Digital Social Hour: How I Rebounded After Losing $1.7M: My Real Estate Journey | Fareed Abedini DSH #858

Host: Sean Kelly
Guest: Fareed Abedini
Release Date: November 5, 2024

Introduction

In episode #858 of Digital Social Hour, host Sean Kelly welcomes Fareed Abedini, a young and dynamic entrepreneur who shares his compelling journey from a substantial financial loss to real estate success. This episode delves into Fareed's strategies for rebounding after losing $1.7 million in the stock market and how he leveraged real estate and business credit to rebuild his fortune.

Early Financial Turbulence

Fareed begins by recounting a pivotal moment in his life:

"When I lost all that money put me into a position, and my back was against the wall, and I was like, all right, like, what the hell do I do now?" (00:01)

At just 24 years old, Fareed experienced significant financial setbacks, including going bankrupt twice after losing approximately $1.7 million through shorting options in the volatile stock market during the 2020 crash. This period of adversity was a catalyst for his shift towards real estate.

Transition to Real Estate

Forced by circumstance, Fareed turned to real estate with limited initial capital. He explains:

"I was just another first-generation kid who came from a family that doesn't even know what entrepreneurship is. My mom was a school teacher, my dad was a taxi driver, and I was just forced to figure it out myself." (01:46)

Moving from Washington D.C. to Dallas to stay closer to his properties in Texas, Fareed demonstrates his commitment to building a real estate portfolio across cities like San Antonio, Houston, Dallas, and Austin.

Mastering Business Credit and Funding

A significant portion of Fareed’s success is attributed to his adept use of business credit. He shares:

"If you're 18 years old, you live in the U.S., open up an LLC, you can get like $50,000 of business credit on a business credit card instantly." (02:17)

By leveraging business credit, Fareed avoids using personal funds, thereby minimizing personal financial risk. He elaborates on building multiple LLCs to maximize credit limits:

"You can legally take out $150,000 of 0% interest business funding per Social Security." (03:54)

This strategic use of debt allows him to scale his investments rapidly, using "other people's money" to generate cash flow without depleting his savings.

Airbnb Success and Property Management

Fareed discusses his foray into Airbnb, highlighting the importance of meticulous planning and management:

"Any properties I ever get, now I'm just getting loans. Never use any of my own money for it." (03:29)

He emphasizes the necessity of running accurate numbers and understanding market trends to ensure high occupancy rates, as exemplified by his Washington D.C. condo:

"I've got 19 real estate properties. The latest acquisition I had was a $560,000 two-bedroom condo that I purchased in Washington, D.C... now I've rented it on Airbnb. It's pretty much like 90 booked out." (12:23)

Fareed asserts that Airbnb remains lucrative for those who approach it as a business rather than a casual venture.

Mentorship and Educational Approach

Distancing himself from traditional educational models, Fareed champions hands-on mentorship over passive learning:

"My learning process is being here with my mentor, with someone in the actual mud and going through trial and error and going through experience." (14:07)

He criticizes online courses and emphasizes the value of direct mentorship, offering a collaborative model where he partners with his students:

"I actually partner up with my students. So I teach my students how to go find deals, then when they acquire and find those properties, they bring them to me and then I help them and I partner up with them and I manage the properties with them." (16:45)

This approach ensures that his students receive practical, actionable guidance rather than theoretical knowledge.

Philosophy on Debt and Investment

Fareed presents a contrarian view to traditional financial advice, advocating for the strategic use of debt:

"Leveraging debt can be very, very powerful. Obviously, you don't want to put yourself into bad debt. But if you know what you're doing with your money and it's creating cash flow, why not?" (06:30)

He contrasts his approach with that of financial guru Dave Ramsey, who opposes debt, arguing that with proper planning and business credit, the risks can be mitigated effectively.

"If you don't take out debt, you can only go so far with your own cash." (07:09)

Fareed believes that using business credit accelerates growth and allows for greater investment opportunities without the limitations of personal savings.

Overcoming Educational and Cultural Barriers

Fareed reflects on his decision to prioritize entrepreneurship over traditional educational paths, despite familial pressures:

"Both my parents are Middle Eastern, and I had to graduate for them. And at the time, I really didn't know what I wanted to do. So I was like, all right, it's gonna get this degree to make my mom happy. That is the biggest regret I've ever had in my entire life." (18:33)

He underscores the importance of independence and self-determination in achieving entrepreneurial success, advocating for moving out and creating one's own space to foster productivity.

Credit Repair and Financial Services

Addressing common financial hurdles, Fareed introduces his credit repair services aimed at assisting individuals with poor credit histories:

"We can help those types of individuals increase and improve their credit... we can even get student loans removed." (23:45)

He details the qualifications needed to access substantial business credit through his program, emphasizing the importance of maintaining good personal credit to secure significant business funding.

"If you have a 680 credit score, at least 4 open positive personal credit card accounts, no late payments, and at least two or three years of credit history, we will acquire you an LLC and get you a $50,000 business credit card." (25:07)

This service is presented as a critical tool for aspiring real estate investors to access the necessary funds to scale their operations.

Future Endeavors and Closing Thoughts

Looking forward, Fareed is expanding into development, new construction, and multifamily properties. He remains committed to mentoring students through Airbnb arbitrage and reinvesting his earnings into property acquisitions.

"My goal is equity ownership. I'm young, so that's what I want." (27:03)

Sean concludes the episode by encouraging listeners interested in Airbnb and real estate mentorship to connect with Fareed through various social media platforms.

Notable Quotes

• “I was high off money, bro. I was a kid, I was 20 years old and I didn't know what I was doing...” (10:54)
• “If you’re not getting access to a mentor or coach or anyone, why the hell would you, bro, I can pull up hella manuals on how to drive a car online for free, bro.” (17:21)
• “Leveraging debt can be very, very powerful. Obviously, you don’t want to put yourself into bad debt. But if you know what you’re doing with your money and it’s creating cash flow, why not?” (06:30)

Conclusion

Fareed Abedini's story is a testament to resilience and strategic thinking in the face of financial adversity. By harnessing the power of business credit and real estate, he not only rebuilt his fortune but also established a mentorship model that empowers others to achieve similar success. This episode of Digital Social Hour provides invaluable insights into unconventional financial strategies and the importance of hands-on learning in entrepreneurship.

Connect with Fareed Abedini:

• Instagram: @fareedabedini
• YouTube: Fareed Abedini
• TikTok: Fareed Abedini
• Website: fareedabedini.com