JF1617: Millenial Real Estate Investor Reaches Financial Independence By The Age Of 30 with Grant Sabatier

From no job and submitting endless amounts of job applications to entrepreneur and financial independence, all in just 6 years time. Grant got his start by getting certified with Google Ad Words and hit the ground running, getting into real estate investing along the way. Hear how he was able to work his way up to a $500k income per year in a fairly short amount of time. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!

 

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Grant Sabatier Real Estate Background:

  • Creator of Millennial Money and host of multiple finance podcasts
  • Writes about personal finance, investing, entrepreneurship, and mindfulness and has been featured in over 200 media outlets
  • Based in New York City, NY
  • Say hi to him at https://millennialmoney.com/
  • Best Ever Book: Art of Living

 


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TRANSCRIPTION

Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Grant Sabatier. How are you doing, Grant?

Grant Sabatier: I’m good, Joe. How are you?

Joe Fairless: I am doing well, and nice to have you on the show. Grant is the creator of Millennial Money and host of a whole bunch of finance podcasts. He writes about personal finance, investing, entrepreneurship and mindfulness, and has been featured in over 200 media outlets. His website is millennialmoney.com. Based in New York City now… With that being said, Grant, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Grant Sabatier: Yeah, thanks for the introduction, Joe. My story starts back when I was 24. I was living at home with my parents after college. I’d bounced around a number of different jobs and ended up getting laid off twice, and finding myself back living in my parents’ home, and sleeping in the bed that I slept in as a seven-year-old kid. That’s where my financial independence journey started. It was at that point that I had to completely reinvent myself, and from that day in August 2010 it took me five years and three months to reach financial independence, at the age of 30. So there was a five-year period where literally 18 hours a day I was making money, launching side hustles, growing two different companies, and I really had a ton of fun doing it… And real estate actually factored pretty heavily into that entire process, and I’m excited to chat about it.

Joe Fairless: Well, I’m excited for you to chat about it, too. Just so we know how you define it, how much money were you making by the age of 30?

Grant Sabatier: By the age of 30 I was making a little over half a million dollars. After investing in taxes and all that good stuff, I was saving about 62% of my income.

Joe Fairless: Alright, got it. So you were making a little over $500,000, and you were saving – did I hear that correct, 62% of that?

Grant Sabatier: Yeah, that’s correct.

Joe Fairless: Well, you piqued my curiosity… Let’s go back to your seven-year-old bed – what did you do from there?

Grant Sabatier: So in August 2010 my parents had told me that I could crash there for about three months, and I was at month two, and I’d sent out over 200 resumes really into the abyss, and hadn’t gotten a single call back. It was at this time I was doing a search on my phone and I saw a little Google mobile ad, and I was like, “Huh, what’s this?” I’d never seen one before. So I started researching it and figured out that you could make between 10% and 20% of media spend to manage Google Ad campaigns. And what’s more exciting is that you could actually get certified through Google for free.

I had no digital ad experience whatsoever, didn’t know anything about Google campaigns, so I dove into their free YouTube videos, and the Google AdWords University, and I got certified. It took me about 30 days to do that, and I applied to a couple digital marketing jobs and ended up getting the first one that I applied to, and was off to the races, making $50,000. It was at that time where I was like, “Okay, I’m gonna treat money very differently. I’m gonna figure this out.” Money is really essentially just a human invention. How can I really put all of my attitudes, all of my thoughts about money, all of my emotions, how can I put them in a box and set them to the side, and look at money as a philosophical concept, as something we embed so much meaning into?

So I started looking at money from so many different angles, and really fell in love with not only how it can change your life, but how to make money in really counter-intuitive ways. And real estate factored in pretty heavily into this process…

I got kicked out of my parents’ house pretty quickly, got the job that gave me the boot, and I knew…

Joe Fairless: Did you try to convince them to stay?

Grant Sabatier: I was ready to leave, but it was the first time–

Joe Fairless: You weren’t being proactive about it though… They kind of came up to you…

Grant Sabatier: It was kind of just a confluence of a couple weeks where it was like “Alright, you’ve gotta get out of here.”

Joe Fairless: [laughs]

Grant Sabatier: I’d gotten my first paycheck and I was excited to start investing the money, and I was like “Hey, if I can just stay here for free…” But it was short-lived…

Joe Fairless: “Get outta here, kid…”, okay…

Grant Sabatier: Yeah, absolutely. So the best decision that I made was to move into the cheapest apartment that I could find. I’d moved to Chicago, that was where the job was, I got settled, and I found a $700/month apartment, when all my friends were living in $1,500-$2,500 a month apartments; I found literally the cheapest apartment that I could find. It had two bedrooms; I needed two bedrooms, because I wanted to have a little office…

Joe Fairless: Bad area?

Grant Sabatier: It wasn’t a bad area, it was a transitioning area; it was just a really crappy apartment. It was old… If it had been fixed up, it probably would have gone for double the price, but it was just something the landlord and the management company were just super-lazy… And actually, once I moved out a couple years later, they ended up redoing it and almost did double the rent. So I found kind of an undervalued place, and was able to bank pretty much every dollar that I would have spent on housing above that into investments.

Just renting that apartment for a little over two years, I’ve now calculated that investing the additional money – I invested an extra $800/month – it’s actually helped me earn almost $200,000 more, from my investments.

Joe Fairless: Wow. Did you have student loans, by the way?

Grant Sabatier: I had a little bit of student loans. What I had more of was credit card debt. I’d actually gotten an academic scholarship, so I was very fortunate. I’d taken out a few loans, but I paid them off over the course of actually college, because I didn’t wanna graduate with debt.

Joe Fairless: Good for you.

Grant Sabatier: But I did have about $20,000 in credit card debt.

Joe Fairless: Dang! Okay…

Grant Sabatier: I was certainly hedging there… But just the compounding impact of that one decision of renting the crappiest apartment I could, the one that my now-wife but then girlfriend – she literally wouldn’t come over to hang out… [laughs] I’m happy she stayed with me, but I focused on reducing that expense, and then two years in I ended up buying my first property in downtown Chicago, which was in a loft building, actually where they printed the Sears Catalog for almost 70 years. I found a really incredibly unique property; I took the route of how can I find a property that has immense historic value, and is also something — you can’t go and build it today. I had over 100 feet of windows, east-facing… Just an absolutely gorgeous apartment.

I was able to buy it — I looked specifically in the month of November and December, because Chicago, when it’s zero degrees, very few people are looking for properties, and I was able to find a guy who had been trying to sell it for a little while, and he was desperate and he needed to get it sold by the end of the year, so I was able to lock in about $60,000 worth of equity immediately, just on the purchase price. Then I bought a parking spot from him separately for cash, I paid $12,000 for a $40,000 parking spot, and that got me into investing in parking spots, which is something I never scaled, but actually ended up being quite profitable from a real estate investment standpoint.

Joe Fairless: What was the purchase price?

Grant Sabatier: Of the property in Chicago?

Joe Fairless: Yup.

Grant Sabatier: $272,000.

Joe Fairless: Okay, cool.

Grant Sabatier: This was a 2,000 square foot open loft, 11th floor, national historic landmark building. The only kicker was the assessments were incredibly high, just because the head of the board – he was really conservative, and they wanted to keep a million dollars in reserves at all time. So that was one of the kickers that ended up making it a little challenging to rent once I did leave the apartment.

Joe Fairless: Okay.

Grant Sabatier: So yeah, that was a really great investment from a real estate standpoint. There was also — I started Airbnb-ing it quite early. So one of the things I was actually able to do is I had a friend who lived a couple of blocks away, and I was able to rent out my loft for about $300/night, and for a period of about six months I was able to completely offset the cost of the mortgage on that property, and basically bank and invest the difference.

My girlfriend ended up moving in with me, and that was no longer possible, but I was able to bank that investment. Since then, I’ve invested in a couple of other properties also in historic buildings. That’s something I’m particularly passionate about. One of the things in Chicago, actually, during this time – they’d built about 5,000 rental units within a quarter of a mile of this property, and what was interesting is the property has actually more than doubled in value since I bought it in the year 2012. So it was an incredible investment. And then these historic properties are something – like I said, I’m incredibly passionate about that, because they’re not making any more of them… And they’re really like art pieces, in a way, and that’s something — I wanted to invest in the most beautiful homes that I could invest in, because a) they attract a more sophisticated renter, and b) you’re able to get a higher price point because it’s something that is very unique.

Joe Fairless: So within these five years you’ve been buying in historic buildings, renting them out via Airbnb, offsetting your mortgage, making some cash on the side… What else were you doing?

Grant Sabatier: Oh gosh, so many other things… So at this point I had two digital marketing agencies that I was growing.

Joe Fairless: So you left your 50k job.

Grant Sabatier: Yeah, I left the 50k job after a year. That year was an incredible learning experience for me. It was like getting a Ph.D. in digital marketing, because I was working for a 30-person agency, and I was like a sponge; I spent as much time as I could with the SEO guys, with the web developers, with the designers… But most importantly, I spent time with the sales guys, and one of the things I quickly learned was that our agency wouldn’t take clients who wouldn’t spend at least $10,000 a month in fees on campaign management, or pay less than $50,000 for a website… So I was able to form a good relationship with the sales guys and say “Hey, if someone calls us and they have a smaller budget, could I talk to them?” And it was completely fine with the CEO, so I was able to pick up some of my first clients. They’d called the agency, but they were too small for us to work with, and then through that process I became very good at selling.

By the end of that first year I was making over $300,000 just through my own side hustles, in addition to the full-time gig. So I made the leap and went full-time into entrepreneurship, with the specific goal of trying to make a million dollars as quickly as possible. That was the singular focus of my life… Fortunately, but kind of unfortunately too, because I did burn through the end of my twenties working literally the entire time. But I had a goal – I wanted to essentially buy my freedom as quickly as I could. I never wanted tens of millions of dollars, I simply wanted enough that it would give me the freedom to go and pursue other projects that I was passionate about, and just take off the stress of having to always grind.

I was on the road at one point 35 weeks a year, servicing clients and speaking at conferences. I knew that that wasn’t going to be sustainable long-term. I also didn’t want to work till I was 65. Both of my parents were in their early 60’s and they were still working, still  chucking away, and that was one of the things — I was so burnt out, even by the time I was 24. I was like, “Alright, I’ve gotta find the escape hatch here.” And I fell in love with money in the process, not from a greedy perspective; I fell in love with the potential that it has to transform people’s lives, and it’s never been easier in history to make more money, whether it’s through real estate, or side-hustling, or making money online, or selling your knowledge. It has literally never been easier in history, but a lot of people think they need degrees, or they have to spend just tons and tons of time learning. Not that it’s easy, but it’s easier, and that’s one of the things that really excited me most.

I went from selling $500 websites to $50,000 websites within a year. I was really hooked on “Hey, how do sell the same thing to two different people, but get one to pay literally a hundred times more?”

Joe Fairless: How do you do that?

Grant Sabatier: Great question. It really comes down to understanding the perception of the value of what you’re selling. I think a lot of people think about making money the wrong way. They’re like, “I’ve gotta be busy, I’ve gotta spend all this time, I’ve gotta even over-deliver”, and while delivering obviously value and over-delivering is one path to making money, I quickly learned that what was most important from the people who were buying from me was that they wanted to look good to their boss, or their boss’ boss, or their board. So I focused a lot of my energy on helping my clients communicate the value of what I was doing and what they were doing through working with me all the way up the food chain. So I actually ended up spending an inordinate amount of time crafting e-mails that my clients could send to their boss, could send to their board, could send to their CEO, being like “Here’s what we’re doing, here’s how it’s working out, here’s the data, here’s the new website.”

So when I sort of flipped it, and instead of trying to just sell my client and add value to my client, I made my clients look really good to their bosses, and that’s what I realized that I was actually selling… Because a website is a website. But if you can get the director of marketing at a big law firm – if you can make them look amazing to the CMO and to the partners, that’s a win/win across the board. They’re gonna give you more business, they’re gonna give you more referrals, so I focused on increasing the perceived value of what I was selling, in addition to — you can sell the same thing to two people, but the person who has more money and more at stake from that thing that you’re creating, they’re obviously more likely to pay you more money as well. So I was able to go in really as a solo practitioner first, and be able to under-price big agencies using the pitch “Hey, it’s me and my small team. We’re able to move faster, we’re gonna over-deliver, and we’re gonna make you look amazing to your boss.”

So that ended up being the secret sauce, and I figured out kind of the art and science of pricing… And then sometimes you’ve just gotta shoot for the fences, and that was one of the things I did a couple of times – the first six-figure engagement that I sold was literally a lead that had come through my website, and I just was like “I’ve got a lot going on right now… Hey, I’m gonna try to make $100,000 on this website”, and I did. That was something where if I’d undervalued and underestimated and just not tried, I never would have gotten there.

And then finally, the last thing is I spent a significant amount of time calculating my actual real hourly wage. This is one of the things a lot of the people don’t understand – even if you’re making $200,000 in your full-time job, but you have to travel all the time, you have to spend time decompressing from work, you actually are spending a lot more time on your job than you probably realize, and when you divide that number of actual hours that you’re spending into your salary or your paycheck… I did this with one of my friends who was making over $300,000 as a management consultant, and when we actually ran the numbers, he was making $37/hour, because he was on the road so often. He quit his job a couple weeks later and then moved into a less-paying job that took less time, so his actual real hourly wage almost doubled, and he was a lot happier.

A lot of people spend significant amounts of time trying to make money, when they could move to a job making less money, but they’d actually free up more time. And then the final thing is once I realized that a vast majority of companies are really just legal Ponzi schemes – they’re built so the person at the top makes the most money – that was a huge eye-opener for me, and that was something that I share with my audience, that I’ve talked a lot about… Because at the end of the day, the whole value of a company, of being a company owner, is that you can create efficiency and you can leverage other people’s time. So then you’re in the business of selling someone else’s time instead of selling your own, and that becomes really the multiplier effect, where I was then able to start selling websites, and I just became the broker and the connector of supply and demand; I actually wasn’t doing any of the work myself. So that’s where the value exchange can happen, because you no longer have to trade as much – if any – of your time for money.

Joe Fairless: Yeah, those are some profound insights – sell someone else’s time, not your own, and in order to  really let that resonate or have that sink in, then calculate how much you’re actually making on an hourly wage…

And then the other thing that you mentioned is make the clients look really good to their bosses. I always think “How does this apply towards what I’m doing?” and holy moly, it applies with my investors when we’re performing on a project – make sure that they’re aware of it. Now, I do monthly communications, but what you might have inspired me to do (I don’t know, I have to think through it a little bit more) is whenever we do a refinance or a sale of one of our properties (or a supplemental loan) I might do a special e-mail just recapping what all has transpired in more of a storytelling format, versus what I have done in the past, which was just “Hey, here’s what you’re receiving and here’s the status of the property”, just so that they can then forward that on to their significant other, who probably is their boss, in some ways… And their significant other can then look at that and be like “Hey, nice job. I’m proud of you for finding this investment”, and that makes them feel better, and then it just increases their likelihood of reinvesting.

Grant Sabatier: Absolutely. Life is storytelling. It really is. And the better you are at communicating the value, just like you said, of being an investor in one of your projects, the higher the retention, the better the person who invested with you looks… And this is one of the things – yes, more and more of our lives are being automated, but that actually increases the value of human connection. You have to think that the written word has only existed for a very small amount of the time that we’ve been humans. A vast majority of the time we were telling stories; it’s really wired into our DNA. So the better you are at telling stories and communicating that value, the more seamless that it is, the better people feel, the stronger the connection.

One of the things that I’ve done in a lot of my writing is the more open and vulnerable I am, the bigger the audience grows, the stronger the connection. When I make a mistake with money, I talk about it, I’m open about it. That’s one of the things probably a little more difficult to do when you have investors, but you could be like, “Hey, here’s the mistake that I’ve made, too”, because actually, people connect with those human mistakes, because it creates a level playing field. Everyone likes to see the human side, they don’t just wanna see all fluff, all plump, all positive storytelling as well. I think that was important too when I was selling – when I messed up, I owned it. When I made a mistake, I owned it. And sometimes even leading with that and then giving the good story became a pretty effective process.

Joe Fairless: And we’ll get into one of those mistakes, but first, what’s your best real estate investing advice ever?

Grant Sabatier: Oh gosh, try to live for free as long as you can, and there’s a number of ways to obviously live for free. You can stay with your parents, but no one wants to do that. The easier way is especially when you’re young live in your closet, live in the basement, live in a spare room, rent out the other rooms for as long as you can. Nothing is forever – that’s one of the big mistakes people think… It’s like, “Ugh, gosh, my living situation sucks. I don’t want this”, but be uncomfortable for a couple years so you can bank the difference, because every single dollar that you save today is worth significantly more than a dollar you’re gonna save in five years. So try to save and invest as much of that money as you can, whether it’s through living with someone else or through house-hacking, all the different forms of house-hacking that are out there… Or even house-sitting. Some of the best investors that I know – they’re flexible and they go from city to city and they house-sit, and they live for free.

The average American spends most of their money on housing. That’s the biggest expense. So if you can keep that as low as possible, or even make money from it and bank the difference, you’re gonna be better off than 99% of the people out there.

Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?

Grant Sabatier: Let’s do it, Joe.

Joe Fairless: Alright, let’s do it. First, a quick word from our Best Ever partners.

Break: [[00:22:29].11] to [[00:23:19].12]

Joe Fairless: Alright, best ever book you’ve recently read?

Grant Sabatier: The Art of Living by Thich Nhat Hanh.

Joe Fairless: Best ever real estate deal you’ve done, that we haven’t talked about?

Grant Sabatier: We’ve talked about all of them, so… I will say the first property. I think the first property you buy is the most important real estate investment that you’re gonna make in your career.

Joe Fairless: Top three (in order) sources of income for you right now?

Grant Sabatier: Right now blog affiliate income and sponsored content income is number one. Number two would be income from my book contract and my book deal, and number three would be rental income.

Joe Fairless: What’s a mistake you’ve made on a transaction?

Grant Sabatier: That’s a good question… I actually recently sent a wire internationally to the wrong place.

Joe Fairless: Did you get it back?

Grant Sabatier: I did get it back, but it took quite a bit of time.

Joe Fairless: A couple sleepless nights?

Grant Sabatier: No, it didn’t lead to any sleepless nights, but it was just a careless mistake that ended up costing me a lot of money. I also realized recently that an affiliate link on my website had been wrong for over two months and I lost about $20,000 worth of income from it.

Joe Fairless: Why did the wire cost you a lot of money if you got the money back?

Grant Sabatier: I wouldn’t say it cost me money… It was just one of those situations where – it took about three months to get money back – for a period I thought that it was completely lost. It was about 40k, so it wasn’t an insignificant amount of money.

Joe Fairless: That wasn’t a sleepless night, when you thought you’d lost $40,000?

Grant Sabatier: No, actually, interestingly, the more money that I’ve made – and I don’t have tens of millions of dollars – the less it kind of means to me. It has diminishing returns, in a way. So something like that — well, it more upsets me than it does keep me up at night, because I’m the kind of guy… If I actually never got it back, I’d actually probably double down and try to make that $40,000 back faster, just because it would give me more motivation… But I’ve probably lost 150k-170k just in the past couple months on some of my investment declines, just because the market has been so crazy… But once again, you only lose the money when you withdraw, when you lock it in, but those types of shifts, and even — actually, the $25,000 affiliate link made me more upset than the wire.

Joe Fairless: Best ever way you like to give back?

Grant Sabatier: Oh, this is great… Giving back my time. Actually, most of the time that I do now is mission-driven work. Sometimes there’s not a high ROI from a monetary standpoint at all, but I find that giving your time is actually significantly more valuable than giving money, and that’s one of the things that I’ve learned, and I’m trying to give my time away as much as I can.

Joe Fairless: How can the Best Ever listeners learn more about what you’ve got going on?

Grant Sabatier: Best two ways are millennialmoney.com, and then I have a book dropping, FinancialFreedomBook.com. My books is coming out in a bunch of different languages all over the world, February 5th. Check it out. It’s everything that I’ve learned about money over the past eight years, and how you can become financially independent as fast as possible. So check out millennialmoney.com, FinancialFreedomBook.com, and these are the best two places to find me.

Joe Fairless: Well, congrats on the upcoming book, and looking forward to checking that out. And thank you so much for being on the show, talking about how you’ve progressed from living with your parents after graduating college, getting laid off a couple times as a 24-year-old, to making over $500,000 in five years from that time, and how you were doing that  through your digital marketing companies, and how you did that through those companies, which was you made clients look really good to their bosses, powered through some limiting beliefs, and looked at your time relative to your hourly wage that you were spending, and then started selling other people’s time, not your own, and scaled the company accordingly, and what you’ve done to date since then. Really interesting.

Also, on the real estate front, buying in historic buildings, and buying things that can’t be built today. You mentioned earlier a bunch of floor-to-ceiling windows facing East. I assume that’s a big deal in Chicago, the facing East part… Is that the river, is that what it would face?

Grant Sabatier: Yeah, you’re facing the river, and just the sun in the morning. It could be five degrees outside, but it’d 70 in and warm, because you get that morning sun.

Joe Fairless: Oh, beautiful. Well, thanks again for being on the show. I hope you have a best ever day, and we’ll talk to you soon.

Grant Sabatier: Thanks, Joe. I really appreciate it.

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