Senior Living Real Estate Investing With Markian
In this episode of Own Your Power, Rod sits down with Markian to explore one of the most underserved and fast-growing segments in the U.S. property market: senior living real estate investing. With 10,000 Americans turning 65 every single day, demand for quality senior housing is climbing fast, and Markian shares how he entered this niche, scaled within it, and ultimately used it to retire his parents.
Why Senior Living Is a Massive Opportunity
Throughout the conversation, Markian explains that states like Georgia are dramatically behind in senior housing development, creating enormous opportunity for operators capable of stepping in. Many existing facilities are outdated, poorly managed, or run by absentee owners, making value-add plays especially strong. He also highlights that assisted living communities can command strong rents without requiring the intense licensing of full memory-care centers, creating a uniquely profitable “sweet spot” in the industry.
How He Transitioned From Multifamily to Senior Living
Though he initially built his real estate background in multifamily syndications, including a 56-unit deal in Indiana, Markian felt a pull toward senior housing after witnessing his mother care for her grandmother in a near full-time hospice role. That personal experience revealed to him the deep need for better senior care, motivating him to choose a mission-driven niche where he could build both impact and strong returns.
Lessons From His First Senior Housing Deal
Markian openly shares the challenges and mistakes on his first acquisition, including hiring the wrong property management company, overpaying slightly for the asset, and struggling through an initial learning curve. Ultimately, that deal became the one that allowed his father to retire, generating more income than his former W-2 job. He stresses that senior living is not for the unprepared—a successful operator must be decisive, compassionate, and willing to learn quickly.
Using the Tax Code to Build Wealth Faster
A recurring theme in the episode is the power of the U.S. real estate tax code as a wealth-building tool. Markian discusses how the government intentionally incentivizes investors to provide housing and care that the public sector cannot efficiently deliver on its own. Through depreciation, cost segregation, and reinvestment strategies, he emphasizes how investors—especially high earners—can accelerate their financial freedom.
Master Lease Options As a Creative Expansion Strategy
One of the more advanced topics Markian breaks down is how he is pursuing a new senior living facility using a master lease option, giving him control and cashflow without needing to assume existing debt. By taking over operations while the seller retains the mortgage and licensing responsibilities, he can stabilize the property and eventually secure favorable financing—all while minimizing risk.
About Markian
Markian is a multifamily investor, senior living operator, author of “Military House Hack,” and leader within the Active Duty Passive Income community, helping thousands of military members build wealth through real estate. From single-family to multifamily to senior housing, his journey demonstrates resilience, creativity, and mission-driven investing.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
FAQ: Senior Living Real Estate Investing
What is senior living real estate investing?
Senior living real estate investing focuses on buying, improving, and operating properties designed for older adults, such as assisted living facilities, independent living communities, and residential care homes. Investors generate income through rent, care services, and operational efficiencies.
Why is senior living real estate investing growing so quickly?
Demand is rising because thousands of Americans turn 65 every day. With many states lacking enough quality senior housing, investors can fill a major gap by providing upgraded facilities, better operations, and more compassionate care options.
What types of senior living properties can investors buy?
Investors can purchase assisted living homes, independent living communities, memory care properties, and small residential care homes. Many choose assisted living because it provides strong cashflow without requiring the higher-level licensing needed for skilled nursing or memory care.
Do you need experience to start investing in senior living real estate?
Experience helps, but it is not required. Many operators begin by acquiring one small assisted living home and working with an experienced manager. Learning the operations side is key, since senior living is both a real estate investment and a people-centered business.
How is senior living investing different from multifamily investing?
Senior living combines real estate with hospitality and healthcare services. Unlike multifamily, revenue does not come only from rent. Income includes care fees, services, and higher room rates, and operational oversight plays a larger role in profitability.
Is senior living real estate investing risky?
Senior living can be highly profitable, but it carries operational risk because staffing, care quality, and management directly impact revenue. Strong operators, well-trained staff, and consistent oversight help reduce risk while increasing investor returns.
Can senior living real estate investing help with tax benefits?
Yes, senior living offers tax advantages similar to other real estate investments. Investors can use depreciation, cost segregation studies, and reinvestment strategies to reduce taxable income while building long-term cashflow and equity.
How do master lease options work in senior living investing?
A master lease option allows an investor to take control of operations and cashflow without taking over the seller’s existing debt immediately. The investor leases the property, improves operations, builds value, and later exercises the option to purchase.
Disclaimer: This summary was written with the help of AI and reviewed by Rod’s Team.
Full Transcript with Markian Sich Below
01:20:08:01 – 01:20:28:01
Rod Khleif
Welcome to another edition of Lifetime Cash Flow to Real estate investing. I’m Rod Khleif, and I’m thrilled you’re here. And I’m really going to enjoy this interview today. I know I am, because it’s a friend of mine, who has been in the business a long time. Actually, I don’t want to be braggadocious, but I think I may have played a small role in that.
01:20:28:01 – 01:20:47:16
Rod Khleif
But his name is Markie. And sick, sick, sick, sick. I’ve got the situation. The situation got. Oh. Got it funny. Oh that’s awesome. You know, he’s, he’s a marine Corvette. He’s a he’s from Ukraine. And, he’s also CEO of Active Duty Passive Income, which is the largest military real estate education community really in the world.
01:20:47:16 – 01:20:59:08
Rod Khleif
And, and, and I’ve spoken at your event. Yes, sir. And, I think I’m trying to speak at the next one here. Eric’s trying to get me lined up for that, but, welcome to the show, brother.
01:20:59:10 – 01:21:18:15
Markian Sich
Right. It is. I, I mentioned this when I first walked in here. It’s, a little bit surreal. I know a lot of people probably said that, but truly, this is this podcast is what gave you my start. Well, it got me, and actually, I remember I don’t remember the number of the episode, but I remember the exact line you were going back and forth with somebody.
01:21:18:15 – 01:21:37:07
Markian Sich
I was driving down 146 from Miramar, from work down to my downtown apartment in San Diego. Okay. And and you mentioned the Irv Triangle, right? And I’m a math guy. And I thought it was just, you know, simple. I was always thinking about it like a single family home. And you said something about it. Yeah. You raise the rents by 50 bucks.
01:21:37:07 – 01:21:51:24
Markian Sich
50 units. Boom. Half $1 million in value added. And I was just, like, in my mind, just went. And I was like, wait, I get it. Now I understand how cap rates work. I understand how like it’s basically this multiple effect. And and I was like, wait a second, this is this is the real estate.
01:21:51:24 – 01:21:56:24
Rod Khleif
I should be. And did you already have ADP going at that point? I’m just curious.
01:21:56:24 – 01:22:17:20
Markian Sich
I honestly, I think it was all kind of starting at the same time. I basically so a little bit about myself as I work better under pressure, I’m like, I feel like I have a, I’m naturally lazy a little bit. And so I had to put myself in situations to where I created pressure on me. And so, like when I was in flight school, I would tell my best friends, be like, hey, let’s meet at Books-A-Million.
01:22:17:20 – 01:22:33:03
Markian Sich
We’ll study together. And that way I couldn’t let them down. I had to go show up and study. And that’s what got me through high school was like. So for me, ADP, was basically a way to create pressure on myself. I was like, I need to do this in front of a community of other military members who are naysayers for the most part.
01:22:33:03 – 01:22:55:28
Markian Sich
Right. Not a lot of military in my circles at least, were interested in this stuff. And I was like, I need to show them that this is a thing because I read, you know, Robert Kiyosaki book, right? Read, also Four Hour Workweek. And I was like, I gotta, I gotta figure something out. And so and then the podcast I started listening to like, you know, I went through Morrison first, and then I went to listen to Biggerpockets, but then I found yours.
01:22:55:28 – 01:23:01:10
Markian Sich
I don’t know how I think you were just I think I think it was like the early days of the podcast. Yeah. And I went from episode one on.
01:23:01:16 – 01:23:02:13
Rod Khleif
Okay. Wow.
01:23:02:13 – 01:23:04:13
Markian Sich
Yeah. And, and.
01:23:04:16 – 01:23:12:16
Rod Khleif
Wow. So, so, you know, tell your story though. I mean, you’re. Yeah. You’re a marine pilot. What is a 53? What is that?
01:23:12:18 – 01:23:32:21
Markian Sich
So it’s like it’s 99.5ft long. Okay, so it’s a very big helicopter. Oh, wow. I can think of it as, like, a big school bus. Okay. And we carry typically, the joke is like, how many Marines can you carry? One more, but we, typically carry about 30 Marines with, you know, full gear and everything.
01:23:32:28 – 01:23:50:15
Markian Sich
There’s typically 2 to 3 crew chiefs on board. You know, you might have a, a gunner in the back, and one on the side and, you know, two pilots. Wow. And you just it’s just a big school bus with a bunch of, you know, Marines full of passenger heads. Yeah, ready to mess things up.
01:23:50:16 – 01:23:56:11
Rod Khleif
And I guess it’s. Today is the 250th anniversary of the massacre. So this is a awesome day to have the free.
01:23:56:11 – 01:23:56:28
Markian Sich
Yes, sir.
01:23:56:28 – 01:23:59:03
Rod Khleif
Yeah, actually, what do you say? Go, dogs?
01:23:59:06 – 01:24:16:14
Markian Sich
Devil dogs. This is where the devil dogs? Yeah. I’ll say this is a, a German word, actually. So the original phrase was, two London. Oh, yeah. So that stands for Devil Dog. And so they were really impressed by the Marines back in the days. And they’re like, they call this devil hundreds. But yeah. Okay.
01:24:16:14 – 01:24:18:01
Markian Sich
Teufel hoon is I don’t know how to pronounce it.
01:24:18:01 – 01:24:22:13
Rod Khleif
Exactly, but yeah, well that’s this awesome that we’re doing this today. Then. Yes. I’m. Yeah.
01:24:22:14 – 01:24:23:27
Markian Sich
Good luck. Pick a better day.
01:24:23:27 – 01:24:27:04
Rod Khleif
Love it. So. So how long were you in?
01:24:27:06 – 01:24:46:22
Markian Sich
Eight and a half years. Active duty. Okay. So actually, first four years in Naval Academy. Technically, that’s active duty, but it’s just college. And then did eight and a half years active duty. Both, flying helicopters and then did, what’s called communication strategy in operations, basically just public affairs. They were like, oh, you you’re good at talking like, oh yeah, maybe help our generals not get in trouble.
01:24:46:22 – 01:24:52:24
Markian Sich
Right. I’d like, fix up a speech or something here and there. And then I did three years in the reserves, and now I’m completely out.
01:24:52:25 – 01:24:53:28
Rod Khleif
Oh, wow.
01:24:54:00 – 01:24:56:13
Markian Sich
Just. Yeah. Veteran status. Whatever. Civilian now. So.
01:24:56:13 – 01:25:13:05
Rod Khleif
Very cool. Yeah, well, thank you for your service, brother. I appreciate your support. Yeah, I absolutely, know that we live in the greatest country on earth because of our military. And thank God Trump got elected in that regard. But anyway, we won’t go. We won’t go down that political rabbit hole. But I have no problem saying it anyway.
01:25:13:12 – 01:25:19:25
Rod Khleif
So, so when real estate, you were active, you were still active at that point then?
01:25:19:27 – 01:25:37:24
Markian Sich
Yeah. So I actually when I tell my story, I explain to people, it’s kind of funny, but I got into real estate primarily because of my wife, who I was in love with during during flight school. And but she lived in France. Oh, she was learning how to make she was a winemaker in France. She was going through like an internship, college thing.
01:25:37:24 – 01:25:51:21
Markian Sich
She’s also originally from Ukraine. Okay. And I was like, well, I, I only got to see her every once every four months. And I was like. And then I wanted to take her to a nice restaurant, go to when I can make like a nice hotel or something, whatever. Just have the time of our life for 3 or 4 days and then go back to flight school.
01:25:51:24 – 01:26:06:11
Markian Sich
Well, it got expensive. It’s like a a second lieutenant. I was like, I didn’t have that much money. It was decent money. So anybody that was enlisted listening to this like, yes, I’m not I’m not belittling my paycheck. But it was definitely not easy to fly to Europe all the time. And like, so I was like, you know what?
01:26:06:11 – 01:26:30:26
Markian Sich
Can I just make more money? Is that is that allowed to say out loud in the military? Because I was like, I’m supposed to just focusing on the military thing, but I, I, I started looking into it, you know, and, I got into I was a computer science i.t. Major, so I wanted to do something online. I wanted to build websites, but, I also, you know, when I lived in Ukraine till I was 15.5, I’d come back every summer to visit my grandparents.
01:26:30:29 – 01:26:50:22
Markian Sich
My mom’s parents in Knoxville, Tennessee, my dad’s parents in, New York, upstate New York. Alfred. They were all the first generation immigrants. My parents were second generation. And it’s just serendipity that I ended up being a third generation, but I was actually also born and lived there because of my dad’s job. So I’d come every summer and I’d be like, why is America so awesome.
01:26:50:24 – 01:26:51:06
Rod Khleif
Right?
01:26:51:07 – 01:27:09:11
Markian Sich
Like, I literally, I like we went we went to Dollywood and, outside of Knoxville, like, in the smoky Mountains. And I was like, there’s like these, you know, rollercoasters, doing loops. You’re not afraid of dying, going on them like it, like everything was amazing, you know? And then I’d go back, and I love Ukraine. Like to like it is the country of my heritage.
01:27:09:11 – 01:27:11:10
Rod Khleif
Like it’s terrible what’s going on now obviously.
01:27:11:10 – 01:27:24:06
Markian Sich
But yeah, yes, it is absolutely terrible. And but I come back and I tell all my friends like, America is awesome, this isn’t this, that and the other thing, and the houses are so big and you have basements and this, you know, it sounds so funny, but, like, it’s funny.
01:27:24:06 – 01:27:39:14
Rod Khleif
It’s funny what you think is important. I guess it’s funny. It’s hard to interrupt. But I remember the first time I saw three car garage or I. Yeah. Or actually, when I came here to Sarasota and you could get a place on the water where you have a canal in your backyard and you go out to the ocean on a in your boat.
01:27:39:17 – 01:27:41:18
Rod Khleif
I mean, it was like, Holy crap. Anyway, sorry.
01:27:41:18 – 01:28:00:11
Markian Sich
No, no, no, you’re right, you’re right. It, very. It was a lot of Ukrainians when I was growing up, my friends, you know, when I was like seven, eight, nine, ten. America was almost similar to, like, thinking of Mars. It was a completely different planet. Yeah. They’d watched Die Hard and and, there’s a few, like, Fifth Element.
01:28:00:11 – 01:28:09:07
Markian Sich
There’s a few movies that they would like, typically Bruce Willis movies. Right. But it was just like they would just love. And they were like, That is America like watching Home Alone? They thought everybody’s house was this big.
01:28:09:08 – 01:28:22:25
Rod Khleif
I remember when I immigrated, yeah. My mom told me I was so disappointed that that when we got to New York Harbor, I didn’t see cowboys and Indians because I thought it was going to be cowboys and Indians. True story. Yeah, yeah, yeah, I was six, you know, but I.
01:28:22:25 – 01:28:25:01
Markian Sich
Landed in, like, Houston or something, right? Right.
01:28:25:01 – 01:28:27:04
Rod Khleif
Yeah. But yeah.
01:28:27:04 – 01:28:43:10
Markian Sich
So I, I, I got into, I got this bug of trying to figure out what made America awesome. Like, that’s the only way I can think of is, like, what made America. I couldn’t to me, like, I’m a math person. I’m like, I need it. But I also need to know why. Like, even I was flying aircraft, I was like, they would get annoyed with me.
01:28:43:10 – 01:28:47:11
Markian Sich
They’re like, just just believe it. Just pressed I believe button. When you do this, it does that.
01:28:47:11 – 01:28:48:10
Rod Khleif
You want to know why it did?
01:28:48:15 – 01:29:07:12
Markian Sich
I was like, no, I can’t, I can’t even remember what you’re telling me to do unless I understand why it does it. And so I started learning about I remember listening to Tom Wheeler. Right. Oh. And he. Yeah. And he explained the tax code to me, and I, I was like, this is it.
01:29:07:14 – 01:29:11:11
Rod Khleif
I was like, I had him on the podcast way back at that name. He’s a rich dad. Yeah.
01:29:11:11 – 01:29:12:13
Markian Sich
Advice. Yeah, yeah, yeah, I’m.
01:29:12:13 – 01:29:15:01
Rod Khleif
Pretty sure I had my podcast a lifetime ago anyway.
01:29:15:03 – 01:29:25:10
Markian Sich
Yeah. And I don’t know if he’s doing stuff still, but he, he explained it so well to where somebody was just beginning. Could understand why the tax code of his.
01:29:25:10 – 01:29:25:23
Rod Khleif
Yeah. Yeah.
01:29:25:29 – 01:29:36:23
Markian Sich
Why the tax code in the United States specifically in the his history behind it was so amazing, amazing. And it positioned real estate to really be the cornerstone of our wealth.
01:29:36:23 – 01:29:43:17
Rod Khleif
No question. And I it’s when 90% of the world’s millionaires either made it in real estate or invest in real estate because the frickin tax code, it’s extraordinary.
01:29:43:18 – 01:29:44:02
Markian Sich
It.
01:29:44:09 – 01:29:49:13
Rod Khleif
And that’s why Trump didn’t want to show his tax returns to pay taxes. When you buy real estate, you don’t pay for taxes.
01:29:49:18 – 01:29:55:18
Markian Sich
Well, but also it’s one thing to not pay taxes is one. It’s another thing to show it to somebody who will understand why. Well, yeah, it’s a good thing, right?
01:29:55:21 – 01:30:14:03
Rod Khleif
It’s a it is a good thing. It’s it’s to promote, you know, a property ownership and, and, and housing and, and real estate investment because that stimulates the economy. It’s there for a reason. I mean, I haven’t paid taxes in decades, you know, but but I’m. No, I’m, I, I still provide a lot of tax revenue and all the work that I do and.
01:30:14:03 – 01:30:18:19
Rod Khleif
Right, provide housing and everything else. So, you know, I don’t feel bad about it.
01:30:18:21 – 01:30:30:28
Markian Sich
No. And what he taught me was to, actually, I became pretty adamant about this. I was like, I started hating the word loophole. I was like, there’s no loopholes. I was like, this is by design. Yeah. I was like, the.
01:30:31:05 – 01:30:31:24
Rod Khleif
The.
01:30:31:27 – 01:30:50:13
Markian Sich
It’s not a bunch of dummies, you know, writing this tax code. These people designed it to for social engineering. They realized and this was not only America. There’s other countries that know that, hey, people would rather make less money. I remember Tommy all saying this. People would rather make less money than to make more money than have to give it to the government.
01:30:50:15 – 01:31:04:25
Markian Sich
So the government uses that to its advantage. And it’s like, wait a second, let’s just design this tax code so that the American people do things that that they can do better then we would be able to do on their behalf. Right? Right. And that’s that’s the whole game.
01:31:04:26 – 01:31:25:22
Rod Khleif
No, you’re right. You’re absolutely right. I mean, and there’s just so many opportunities to take advantage of that tax code. I don’t even use them all. You know. Yeah. Nobody is. Yeah. Yes. It’s complex, but there are some, you know, there’s some some amazing opportunities there. So, so I mean, you’re in I mean, you’re you’re in.
01:31:25:24 – 01:31:28:22
Rod Khleif
Yeah. $1 billion with the real estate. I wish.
01:31:28:24 – 01:31:31:04
Markian Sich
But but no. Yeah. So I, I.
01:31:31:07 – 01:31:34:17
Rod Khleif
I mean, you are I mean, you bought $1 billion worth of real estate over the.
01:31:34:24 – 01:31:38:03
Markian Sich
Oh, sorry. That that’s our community. I wish community okay. No, no. Yeah.
01:31:38:09 – 01:31:39:17
Rod Khleif
That’s the community. You got it.
01:31:39:17 – 01:31:59:04
Markian Sich
Okay, I so at that point, let me just backtrack real quick. So it kind of makes sense for the listeners. At that point, I made a decision that I was going to do real estate, and I brought my family along because it wasn’t enough that I. It wasn’t enough that I feel like I figured it out. I realized that my parents didn’t have it figured out.
01:31:59:07 – 01:32:01:20
Markian Sich
And I, I saw this storm that.
01:32:01:22 – 01:32:04:00
Rod Khleif
They domestic at that point. They were. Yeah, that they had just.
01:32:04:00 – 01:32:04:24
Markian Sich
Repatriated.
01:32:04:24 – 01:32:05:23
Rod Khleif
Second generation.
01:32:05:23 – 01:32:27:28
Markian Sich
Yeah. Their second generation. But they just repatriated. We all lived in Ukraine for a long time, right. Even though they were second and I was third generation, they all came back and we were like, wait a second, we have to. I was like, I need to help them. I’m the oldest of seven kids. Okay? So I was like, if my parents want to go visit all of their grandkids someday, if they want to have a good life, like they need to not just stash money under the couch, you know, they need to actually have a plan.
01:32:27:28 – 01:32:46:19
Markian Sich
And so, I, I started listening to your podcast and now I kid you not, there’s so many things I failed at. But finally I got a little three bedroom, two bath house. And a month later or two months later, I closed on a 56 unit in Indiana. Well, with them, Tyler Carney Debord was my lender. No kidding.
01:32:46:19 – 01:32:47:06
Markian Sich
Yeah, by 20.
01:32:47:06 – 01:33:01:18
Rod Khleif
17, Tyler is my is is the is the lender for my most of my warriors. That’s these are loan broker not a lender. He’s a broker but he aligned you with the right lender. So that’s what a good loan broker does. But so you was this before after you went to my bootcamp.
01:33:01:20 – 01:33:08:16
Markian Sich
This is right before I was just before I was just reading your book, listening to your podcast. And then I bought tickets to your event in July.
01:33:08:21 – 01:33:09:06
Rod Khleif
Okay.
01:33:09:12 – 01:33:18:04
Markian Sich
And I was in the military, still active duty and something. I can’t remember what happened. I couldn’t go, you couldn’t go. So I gave Eric one of my tickets.
01:33:18:07 – 01:33:31:27
Rod Khleif
Eric, Eric’s one of, one of his in ATP and actually one of my warriors. And just an amazing. Yeah, being has raised thousands and thousands of dollars for veterans suicide and veterans homelessness. Yep. You know, just, just an incredible guy.
01:33:31:28 – 01:33:51:22
Markian Sich
Anyway. Incredible guy. And, he jumped into my community, just, you know, helping people with real estate, too. And that’s why we kind of banded together and we both kind of jumped from single family or had that mindset shift to multifamily at the same time. And so we then syndicated a couple deals together.
01:33:51:23 – 01:34:01:23
Rod Khleif
And so just I want to do the chronology because I know I just wanted no one’s ever sat in that chair. That’s been in Baltimore or whereas the other.
01:34:01:24 – 01:34:06:04
Markian Sich
La la, yeah. Well, my mom was in Baltimore, I was in Atlanta. Eric was in L.A.. Yeah.
01:34:06:04 – 01:34:23:25
Rod Khleif
So. So Eric went to L.A.. Your mom went to the Baltimore, that I did back. I did an event in Baltimore, and it’s really funny. My nieces, my my my nephew is here. Who’s the little brother of the nieces at the Baltimore event. Decided they wanted to throw flowers. When I walked out, I just I came across those pictures.
01:34:23:25 – 01:34:31:19
Rod Khleif
So as I walked out, they were throwing flowers like, it was just adorable because I lived in Baltimore. And then. And then you were. Which one were you at? Atlanta?
01:34:31:23 – 01:34:36:04
Markian Sich
I was in. I went to the Atlanta event. That was right after our book came out. The you wrote the forward.
01:34:36:08 – 01:34:37:04
Rod Khleif
That’s right. Yeah.
01:34:37:04 – 01:34:48:16
Markian Sich
Because Eric came up to you at the L.A. event, right? And was like, hey, will you sign this book? And then I guess he reached out to you later after he became a warrior. And he was like, hey, we’re writing this. You know that that book, like, would you write the book?
01:34:48:20 – 01:34:49:25
Rod Khleif
What’s the name of it? Because you guys.
01:34:49:26 – 01:34:51:00
Markian Sich
Military house hack.
01:34:51:00 – 01:34:53:27
Rod Khleif
Military house hacking. Because I know you guys give that away a lot and.
01:34:53:27 – 01:34:54:17
Markian Sich
Yeah, yeah.
01:34:54:17 – 01:35:03:04
Rod Khleif
And it’s on Amazon. So if you’re in the military, get that freaking book. Military. How’s that going? For sure. But yeah, that was a real honor to be able to write that for you guys.
01:35:03:04 – 01:35:05:28
Markian Sich
And you were in, like, France at the time or something.
01:35:05:28 – 01:35:06:11
Rod Khleif
Yeah, no, I.
01:35:06:11 – 01:35:08:07
Markian Sich
Was, and you told us you were on a train typing it.
01:35:08:11 – 01:35:14:19
Rod Khleif
I was, I was, I was, I was in the, I was in Europe and I did it on a train. Yeah, yeah. And it came out okay, I think I was.
01:35:14:20 – 01:35:17:03
Markian Sich
Oh yeah. It was great, you know, to be a real man.
01:35:17:03 – 01:35:33:24
Rod Khleif
Yeah. But but yeah, I mean, so, so. And your mom has reached out to me in the past. I mean, this was 6 or 7 years ago or 5 or 6 years ago, where she’s reached out to me about things I just recall. Yeah, I’m sure she did. Yeah. No, but that’s so cool that that you’ve got you got them involved in it.
01:35:34:01 – 01:35:45:27
Markian Sich
Yes. I mean, I’ll tell you that first deal we got, we overpaid for it. But it’s now making them more than my dad’s W-2 salary and is basically their retirement. Wow. That first deal. So 56 units.
01:35:45:29 – 01:35:47:02
Rod Khleif
Ish units in Indiana?
01:35:47:07 – 01:35:49:07
Markian Sich
Yeah, 56 units.
01:35:49:10 – 01:35:49:21
Rod Khleif
Wow.
01:35:49:26 – 01:36:06:16
Markian Sich
Yeah. So I’m about to do a second cash out refi on it, like, almost seven figures. Cash out. I mean, like, for a single, like, this is our first, like, little gem of a property that’s always going to be our cornerstone. Like, I’m never I’m going to do my best to never sell it. Nice. You know, but.
01:36:06:16 – 01:36:08:06
Markian Sich
And it’s what I’m.
01:36:08:06 – 01:36:12:18
Rod Khleif
So how did you take it down? Did you just have some side money or what? How’d you take that first down?
01:36:12:18 – 01:36:31:26
Markian Sich
That’s a good, very good question. I had zero money. So, because I was, you know, second lieutenant in the Marine Corps. I mean, I didn’t have any college that fortunately, I, I got into the Naval Academy, but I, I had some money stashed away in a in a, IRA, which I actually liquidated to get my first rental property.
01:36:31:28 – 01:36:45:25
Markian Sich
Almost gave the the guy at the bank a heart attack when I told him I didn’t want my IRA anymore, but I, I called my parents, and I asked them. I was like, look, I know you guys have some money stashed away somewhere. It’s like. So basically, the first people I raise my money, raise money from one of my parents.
01:36:46:02 – 01:36:56:17
Markian Sich
And if anybody’s like, his parents get. You can think where you are. But I’ll tell you, if you try to raise money from my dad, it is way harder than anybody. I’m raising money for him right now. Please.
01:36:56:19 – 01:36:59:29
Rod Khleif
Oh, please. Oh, yeah. Okay. Yeah. No, it was the pressure.
01:36:59:29 – 01:37:00:14
Markian Sich
Oh.
01:37:00:16 – 01:37:04:20
Rod Khleif
I enjoyed just seeing that conversation candidly. Wow. Wow.
01:37:04:20 – 01:37:18:12
Markian Sich
So I come I it took months to get my dad and my mom on board with like hey, we need a, we need to help your money make you money. And so my dad had been because he’s, he’s a professor.
01:37:18:15 – 01:37:19:07
Rod Khleif
Oh is he really.
01:37:19:07 – 01:37:34:25
Markian Sich
Yeah. Yeah. So so he teaches physics and philosophy. He went to get this. He went to Rensselaer Polytechnic Institute for nuclear Engineering. Then he went to Harvard and then he went to MIT and wrote the first ever dissertation on Chernobyl as the world meltdown expert on the Chernobyl accident.
01:37:34:25 – 01:37:36:22
Rod Khleif
Kidding. He’s so he’s he’s a ten.
01:37:36:22 – 01:37:37:15
Markian Sich
Pound has a.
01:37:37:17 – 01:37:38:15
Rod Khleif
PhD and. Oh, yeah.
01:37:38:17 – 01:38:01:16
Markian Sich
And he’s a PhD in nuclear physics. Nuclear, nuclear nuclear engineering from MIT. Wow. And has I, I can’t remember I don’t want to misspeak, but it’s like a master’s in Soviet, history and politics or something like that from Harvard. Had his nuclear engineering degree from Rensselaer. Also has now a philosophy and theology masters just because he collects Cartesian.
01:38:01:18 – 01:38:02:29
Rod Khleif
Okay, okay.
01:38:03:02 – 01:38:25:03
Markian Sich
So for him, what do you think his money went well? Five 20/29 he started putting most of his money that because as he was making money as a US diplomat working in Ukraine, he was basically helping a bunch of, former weapons scientists from the various, Soviet satellite countries. He was helping them find jobs that would benefit America instead of like Russia and Iran and that kind of stuff.
01:38:25:03 – 01:38:44:22
Markian Sich
So he because he was a scientist and he could speak the language, he could any any new English, he was like a perfect type of person to help them out. So anyways, he was doing that he was making pretty good money for especially for somebody living in Ukraine. And so he was putting that away into 529 into some random a 529.
01:38:44:22 – 01:38:45:11
Rod Khleif
Sorry.
01:38:45:14 – 01:38:45:26
Markian Sich
College.
01:38:45:26 – 01:38:46:27
Rod Khleif
Fund. Oh, College fund.
01:38:46:27 – 01:38:48:19
Markian Sich
Okay. Yeah. So it’s like a college IRA.
01:38:48:20 – 01:38:53:11
Rod Khleif
Okay. Okay. So it’s tax, a tax fund that they see. This is why I no.
01:38:53:13 – 01:39:11:27
Markian Sich
No no no no I mean I mean there’s no reason why you would even need to know that because you have other ways of doing the same thing. That’s even better. But but to them it was like, okay, this is for college. It’s going to be tax free. Well, I, I was kind of bold and I was like, dad, you need to liquidate that thing because that is a waste of money.
01:39:11:27 – 01:39:29:13
Markian Sich
I was like, if any of Mike and I and I mean this with love with all my siblings, I was like, if if they want to go to college and I know times are different than when you went to college, you guys could work a couple of jobs and pay off your own college. Maybe that’s not a thing right now, but I was like, they have to figure it out on their own because you can’t suffer and not be able to even see your grandkids because of these.
01:39:29:16 – 01:39:30:21
Markian Sich
Because because of those accounts.
01:39:30:22 – 01:39:38:26
Rod Khleif
Well. Well said. Well I mean well, well, well, presented. Yeah. I rent the grand. Bring the, bring the grandkids in. Good. Yeah.
01:39:38:29 – 01:39:45:25
Markian Sich
Like you’re right. I’m a sales guy. Okay. So, and he was like, you know what? Fine. And so he liquidated. It was like 650,000.
01:39:45:27 – 01:39:48:16
Rod Khleif
Holy crap. So he that was like, it’s like half of the.
01:39:48:17 – 01:39:53:17
Markian Sich
All of their life savings basically was in was invested for our education.
01:39:53:17 – 01:39:56:10
Rod Khleif
And you convinced them to put that in the multi-family property.
01:39:56:10 – 01:40:06:16
Markian Sich
Wow. That was the down payment on the 56 unit. Oh wow. And and I couldn’t find any I don’t know, there was one broker in Ohio that somehow connected me to Tyler.
01:40:06:20 – 01:40:07:21
Rod Khleif
Okay.
01:40:07:24 – 01:40:23:27
Markian Sich
And Tyler for whatever. I mean, he was he was way younger in his career. Oh right. And so he he believed in me and he helped us make it happen. Should we meet? I just had lunch with him the other day and and he’s like, should you have qualified for that? I don’t know, but you did.
01:40:23:27 – 01:40:43:09
Rod Khleif
And I was like, yeah, I am, I got it. Okay. Yeah, yeah I know he, he he speaks at all my boot camps and all that. Yeah, he’s a good friend. So, so, wow, I can’t even imagine. I mean, that that would be some fear around that as well. Your your parents life savings. You felt really good about that deal, obviously.
01:40:43:09 – 01:40:45:14
Rod Khleif
And it was a it was a good deal.
01:40:45:17 – 01:40:53:00
Markian Sich
Right. I’m gonna be honest. I’m more of like, a dive head first type of person. I’m not the underwriter on my team. I mean, I, I felt good.
01:40:53:00 – 01:40:53:21
Rod Khleif
Same as.
01:40:53:21 – 01:40:56:10
Markian Sich
Good as I could, but I.
01:40:56:12 – 01:40:56:24
Rod Khleif
Okay.
01:40:56:26 – 01:40:59:17
Markian Sich
I, I know for a fact we overpaid for it a little.
01:40:59:17 – 01:41:01:06
Rod Khleif
Bit. Oh that’s okay though.
01:41:01:09 – 01:41:08:07
Markian Sich
But it got our no pun intended foot in the door. Right. And, I mean, we made some mistakes, like the first year I got a.
01:41:08:09 – 01:41:10:29
Rod Khleif
To talk about some mistakes. That’s. Yeah, yeah, yeah. Okay.
01:41:11:00 – 01:41:25:17
Markian Sich
I rushed into hiring a property manager. I did not, actually. I mean, I did what I self-managing. No, no, no, I no, I hired a property manager, like the first property when we probably management company. Yeah, it was a property management third party property manager.
01:41:25:17 – 01:41:26:14
Rod Khleif
Yeah. Yeah. And he got it.
01:41:26:14 – 01:41:41:15
Markian Sich
Okay. I hired them and. But I, you know, I just wasn’t good at vetting or interviewing people like they were actually managing like a few hundred single family units. And I was like, oh, the salt of the earth people. No, no. Like they knew how to, you know.
01:41:41:15 – 01:41:51:28
Rod Khleif
No, no, they have to manage the same asset class and same size. Otherwise they’re going to crash and burn. This I teach you, you learn that in my boot camp. So this was before the boot camp, or you would have had that.
01:41:52:04 – 01:41:55:15
Markian Sich
This was before the boot camp. Yeah. This is absolutely okay because I know I remember.
01:41:55:15 – 01:42:00:09
Rod Khleif
Going to your boot camp and you saying that single family management companies can’t manage a frickin 55. You.
01:42:00:09 – 01:42:26:23
Markian Sich
I remember you saying that on stage, that I was like, I wish I knew that earlier. And so I, we immediately had to fire them. We had a one year contract, but they they were embezzling money for sure. I couldn’t I wasn’t I didn’t have the capacity or the. No, no how to prove it, but I just we got rid of them, got a third party property manager and actually and while they were, they did decently well and they kind of like helped the property come along and get better.
01:42:26:26 – 01:42:39:24
Markian Sich
Meanwhile, ADP is growing. Our members are wondering, okay, how the heck do you, you know, raise money? I mean, how do you buy apartment complexes? And also they wanted to know simple things like the VA loan. How do I house that? Which is why we wrote the book.
01:42:39:24 – 01:42:45:00
Rod Khleif
Right? It’s a loan to get get your first two duplex triplex or four plex. Live in it. Move in it. Yeah.
01:42:45:00 – 01:43:16:06
Markian Sich
Yeah. And and so we literally wrote the book on it, right. And refined the system and found all the support and everything. And so we started growing because people were like changing there. Like legitimately, I’m not trying to toot my own horn, but like legitimately changing their lives. Sure. And it was it gave us so much energy and drive, like, wait, I’m able to like, give back to the military community, which my family feels like America and the military basically adopted me, you know, adopted us as like like we truly are so grateful for the country and what the military has done for us.
01:43:16:06 – 01:43:32:12
Markian Sich
So like to me, that was like just the the best thing. I was like, I get to walk the walk and I get to talk the talk. I do the real estate and then I teach the real estate. I’m sure you feel the same way. And especially and it was like in a niche for my military people. And so anyway, I mean, Eric syndicate a couple of deals.
01:43:32:15 – 01:43:33:24
Markian Sich
Those are really fun. Those are really the.
01:43:33:24 – 01:43:36:11
Rod Khleif
First one because you guys were struggling to raise money.
01:43:36:11 – 01:43:39:15
Markian Sich
For it. Oh yeah. We knuckle drag that one.
01:43:39:18 – 01:43:49:09
Rod Khleif
He called me. He called me freaking out. I’m like, just hit the freaking phones, dude. And you guys pulled it out, and now that one’s. That one’s gone for a second. You might even buy it again.
01:43:49:09 – 01:43:51:25
Markian Sich
I think we’re trying to. We’re trying to.
01:43:51:27 – 01:43:55:11
Rod Khleif
They presented that as a case study at my at the yeah camp this last weekend.
01:43:55:11 – 01:44:24:23
Markian Sich
Gosh. And I visited it recently and I’m just like, I can’t believe we ever sold this thing. I was, but it was. But I needed that, you know, that that medal of achievement that we we went full cycle, we doubled everybody’s money. And it was this huge success. And so it went, you know, we also did a mobile home park and and then anyway, I about that time I started transitioning out of the military, were planning my exit and my mom comes to me because this is what you were asking about senior living.
01:44:24:25 – 01:44:34:17
Markian Sich
My mom had just, she’d been taking care of my grandma on my dad’s side who had a stroke. So half of her body was paralyzed for three years before she passed away. My mom was her primary caregiver. She was basically her hospice.
01:44:34:17 – 01:44:35:06
Rod Khleif
Gotcha.
01:44:35:08 – 01:44:51:13
Markian Sich
And so put yourself in, like, just imagine my mom for a second. Mom of seven kids, while also taking care of a grandma, as her hospice, like, essentially like she everything she does is out of care for people like, oh, she’s a most caring person.
01:44:51:13 – 01:44:54:04
Rod Khleif
Just a little bit of time I’ve spent with her. Yeah, yeah, yeah.
01:44:54:06 – 01:45:12:09
Markian Sich
Just absolute angel. She. I don’t think she. I don’t think she can imagine anything like. That’s what gives her energy is caring for people. And so when she comes to me, she’s like, hey, I really want to do, you know, senior living, senior housing. As I, I couldn’t say no because I felt eternally indebted to her. Yeah.
01:45:12:09 – 01:45:23:19
Rod Khleif
Listen, her timing is freaking perfect. You know, there’s 10,000 people a day turning 65 in this country. I’m one of them. And, you know, so, so. But talk about the seminar on that first deal.
01:45:23:21 – 01:45:25:15
Markian Sich
Oh, on the on the senior living.
01:45:25:15 – 01:45:26:13
Rod Khleif
Yeah, yeah, yeah.
01:45:26:16 – 01:45:36:08
Markian Sich
So the first thing I learned, and I’m sure you said this probably a million times on your podcast, don’t get a floating rate loan. You know, I learned about 2008 and how that was what brought the whole house down.
01:45:36:08 – 01:45:37:27
Rod Khleif
Was that was part of it was a.
01:45:37:27 – 01:45:44:03
Markian Sich
Part of it. Right. And but I don’t know, you know, I had a couple deals under my belt. I was feeling.
01:45:44:03 – 01:45:57:01
Rod Khleif
Good, by the way. Don’t feel bad. My ex-partner got me in a couple of those and then and you know, I’m I’m challenged with those myself. Okay. So yeah. Yeah. No, I, it’s no one’s immune. But anyway, so talk about it and talk about what happened. Yeah.
01:45:57:01 – 01:46:14:11
Markian Sich
So we, I dove into this industry, and everybody told me like, hey, if you’re coming from multifamily, you don’t know what you’re doing. You’re going to get screwed over there like a B, and C. So many people coming from multifamily thinking they know what they’re doing. And that was me. But I jumped into it and I wanted to do something near my parents because my mom wanted to also work there.
01:46:14:11 – 01:46:25:11
Markian Sich
She wanted to actually do something. Oh, wow. Right. You hands on. And so we looked around in the area and finally she found this place. And there was this this was outside of Atlanta, in Smyrna.
01:46:25:15 – 01:46:26:08
Rod Khleif
Okay. Smyrna.
01:46:26:08 – 01:46:45:13
Markian Sich
And this place was known as the place where people go to die. Now, let me explain. Georgia is not like Florida. Florida has a very, relatively speaking, a developed senior housing situation. Like like Georgia’s kind of like the redheaded stepchild it is. It is not it is very underserved when in this in this industry.
01:46:45:13 – 01:46:45:24
Rod Khleif
Interest.
01:46:45:29 – 01:47:04:12
Markian Sich
Very underserved a lot of the owners are absentee mom and pop owned it for decades. The they don’t have the capacity to care or they’re callous or I don’t know what the right word is, but I think it’s just because the care required back in the day was not nearly as high as it is now. Now things are just so weird.
01:47:04:13 – 01:47:04:20
Markian Sich
If it.
01:47:04:20 – 01:47:05:20
Rod Khleif
Were not taken.
01:47:05:20 – 01:47:24:15
Markian Sich
Care of, they’re not well and it takes more to take care of. That’s what I’m saying. Like dementia used to not be as big of a problem then as it is now. It is getting worse and worse and worse. So it’s harder, and it’s like borderline psychosis sometimes. You don’t like it. It is a very challenging, challenging industry to take care of people like.
01:47:24:15 – 01:47:34:11
Rod Khleif
And so, so, so you found this place in Smyrna and, your mom wanted to work at. So you decided to manage it yourself, operate it yourself?
01:47:34:13 – 01:47:38:04
Markian Sich
Yes. You bring in an operator I brought in. I brought in an executive director.
01:47:38:04 – 01:47:39:04
Rod Khleif
Okay, but I need.
01:47:39:06 – 01:47:52:12
Markian Sich
Yeah. So he, him and his sister, they, He’s awesome. His name is Jermaine Hawthorne. He’s the bum. He, him and his sister, they had a home health agency, so they were. It’s kind of like for all the military peeps out there.
01:47:52:12 – 01:47:54:10
Rod Khleif
So they send people to people’s homes to take them.
01:47:54:10 – 01:48:10:15
Markian Sich
Yeah, yeah. So they were like military cure. If you send a team, they’re here and everybody. Right. You know, so they knew how to hire, they knew how to fire. They knew all the rules, all that, everything. They just never had a physical location. I was like, dude, okay, you’re perfect. Plus military background. Me and him jived like, we were just same page.
01:48:10:21 – 01:48:21:00
Markian Sich
I could tell that his level of integrity and loyalty was where I needed it to be perfect. And so me and him clicked immediately. And we, we, we use an SBA loan.
01:48:21:02 – 01:48:21:24
Rod Khleif
01:48:22:12 – 01:48:36:16
Markian Sich
Which only needs like 10 or 15% down depending on the appraisal. Right. And but the biggest mistake I’ve ever made, and I hopefully will ever make in my professional. Probably not. Probably not. Yeah, yeah. You got to make bigger mistakes to get to bigger heights, right?
01:48:36:16 – 01:48:43:16
Rod Khleif
That’s it. You know, it’s not it’s not it’s having a better quality problem. Then you’re going to have problems anyway.
01:48:43:16 – 01:49:04:27
Markian Sich
Please, can I get it? So don’t scare me right? I don’t want to have bigger problems in this. So we got under contract. I don’t know, just right after New Year’s, probably, or something like that. Around New Year’s, between 2021 and 2022. Interest rates were all time low, right? And I got a little cocky. And I said, you know what?
01:49:04:29 – 01:49:22:19
Markian Sich
And I still remember raising capital for the other two deals. And I was like, I don’t want to do that. Don’t even get it. Hey, can I finance in all the renovation costs? They’re like, yeah, sure. It’s just going to make your your rate floating for the first 12 months is going to be a hybrid SBA seven A so it’s going to have a construction period, which is interest only, which I loved.
01:49:22:19 – 01:49:29:24
Markian Sich
I was like, right? I was like, rod tells me to get interest only, but what nobody told me, but I still went for it was the floating rate.
01:49:29:26 – 01:49:35:25
Rod Khleif
So for 12 months. But then does it lock at whatever the rate is back then. Yeah. Oh, so.
01:49:35:27 – 01:49:52:05
Markian Sich
So five and a quarter interest rate starting. My payments interest only were $18,000. Okay. 12 months later principal and interest now nine and a half. My payments were 42,000.
01:49:52:07 – 01:49:54:06
Rod Khleif
18,000 to 42,000.
01:49:54:06 – 01:50:01:00
Markian Sich
I did not underwrite that. Yeah. No, no nobody does. I did not plan for that at all. Oh. And
01:50:01:02 – 01:50:04:00
Rod Khleif
And so, so but you were able to pull it out still.
01:50:04:02 – 01:50:21:07
Markian Sich
Yes. Yes. Well pull it out. It wasn’t like there’s like this one moment. It’s been a labor of love for three and a half years now, and, I just got a term sheet on the way here. No, to finally refinance. Oh, my gosh. Yeah. Oh, on the way here. Oh, yeah. Yeah. Finally got a term sheet.
01:50:21:09 – 01:50:23:12
Rod Khleif
And is your mom still working there or or.
01:50:23:12 – 01:50:25:12
Markian Sich
Yeah, almost every day. Multiple times a.
01:50:25:12 – 01:50:26:06
Rod Khleif
Week. Wow.
01:50:26:06 – 01:50:28:17
Markian Sich
She’s the activities director. I mean.
01:50:28:17 – 01:50:44:17
Rod Khleif
How fun it is for her to do good. Hey, by the way, every senior housing we’ll have, we’ll have an executive director. They have an activities director, because. Yeah, these people have to, you know, they have to do things. They have to. They have to be engaged. They’ll have a food and beverage director. So these are the things that the people that you hire.
01:50:44:21 – 01:50:53:17
Rod Khleif
By the way, I got certified here in Florida back in 2007 to be a under three day, to be an administrator, to be a teacher.
01:50:53:17 – 01:50:54:15
Markian Sich
Oh no kidding. Okay.
01:50:54:20 – 01:51:05:05
Rod Khleif
I was going to do it back then, and and then it happened. I got my ass handed to me, so I shifted, but, Yeah. No, I knew I wanted to be involved in senior housing long time ago, so.
01:51:05:11 – 01:51:07:28
Markian Sich
Yeah, I didn’t know that. I thought, yeah, yeah, but.
01:51:07:28 – 01:51:15:08
Rod Khleif
And all this is. I mean, I’m finally circling back to it. It’s about frickin time. But, So is that the only one you have, or have you done others?
01:51:15:10 – 01:51:25:16
Markian Sich
On the senior care side, that’s only one. But I’m about to. So here’s interesting. I wonder if you’re going to hear this episode. The same guy who sold me that one. Yeah. Wants to sell me his other one.
01:51:25:17 – 01:51:26:02
Rod Khleif
Nice.
01:51:26:08 – 01:51:46:25
Markian Sich
And, but, I mean, this is a tough business as it is, right? But being that he’s also absent, he’s he’s remote. He’s not there. Okay. And I don’t in his I don’t think he has any partners working like so my executive director is also my partner. Right. Like the level of loyalty and care is just next level, right?
01:51:46:27 – 01:52:09:01
Markian Sich
We’re so, so I think he’s been struggling a little bit, and he hasn’t been able to get occupancy where it needs to be. And, the property just started getting, you know, worn down. And finally, after two and a half years of negotiating back and forth, he said, hey, I’ll let you have it. And he said he was going to give it to me because I told him was like, the only way I can get it is if you because his is loan loon balloons.
01:52:09:03 – 01:52:28:21
Markian Sich
His loan balloons in about 12, 13 months from now. And so he I was like, the only way I can take it off your hands is if you give it to me as a master lease, and I can take it over with my team, operate it, improve it, and then refinance you out. Yeah, it’s the only way because, I can’t pay you what you want right now.
01:52:28:26 – 01:52:31:09
Markian Sich
Got it? Not even close. It’s just not worth.
01:52:31:09 – 01:52:32:06
Rod Khleif
Ever get it? Finance.
01:52:32:07 – 01:52:42:22
Markian Sich
Yeah. Okay. And so aren’t there. I mean, SBA is a weird beast. I might be able to, but I don’t want to risk it. It just would be okay. I was like, I was like, I mean, it’s almost so.
01:52:42:28 – 01:52:44:06
Rod Khleif
Receptive to that.
01:52:44:08 – 01:52:45:28
Markian Sich
He wasn’t for two and a half years.
01:52:45:28 – 01:52:50:05
Rod Khleif
He was. That’s a scary thing. You know, he was scoffing, he’s my place, I forget it. Yeah.
01:52:50:05 – 01:53:01:16
Markian Sich
No way I get it. Yeah, yeah. But at this point. But he’s, you know, staring down the barrel of a roof of a balloon in 12 months and it’s not getting any better. Well, and so, I hope to find a, you know, can you.
01:53:01:16 – 01:53:04:14
Rod Khleif
Point to the existing facility and say, hey, he take a look at this?
01:53:04:19 – 01:53:05:06
Markian Sich
Exactly.
01:53:05:06 – 01:53:09:02
Rod Khleif
Yeah. I mean, that proves the concept that proves your abilities, right?
01:53:09:09 – 01:53:28:13
Markian Sich
Yeah. Since I’ve owned this one for over three years, and this, so I’m about to get it refinanced. What? They told me because I talked to the guy, he’s like, look, if you get this refinance done and you show us one quarter, three months of it doing well, we will go and finance that one for you. They might even be able to do 100% financing.
01:53:28:13 – 01:53:31:10
Markian Sich
It depends. Well, because, SBA has so.
01:53:31:10 – 01:53:35:18
Rod Khleif
Just described a master lease option for my listeners because I it’s never really come up before.
01:53:35:24 – 01:53:45:04
Markian Sich
Oh, really? Okay. No, I don’t remember where I heard this, I don’t, but I but what I basically wanted to do is I wanted to take over the property and you get control.
01:53:45:06 – 01:53:47:01
Rod Khleif
Yeah. Completely right.
01:53:47:03 – 01:54:03:14
Markian Sich
I it it’s kind of like turned into a triple net lease. So basically I am the sole tenant, but I’m now operating the business. He’s still going to hold the licenses. He’s still going to have to pay the mortgage. So I’m not assuming the loan. I’m not he’s going to pay the taxes, insurance and the loan. Right.
01:54:03:14 – 01:54:14:14
Markian Sich
But I’m going to pay him. And what I told him because he was like, hey, you’re going to give me a down payment or, you know, give me earnest money. I was like, no. I was like, honestly, I’m doing you a favor. You should pay me to do this right? Okay. This is not this. This is going to be a job.
01:54:14:14 – 01:54:17:20
Rod Khleif
But but you you have a payment to him that. Yeah, cover all those expenses.
01:54:17:20 – 01:54:19:28
Markian Sich
The pit. Right, right. It covers that.
01:54:19:28 – 01:54:33:28
Rod Khleif
Any any any any while keeping any. Is there anything else to add here or just really it’s just a lease payment that, that basically. And he still owns it still pays all the bills the, the relevant like so.
01:54:34:00 – 01:54:35:14
Markian Sich
Anything involving the business I.
01:54:35:14 – 01:54:35:25
Rod Khleif
Pay.
01:54:35:26 – 01:54:47:04
Markian Sich
Okay. Anything. Just the real estate like principal interest tax insurance I pay him the exact amount. Okay. So that’s what I wrote in the Loi. I was like whatever that is, I’m paying you that. You turn around, you just make sure the payments happen so that, you.
01:54:47:05 – 01:55:03:06
Rod Khleif
Know, you make sure those payments. Well yeah. Yeah. Okay. Yeah, yeah. There’s, there’s there’s a problem there too. You got to make sure those payments happen too. But yeah, I mean you can pay them into an escrow agent. That’s not super true. And true. True, true. Bad idea. But but, But then. Okay. And then and then whenever.
01:55:03:08 – 01:55:05:05
Rod Khleif
How do you refinance if you don’t own it, though?
01:55:05:07 – 01:55:07:16
Markian Sich
It’d be a fresh, so.
01:55:07:18 – 01:55:08:14
Rod Khleif
It’d be new finance.
01:55:08:14 – 01:55:09:13
Markian Sich
It’d be new finance.
01:55:09:15 – 01:55:13:16
Rod Khleif
So you basically be buying it. But but it’s not really a refi at that point.
01:55:13:16 – 01:55:30:16
Markian Sich
Absolutely correct. So it’s basically think of it this way like when you buy an apartment complex or any kind of business, there’s like a due diligence in a closing period. Right. So there’s some timeline, maybe it’s 60 days, maybe 90 days, whatever the case may be, this is the same thing, except for it’s for a whole year. So I’m so it’s just a year long closing.
01:55:30:16 – 01:55:33:28
Markian Sich
Right. But I am allowed to operate it throughout that year.
01:55:33:28 – 01:55:43:15
Rod Khleif
So it’s not just a master lease, it’s a lease option as well. Yes, exactly. So there’s a contract in place to to buy it for a certain amount of money. But you just need to stabilize it before you could do that.
01:55:43:22 – 01:55:47:23
Markian Sich
Yep. I’m going to be the first right of refusal to buy it.
01:55:47:29 – 01:55:58:16
Rod Khleif
Got it. Yeah. Yeah. It’s a it’s a great strategy. I’ve never used it myself, but, you know, good luck with it. That’s that’s, so, so you bullish on senior housing or.
01:55:58:16 – 01:56:02:01
Markian Sich
How do you feel? Oh, yeah. I mean, what did you say the numbers were 10,000 people at 65.
01:56:02:03 – 01:56:19:11
Rod Khleif
Just think, in ten years of return in 75, I mean, that’s, you know, that’s right around the age they really hit hard. I mean, there’s a huge shortage of beds in this country. You know, I went to the Nick conference, which is a senior housing conference in, Austin, Texas, like two months ago. And there were like 5000, 4500 people there.
01:56:19:11 – 01:56:40:16
Rod Khleif
And and they talk about they talk about the, yeah, it’s a big conference. It’s the biggest, they talk about, you know, the need. And it’s just I don’t know how they’ll meet the need, candidly. And it, you know, from what I, what I’ve seen, it’s a, it’s cost almost 200 to 250,000 a bed to build one.
01:56:40:18 – 01:56:44:04
Rod Khleif
I mean, it’s it’s staggeringly expensive. So, you know, this is what I.
01:56:44:04 – 01:56:49:08
Markian Sich
That’s something I want I personally want to look into a little bit more because I. Yeah I think you.
01:56:49:08 – 01:56:49:20
Rod Khleif
Might want to.
01:56:49:20 – 01:57:04:02
Markian Sich
Build. Yeah. Yeah. Okay. So I then there is a and so specifically just to your listeners know I there is this is something I had to learn okay. So there’s personal care. So that it doesn’t necessarily mean that there’s anything you just need independent living.
01:57:04:02 – 01:57:16:02
Rod Khleif
Yeah. Basically there’s independent living. There’s assisted living, there’s memory care and then there’s sniffs. It’s, skilled nursing. Right. So that’s kind of the progression. Independent living is what you’re talking about.
01:57:16:05 – 01:57:24:22
Markian Sich
Right. So so we have a personal care facility. So the current one we have is 40 bed, but we’re licensed it to 46 bed because.
01:57:24:22 – 01:57:31:04
Rod Khleif
So you you call it personal care, but it’s it’s independent living basically. You’re not assisting them with their daily.
01:57:31:04 – 01:57:31:22
Markian Sich
No we are.
01:57:31:23 – 01:57:32:24
Rod Khleif
Oh you are. So it’s assisted.
01:57:32:24 – 01:57:53:29
Markian Sich
Living. No. So here’s here’s the where. And maybe this is a Georgia thing okay. It’s called it. So personal care. They do need help okay. All right. But it’s not it’s not at the acuity level, of like, assisted living, which requires additional help. Really. But it is in the memory care lane. So we have a focus of memory care.
01:57:54:04 – 01:57:59:06
Markian Sich
And, Jermaine, if you’re listening to this, I hope I’m saying this right. I wish he was he was here. But yeah because he he’s my license.
01:57:59:08 – 01:58:06:15
Rod Khleif
I’m surprised by this because because I wasn’t aware of like, something in between independent living in assisted living. So you’re calling it this?
01:58:06:15 – 01:58:09:01
Markian Sich
Yes. This is this is a personal care license.
01:58:09:01 – 01:58:09:26
Rod Khleif
I’ve not heard of that.
01:58:09:26 – 01:58:12:11
Markian Sich
Yeah. Interesting. Yeah. So, every.
01:58:12:11 – 01:58:13:23
Rod Khleif
State’s different, by the way. You know.
01:58:13:23 – 01:58:14:12
Markian Sich
I that’s what.
01:58:14:12 – 01:58:28:01
Rod Khleif
I learned is aligned with an operator that’s nationwide. And you know, he tells us, you know, this state sucks because of this this one, you know, you can’t you don’t you Medicare is terrible in this state, you know. And so every state gets kind of crazy. It’s a shame it’s not a national thing.
01:58:28:06 – 01:58:30:04
Markian Sich
I would I wish it was. Yeah, it would be.
01:58:30:06 – 01:58:39:17
Rod Khleif
And I think it may have to be at some point because there is a huge need and I don’t know how it’s going to get met. Candidly, I think it’s going to be a crisis. Right. That’s what it’s looking like. Our elderly. Yeah.
01:58:39:18 – 01:59:01:19
Markian Sich
And especially in the dementia and Alzheimer’s. Right. And this is what this is what kind of got us into this was okay. So there’s let me explain. So there’s personal care. So think of it as assisted living for all intents and purposes. Except for it doesn’t have certain requirements a personal care. Then there’s memory care. So memory care when you think of memory care, you think of a memory care center also known as MCC.
01:59:01:19 – 01:59:19:03
Markian Sich
And you need to have a special nurse on staff and special like the the ratios of staff to to to residents goes to be secure. Yes it has to be secure. There’s a whole list of other requirements now in Georgia. What what we’re able to do is there’s an in-between space. It’s personal care with a memory care focus.
01:59:19:08 – 01:59:36:24
Markian Sich
So I have to make sure that there’s certain requirements for it to be, acceptable for dementia, residents is met, you know, like doors are locked by the secure stuff, all that kind of stuff. But it doesn’t it doesn’t meet it doesn’t it doesn’t have a memory care center license yet. So it doesn’t have those.
01:59:36:26 – 01:59:55:28
Rod Khleif
Assets, less licensing. I mean, we’re dealing with that now in our Pittsburgh facility, getting it licensed. And there’s a lot to it. You know, there’s a lot you have to do to get licensed. You know, you’ve got to have your activities calendar. You’ve got to have your menu laid out. You’ve had your fire, you know, a plan in case you’ve got to get everybody out.
01:59:55:28 – 02:00:10:03
Rod Khleif
You’ve got to have a generator in case the power goes out. You’ve got to have fuel for that generator. You know, there’s all these things that have to be in place before you can get licensed. And, it’s a lot there’s a lot of detail to it, which is why I decided I didn’t want to do it.
02:00:10:03 – 02:00:13:24
Rod Khleif
I’m not going to do the operations piece. I want to just do the, the real estate.
02:00:13:24 – 02:00:35:24
Markian Sich
The real estate piece. Yeah. So. And, that’s what my dream was, was I was I acquire one of these, we ramp up the operations like Jermaine does that, and then we can sell the business and we just lease the real estate. That’s what I eventually wanted to do. I don’t know where we’re went. Once this refinance and this next acquisition happens, I will kind of I’ll see what our next steps are.
02:00:35:26 – 02:00:50:01
Markian Sich
But, for now, you know, I already know I’ve already gone through the fire. I’ve learned all the things we’ve done, the things we’ve gone from basically a D-class property to like C plus. Now we’ve like, we’ve. And so we’ve transformed.
02:00:50:01 – 02:00:54:11
Rod Khleif
Are you doing, government as payment, government payment or private pay?
02:00:54:17 – 02:01:03:11
Markian Sich
It’s private. It is private. It is private pay. Although we are applying for Medicaid now because initially we thought that the rules said that you can’t blend Medicaid with private, but we found out that you can’t.
02:01:03:12 – 02:01:04:12
Rod Khleif
Sure. You can’t. Oh sure.
02:01:04:12 – 02:01:06:04
Markian Sich
Well, again, it’s a state by state thing.
02:01:06:04 – 02:01:11:28
Rod Khleif
Is it really. Well, yeah, I mean, I know lots of facilities that I’ve seen will have a little bit of each.
02:01:11:28 – 02:01:29:05
Markian Sich
Yeah. So we apply just now. We’re in the process. We should be getting that which will help our loss to least for all those that are still not quite at market rate. Okay. But, Yeah. So sorry. Where was I with that? Oh, so the memory care side is that we’re able to command higher rents, but not quite as high as memory care center.
02:01:29:12 – 02:01:34:14
Markian Sich
And so I think it’s like a sweet spot where you’re licensing requirements are here, but you’re able.
02:01:34:14 – 02:01:43:00
Rod Khleif
To lower licensing lower, but you’re still able to get more money. Yeah. It love it love it. So tell me where ADP is at this point. Active duty passive income right.
02:01:43:00 – 02:01:50:28
Markian Sich
Yes, sir. Yeah it’s just a play on words. It’s not only for active duty, it’s for veterans, reservists, retirees, military spouses, the whole military community. Right. And.
02:01:50:28 – 02:01:52:15
Rod Khleif
How how big is the community now?
02:01:52:21 – 02:02:14:14
Markian Sich
So we’re like our Facebook group and such as probably 80,000 are our internal, I think over a thousand members. It’s it’s, you know, modest maybe compared to, to your community as far as, like our, our, our internal paying members, you know, those are very intentional about changing their lives. And, and then the free community, which is also a big part of our what, you know, our mission, what we do.
02:02:14:14 – 02:02:19:18
Markian Sich
But, it is it is evolved quite a bit and I’m sure I gosh, I would love to.
02:02:19:22 – 02:02:24:29
Rod Khleif
For a while there you had it. You had a mortgage component. Yeah, it was a component. You let all that stuff go.
02:02:25:02 – 02:02:25:14
Markian Sich
Yeah.
02:02:25:14 – 02:02:29:14
Rod Khleif
So I was I knew you were going to what I yeah, yeah I knew it was.
02:02:29:14 – 02:02:39:23
Markian Sich
A good it’s funny, I remember when Eric called me, he’s like, you know what I talked to rod and he said that, that that’s not all going to work, but I was like, you know, you know, I had a little I didn’t.
02:02:39:29 – 02:02:41:24
Rod Khleif
I didn’t know I told, I didn’t know, I told him that. But no.
02:02:41:24 – 02:02:42:10
Markian Sich
No, you were.
02:02:42:10 – 02:02:43:17
Rod Khleif
You were very brutally.
02:02:43:17 – 02:02:43:27
Markian Sich
Honest.
02:02:43:27 – 02:02:44:09
Rod Khleif
Was I.
02:02:44:09 – 02:03:03:04
Markian Sich
Okay? Yeah. I remember him calling me and being like, dude, he said, there’s no way we got to focus more. Yeah. And I was like, so I actually one of my companies, I use the word focus now because I learned my lesson the hard way. But, so what happened was we had a regulation A+ fund. Oh, we had a mortgage branch, we had an insurance company.
02:03:03:04 – 02:03:07:28
Markian Sich
Right. And we had a real estate brokerage, and we had the education company and a marketing arm to educate.
02:03:08:00 – 02:03:12:07
Rod Khleif
Well, I would have said that was a mistake because that’s this. You got to focus. Focus is power.
02:03:12:09 – 02:03:14:01
Markian Sich
I realized I can’t climb five empresas.
02:03:14:02 – 02:03:15:13
Rod Khleif
So what do I do now?
02:03:15:16 – 02:03:29:16
Markian Sich
So I shut it all down except for the education committee. That’s it. I decided all I want to do is I want to have a simple life. I mean, Eric joke. We like. We want it. We want it to be boring. I want to do the real estate, and then I want to teach the real estate. So I want to do the real estate, and then I want to teach the real estate everything I learn.
02:03:29:16 – 02:03:31:06
Markian Sich
I didn’t go teach in perfect. That’s my life.
02:03:31:06 – 02:03:49:15
Rod Khleif
Perfect perfect, perfect, perfect. No, I love it, man. You know, I like I said, I was honored to speak at one of your events. It was at the Westin San Antonio Riverwalk. Yes, sir. Which is where I stay now because I’ve got two assets there. And so I’m there every time. I love that, that location and, and, where’s your next one going to be?
02:03:49:17 – 02:03:50:12
Markian Sich
It might be there again.
02:03:50:13 – 02:03:51:29
Rod Khleif
You might. Oh, yeah. Yeah, yeah, it might.
02:03:51:29 – 02:03:52:08
Markian Sich
Be there.
02:03:52:08 – 02:04:08:08
Rod Khleif
Again. I love that one. But, you know, like I said, I, I so believe in what you do, and I so believe in our military and all that that, it’s, it’s just it’s just awesome. And so, you know what’s next, man? What’s next for you?
02:04:08:11 – 02:04:24:02
Markian Sich
What’s next is so I you asked about self-management a little bit. I, what I really want to do is I want to I want to just self-manage my. Really. So I got approved by Freddie Mac to self manage for for my apartment complexes. Wow. Yeah, I, I actually, Tyler helped me out.
02:04:24:02 – 02:04:26:07
Rod Khleif
That’s not that’s not easy to do. Good for you.
02:04:26:07 – 02:04:28:00
Markian Sich
Oh. Thank you. It was a big deal for me.
02:04:28:00 – 02:04:30:16
Rod Khleif
So how many multifamily use do you have right now?
02:04:30:16 – 02:04:48:20
Markian Sich
I only have 128. Because of I went. I sold a few, but I’m. I’m on. What I want to do is I want to buy 12 deals. Northeastern quadrant of Indianapolis. That’s my goal. So I have two right there. Right now I want to buy another ten. I already have four in my desk. I just I’m taking it slow because I just I just close a 72 unit.
02:04:48:22 – 02:05:01:27
Rod Khleif
There’s a lot of opportunity. I mean in this with all these distressed assets because these operators got this, these loans, adjustable rate loans. So the and and of course, expenses have gone through the roof and payroll has gone through the roof and everything else, so.
02:05:01:27 – 02:05:02:27
Markian Sich
Or they just suck it up.
02:05:03:02 – 02:05:07:27
Rod Khleif
Oh, yeah. I’m gonna be honest. There. Is that there is that too for sure. Yeah.
02:05:07:29 – 02:05:24:08
Markian Sich
I mean so, so what I want to do. Because now that I can self-manage and basically also so the way I did it was I used Tyler to help me out with this as I, I was in the middle of my cash out refinance, pulled almost $1 million out and and the bank could they could smell the money of this that they’re about.
02:05:24:08 – 02:05:39:10
Markian Sich
They’ll get their fees, you know, like and I told I told them in advance, but they didn’t take me here. So I was like, guys, I’m going to fire my current property manager because they suck right? And I’m going to manage this by myself. I’m going to hire somebody directly. I already had the person and and they were like, okay, okay, okay.
02:05:39:10 – 02:05:45:10
Markian Sich
Then right before I, I was like, all right, right before I sign on the dotted line, I was like, you need to get this approved.
02:05:45:12 – 02:05:49:28
Rod Khleif
And so they got that put leverage on the lender. The lender put leverage on.
02:05:49:29 – 02:05:52:09
Markian Sich
Yeah. The lender was like, fine, we’ll go to Freddie.
02:05:52:12 – 02:05:52:24
Rod Khleif
When was.
02:05:52:24 – 02:05:54:23
Markian Sich
This? This was two and a half years ago.
02:05:54:23 – 02:06:00:07
Rod Khleif
Yeah. I was going to say not now. No. They’re so freaking behind right now. Forget the shutdown. Thank God I think that’s over.
02:06:00:09 – 02:06:01:08
Markian Sich
Yeah, yeah, it sounds like it.
02:06:01:08 – 02:06:06:19
Rod Khleif
But but no, I’m talking about, just the the pace at which they move is so.
02:06:06:22 – 02:06:10:17
Markian Sich
I know my last like when I just acquired the 72 unit, it took forever.
02:06:10:18 – 02:06:13:25
Rod Khleif
Right, right, right. So okay, that’s why I asked when it happened. Okay.
02:06:13:25 – 02:06:21:16
Markian Sich
Yeah, but but I put pressure on them. Was like, I’m not going to refi unless you guys approve this. And they got it approved. Wow. And it just night and day like.
02:06:21:16 – 02:06:46:08
Rod Khleif
Listen I so believe in it brother. And I so believe in what your plan is and here’s why. So, you know when I, I ended up with 23 assets with my ex-partner. I won’t tell you how bad that was. And I ended up having to step into asset management because he screwed things up so badly. And what I discovered was you can’t you can’t be effective being that spread out okay.
02:06:46:11 – 02:07:03:04
Rod Khleif
The most we talk most successful. The most successful. Well, I know I taught you that, and I and I didn’t listen to my own teaching. I, I, you know, he was, but he was going fast and furious, and I’m like, okay, I’ll, I’ll tag along here. But the most successful operators out there are geographically specific.
02:07:03:06 – 02:07:11:27
Markian Sich
The I will die on that hill. Yeah. When I hear syndicate brand new syndicators at that telling me I’ll invest in anything in the southeast, I was like, you’re going to fail.
02:07:12:00 – 02:07:12:11
Rod Khleif
You’re going to.
02:07:12:11 – 02:07:12:27
Markian Sich
Burn.
02:07:12:27 – 02:07:29:07
Rod Khleif
And fail, right? No. You want to focus on one market, become very good at that market. This is what I did. I didn’t eat my own cooking as it related to this partnership with this guy. But I stepped in and I just discovered that. And I discovered how crappy most property management companies are. I’m about to sue one.
02:07:29:07 – 02:07:51:13
Rod Khleif
It’s a friend of mine’s, which is right net, which is really painful, but I mean, they screwed up so badly. It’s beyond belief. And so, you know, I, I love your business model and and I and I wish you luck with that because, you know, self management is the way to do it. Period. Vertically integrate manage yourself. And you know I’m looking to do that in San Antonio.
02:07:51:15 – 02:07:59:29
Rod Khleif
We’d like to get one more asset there because we’re right now we’re at about 500 doors. I’d like to get, you know, at least 800 to 1000 to, to do it. But, I’m going to do it.
02:08:00:06 – 02:08:15:16
Markian Sich
I think this honestly, it goes back to focus. Rod. Right. You told me to like, let go of all this as a company. It’s the same thing if you if you know what area you have the right people and you build around them, I would say like, people are your greatest levers. They’re also your greatest downfall. Right? So like, if I have the right people, I want to build around them.
02:08:15:16 – 02:08:26:15
Markian Sich
And I have an awesome on site property manager who’s she’s now one of my asset managers. Nice. And, her husband is our maintenance director, and I’m just going to I’m going to build around them. They’re the bomb.com.
02:08:26:15 – 02:08:39:06
Rod Khleif
Perfect, perfect. No, I love it, man. And, yeah, I, I’m very interested in doing that myself as well. And plan to do it. So if someone is in the military and they want to check out ADP, how do they get their.
02:08:39:12 – 02:08:56:17
Markian Sich
Absolutely active duty passive income.com. It’s a mouthful okay. But you can also, just look us up on Instagram. But if you if you’re just getting started out started out like just go to Amazon, buy the book for like ten, $15, I don’t know, whatever it is, we don’t make money off the. But the military house hacking book will get you started.
02:08:56:19 – 02:08:59:25
Markian Sich
And then if you’re like, you really want to get into it some more, keep listening to this podcast.
02:08:59:27 – 02:09:09:12
Rod Khleif
Well thank you. You know. Yeah. Get your ass to one of my boot camps. Yeah. Like like like you did, you know, and and, Yeah, I pretty much only do virtual now. I,
02:09:09:14 – 02:09:10:26
Markian Sich
It’s a virtual world, It really.
02:09:10:26 – 02:09:22:16
Rod Khleif
Is. It really is. I was going to have one in LA in January, and, people aren’t buying tickets. I mean, I was supposed to be at 200 and I was at 18. I’m like, nope, we’re out. We’re not doing this or virtual. Yeah.
02:09:22:22 – 02:09:24:11
Markian Sich
So we were not the.
02:09:24:11 – 02:09:43:06
Rod Khleif
Sign of the times. It’s the sign of the. Yeah. I mean, this is a lot of economic unrest right now, but. Yeah. Yeah. I’m praying to God that the Supreme Court overturns that, appellate decision on the tariffs. Because honestly, with our national debt here, I think that’s the only option. We, only opportunity we have to minimize that debt is his tariffs.
02:09:43:06 – 02:09:49:26
Rod Khleif
And if they take that away, man, I think we could be headed for some pain in this country. I really I really do. We’ll see.
02:09:49:29 – 02:10:07:17
Markian Sich
I wish I had a smart comment on that, but I, I am so yeah, I’m in my own little bubble these days. I’m like, let me get my 12 multifamily is let me get my 12. But but I hear you. I’m trying not to keep my head in the sand, but it’s it’s, that’s the macroeconomics of that are a little bit above my bag.
02:10:07:19 – 02:10:23:00
Rod Khleif
Yeah, well, to mine too. I just bitch about them all the time. But yeah, that mine to. Well, listen, brothers, so great to see you again. And, please give my regards to your mother and and, yeah, I’m. I’m really, really enjoyed this conversation with you.
02:10:23:06 – 02:10:25:07
Markian Sich
Likewise. Thank you so much. Thank you for having me.
02:10:25:07 – 02:10:25:21
Rod Khleif
Of course.
02:10:25:21 – 02:10:42:23
Outro
Thank you for listening to the Lifetime Cash Flow Through Real Estate Investing podcast. If you’ve enjoyed the show, please take a minute to visit iTunes and leave your comment for more resources or to connect with us further, please visit our website at radcliff.com.
