Real Estate Investor Shares $5M Mistake and Redemption Story

Sina Sabeti (00:00)
I tell you though, I tell

you though, I spoke to so many advisors, ⁓ business advisors, and I spoke to several attorneys as well. Everybody, I mean literally everybody, told me you have to file bankruptcy. I’m like, no, I’m not doing that.

Kristen Knapp (00:21)
I’m not doing it.

Wow. Wow.

Sina Sabeti (00:25)
Yeah,

it’s easy to give up. It’s easy to give up and go away. ⁓ But I always had the mindset and thought that money can come in and go at any time. Many things can happen for you to lose the money. But your credibility, the trust, and your knowledge is what always stays with you.

Kristen Knapp (00:28)
Exactly.

Welcome back to the Real Estate Pros podcast. I’m Kristen and I’m here with Sina Sabeti. He is a fix and flip expert out of Arizona. So thank you for being here today.

Sina Sabeti (02:35)
Thank you. Thank you for having me here.

Kristen Knapp (02:38)
So let’s go to the beginning. How did you get into the real estate industry?

Sina Sabeti (02:43)
So my father was a builder, so I grew up in construction since I was a kid. I remember I was six years old switching outlets and ⁓ switches, replacing them. I grew up with the passion of construction. And as I grew up, I realized doing the construction itself is not really the moneymaker and working is smart.

is the way to go. So I started getting involved more in real estate. And after I immigrated to United States, of course, the language barrier was the biggest headache to deal with. And after a while, I started as a handyman, built up the clientele, then started getting into real estate again. ⁓ So it’s a long story.

But to make it short, I think I was born to be in real estate and construction.

Kristen Knapp (03:48)
amazing

so you really worked your way up. I think that’s important because I think a lot of people expect their journey to start at a hundred right away but I think it’s more realistic to as you said build up your client base, build up your confidence and yeah just ease into it.

Sina Sabeti (03:51)
Yes. Yes.

Correct.

Kristen Knapp (04:08)
Yeah, can you talk about, you know, as you got started in investing, maybe thinking back to those first deals and the time where you really thought that this could definitely be something. ⁓

Sina Sabeti (04:21)
my god, well there was a few first deals. The first deal that I thought about wholesaling, I had no idea what wholesaling is. ⁓ I had my real estate license and there was a cash buyer. It was a family, not an investor. They just had the cash to purchase a house.

⁓ I showed them the property, they looked at it, they didn’t like the house because how distressed it was. And I come back home, I think, my God, this is a good deal.

This could be bought and sold immediately. And then I keep thinking to myself, what should I do? And I think, I wish I had money to invest in this one.

And then I keep thinking and realize I tell myself, let’s just put an offer on and see what happens. So I ended up with the wholesale idea without knowing about it. ⁓ And then that’s when I actually started getting into wholesales. There was a friend of mine that I told him about it and he told me this is ⁓ pretty much the wholesaling idea.

and he referred me to a group Azria meeting that I joined and I started learning more about it and I got more involved in it and yeah I started doing fix and flips sorry the wholesaling and after a few years I started doing fix and flips and the first deal was a little bit

Concerning, ⁓ I was scared to ⁓ commit to the hard one alone, but I’m glad I did it. There’s always a first thing to everything. Once you do the first one and ⁓ shave off the scariness, ⁓ it becomes much easier and more joyful.

Kristen Knapp (07:24)
Right, and how did that first fix and flip go for you? I’m sure it was nerve-racking to kind of step into that role.

Sina Sabeti (07:32)
Well, it was because I wasn’t used to having the hard money loan. It was the first one I was taking on. And it was a big commitment for me as the provider of the house, you know, taking additional risk and trying to test something new that I haven’t done before, even though I was…

⁓ involved and I have helped many people make the money ⁓ by finding the wholesale deals and assigning to these investors. But when it becomes about you, that’s a different world. So the first one, even though I was involved in construction and I had a construction team, just the fact that I was getting more involved in it and committing to the hard money loan.

It was a little bit weird. was a little bit hard to get involved in it. I was scared. I found a deal that was 153,000 I think, the purchase price. 150 or 153,000 dollars. Very rough neighborhood of Phoenix, I tell you that.

I got into it. I found a hard money lender that was willing to lend me 100 % of the acquisition and 100 % of the rehab. That was the good part about it. ⁓ Without spending any money out of my pocket, I got the deal, I remodeled it, I was actually involved in the construction, I did some part of the construction myself.

the painting I sprayed it myself. ⁓ But yeah, we finished the job. think it was about five weeks to finish that project. And then we sold it. I made about $40,000 on it. That was good. That was a good first experience. Then immediately I got the second one and before I knew it, I had over 200.

Kristen Knapp (09:39)
Nice. Yeah.

Yeah, that’s That’s enough. ⁓

Wow, 200, that’s amazing. And I’d love for you to talk more about how you got started with 100 % financing. Because I think a lot of people are hesitant to get into real estate investing because they think they have to put up so much money. Can you talk more about that?

Sina Sabeti (10:45)
Well, generally speaking, in a normal world, you have to have some money to put down for the acquisition and some money for the rehab. So in Phoenix area, you have to have at least about $100,000 to start. But if you have connections, if you are connected with other private investors,

and they can trust you and they know you know the details and you know what you’re doing once you build up the relationship you can pitch them to have them putting the money ⁓ which is what they have

and you put in the expertise and the time, which is what you have. So they put in the money, you handle the project from acquisition to disposition and the rehab and you split the profit or you give them certain percentage. However, the negotiation goes between you and the investor. What I did was I said,

Kristen Knapp (11:54)
you

Sina Sabeti (11:58)
to the investor, you put in the money, I’m gonna purchase the house, do the construction, handle all of it, and resell the property, and I’ll share the profit with you 50-50.

Kristen Knapp (12:14)
Amazing, yeah, so there’s ways to get around it. And what would be some of your best tips for somebody getting into the fix and flip game? What are some of your, because I know you’re really good at this sector of it.

Sina Sabeti (12:28)
Well, there are a few things. The first thing I always say is don’t overthink. 90 % of people don’t achieve their goals because they keep overthinking over what they want to do. ⁓ You study it a little bit, you learn the basics, you learn what you need to learn. And there is always mentors out there. There are people that would give you the information.

Kristen Knapp (12:42)
Okay.

Sina Sabeti (12:58)
It’s just a matter of you reaching out to them and using their help. ⁓ Instead of overthinking, keep thinking about what if I don’t do this right? What if I do that wrong? I mean, the worst thing that could happen to you is you lose the time. Or even if you lose a little bit of money,

Kristen Knapp (13:12)
you

Sina Sabeti (13:24)
you still are ahead of the game because there is still so many others that haven’t done anything and you or they would not learn it if they haven’t taken that first step so what we always ⁓ lack is taking that first step ⁓ there is a good saying that without cooking

Kristen Knapp (13:45)
Right.

Sina Sabeti (13:51)
you won’t know the taste and you won’t learn how to make the taste you want. So there is always the first step to do. And the second thing ⁓ that I noticed in the market in the past 15 years that I’ve been involved in is everyone talks about the positives.

Everyone talks about helping others make the money becoming a six-figure income guy or seven-figure or even ten-figure income But what happens after that? You start making your million two million dollars a year five million dollars a year if you don’t know what to do with that How to handle being a rich person you end up losing it?

So as you grow, you have to start changing your mindset, adapting the new style, new lifestyle, new business style, new… You have to keep on just like the stuff is on your phone that you keep upgrading. You have to upgrade your mindset. And if you stay with the mindset of two years ago and now you’ve done the work, you’re making a million a year,

Kristen Knapp (15:00)
Mm-hmm.

Sina Sabeti (15:10)
⁓ your mindset and your position at the moment doesn’t match up. So that becomes a really big struggle. I’ve seen a lot of people go through that. I personally went through that.

It got me down to bankruptcy point, but thank God I could save the company and got it back up running and making money again. So…

Taking the first step and updating your mindset, becoming prepared, adapting the new stuff as you go is the two most important things I always suggest everybody to be aware of.

Kristen Knapp (16:39)
I think that’s such great advice. You mentioned that things didn’t always go as planned and you were in bankruptcy. Can you talk a little bit more about that and what you learned from it and how you got out of it?

Sina Sabeti (16:53)
Well, that’s a good question. Well, it was a little bit complicated on my end because it wasn’t just about the real estate investment. So it doesn’t 100 % apply to everybody else. But definitely it’s a big lesson to be learned. It would have…

Kristen Knapp (16:57)
You don’t have to, just if there’s a learning in there.

Sina Sabeti (17:23)
being a $5 million less than if I knew it from the beginning. ⁓ I started growing the business, expanding on the fix and flips. I had all the properties that I bought and we had the September, 2022 with the market change immediately. I was not used to it. And I wasn’t ⁓ personally involved

or had experience of the crash in 2007. I came to United States in 2008. So back then, I had no idea what’s going around. I had no idea why every street I walk into or drive into, there are 10 properties for sale. ⁓ So I didn’t have that experience.

Kristen Knapp (18:13)
Yeah.

Sina Sabeti (18:19)
and I’ve never been in a downturn of a real estate market and I’ve been used to making lots of money doing these fix and flips and I kept adding to the volume. I was doing six properties per month. The market changed immediately and I got shocked.

One thing is, one good part is I stopped purchasing as soon as I realized the market is going to change. But on the other side, I had 16 properties that didn’t sell. I got involved with a person that promised me to turn the properties into sober living properties. And…

Manage him for me and I start making he promised that we are gonna make thirty thousand dollars her property net profit And I’m like, okay, my heart money is six thousand dollars on his property about six thousand dollars So if we’re making thirty thousand

I’m gonna still make a lot of money. It’s better than the fix-and-flip itself. Let’s let’s do it So I did some due diligence on him to make sure that he has the experience and he knows what he’s talking about But one part was even though he had the experience

there was a hold up on the license issues, issuing licenses. So it took a year and half for us to realize there is no way we can get the license. Now I’ve been holding up 16 properties with hard money loans for a year and a half. And it drained my pocket. And not only that,

Because of the expansion I was going through, I started my title company and the architecture firm. I got a big office, operating from home and on my phone, changing to a 3,300 square foot office space with 15 office staffs, managers. I wasn’t built for the corporate world. I didn’t have that experience. So dealing with the employees,

also added up to the issues and now the employees don’t let me do what I’m good at. I have to babysit employees. So the business overhead for that, the hard money loans on these 16 properties and the time that I lost by not having my own time to focus on making more deals, it all added up together.

Kristen Knapp (20:51)
Thanks.

Sina Sabeti (21:11)
So it was a complication. It drained my pocket. How I saved the company from going bankruptcy though was I worked out with the investors. I told them the situation, I explained it to them and I said I’m not gonna give up.

I’m gonna do my best to come out of this situation. I’m gonna save as much of the dollars I can for you and whatever is remaining, we will continue making the payments. It’s just the beginning. Now we have even more experience, we are more knowledgeable and we have the branding and the system in place. So we are set for growth. We just need more

time to pay back and they accepted it so I worked out with them and we’re back on track.

Kristen Knapp (22:07)
Amazing!

Sina Sabeti (22:09)
I tell you though, I tell

you though, I spoke to so many advisors, ⁓ business advisors, and I spoke to several attorneys as well. Everybody, I mean literally everybody, told me you have to file bankruptcy. I’m like, no, I’m not doing that.

Kristen Knapp (22:30)
I’m not doing it.

Wow. Wow.

Sina Sabeti (22:34)
Yeah,

it’s easy to give up. It’s easy to give up and go away. ⁓ But I always had the mindset and thought that money can come in and go at any time. Many things can happen for you to lose the money. But your credibility, the trust, and your knowledge is what always stays with you.

Kristen Knapp (22:37)
Exactly.

Sina Sabeti (23:03)
So I prefer to keep the credibility and build up the trust again with my investors rather than just filing bankruptcy and saying goodbye. The easy things, everybody can choose the easy way. ⁓ You become a man when you go through the hard path and stay strong and you actually learn a lot from it. I’ve been in business since I was 12.

Kristen Knapp (23:28)
Right.

Sina Sabeti (23:33)
Now I’m 36, so exactly 24 years of my life, two-thirds, has been in business. But I was telling my friend a few weeks ago, this last year actually taught me 10 times the first 23 years of the business.

Kristen Knapp (23:52)
Wow.

So this last year, I mean, why was that so formative for you? This last year was the most formative for you?

Sina Sabeti (24:02)
What was that?

Yes, yes, going through the hard path.

Kristen Knapp (24:11)
Okay, yeah, I didn’t realize that was so recent. Yeah, I mean, I think it’s a great story. I think that people need to hear about that because it’s a lot of glitz and glamour in this industry and you do learn the most from the hard times. And, you know, we’re quickly approaching our time. It’s gone really fast, but I would love to hear about your upcoming coaching program.

Sina Sabeti (24:15)
Yes.

Right.

Yes, so after going through all the hard parts and learning so many things that nobody even talks about the negative parts or the things that you have to pay attention to and be aware of, ⁓ I realized nobody is teaching these songs. Everybody talks about the…

making money, making money, making money, but nobody talks about scaling it and doing it properly so you don’t run into the issues. I came up with the idea of sharing everything that I have learned from the beginning to this point with others and save them money, save them time.

save them the headaches and so many hardships that they could go through if they don’t know what I have learned. ⁓ You can always learn it by yourself, but it’s much better and more efficient if somebody else that has gone through and cares about you, teaches you. So I created a program for fix-and-flippers specifically to begin with.

but it can be done in any other niches, multifamily, commercial, real estate, wholesaling, and any other niches, VRRR. I created the program where I helped the investor learn the concept. I helped them source the deal. We find them the deal.

We help them secure the financing. We help them with construction estimation. We help them connect with contractors, the right contractors. We help them through the process of the rehab. And we help them through the process of resale. So from start to the end, and also after math, the mindset that has to be updated as you go, ⁓ we coach them throughout the process.

for only a $10,000 fee.

Kristen Knapp (26:46)
Amazing. Well, I think people can learn a lot from you like from the hard skills to even just the mindset I think that’s wonderful. So where can people find you?

Sina Sabeti (26:56)
coachmeflip.com

Kristen Knapp (26:58)
Amazing, easy. So thank you so much for being here. This has been wonderful. Thank you.

Sina Sabeti (27:00)
Cheers.

Thank you. I appreciate

you giving me the opportunity to be in your podcast. ⁓ Thank you very much. Very nice to meet you and hope to see you again.

Kristen Knapp (27:15)
Yes, very nice to you too. And thank you everybody for listening and we will see you back next time. Bye.

Sina Sabeti (27:21)
Take care.