfolio, so I invest in, you know, I’ve got my Schwab account and cryptocurrency.⁓ And then as an entrepreneur, I have cash coming in every month. So that’s ⁓ kind of driven some different decisions as I try to have a balanced portfolio. ⁓ So if I look at my real estate holdings as a place for tax advantage and store of value that’s generally gonna appreciate, that kinda checks that box.
So that just means I need to bring in cash flow elsewhere. So I’ve done that as an entrepreneur. I’ve got a staffing software near shore company. That just means I place people from Latin America with US companies. ⁓ And then ⁓ in the last year,
I’ve bought ⁓ stakes in a cleaning company and a locksmith company here. So again, those are in pursuit of cashflow. ⁓ And sometimes, you know, if you look at like dollar for dollar, buying a business or buying a piece of a business will generally yield a better cashflow than buying real estate. Not always, but generally. ⁓ On a broader horizon though, ⁓
If I wanted cashflow in real estate and I’ve looked into it, ⁓ we all have our, ⁓ we can get sucked into Zillow and just like, ⁓ it’d be interesting to own something in Eastern Tennessee or wherever. ⁓ Alabama is a place that I’ve kind of circled as a pro landlord. ⁓
lower cost, higher income market that seems to chuck a lot of boxes for cash flow. So my broader goal is to take some of the cash flow I have as an entrepreneur and then spin some of that back into ⁓ cash flow in real estate.
Erika (13:29)
That’s exciting. So we haven’t really talked about it yet, but we haven’t talked about how you have the time to manage these properties that you have, run plug technologies, be a part of CleanScape and KeyMasters. What’s been the secret there?Brian Samson (13:50)
Yeah, I’ve been really lucky. ⁓ It wasn’t always this way, but I have a lot of free time and I read a book that I’m sure a lot of your audience has read, Rich Dad Poor Dad. And that was a big, just like Real Estate for Dummies, Rich Dad Poor Dad was a very impressionable book for me. And I read the sequel, which is Cash Flow Quadrant.and you learn all about, you an employee? Are you self-employed? Are you a business owner? Are you an investor? And there’s these four quadrants. And I look at myself and I’ve kind of slowly been eking my way from employee to self-employed to business owner and now investor. And I think I’ve found a place where as a business owner with Plugg, we’ve got about 100 employees.
but I have a full-time president who runs that. And then for Keymasters and Cleanscape, I have partners. My partner for Cleanscape is a cleaning person. ⁓ My partner for Keymasters is a licensed locksmith. So they’re in it, they’re on the calls. I don’t know how to change locks. Probably not the person to call when you want to clean your apartment.
⁓ But I do understand, you know, basic business and finance and marketing, so that’s kind of my contributions there. But generally, you know, based on those rich dad, poor dad, and cash flow quadrant principles,
I try to stay as much as possible out of the day to day and let my capital do the talking instead of my hours do the talking. And that frees me up to have the brain space to evaluate other opportunities.
Erika (16:31)
That’s really awesome that you have the flexibility and that you’ve scaled your business in such a way that you can do that, Brian. For our listeners here who are looking the level up in what they do, whether it’s a lesson that you’ve learned from investing or with scaling those businesses and growing them, what has made the biggest difference for you?Brian Samson (16:56)
Yeah, I think with… ⁓I think there’s maybe two lessons there. The first is just general business entrepreneurship and it’s something I share with everyone ⁓ because I’ve learned it the hard way is
you don’t have a business unless you have a customer. ⁓ And it’s something that I think needs to kind of be drilled in people’s heads. Because I remember a decade ago I had like ⁓ a very ⁓
Small time, you know, this is when I was a self-employed in the S quadrant trying to get a business off the ground. And I was just spending all my time like on the grammar of the text on the website and which LLC should I get and researching that for weeks. Who cares? You know, go get a customer. Then you can figure all this stuff out, get some money coming in. ⁓ And from an investing standpoint,
I know it’s easier said than done, but you have to recognize you’re probably not gonna be successful on your first investment. You have to understand that that’s your tuition.
And you could read all the books possible. ⁓ And I’ve made some dumb investments. I bought YouTube channels that I might as well have lit that money on fire.
You know, I’ve, you know, just bought some bad stocks, other things, ⁓ you know, even entrepreneurship and buying businesses, you know, not everyone has been successful. In COVID, I got into, ⁓ I don’t know why, what I was thinking, but I started like a men’s fashion online Shopify store.
You know, might as well have lit that money on fire. ⁓ So it’s easy to look at successes, but recognize, like, I burned through some money, burned through some dumb things, but all of this compounded for me. So this is my tuition that I get to take advantage of ⁓ and make better decisions tomorrow.
So just recognize it’s hard, it’s hard out there. If you put all this pressure on yourself to make the first deal right and it doesn’t go through, you gotta dust yourself back up and realize you just got your tuition paid for. Now you gotta make the second one a better deal.
Erika (19:44)
Yeah, I love that perspective, Brian. So when so when it comes to the lessons that you’ve learned, in particular, when it comes to investing, Brian, what is your approach and strategy going to be when you do enter a new market like Alabama?Brian Samson (20:04)
Yeah, well, so I try to feel the market, be in the market instead of just, you know, do it totally remote. So as an example, in 2015 was when I entered the Latin America world and I had an investor, I actually raised about two million dollars for this business andAnd I was living in San Francisco at the time, ⁓ but I decided to, ⁓ uproot. didn’t have kids yet. ⁓ my wife and I moved to Buenos Aires and you know, we just got like right, right in the middle of this world, you know, of, ⁓ all the good and all the bad, you know, the tree line streets and great steak and wine, and then volatility and labor strikes and chaos and all that. So for the good and the bad.
So I probably would have moved to Alabama, but I would certainly spend some time there and, ⁓ you know, not try to do this remotely, not try to do this over zoom, ⁓ and not just talk to some realtors, but get out there, go to some open houses, ⁓ talk to real estate attorneys, you know, talk to CPAs out there. ⁓
Try to understand the whole ecosystem. ⁓ Maybe even talk to some potential ⁓ tenants. Really understand the whole ecosystem, not just throw some money at another state and hope it all works out.
Erika (21:51)
Absolutely, you need a plan there. Well, that sounds great. Brian, if someone today listening, maybe they want to collaborate on a deal with you, or I know we got to give a shout out to your company’s plug technologies, Cleanscape Keymasters, ⁓ what are the different ways that you can be reached and the companies?Brian Samson (22:14)
Yeah, if I could just drop the websites for everybody. ⁓ So if you just want to re-talk to me in general, Plugg Technologies is the best way and that website is p-l-u-g-g dot t-e-c-h, plugg.tech.And then ⁓ Cleanscape, if you happen to be in Hawaii and you need a move out clean or a recurring clean or a vacation turnover, that’s simply cleanscapehawaii.com. ⁓ And then if you happen to be locked out or need some help with new keys or something, again, Hawaii only, ⁓ that’s a keymastershawaii.com.
Erika (23:05)
Brian, I appreciate you being on the show today, sharing your story, your expertise. We need people in the real estate world who are just as strategic as you.Brian Samson (23:16)
I appreciate that. Thanks so much for the opportunity.Erika (23:19)
And for our listeners, if you got value from this episode, make sure that you’re subscribed to the Real Estate Pros podcast. We’ve got more conversations coming up with pros like Brian, who are out there building fantastic businesses. We’ll see you on the next episode.
