Gabriel Hamel is a Real Estate Investor who’s passion for Real Estate has helped him to amass a Multi-Million dollar Real Estate Portfolio.
In today’s episode, we interview Gabriel Hamel from Hamel Investments.
Gabriel Hamel is a Real Estate Investor whose passion for Real Estate, Business, and Financial Freedom has helped him to amass a Multi-Million dollar Real Estate Portfolio consisting of Single Family Homes, Multi-Family Apartments, Commercial Real Estate, and Mobile Home Parks.
Gabriel Hamel is an experienced and successful real estate investor who started investing in property shortly before the 2008 housing crash. He has developed his own particular investment style over the last fifteen years which has allowed him to build a multi-million dollar portfolio from nothing.
Below we have picked out and outlined some of the key points from the podcast episode. If you would like to listen to the full episode you can watch the video above or listen on your preferred podcast channel.
“Whether you think you can or you can’t – it’s correct” – Henry Ford
I joined the army national guard in my senior year of high school. I knew college wasn’t my path, but I didn’t know what I wanted to do.
Then I read “Rich Dad Poor Dad” which opened my eyes. It’s not a how-to book, rather it’s about having the right mindset around finances and financial freedom. It’s about changing the way you think about things. I decided this was what I was going to do. I was going to build a real estate portfolio and retire young and wealthy.
In 2003, I got called up and was deployed to Iraq for a year. When I got back, I started looking for properties and I bought my first house in 2005. That was back in the subprime when banks were just giving away money.
I bought my first house and I house hacked it. I rented out two of the bedrooms and lived in the third. It just made financial sense, I lived for cheaper than I could have anywhere else and I owned the house.
I was in the Army National Guard, you go to regular basic training just like in the Army. It was 14 straight weeks. They tell you what to do and I’ve never really liked someone telling me what to do, I’ve always liked being my own boss, at the same time I actually did well with the structure.
And then we got deployed and it really reiterated that I don’t like somebody telling me what to do. They tell you when to wake up, when to go to bed, what to wear, everything. It was a great experience in a lot of ways, but after my contract was up I was ready for the next chapter of my life.
I got approved for a loan and I was making offers, but I was getting beaten out by other offers. Then the realtor I was working with got me to check out this property.
It was being redone and nobody else knew it was on the market. In terms of house hacking – it just made financial sense. My mortgage at the time, with taxes and insurance, was $1200 or so. I rented out two of the rooms and covered more than two-thirds of that.
I did the same thing in ‘06 and ‘07 and I also opened up a small nutrition store at that time as well. I realized though that the store just wasn’t something I was passionate about and eventually closed up the doors in ‘08 just as my first son was born.
And I was like, ‘crap.’ I didn’t have any income. But when I went to the banks in ‘08 they said you need a job, you have to put at least 30% down. The rules of the game had changed. It went from anybody who could get a loan with very little money to really tightening up the guidelines about who they would lend to. That was really the beginning. I had to make a decision, do I become an investor, or do I just submit to living a less desirable life.
So, I got a job, a minimum wage job in a school. And after about 3 months I was thinking ‘oh my gosh, I’m going to do this forever. I reanalyzed my goals. I realized I just needed to replace the income from this job, which, as I wasn’t earning much, felt doable.
This is also when I heard about seller financing. I got on Craigslist and, in 2009 I found two duplexes, side by side, and that was my first seller-financed deal. That cash flow was, almost on the dollar the amount I was making at the school. I stopped working and I’ve actually never traditionally financed a property since.
Early on I was managing the properties myself. I don’t manage them now I don’t like managing properties and it’s not the best use of my time. At the time though it was necessary and part of the learning process.
The challenge for me was that I’m not handy and it took me off the big picture stuff and the stuff I enjoy. I love meeting people, talking to sellers, arranging deals. But dealing with the tenants, handling the day-to-day wasn’t for me.
Most of my days aren’t really involved in the business. Back in 2009 all the way to ‘13 I picked up small multi-family homes, all seller-financed. In 2014 I moved into some medium-sized multi-family properties. Small apartment complexes, stuff with commercial ground floor and apartments upstairs, and they have been the focus for a few years now.
I’ve also partnered with someone who’s very hands-on. We were able to pick up a lot of properties way below market, a lot of times from the bank, and he would go in there with the crew and fix them up. These were properties I wouldn’t have touched on my own. We own a couple of properties together still but have sold off a lot of our smaller stuff simply because the equity position was strong.
More recently, my last few purchases have actually been mobile home parks. I like multi-family properties but cap rates were being condensed down to almost nothing, the returns just weren’t there and so I started looking into mobile home parks. They actually operate a lot like multi-family properties but the returns are just better.
It’s really important. Maybe not so much the day-to-day numbers, but I won’t do a deal unless I know it’s cash flow positive. I have had conversations with that partner where we have talked about whether there was some value add, but all those small multi-families that I bought in 2009 through to ‘13, the cash flow.
I think it’s dangerous to bet on appreciation. I started meeting people that made and lost a lot of money in 2008 on appreciation plays, they were buying stuff with the thought that they could sell it for more later and or they could rent it for more later but it didn’t always work.
When I started I didn’t know a lot about cap rates, or cash on cash return, but I did know that if I was bringing no money to the table and it was cash-flow positive then my return was infinite. And yes, there have been some equity built up over time and I would buy properties with that value add the component, but I never banked on that.
Trust yourself and do it.
You can over-analyze a deal and I think I said before, you can find a reason not to buy anything in any property but I think you have to jump in. Not everyone is gonna be a home run but it’s going to give you the confidence to do the next one.
Find what works for you and yeah, go for it.