Sam Bates on The Value of Build-to-Rent Communities – EP 266

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Even with interest rates going up and the economy seeming to be tapped out, we’re still bullish on housing–especially apartments, multifamily, and build-to-rent communities. These properties are proving to be great investments, especially for first deals, and you’re all but guaranteed to find renters for years to come.

For this conversation, I’m excited to be talking with Sam Bates. Sam is the CEO of Bates Capital Group. Since 2009, he’s been directly involved in acquisitions, repositions, dispositions, and sales of over $200 million in assets. 

His portfolio currently has 1,035 units in Texas and the Southeast, with 1,100 units in the development pipeline. He recently bought a property for $16 million, added a couple of million dollars in upgrades and now it’s valued at $32 million!

Today, Sam joins the podcast to talk about his recent wins, why he bought into a company focused on single-family build-to-rent (and how it makes him money), and his advice for anyone that is looking to get into single-family or multifamily investing.

Key Takeaways with Sam Bates

  • Why build-to-rent communities are satisfying renters’ needs.
  • How he evaluates build-to-rent deals in both single and multifamily units.
  • Why it makes sense for new investors to start as a limited partner before entering into a general partnership.
  • How to manage properties and oversee investments.
  • Why the United States is becoming a renter nation–and why we’re so bullish on multifamily in syndications.

Sam Bates Tweetables

“I think it's almost the perfect storm for rentals, whether it's multi-family, build-to-rent, or just single family.” - Sam Bates

“Every deal I’ve ever done is never 100% to plan. I’ve always learned something from them.” - Sam Bates


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Josh Cantwell: So, hey, guys. In this episode, I’m interviewing the CEO of Bates Capital Group. His name is Sam Bates. Sam started his real estate journey back in 2009, probably not the best time to get started in real estate, but he’s been directly involved in acquisitions, repositions, dispositions, and sales of over $200 million in assets under management, currently is a general partner and limited partner in 1,035 units in Texas and in the Southeast, and has another 900 units in his development pipeline. And also, interestingly enough, actually off-camera, after the recording, Sam told me about a deal that he bought for 16 million. They put a couple of million bucks into it and it actually just got a valuation of $32 million. You actually won’t hear that on the recording but really cool stuff.


In this interview, Sam and I talk about, number one, build-to-rent communities and why build-to-rent communities are satisfying the need for renters, and how he evaluates build-to-rent communities not only for multifamily but single-family build-to-rent communities. That’s an interesting conversation. Also, Sam talks about, number two, why it really makes a lot of sense for investors to start as a limited partner and make an investment in a deal and a general partner and use that as a way to catapult into the general partnership. Number three, we also talk a lot about property management and asset management and how to oversee investments. Number four, why we’re becoming a renter nation in the United States and why we’re so bullish on multifamily and syndications even when it appears that the Fed’s going to raise interest rates, even when it appears like the economy may be tapped out, why we’re so bullish on apartments and multifamily and build-to-rent communities. So, I really think you’re going to enjoy this interview on Accelerated Investor with Sam Bates. Here we go.




Josh Cantwell: So, hey, Sam. Listen, welcome to AI. Welcome to Accelerated Investor. Thanks for jumping on.


Sam Bates: Yeah. Josh, thank you for having me. I’m excited to be your guest and just talk to your audience.


Josh Cantwell: Awesome. Sam, listen, there’s a lot going on in the south. I know you primarily syndicate and operate in Southeast Texas and down in that area. So, I’m curious to see what kind of projects you’re working on right now. What are you excited about for 2022? And kind of where do you think the market’s going right now?


Sam Bates: Yeah. We have a lot going on and very excited about 2022. I’ve done about half acquisitions and half developments. And with the market being so hot right now, I don’t know if we’ll have any acquisitions going on but we have 900 units of development lined up in the pipeline. So, that’s going to be really exciting, mainly in the Dallas-Fort Worth area but we also have a project at Austin and we’re going to start construction on all those units this year and next year. We’re in different phases of the planning, zoning, and raising funds, and things like that so I’m very excited about that. I’m excited about we just exited four or five deals, so we provide our investors some phenomenal returns and we’re going to have, I think, a lot of repeat investors. We’re able to do some 1031s and the new projects. So, there’s a lot going on. I hope to get some acquisitions, but we’re pricing that right now. It’s hard for me to buy something at a 3 cap in a 1970 or 80 when we can build it for a 7 or 8 cap.


Josh Cantwell: Got it. Yeah, new construction. Wow, at a 7 or an 8 cap especially with rising rents, it almost feels like remember in 2006, 2007, and 2008 when people were like building spec and you’d be all in for $500,000 on a condo, and then it would be worth $800,000? It’s a little bit like that right now, and I think it’s going to stay that way for a while with rents, right? Maybe do your pro forma and the rents are 1,500 a unit. By the time the thing is built and you’re leasing up, I imagine those rents are much higher than even you probably pencil out.


Sam Bates: Oh, yeah. I’ve always underwritten conservatively and usually in rent growth, we pencil 2% to 3% per year depending on the market. And like last year, we bought a deal in Atlanta in January of last year and we have increased rents by $500 on average and there’s just no way you can project that or if you can, no investor is going to take you seriously. So, it’s really hard. But like I’ve been watching a lot of the ‘22 economic predictions and talks, like last night, I was looking at one where the top 10 rental growth rate markets they’re projecting 6%, 7%, 8%, and pro forma is… I’m not going to do that but in order to get a deal, I think a lot of people are having to do that, which that concerns me, especially for the new syndicators that don’t have experience and maybe not know how to navigate treacherous waters or just people that haven’t went through the correction or they haven’t had any storms come about at this point.


Josh Cantwell: Yeah. It’s nice if you can underwrite conservatively and then outperform right away. It’s another thing to depend on that outperformance, right, just to hit your numbers. I mean, there are so many deals, especially the deals in the major cities like Chicago or San Francisco or Atlanta, Dallas, Austin, some of the ones you mentioned that are trading at 3, 3.5 caps. But if you’re investing for cash flow, just by raising rents, you can easily go to a 4.5 cap or even a 5 cap within 12 to 18 months. Still, pretty lean cap rates to be in those markets. So, what are some of the things that you’ve seen people do or that you’ve done? Are you guys focused on secondary markets, tertiary markets that maybe there’s a little bit more cap rate, there’s a little bit more yield between cap rates and interest rates, a little bit more yield between acquisition cap rate and your stabilization cap rate? Obviously, there’s so much institutional money-seeking yield, especially in downtown urban areas. It’s tough for even someone like you that’s 200 million of AUM and 1,000 units. Man, to find a deal in those urban markets is really tough. So, is part of the strategy to go to those second and tertiary markets?


Sam Bates: Yes, it is. And like you said, it’s really tough to get them in the true primary markets. Honestly, all of our acquisitions except the last one have been in secondary and tertiary markets. The last acquisition we did was 110 units in Dallas proper. But besides that, the closest we’ve been to major MSA is probably 30 or 40 minutes out, some are two hours out, and you do have that spread. Now, the cap rates are compressed in even in those markets. But when we were buying, you definitely had a spread that gave you some cushion. In other ways, we’ve hedged against that. It’s just most of the debt we’ve put on has been long-term debt. So, if we can cash flow, no matter what, if we have a 7, 10, 12-year piece of debt on it, we can weather kind of any storm. And I started off as a limited partner and I went through that experience where we had to sell, where it wasn’t optimal. And that’s always just been a takeaway I took where you want to have that long-term debt. Obviously, you might struggle with prepayments or some other things, but I feel like it’s better to be safe than sorry.


Josh Cantwell: Yeah. And some of these guys doing bridge loans that are just two years, three years trouble, right? At least even if you have five-year money seems to be fairly safe. Certainly the 10, 12-year Fannie Freddie or even the longer-term CMBS stuff it’s even longer. But yeah, I agree. Look, you’re going to lose money in this business if you had a recapitalization event when you’re forced to sell a refi, otherwise, you can weather the storm. You know, you could change up the structure. You have that kind of thing. But if the banks are breathing down your neck for payoff, it becomes a real hard time. And that’s why everybody got busted up in 2006, 2007, 2008, 2009, and I don’t forecast that. Now, I think we’re in a different space right now. It’s just a different world. Right now, there’s so much money and stimulus that’s out there seeking yield. We don’t have a banking problem or a financial services problem. We have really an economic problem with lack of workers like lack of labor and too much money in the system seeking yields. Right? So, I don’t think we have an issue with banks seizing up and banks calling notes.


What may happen over time is that banks seeing something that’s got a 3% or 4% or 5% yield and over time, they see like the economics change they maybe call a note due because they could put the money back in play at a higher yield as interest rates go up. But certainly, secondary tertiary markets and longer-term financing is always going to win the game. So, Sam, talk to us a little bit about your structure. You mentioned the 900 units that are in the development process, the acquisitions. I also know you just bought into a single-family company that’s doing build-to-rent. And so, how do you structure those deals with you, the GPs, the LPs to kind of have a win-win-win scenario for everybody?


Sam Bates: Yeah. It’s a great question and, honestly, it’s still dependent. I’ve done almost every structure under the moon. We’ve done joint ventures where we bring 50% of the capital. Our limited partner brings 50% then we do the work. I’ve done syndication where it’s 80/20 splits with no pref, 70/30 splits with a pref. We raised a fund for 25 million to start doing the single-family and the single-family build-to-rent. Right now, we’re looking at raising a multifamily fund. So, it just kind of depends on the deal but I guess our bread and butter and for most of the developments we have in our pipeline or the standard syndications, the 70/30 split. On the development, sometimes we don’t offer a pref just because the construction time takes two to three years, depending on if you have to go through planning and zoning. And we don’t want to get behind the eight ball with the 8% pref if we don’t have cash flow for three years. But on acquisitions, we always offer a pref. And all of our investors at this point have been friends or referrals of business colleagues and acquaintances from a previous life. So, they have this trust factor with us and they know us. So, outside of the first raise, we’ve always had a really easy time raising money for capital.


Josh Cantwell: How about those couple of you just said you just exited? What were the structure of those and how did you guys do on those deals?


Sam Bates: Well, we’ve exited four over the last quarter basically. Two are joint ventures. One was actually an RV park. That kind of just fell into our lap is a creative financing deal where we did a lot of development and the owner of the RV park want a lot. So, we basically exchanged him a lot for the RV park and a little bit of cash. We exited at about a 46% IRR. We did a 48-unit townhome development that was actually – we’re able to structure the loan where we didn’t have to bring a significant amount of money so we did 151% IRR. On a syndication that we sold last Friday, we did a 54% IRR. And then one we sold in December, we did a 36% IRR. And those two syndications had anywhere from 25 to 35 investors.


Josh Cantwell: Nice. So, the RV park, how did it fall in your lap? The reason why I’m curious is I have a campsite, right? I have a park model camper and a gorgeous spot on the lake. It’s got this big tree in the front with the swing the kids go on and doing a bunch of investments in the RV park, as far as like another pool and another bar and all this kind of stuff. So, I love the summers at the campsite at the RV park. So, how did that thing fall in your lap? And is there anything that you learned from that that was good or bad about RV parks going forward?


Sam Bates: Yeah. Well, it kind of just fell on our lap like I was saying with the owner needed a lot to build a house, so we traded them, but there is a lot to learn from it because we self-manage. One of the things we learned is there isn’t really good property managers in that space, and that park was pretty small. It had 60 lots and a single-family home and one mobile home. So, we self-managed and it took up a lot of time. And it was outside 50 miles or so from Fort Worth and there’s a narrow lake in a net of park to go hiking and stuff. But the typical tenant was a longer-term tenant and there are just a lot of issues that arose that we weren’t expecting, dealing with drugs and meth, and cops being called or us being called by the cops at 11:00, 2:00 in the morning, and all these random times. So, I don’t think I’d do it again but it was a good learning experience. We did well on investment and we’re able to move on and kind of washed ourselves from that experience.


Josh Cantwell: Yeah. Wash the goo off. The need for affordable housing, which we definitely need, right? And so, you also are in the process of you bought into a company that does single-family build-to-rent. So, just talk about that structure with our group to kind of educate our audience a little bit about that. And you know, why build-to-rent? Obviously, you and I are both bullish on the fact that we need a lot of affordable housing. So, multifamily apartments build-to-rent communities, affordable housing is the demand way out exceeds the supply right now. So, tell me about the structure. How are you guys going to make money with those types of communities? What size of the homes that you’re building and what do you think they’ll rent for?


Sam Bates: It was pretty much a perfect transition because the owner of the company, he’s had the business for I think 20 years or so. They started off building custom home space, changes the business model to do spec homes, and all the apartments that I’ve developed he’s built at this point. So, we have a great relationship and he understands that side of the business. I understand the operations, running the management. And like he said, there’s just a massive demand. I know last year NAA said there is a 4.2 million-unit shortage of apartments in the US by 2030. And I mean, we’re in a prime location where everybody’s moving to DFW. We usually build on the outskirts so we don’t have to fight the Trammell Crows, the JPIs, those types of developers. Well, we can find our own niche and be very successful at it. And the costs have definitely changed over a couple of years, like we were importing a lot of our materials from China. And then when the trade wars happened and COVID, that slowed it down significantly like we were building for 100,000, 120,000-unit. Now, we’re probably closer to 140,000 to 160,000-unit. And of course, it varies on square feet.


I mean, we’re selling some of our deals at 4 or 5 caps. I’ve heard some very prominent data analysts and speakers talk about builder and community selling at 2 and 3 caps. And I think it’s just the wave of the future because we are becoming a renter nation. When people they graduate high school, graduate college, they want to live in an apartment but once they have a family, they might not be able to afford a house. A lot of people are going to those build-to-rent communities because they are nicer than an apartment. It feels like you have your own house. A lot of the build-to-rent communities have pools, they have nannies that these apartments have, and so it’s kind of the best of both worlds. And it’s the next phase before you can afford a house.


Josh Cantwell: Yeah. You look at some of the economics right now between the number one is the flight from the urban core. Right? Partially because of COVID. People realize they don’t want to live in a small box apartment in downtown DFW or downtown Austin, downtown Cleveland, downtown Columbus. That’s number one, especially because those people working from home, they want the extra space, the office, that kind of stuff. So, the flight to the suburban apartment is big. That’s number one. Number two, single-family homes for sale, they grew by 16%, 16.1% year-over-year. The price, so if you had a $200,000 house, that grew by 16%, that’s $32,000. Right? So, now that house is worth $232,000. And if you had X amount of dollars saved in order for your down payment, now, you would have to have that much more of a down payment to afford a much bigger home. So, people are thinking, “Well, I don’t have that kind of down payment, so I need to rent.” And like you said, a lot of these communities that do offer the amenities where people can feel like they’re at home, that’s a big deal. And wage growth. Wage growth is up almost 5% year-over-year. And even though apartment rents are up about 15%, certainly wage growth is happening to allow people to afford those rents.


And so, for all of those reasons and the lack of supply, just general lack of supply, it’s a winning strategy to build-to-rent or it’s a winning strategy to own value-add apartments and it’s going to be. We’re very bullish on it. As a matter of fact, the largest apartment owner, one of the largest apartment owners in the country is TruAmerica, right? And the CEO, I just listened to him talk and he said, “Look, we’re so bullish on apartments. We think the growth is going to continue unabated.” And when I hear that, it scares the crap out of me and I also want to be bullish, but the word unabated when I hear that I’m like, “Ooh, man, it might be a little too bullish on it,” but unabated is the word he used. So, for you, Sam, like this year and the next couple of years, are you kind of getting behind that same kind of drummer and following along? Are you continuing to think, “Look, this thing’s going to keep going?”


Sam Bates: Well, I am very bullish on apartments and the housing market in general. I don’t know if I’d go as strongly as say unabated. But you mentioned earlier, I mean, this is a new frontier and we don’t know exactly what’s happening. The Fed and the other world governments printing more money in the last couple of years than they ever have and everybody is searching yield. Like, I’ve talked to investors in South Korea where they’re happy with 2%. I’ve talked to investors in Europe where they’re happy with 5% and people complain about America but we still have the strongest currency in the world and it’s the safest place to invest. So, with the amount of capital flowing into real estate, multifamily has been very strong. It’s not the best asset class for 10 years going, give and take a few years. So, people are trying to get out of other asset classes, putting their money into safe, secure investments, then with a supply issue and the pricing of your own personal residence skyrocketing, like you were just saying, I think it’s almost the perfect storm for rentals, whether it’s multi-family, build-to-rent, or just single family. If you aren’t in the multifamily, I would argue that single families or multifamily is a lot better way to invest but people that enjoy a single family are going to do just as well.


Josh Cantwell: Yeah, no doubt. No doubt. I’m with you on all that. All those points, great points. Sam, when you got started in this, there’s probably about a third of our audience that are residential investors looking to scale into multifamily. So, I’m curious to hear about your start, your first couple of deals. You mentioned that you were a limited partner in the first couple. And I’m just curious here about some of the initial challenges that you experienced and what you learned from them.


Sam Bates: Yeah. I felt like every deal I’ve ever done is never 100% the plan, so I’ve always learned something from them. But I invested as a limited partner in two apartments and one hotel deal. The hotel deal didn’t get off the ground. It ended up in litigation that we’re still in over many years. In one of the multifamily deals, we kicked out the general partner, so there’s just a lot that happened and transpired. So, I was like, “Okay. I’m going to take the bull by the horns,” and I started investing in single-family because, at that time, I didn’t have the experience or really the money to invest in multifamily. So, I did quite a few single-family homes. I remember the first home I bought, the day before we closed, the contractor went in without me knowing and started busting up things. In like two days before that, I found out there were massive foundation issues and I was going to back out of the contract. But since he walked in and started renovating it, I had to close but it turned out to be a phenomenal investment. And there’s just a lot of different things and issues that I’ve learned over the years that have popped up in multifamily. Our first multifamily deal was a multi-use development. There is a lot of rain, so it pushed the timelines back. We had to fire the GC. We had to get rid of the property manager during the lease-up for basically money laundering. There was a lot of issues that happened but if you’re intelligent, if you make decisive decisions and move forward, you can still be successful.


Josh Cantwell: Yeah. I love it. That’s great advice. That’s great advice. So, Sam, as we kind of round third and head for home here, I guess if you had to look back at all the things you’ve accomplished, $200 million in assets under management, you’ve sold a number of your syndications, 1,000 units of multifamily, you’re obviously in a great spot and Texas is growing like crazy and will continue to grow. If you had to look back and say like, “Man, I did a few things right and a few things wrong,” what kind of advice would you give your younger former self about your path? What would you change? And also, what do you think you did right that you’d do all over again?


Sam Bates: I think some of the things I did right was I’ve surrounded myself with good partners and good people. Really, since an early age, I always try to surround myself with solid people that I’ve looked up to and respected, and they can add value to my life. Another thing is I’ve always been a big proponent of education, and multifamily is not rocket science, but there’s a lot of moving pieces and you do need to, especially if you’re on the operator side. If you’re on the capital raising side, it’s a little bit different but if you’re operating an apartment and do from soup to nuts, you need to know, especially if you’re taking investors’ money, you have a fiduciary responsibility to do your best, so you need to know it backwards and forwards. And I think I did a really good job educating myself. Now, there’s I mean podcast just like yours, there’s mentorships, there’s a lot of different things. I think a couple of things I would do differently was I won’t say I have analysis by paralysis, but I always kind of been slow to just dive in, and like I worked a corporate job for 12 years before I went off even though we had quite a few projects going on. And I would have took the legal a lot faster I think. And the other thing I probably would have done is surround myself with knowledgeable people. Like early on, I surround myself with some great people but they really haven’t done it.


And I think surrounding myself with people that have 2,000, 5,000, 10,000 units early on would have been very helpful because the first two years I was looking for multifamily, I was kind of spinning my wheels because I was underwriting way too conservatively. But that was, I mean, back then people were saying the market was going to correct like 2008, and that was in 2014. So, I was hesitant and scared, and maybe hindsight is 20/20. And if the market would have corrected in 2016, I would have been very, very grateful. But we’ve seen this massive run-up where the deal I sold, we sold as a limited partner, and we bought it for 70 and sold it for 30 is probably trading between 130 and 150 now. So, there’s just probably really six to seven years I missed out on a lot of growth potential.


Josh Cantwell: Yeah. You know, I mean, getting out, though, and taking some chips off the table versus no chips, I take that all day too. I think the lesson there probably is, look, there isn’t a perfect time to buy or sell. It’s impossible to time the market. It’s impossible to figure out exactly when it’s going to kind of hit a ceiling and start going south. And usually, that’s when there are no buyers when you realize that you hit the ceiling and it’s impossible to time the market. So, the only solution to that is to invest for the long haul. Right? That’s really the only solution, invest for the long-term, invest for cash flow, take some chips off the table, sometimes, stay liquid, a lot of dry powder, and that’s the only way to get through it. It’s really the only way, and I think that’s a timeless lesson that all of our listeners can take away is take some chips off the table, stay liquid, invest for the long term. The last thing I would say too, Sam, is, look, this business really comes down to underwriting, right? You mentioned underwriting too conservatively. And I tend to do that too. And I have other operators that are really pushing the needle and being much more aggressive.


But underwriting for your style is hugely important because not only does that become essentially your private placement memorandum, it becomes your business plan, then your property management company, your CapEx, crew, the rest of your team can all get behind that, right? It all starts with the underwrite and the most important part of the underwrite, if you want to drill down even further is what’s the future rent? What’s the future blended rent? It’s the number one metric in multifamily. Nobody has a crystal ball to say what that’s going to be but this is why if you’re well-read, you mentioned education, you got to have a great education and constantly be learning about your markets and your submarkets. Because if you can better pencil out what that future rent is going to be and you can better pencil out the underwrite, then you could be the most aggressive in your offer, right?


Sam Bates: Yeah. I completely agree.


Josh Cantwell: We can close down at that if you want to get in the dirt. I’m sorry, Sam. You’re going to say?


Sam Bates: Oh, I was just completely agreeing with that. And everybody has a different risk tolerance. The last thing I want to do is tarnish my reputation or have a bad deal just to get into another deal. And we haven’t grown or scaled as quickly as some people, and I’m completely fine with that because in every single project we have, we invest money in it. And also, every single investor that I’ve raised funds from, I have a personal relationship with. So, I don’t want to look them in the face and say, “Hey, we lost this much or we only got 5% on your returns,” when you’re, I mean, yes, multifamily is the diversification strategy, but you’re also competing against the stock market or other investors. And if you’re providing a 5% or 8% IRR, they’re going to go somewhere else. They could even go to the stock market and, granted, you have fluctuations in the stock market but over the last couple of years before the last few months, the stock market was up. So, I think it’s very important to follow your instincts and your underwriting, I guess, tactics. And I mean, people I know firsthand are changing their underwriting just to get bills and I’m not going to do that. Yeah. And like you’re saying, you talked to the property manager. If you give them an unrealistic P&L or budget, it’s going to be hard for them to meet it and that’s just going to be an uphill battle and you’re going to be constantly fighting and bickering, and it’s not going to be a win-win situation for any party.


Josh Cantwell: Yeah, I love it. I love it. Sam, that’s great advice. Listen, man, as we wrap up here, let’s finish with what we call the final five. Some quick answers. Some quick questions. Are you ready for these?


Sam Bates: Yes, I am.


Josh Cantwell: All right. What’s your favorite way to find deals in today’s market?


Sam Bates: In today’s market, it’s either going to brokers and relationships we have, even debt brokers or going directly to the seller. The last three acquisitions we’ve done have been directly off-market and haven’t had any competition, which has been great.


Josh Cantwell: Nice. What’s your favorite way to find capital for your capital stack and limited partners and mezz debt and just the whole stack?


Sam Bates: At this point, going to the network we have and the referrals we have, one of my goals is to make as many millionaires as I possibly can. And I think by getting repeat investors, I can do that. And who better to do that than with your friends and family?


Josh Cantwell: Yeah, I love it. Sam, what do you think is maybe your favorite book that you’ve read or the favorite piece of advice that you’ve been given that really kind of guides you on a day-to-day basis and really has an impact on your life?


Sam Bates: Over the last few years, I’ve read a lot of books, so it’s hard to narrow it down, but one that has changed my life honestly the last six months is Who Not How and I’ve always been a person who just does, and I have a hard time delegating and I finally realized I have to delegate or I’m going to die. And by delegating, I can focus on a lot more higher-income activities and revenue-generating activities.


Josh Cantwell: Yeah. If you guys are not familiar, that book, Who Not How, I’ve read it. I can’t remember the main author, but it’s based on Dan Sullivan, Strategic Coach, who I’ve studied for over 20 years, and I highly recommend that book, especially for commercial investors and multifamily investors. Because really, in this business, it’s about aggregating the best team. It’s about aggregating the who. And then as a group, you’ll figure out how versus most people think like how am I going to do this? That book really pushes the theory of find the person who can do it or who can bring you the answers instead of you figuring out how to do it yourself. It’s a phenomenal book. I’m a huge fan, huge fan of Dan Sullivan as well. Sam, who do you think has been the mentor that’s had the biggest impact on your life? Like, who’s been somebody that you’ve looked up to and that you’ve kind of grabbed onto their curtails, if you will, and kind of followed along?


Sam Bates: From an early age, I would say it’s been my grandpa. He was a successful businessman and also family man, but he always pushed me to do more. He is a big proponent of education and like any time I had an idea or dream or goal, he was like, “Why not double it?” Almost any time I had a goal, he’s like, “Why not do this or X or X?” and it just pushed me to achieve so much more than I ever thought possible.


Josh Cantwell: That’s fantastic. And, Sam, last question about multifamily. What do you think’s the biggest pothole or choke point for new investors? Like what do you think is the one thing that they should look out for?


Sam Bates: At this point, pricing is the highest it’s ever been. And even though I’m bullish on it, we don’t know what the market’s going to do with the potential for interest rate hikes. So, I’d say just be cautious on what you’re buying. And long term debt is key for uncertain times.


Josh Cantwell: Yeah, that’s fantastic stuff. Long-term debt. Try to stay away from bridge and short-term capital. Definitely underwrite with these four interest rates hikes in mind, right? Because by the time you stabilize them, by the time you’re ready to refinance or sell, those are going to be part of the underwrite. It wouldn’t surprise me, by the way, Sam, that if the Fed raises rates in the short run to tame inflation and then they drop back down because there’s so much freaking money in the system, right?


Sam Bates: I think they could easily do that. I know the T-bill went up this week and they’re projecting more interest rate hikes. But like you said, with the amount and the money supply, I don’t see how they can keep raising rates and I could easily see it drop back down after they raise it up some.


Josh Cantwell: Yeah, same here. Sam, awesome stuff today. Thank you so much for joining us today on Accelerated Investor. If our audience wants to reach out to you, connect with you, invest in your deals, just learn more about your business, where can they go?


Sam Bates: Yeah. You can go to my website,, or you can send an email to I’m on social media. Sometimes I’m not. Even though I’m a millennial, I’m not a huge proponent of it or adopter of it but you can reach me there as well.


Josh Cantwell: Fantastic stuff. Sam, listen, thanks for joining us today on Accelerated Investor.


Sam Bates: Josh, thank you for having me. It’s awesome to talk to you.




Josh Cantwell: Well, hey, guys, I hope you enjoyed that episode of Accelerated Investor with me, Josh Cantwell and Sam Bates. If you would be so kind, leave us a rating and review. Let us know if you enjoyed that interview. Reach out to Sam on his website. And also, if you’re looking to take your investing to the next level whether you’re an owner-operator, a residential investor, limited partner, go visit our main website, There you’ll find everything to do with our mastermind, our investment opportunities, our portfolio. Check out for all things Josh Cantwell and Freeland Ventures. Thanks so much for being here. We’ll see you next time.

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