Mark Hewitt, a Seattle native, excelled in collegiate baseball before transitioning into education as a teacher and coach, earning a master’s degree in educational leadership from Stephen F. Austin University. In 2014, he began his full-time career in real estate as a Realtor, and by 2017, he launched his own investment company specializing in rentals, flipping, and wholesaling homes. With over 800 homes sold, Mark’s expertise lies in ensuring clients’ success. Additionally, he founded a hard money company and expanded his rental and creative financing portfolio to include 44 properties.
Here’s some of the topics we covered:
- From Baseball to Real Estate 00:00
- Flipping Houses and Cashing In 3:37
- Powerful Advertising Tactics for Real Estate Success 5:39
- Wholesaling vs. House Flipping 8:27
- The Secret Weapon of Top Investors 19:51
- Creative Financing Strategies You Need to Know 26:20
- Snagging Foreclosed Properties 36:58
- Must-Hear Advice for Aspiring Real Estate Investors 43:14
To find out more about partnering or investing in a multifamily deal: Text Partner to 72345 or email Partner@RodKhleif.com
Full Transcript Below
00:00:35:25 – 00:00:56:28
Rod
Welcome to another edition of Lifetime Cash Flow through Real Estate Investing. I’m Rod Cleef and I am thrilled that you’re here. And we’ve got kind of a unique interview today. It’s not about multifamily, although he’s got a couple of duplexes. It’s really more about flipping, wholesaling, even hard money lending, different creative financing strategies. So we’re gonna have a lot of fun today.
00:00:57:00 – 00:01:01:10
Rod
the jumbo’s name is Mark Hewitt, and he’s from the Dallas-Fort worth area. Welcome to the show, brother.
00:01:01:11 – 00:01:02:25
Mark
Hey, thank you, sir. As for me.
00:01:02:25 – 00:01:14:05
Rod
Here, I really appreciate you coming in for this. so, give us your story. I know you grew up in Seattle, played some baseball, some at a at a at a decent level. Collegiate. So talk talk about.
00:01:14:12 – 00:01:34:13
Mark
Yes, sir. Yes, sir. So I, I grew up in Seattle, basically, you know, never aspired to be a baseball player. When I was younger, I always thought I was going to be an NBA player, but it didn’t work to my favor. so, I ended up playing baseball at the collegiate level, meeting my wife over in Nashville and, you know, never planned to stay in Seattle.
00:01:34:13 – 00:01:37:21
Mark
And I’m sure lots of people can relate with the rain.
00:01:37:23 – 00:01:43:07
Rod
I I’m not going to go there this early on in the conversation. We won’t say blue red. Yeah. That’s smart.
00:01:43:12 – 00:01:56:06
Mark
That’s, That’s right. So, so I end up moving to Texas and which, which has been awesome. And when I got out there, I didn’t plan to be in real estate. My dad’s been in real estate for 30 plus years. Yeah.
00:01:56:10 – 00:01:57:12
Rod
In what capacity?
00:01:57:15 – 00:02:16:26
Mark
so he’s a broker. He’s an owner of an, of an office. so I never really had the aspiration to do that. and then next thing you know, I end up trying to look for jobs in Texas, and I couldn’t find anything I thought I was going to be, you know, in medical sales. I was trying to be a doctor at one point, but I wasn’t smart enough.
00:02:16:28 – 00:02:23:24
Rod
you’re very humble. You you keep self depreciating. I, I, I, I, I, found that amusing. Anyway. Please continue. Yeah.
00:02:23:24 – 00:02:42:22
Mark
So, so anyway, so then I went, and as I was looking for a job, somebody was like, hey, you know what? You should look at being a teacher. And so I went and, went and became a teacher, coached, and then basically from there, I didn’t like it. I was depressed every time, you know? And so my dad’s like, you got to get into real estate.
00:02:42:22 – 00:02:51:05
Mark
You got to get into real estate. And so basically that’s what I did. I got into real estate, and started in June of 2014.
00:02:51:08 – 00:03:22:10
Rod
Nice, nice. Yeah. And since then you’ve sold 800 houses some of your own and some for others. you’ve flipped, you’ve wholesale. so you know what? Let’s get right into it. I know you own some duplexes now. so you’ve done different aspects of this business. from sales to your own account. and one of the things I want to talk about is, is anybody that’s got their real estate license needs to listen to the tail end of this, because we’re going to we’re going to, give you some, some, some advice, some serious advice.
00:03:22:10 – 00:03:34:05
Rod
But, let’s start with flipping talk about some of the flipping you’ve done and see if we can add some value in that space, because obviously flipping is a great way for someone to raise some immediate cash.
00:03:34:09 – 00:03:34:26
Mark
Yes.
00:03:34:28 – 00:03:38:18
Rod
but, you know, some nuances to it. So, so so take us through it.
00:03:38:20 – 00:03:54:21
Mark
Yeah. So basically for us, when I started getting into flipping like anything, I had no idea what contractors I was going to use. Right. So it was a matter of trying to source those out, you know, trying to figure out, okay, what are these deals going to retail for on the market after they’re, you know, after they’re completely fixed up?
00:03:54:21 – 00:04:07:04
Mark
Right. and basically, for me, the stuff that I prefer to flip in today’s market is a stuff that doesn’t need full, full rehabs. I prefer, like, the quick and out, like just the cosmetic get in.
00:04:07:04 – 00:04:09:26
Rod
Not as much money, but but okay. But easier.
00:04:09:29 – 00:04:23:11
Mark
Way easier. I can get it done way faster because for me, like, it’s all about the velocity of capital to me. So I want to be in and out as quick as I can. Okay. I would say most of our projects were in and out easily in under 90 days. Wow. From start to finish, wow.
00:04:23:11 – 00:04:46:06
Rod
That sounds like a wholesale deal instead of a flip. Okay, so so so, let’s let’s kind of back up here because it starts with how you find the deals. Correct. Now, of course you’ve got access to the MLS. So that’s a that’s a plus. But in the MLS I would guess that mostly what you find there, the ones that do need the heavy lifts that look like crap that that that no couple is going to want to move into unless they’ve been renovated.
00:04:46:08 – 00:04:51:13
Rod
how are you finding the how are you finding ones that make sense that don’t need a lot of work?
00:04:51:18 – 00:05:00:26
Mark
Yeah. So basically for us is we will actually pull specific lists for people of properties that are that meet our certain avatars, what we call it. So they, they have our, I.
00:05:00:26 – 00:05:02:19
Rod
Mean, ultimate buying avatar.
00:05:02:21 – 00:05:06:08
Mark
our ultimate like, yeah, what we want to buy and actually sell on the market.
00:05:06:10 – 00:05:09:27
Rod
Oh, I thought you were talking about the ultimate buyer that you would sell to.
00:05:09:29 – 00:05:29:07
Mark
Oh okay. No, no, no. So yeah, just basically like for us and like in Dallas Fort Worth. Right. If we can stay 350 or under after the, you know, it’s been completely fixed. That’s ideal for us. So we’ll pull houses that you know, basically the tax value is maybe no higher than 250. Okay. and then we’ll go ahead and we’ll call them, we’ll text them.
00:05:29:07 – 00:05:29:16
Mark
We do.
00:05:29:16 – 00:05:35:16
Rod
Okay. So you actually cold call potential homeowners, and say do you want to sell. Yep. We have people that do this.
00:05:35:16 – 00:05:47:21
Mark
Yes, sir. We drop mail to them. We do pay per click advertising. Okay. we just hit them every which way. And usually those lists that we pull, we’re trying to hit all of those people in multiple different facets, right?
00:05:47:21 – 00:05:57:16
Rod
So so they aren’t just going to get a mail piece from either going to get a call from you. If they go online, they’re going to see you on a on on pay per click. where do you market Facebook or where do you do that.
00:05:57:18 – 00:06:00:23
Mark
so we do we basically do Google like Google Pay like yesterday.
00:06:00:27 – 00:06:26:20
Rod
Okay. so kind of almost like, just hey, do you need to sell, give us a call kind of thing. Okay. do you, do you handle the influx of leads, or do you have a team that helps with that? How do you work the actual sale, the actual purchase process? So let’s say you from your marketing activity, be it male, be it cold calling, be it whatever.
00:06:26:22 – 00:06:32:09
Rod
well, let’s let’s go to cold calling for a second. Do they do a hot transfer or do they just set up a call for you to talk to them?
00:06:32:15 – 00:06:33:22
Mark
No. So they take care of it.
00:06:33:27 – 00:06:34:28
Rod
Well, they actually do it all.
00:06:34:28 – 00:06:35:22
Mark
Yeah, they do it. Okay.
00:06:35:23 – 00:06:38:05
Rod
Do you have people that handle the whole purchase process?
00:06:38:05 – 00:06:48:20
Mark
Yeah. Basically their job is to make contact, go on the appointment, you know, get pictures, negotiate, get the contract. And once the contract, once they get that, then they’re out.
00:06:48:22 – 00:07:01:24
Rod
Oh I see yeah okay. And so so you’re you’re paying them a piece of the deal then. Obviously. Yes. Right. Okay. So these are sharp people that you’ve trained to do this. Yeah. Okay. So that’s on the cold calling piece. How about on the inbound. Same same people handle the inbound same.
00:07:01:24 – 00:07:22:00
Mark
Same people handle the inbound. So what we do is we have a general, call line and where we can track which pieces are coming from where. And so each piece has its own different phone number. and then all the, all the, emails and phone calls, they all go into one generic place, and then those leads get filtered out to our team, and then they handle it from start to finish.
00:07:22:00 – 00:07:23:20
Rod
Now, how big is your team? How many?
00:07:23:22 – 00:07:25:17
Mark
so we’ve got about 16 people right now.
00:07:25:17 – 00:07:31:05
Rod
16 people doing this. Yeah. Wow. Yeah, that’s a lot. And and they’re all straight commission.
00:07:31:05 – 00:07:32:13
Mark
I think they’re all straight commission.
00:07:32:13 – 00:07:34:09
Rod
Oh, that speaks to your ability to hire.
00:07:34:10 – 00:07:34:18
Mark
Yeah.
00:07:34:19 – 00:07:59:28
Rod
That’s that’s not easy. Yeah. so so okay, so you doing all this marketing, and you’re doing mailers, you’re doing the pay per click, and this really smart you’re, you’re measuring your results by using different phone numbers so you can track what’s worked. So double down on that. and and so who’ll go. So they’ll go in and buy it, or lock it up.
00:08:00:00 – 00:08:01:29
Rod
Yep. Now that sounds like a wholesale, not a flip.
00:08:02:02 – 00:08:07:05
Mark
Well, though, they’ll go lock it up and then basically from there, what we do is we cherry pick the ones that we want.
00:08:07:09 – 00:08:10:13
Rod
Okay. So you’ll either flip or wholesale based on what you see.
00:08:10:14 – 00:08:22:23
Mark
Exactly. Okay. And based off of what they say needs to be done or their recommendation or things like that. Now, obviously the people that are new are just coming in. Part of our training is I go out there with them. Sure. So that way we can kind of show them we’re looking for.
00:08:22:28 – 00:08:23:21
Rod
How to close a deal.
00:08:23:21 – 00:08:24:08
Mark
Exactly.
00:08:24:08 – 00:08:42:17
Rod
Okay. So for those of you that haven’t got a clue what we’re talking about, let me just take two seconds, okay? Wholesaling means you put it under contract and you sell the contract. Okay? Flipping means you actually close on it. You do some work, and then you sell it to an end buyer. the wholesale deals are typically to another investor.
00:08:42:19 – 00:08:43:26
Rod
Would that be an accurate statement? Yeah.
00:08:43:28 – 00:08:44:29
Mark
No. Absolutely. Yeah.
00:08:45:01 – 00:09:08:05
Rod
So so, if you’re going to, you know, do this flipper wholesale, you got to think about how are you going to market. Number one. You’ve got to you’ve got to obviously get the documents that you’re going to need. a contract, what’s what’s it called? Assignment of contract form for the, for the wholesaling. and and you got to figure out how you’re going to close on the deal, which we’re going to talk about in a minute.
00:09:08:07 – 00:09:30:27
Rod
a way that one of the ways you can do it is one of the other things that he does, which is hard money. But, so that’s on the that’s on the flipping side. now, again, if you’re going to flip, you’ve got to have relationships with contractors. Yeah. and so, you know, I’d encourage you to go to your local real estate investor club meeting your meetup groups, and find out what contractors they’re using and see if they’ll share.
00:09:30:27 – 00:09:38:24
Rod
And they’ve got experience with somebody that’s a big, newbie mistake is to go with the wrong contractor, get screwed.
00:09:38:24 – 00:09:58:22
Mark
Yeah. Oh, yeah. No. And I’ll tell you this, like, one of my rules for me is like, if they asked for money up front. Yeah. You know, like, half down, right? I just forget it, you know, because. Yeah. And especially if we don’t have that relationship. Right. but I will tell you, when I first got into this space with investing, I went to all the Reia meetups, the real estate investor meetups, just gathering as many cards and.
00:09:58:23 – 00:09:59:00
Rod
Right.
00:09:59:02 – 00:10:03:09
Mark
Referrals and recommendations because that’s exactly like you’re saying. That’s the only way to do.
00:10:03:09 – 00:10:23:25
Rod
It right now. You, you know, you can’t like, go in the phone book or whatever. There’s no phone book anymore. Google it. You need. It’s all referral based. Otherwise you’re going to get your your butt handed to you, you know, and I’ve, I’ve renovated easily 2000 houses myself not not me doing the hammers. Yeah. But but had it, oversaw it.
00:10:23:28 – 00:10:44:14
Rod
So, so they, you get the deals in the door and then you decide if you’re going to flip it and do it yourself, or if you’re just going to wholesale it for a quick hit. Yep. and you’ve, you’ve and you’ve commissioned those guys, which is great. and, and are you getting a, a presence in Dallas for buying?
00:10:44:14 – 00:10:50:11
Rod
I mean, are you getting any referral business from people that you’ve bought from or anything like that? Is it all brand new stuff?
00:10:50:12 – 00:11:15:01
Mark
I mean, majority of it, I will just say 90% of it’s all brand new, but there is that 10% piece that we are getting referrals from people or other potential, you know, like other realtors sending us business things like that. Right. And previous people that we’ve bought from referring us. So absolutely that’s growing. but, you know, my thing is, is I always say that, you know, people, people flock or birds of a feather flock together.
00:11:15:01 – 00:11:25:29
Mark
Right? And so I always try to make sure our team is reaching out to the previous people we bought from, because of course, they’re going to have friends that are in the same situation or will be in the near future. Yeah. so that kind of that helps us.
00:11:25:29 – 00:11:46:23
Rod
Out as well. At your 350, $350,000 limit, or I, you know, like a benchmark. that’s that’s that. Cuz you up for regular FHA financing when someone buys right about a homeowner can go in there and buy in which which opens it up to a huge demographic to, to buy these things. Oh, 100%.
00:11:46:23 – 00:12:05:07
Mark
Yeah. Because the average price really in Dallas Fort Worth, if you look at it, the grand scheme of things, it’s about the first time they’re the entry buyer I should say is 250 to 350. Yeah. And so that gives us that perfect entry where no matter what the market does, if the rates even go up higher, whatever happens, I feel like we’re safe and we’re going to be in and out pretty quick.
00:12:05:10 – 00:12:20:11
Rod
Well, let’s talk about the market for a minute because I, I’m not I don’t pay attention to the housing market anymore. I’m all about commercial real estate, which is getting its ass handed to it right now. A lot of opportunity coming. I just saw a headline, the head, head economist at Citi said it’s going to be a hard landing.
00:12:20:18 – 00:12:25:22
Rod
Let me look at I took a picture of it. I was going to do a little a little clip on it, in a little bit.
00:12:25:22 – 00:12:28:17
Mark
Do you ever feel kind of bipolar sometimes reading all the different.
00:12:28:20 – 00:12:46:17
Rod
Oh yeah. Well, anybody that tells you, in my opinion that that things are rosy, is is on freaking medication. Yeah, but, okay, U.S. economy is headed for a hard landing, and the fed rate cuts won’t be enough to rescue its city, says Citigroup. They’re not stupid. Jamie Dimon says it’s going to be much harder. Head of Chase.
00:12:46:17 – 00:12:52:05
Rod
Chase. so you know, I think there’s an incredible opportunity coming. What are you seeing in the housing market?
00:12:52:11 – 00:13:12:14
Mark
So I’m going to tell you this. I asked a gentleman on my team that’s been with me for three years, and I said, hey, just out of curiosity, are you seeing a lot more people willing to sell for cash offers these days? Yeah, and he said 100%. Really? I’m seeing more people that we’re calling texting, throwing their hand in the air saying, because I think they’re getting hard up for you.
00:13:12:20 – 00:13:28:24
Rod
You’re dealing with people that have to sell, not people that want to sell. Correct? Right. And and, you know, with the interest rates where they are, it’s massively impacted. Sales. Yeah. Now, now Citi says there’s going to be four rate cuts by cuts by the end of the year. I pray to God they’re right. Yeah. Yeah. Because we need the rate cuts in the commercial space.
00:13:28:27 – 00:13:47:19
Rod
Yeah. We just talking about that on a team meeting this morning. But so let me ask you an uncomfortable question. Yeah. Okay. Why aren’t you buying freaking cash flowing assets. Okay. That you hold on to more of them? I know you got a couple duplexes, but because, you know, correct me if I’m wrong. You’re only as good as the last sale.
00:13:47:19 – 00:14:02:27
Rod
Flip or wholesale. All right. And every January 1st, you go back to work. Yeah. And I’m not trying to kick your ass here, but, I mean, you know, it’s a valid question because a lot of people move from flipping and wholesaling to buying multifamily to build cashflow. It’s a reason my podcast is called Lifetime Cash Flow.
00:14:02:28 – 00:14:03:06
Mark
Yes.
00:14:03:06 – 00:14:04:11
Rod
So what’s your answer to that?
00:14:04:11 – 00:14:18:27
Mark
Yeah. So I will tell you in terms of the apartment space. Yeah I don’t know it well enough. Okay. And so that’s why I haven’t got into the apartment space. But I will tell you this. So when I first started, I had worked with a, a real estate company that said, hey, you know, there’s a big thing out there called profit share.
00:14:18:29 – 00:14:20:19
Mark
You’ll get residual income off the people.
00:14:20:19 – 00:14:21:17
Rod
You’re exp or something.
00:14:21:17 – 00:14:23:02
Mark
It’s Keller Williams okay.
00:14:23:02 – 00:14:25:19
Rod
Got it. Yeah I had Jay Papa on on the show. Oh okay.
00:14:25:19 – 00:14:41:05
Mark
Okay. Yeah. So and when I first started there, I was like, you know what? That’s not going to be me I want because those people leave, you know, they get out of the business. So I started buying rental properties. You did? Yeah. And I own right now about 36 rental property doors and then eight, eight yourself.
00:14:41:05 – 00:14:45:29
Rod
Yourself. Yeah. Which is great. So you’ve got some cash flow? Yes, sir. The only thing is when they’re houses.
00:14:46:01 – 00:14:46:21
Mark
Yes.
00:14:46:24 – 00:15:01:20
Rod
They don’t cash flow as well by any stretch. I mean, again, I was at a 30% loan to value on 800 houses and I still crashed and burned. Yeah, okay. I unload $0.30 on the dollar. I get all kinds of heat. You know, you were overleveraged. No, I owed $0.30 on the freaking dollar. Yeah. So the houses don’t cash flows.
00:15:01:20 – 00:15:15:26
Rod
Well, because you got your separate insurance, your separate taxes. Yeah. You know, if you have a if you have a turnover, you’re going to pay 3 to 5000 minimum to to make it ready. And you’re going to lose a couple of months minimum and rent. And that could eat up your cash flow for two years in some cases.
00:15:15:26 – 00:15:18:23
Mark
Oh yeah. Absolutely. You agree. Oh I 100% agree. Yeah.
00:15:18:23 – 00:15:35:17
Rod
So so you need to learn apartments is what is what I’m hearing. So get your ass to one of my boot camps, brother. Okay. I just so happened to have one coming up. I always happen to have one coming up. Yeah, but, by the way, if you are listening, you want to come to my bootcamp. What do they have to do to get to to get just just DM me.
00:15:35:17 – 00:15:52:14
Rod
Yeah. Just DM me on any social channel. I give you code. You can print $97. I don’t sell anything at this two day bootcamp. When is it? July. What? July 13th and 14th. Nothing being sold. Kind of a no brainer for 97 freaking dollars. So just DM me and I’ll give you a code mark. I may charge you a little more.
00:15:52:16 – 00:16:07:16
Rod
Yeah, but but I’m just kidding. So so so so you’re thinking, are you thinking along those lines? I don’t want your team to think you’re going to shut anything down here. Oh no no no, you’re going to keep that going. That’s your cash cow right now. Yeah. But but no cash flows the word.
00:16:07:20 – 00:16:13:15
Mark
Oh 100% agree with you. Yeah. Yeah. And I just you know, I always I’ve always learned like don’t get into something you don’t know.
00:16:13:16 – 00:16:14:04
Rod
Oh for sure.
00:16:14:04 – 00:16:26:05
Mark
And I just don’t know the apartment space and I will but I will tell you. Yes. The rental game. Yeah. It’s one of those where the cash flow. I always love when people say like, oh, I’m going to retire and buy rental properties. I’m like, well, then you ain’t going to retire, right?
00:16:26:10 – 00:16:42:17
Rod
Right. Well, not if you’re managing yourself or anything like that. But you buy, you know, a hundred unit, 76 unit property. You have you have third party management. You talk to them once a week when things are things are, you know, improving. And then once they’re stabilized, you can do it once a month or every other week. Exactly.
00:16:42:17 – 00:17:05:14
Rod
You know, it’s an hour every other week, if at that. Yeah. So, yeah. Okay. Well, good. I’m glad to hear that. So, you know, let’s talk let’s talk to agents and brokers for a second, because this is the same freaking conversation. Okay? As an agent, a real estate agent or a broker, you are in the freakin catbird seat to find deals.
00:17:05:16 – 00:17:40:08
Rod
You’ve got relationships with other brokers, you’ve got access to all the resources to find deals. and and certainly, can capitalize on them. And, you know, one of the things I tell my students, in my bootcamp is, is a ninja trick for finding multifamily is connect with someone like you that’s got a residential real estate license, has access to the MLS because when somebody, let’s say they’ve got a ten unit or a 20 unit and they’re going to go to the agent that likely sold them their house to sell it, who hasn’t got a freaking clue what to do with it, doesn’t know how to price it, doesn’t know how to price
00:17:40:08 – 00:17:59:18
Rod
it, and they’re going to throw it in the residential MLS. And and if you’ve got a if you’ve got a, you can tell me what you think of the strategy. If you’ve got a someone like you that’s got access to the MLS, puts in an alert that when a multifamily hits, they you send it to them, you can get some phenomenal deals that way that very few people see because nobody’s looking there for multifamily.
00:17:59:18 – 00:18:22:06
Rod
Would you agree 100%. Yeah. Yeah. So that’s a ninja trick guys. Is is to is to have a relationship with an agent, a real estate agent or residential real estate broker that has access to the MLS. Tell them you’ll obviously let them write the contract, maybe spiff them more than that if you’re allowed to. And and man, I know my buddy Kevin Bubb got a $2 million mobile home park in, orange.
00:18:22:06 – 00:18:40:22
Rod
Something orange, Florida. I think it’s Orange City or something. Florida. And, and I went on a tour with him and that’s how he found it. It was in the freaking residential MLS. Like, you know. Right. So. Yeah. Well, so so listen back to agents and brokers. You’re only as good as your last sale. It’s the same conversation.
00:18:40:25 – 00:19:00:27
Rod
Start investing and building some annuity with some cash flow, for Christ’s sake. You’re in the best possible place to do it. Even if you’ve got to bring in money from someone else. You know, when I was in my 20s, I bought tens of millions of dollars worth of real estate, 5050 with partners. Okay, I did all the work I found to my fixed, to my managed, and we split the profits.
00:19:00:29 – 00:19:04:09
Rod
Yep. And as an agent, you could absolutely do that. Would you.
00:19:04:09 – 00:19:05:17
Mark
Agree? And I did the same thing you did.
00:19:05:17 – 00:19:05:25
Rod
Okay.
00:19:05:25 – 00:19:21:27
Mark
Yeah, I did the same thing starting out. Yeah. And then we sold a lot of those and got all of, you know, even way more money than we could have imagined off of that and even even sometimes today, like, if we’ve got a lot of money out on different projects and our hard money’s all out and things like that, there’s people that we have relationships with.
00:19:21:27 – 00:19:24:25
Mark
They’ll fund deals for us and just take a rip of the profit.
00:19:24:26 – 00:19:44:03
Rod
Sure, you know, it’s that same way in the commercial real estate space. I mean, you know, you’re in my space. It’s a team sport. You’re not going to do the whole deal by yourself. It just isn’t done. And and I don’t know about you, but I’ll take ten, 20, 30, 40, 50% of something, over 100% of nothing.
00:19:44:04 – 00:19:52:16
Rod
Any day. Right. So, so talk about hard money for a minute. So. So what is it number one for, for people that understand what it is.
00:19:52:16 – 00:20:07:25
Mark
Yeah. So a lot of our investors basically, you know, they buy property. They say they’re buying cash. Right. And so basically for us a lot of them are actually using hard money. They’re basically using an alternative financing strategy that looks like cash. Right. And so what we’re doing is we’re funding.
00:20:07:27 – 00:20:08:14
Rod
The writing that.
00:20:08:14 – 00:20:12:19
Mark
Yeah, we’re providing that cash for them to be able to lock up properties for cash offers.
00:20:12:20 – 00:20:13:19
Rod
Nice.
00:20:13:21 – 00:20:22:12
Mark
and so basically for us, you know, we don’t for our personal model, we don’t fund the rehab. We require a minimum of 20% down. Okay.
00:20:22:12 – 00:20:23:28
Rod
So you’re making them come out of pocket. They got.
00:20:23:28 – 00:20:28:02
Mark
Skin. They got to put skin in the game. Got it. Yeah. Because ideally we don’t we don’t really want it back.
00:20:28:02 – 00:20:45:02
Rod
Right. Yeah. No I mean I will tell you there are people out there that will fund the whole thing. but it’s very risky. And I will tell you when 2009 happened, those were the people that had their asses handed to them because they lost right away. Because people just walked from those deals. Yeah. No, it’s not on their credit reports like, see you.
00:20:45:02 – 00:20:55:07
Rod
Here’s the keys. You know, kind of a thing. And so you got to be very careful if you’re in your seat. Yeah. As it relates to loaning that money. But it’s very expensive money number one. What is it 12 and two.
00:20:55:13 – 00:20:57:22
Mark
So we’re at two and a half and 13% okay.
00:20:57:22 – 00:21:19:07
Rod
13% interest in two and a half. Like okay. So you know, but you know, if that’s how you get a deal done and, you know, because, a bank, if especially if a property needs a lot of rehab, banks are not too excited about it and you’re likely going to put more down, and it’s going to take time, and they’re going to be looking at all sorts of things that that Mark may not be looking at.
00:21:19:07 – 00:21:25:17
Rod
Or another hard money lender might not be looking at. So talk about your parameters for the hard money. So it’s 13, 13.5.
00:21:25:17 – 00:21:27:00
Mark
13% and three and a half point.
00:21:27:00 – 00:21:44:15
Rod
13% and two and a half points. Some points are percents of it, percent percentages of the loan amount that you’re paying in advance. You borrow 100 grand. He’s taken two and a half points. That’s going to be 2500 bucks just on the front end interest. And then you’re paying 13% interest. So, and I remember I used to pay 12 and two back in the day.
00:21:44:15 – 00:22:01:24
Rod
I mean, this is this is a long time ago, so it’s really not that onerous. I was kind of yeah. No, no, no. Yeah. I’m being dramatic, but. And then I got down, I got him down to ten. I this old woman that loaned me a ton of money back in the day. and, so talk about your parameters for, for what do you look at when someone brings you one of these deals?
00:22:02:00 – 00:22:14:13
Mark
Yeah. So basically, for us, the biggest thing in terms of our box that will loan on is I look at the property, the asset, and I say if they don’t spend a dime on it, would I ever want that back?
00:22:14:15 – 00:22:25:16
Rod
That’s a good question. The question is kind of along the lines. When you go to an apartment complex and you go there at 10:00 at night, do you feel safe and would you want to live there? Okay. Very commonsensical. Okay. Yeah.
00:22:25:18 – 00:22:32:03
Mark
And so so that’s that’s number one. We don’t look too much at the borrower. We want to make sure they’ve had no bankruptcies, things like that.
00:22:32:06 – 00:22:33:23
Rod
they don’t look for any experience.
00:22:33:25 – 00:22:40:09
Mark
so we don’t we don’t really care. unexperienced side. as long as they’re willing to put 20% down and fund their own rehab.
00:22:40:09 – 00:22:41:10
Rod
About their credit.
00:22:41:13 – 00:22:56:03
Mark
so credit we look at, but it’s not a huge player for us. Now, I will tell you this. If their credit’s lower, the down payments bigger. Okay. Got it. You know, so I will we do look at that. But if they have a lower credit score like let’s say if they’ve got like a 500 credit score, we’re not.
00:22:56:03 – 00:22:56:21
Rod
Loaning to them.
00:22:56:21 – 00:23:03:05
Mark
Of course not. Yeah. But if they’re, if they’re kind of on the edge where some people might turn them down, we’ll just ask for more, okay. If it’s a good asset, it’s.
00:23:03:05 – 00:23:18:09
Rod
The same thing I used to do with renters. I mean, if they have bad credit, you’re going to pay a triple deposit. I want a $3,000 deposit if you bail on me. Yeah, I got it. Tell you a funny story. I had this, this this two story, five bedroom house in Denver. 3000. I shouldn’t say the full address.
00:23:18:09 – 00:23:34:11
Rod
It was on 3000 block of Columbine. Okay, if you Google it, you probably find it. But. But I’m reading the Denver Post one day, and the headline was Making Money the Old Fashioned Way. That was the headline. This picture my house. Okay. And, it was five bedrooms. The guy turned it into a whorehouse. Okay. It was a bordello.
00:23:34:12 – 00:23:48:03
Rod
Yeah. There was a payphone down the end of the street. Heat. Check them out. And they’d come in and he got busted. But he was one of those three. That’s what triggered my brain. I got a triple deposit for him because he had bad credit. Said he was in the maid service. True story. Yeah, I call my partner Al in Chicago.
00:23:48:03 – 00:24:06:05
Rod
I said, brother, you own a whorehouse in Denver. But, obviously we evicted him when we did. Fine. But, anyway, same same along the same line. You know, if credit’s bad, you got it. You got to take. Same with, you know, tenants in apartment complexes. I know even, you know, third party property management companies will increase the deposit based on what they see.
00:24:06:05 – 00:24:13:05
Rod
And, yeah, you got to be careful with fair housing, but. So, okay, so and then what’s the term on the, on the loan.
00:24:13:05 – 00:24:14:13
Mark
So we do six months.
00:24:14:13 – 00:24:15:09
Rod
Six months.
00:24:15:09 – 00:24:18:03
Mark
Yeah. So we do a six month term. and.
00:24:18:06 – 00:24:20:20
Rod
They got a, they got to do their business plan fast.
00:24:20:20 – 00:24:29:22
Mark
Yeah. Because basically what we’re counting on is the renewal. Because typically what we’ll do is a three month extension for another point. And we’ll allow up to two of those sneaky bastards.
00:24:29:22 – 00:24:42:10
Rod
Okay. So you’re counting on that. You’re counting on those renewal fees as well to boost. So this is the velocity of money guys. This is what we’re talking about here. Yeah okay. So you really look at it from a financial standpoint. Correct.
00:24:42:12 – 00:24:53:29
Mark
Okay. And we turn down I mean I’ll just say we turn down a lot of people because other companies are saying, hey, we’ll do it for 100% or, you know, we’ll do it for a year. We’ll fund your rehab and stuff, which is fine. Go to those guys, but we don’t want to.
00:24:54:01 – 00:25:02:14
Rod
Yeah, you know, you don’t want to be. I think there’s going to be a reckoning here. maybe not in single family, though, honestly. Because if they drop the rates, I think it’s going to explode.
00:25:02:15 – 00:25:03:16
Mark
Oh, absolutely.
00:25:03:19 – 00:25:05:03
Rod
I think there’s a huge pent up demand.
00:25:05:03 – 00:25:05:21
Mark
Oh, for sure.
00:25:05:23 – 00:25:19:02
Rod
But, Okay. So that’s hard money. Yeah. and and guys, if you go to your local meetup groups or real estate investor club means there’s always people there that do this. Okay. So you just got to, you know, network and find those people.
00:25:19:02 – 00:25:29:00
Mark
And here’s here’s what I’ll share with that too is basically for us if it if the deal doesn’t meet our requirements, we’ve got other hard money lenders will we’ll give it to you. Here you go. And we’ll just rip we’ll rip a point off of it.
00:25:29:00 – 00:25:30:03
Rod
Oh no kidding. Yeah. Okay.
00:25:30:03 – 00:25:30:21
Mark
So we’ll just take.
00:25:30:21 – 00:25:31:29
Rod
A just like a wholesale deal.
00:25:31:29 – 00:25:32:23
Mark
That’s another one. Yeah.
00:25:32:24 – 00:25:38:06
Rod
So wholesale, you know, you just wholesale the borrower to another, hard money there. I love it and love it.
00:25:38:06 – 00:25:39:20
Mark
In any way we can make money.
00:25:39:20 – 00:25:58:11
Rod
I love it, you greedy. Just so I get that. I get hate all the time on social media every single day. I got 2 or 3 this morning. Every single day. Yeah. You know, you can charge pet rent, you greedy bastard. Yeah, like, okay, whatever. Yeah, yeah, I try not to respond. Sometimes I get sucked in.
00:25:58:12 – 00:25:59:07
Mark
Yeah. That’s funny.
00:25:59:10 – 00:26:18:18
Rod
So. So, So talk let’s talk about creative finance because I will tell you, actually creative financing options are becoming more prevalent in my space, believe it or not, in the huge multifamily assets. But let’s talk about it at the single family level. Talk about some different strategies you’ve implemented that are technically creative financing. Yeah.
00:26:18:18 – 00:26:42:17
Mark
So basically so one that we just did, for example, was we bought a house, that we probably cash off or what I needed to be about 120. but this particular owner had about a $28,000 mortgage. And so we said, hey, look, here’s what we can do. We can pay off that mortgage, give you 28,000 down. But what we’ll do is we’ll finance the house, will buy it at 170.
00:26:42:19 – 00:26:44:06
Mark
So sales price of 170.
00:26:44:07 – 00:26:45:13
Rod
Instead of 120 instead.
00:26:45:13 – 00:26:52:12
Mark
Of 120, because we could do because he was willing to carry the note. But we we had to get the right terms. So we did a 30 year term.
00:26:52:13 – 00:26:52:25
Rod
Okay.
00:26:52:26 – 00:26:54:25
Mark
We started at 4% interest.
00:26:54:25 – 00:26:55:10
Rod
Okay.
00:26:55:10 – 00:27:14:22
Mark
And our, our, our interest to just buy a quarter percent every five years on the unpaid principal balance. So basically rate loan. Yeah. So basically at the end of the thing, he’s going to be at 5.5%, which to him looks great. But what he doesn’t realize is that every time it adjusts we’re not really paying much more because it’s on the unpaid principal.
00:27:14:25 – 00:27:27:01
Mark
Oh wow. And so by doing that, what I, what I calculated was if we would have just gave him four and three quarters, which is half way and said, hey, look, we’ll do this for 30 years, we would actually paid $38,000 more.
00:27:27:07 – 00:27:27:21
Rod
Than the way.
00:27:27:21 – 00:27:29:08
Mark
It’s done, the way that we structured it and.
00:27:29:08 – 00:27:32:02
Rod
It’s and and it was more appealing to him. And the way you presented it.
00:27:32:02 – 00:27:32:20
Mark
Correct.
00:27:32:21 – 00:27:36:24
Rod
Got it. So, so elderly seller.
00:27:36:26 – 00:27:45:12
Mark
so landlord actually landlord. Yeah. Just and we’d actually bought another one from him and it was one where he was just like, you know what? I just want the mailbox money. I just want to I don’t want to deal with it.
00:27:45:13 – 00:28:00:09
Rod
I want a payment. Yeah, yeah. So let’s talk about that for a second. So let’s stick with seller financing. I want to get back to creative financing. Let’s talk to seller financing. Do you believe in if you’re dealing with elderly sellers, do you believe in seller bonding. teach seller bonding.
00:28:00:12 – 00:28:01:15
Mark
I’m not even from. Okay.
00:28:01:15 – 00:28:20:23
Rod
Yeah, I teach it. Okay. Yeah. Because elderly sellers, like, if you’re mailing people that loan 20 plus years. Okay. First of all, they’re likely retirees, okay? All their tax benefits are gone. That appreciation is gone. And, and so if they sell, they’re going to end up with what, 65, $0.70 on the dollar because they got to pay Uncle Sam.
00:28:20:23 – 00:28:37:28
Rod
So that’s number one. Also they are risk averse. So they’re not likely to take that money and buy another high risk investment. They’re likely to put it in the bank. And very often they want cash flow. Yeah. And so to me those are ripe for seller financing. And you tell him, you know, Mr.. Mrs. Smith, you know, I’m going to pay you $1 million for your property.
00:28:38:00 – 00:28:56:16
Rod
You know, of course, because you’re fully depreciated, you only need to keep 650, 70, 700,000, and, but but, and you’re going to put that money in the bank. At the bank, your bank’s going to pay you, what, three and a half, 4%. Here’s what your payment will be at the bank. Now, if you work with me, I’ll pay you enough down payments.
00:28:56:16 – 00:29:10:11
Rod
You know I’m serious, and I’m going to pay you whatever. Whatever makes sense. Five, six, 7% is, who cares if the numbers make sense and you’re only going to pay taxes on the amount you get from me every year. So your payment for me is double what you’d get from the bank. And very often it is double or more.
00:29:10:11 – 00:29:36:05
Rod
Yeah, yeah. And candidly, in my opinion, if you don’t have that conversation with an elderly seller, you’re screwing them in my opinion. Yeah. Okay. So that’s number one. Number two, you know, when people get older, they become relationship driven more than than profit and technical details on a deal driven. And so I tell my students, bond with them, become their friends first, not to freaking screw them or take advantage of them, but to create a a win win situation.
00:29:36:07 – 00:29:50:25
Rod
I mean, I’ve done deals seller finance with nothing down because the, you know, the, the guy, the dish, one of the payments. Okay. I’ve done deals where I didn’t make a payment for a year because the property was trashed and I had to put the money in, and it was the truth. But I bonded with the sellers, and they.
00:29:50:29 – 00:29:53:09
Rod
And I was able to. You know, cut these deals.
00:29:53:09 – 00:30:00:12
Mark
So for sure agree with this 100%. Yeah. You have to build that trust and rapport. Right. Because that I mean, that’s just so key.
00:30:00:12 – 00:30:18:20
Rod
You find that commonality. You go and you say, oh, what’s the cat’s name? What’s the dog’s name? You know, you build that rapport and oh God, that reminds me another funny story. I’m digressing a little bit. I got to tell you the story. So my brother and I, we used to buy foreclosures in Denver. I owned 500 houses in four in Denver at one time.
00:30:18:22 – 00:30:33:24
Rod
Okay, you know that I rent it out, but so we’d go and knock on doors that people are in foreclosure. And we went to this house and it was this old couple, and the woman was a smoker, and she had the stains in her fingers from the cigarets, just to give you a flavor for the environment.
00:30:33:24 – 00:30:34:10
Mark
Yeah, yeah.
00:30:34:10 – 00:30:56:16
Rod
And and, and and. Oh, God. I haven’t thought about this in a long time, so? So. And she didn’t know the house was in foreclosure and he hadn’t told her. Okay. And and she’s like, bitch. And like, you stupid idiot. And he’s just he just kept saying, just shut up. Just. It’s just like, yeah, same tone. Yeah.
00:30:56:18 – 00:31:13:14
Rod
Just same. Shut up. But the funny part is my brother trying to cut the the mood said, And the woman said, Enos, get out of here yelling at the dog. And my brother said, so the dog’s name, Zenas. She said, no, it’s penis, I swear to God. Anyway, I couldn’t resist. Yeah, a true story. That’s an absolute true.
00:31:13:14 – 00:31:14:07
Mark
Story.
00:31:14:09 – 00:31:20:19
Rod
Was hilarious. But, so, so seller financing. We talked about self finance. Talk about some other creative financing strategies. Yeah.
00:31:20:19 – 00:31:28:16
Mark
So it’s another one that we’ll do basically is it will go in. We bought a property for $50,000 and it was a manufactured home. It was got it was a double wide on.
00:31:28:16 – 00:31:29:02
Rod
What the land.
00:31:29:02 – 00:31:43:26
Mark
Though. Yeah. Yep. We got the land. So we bought it for 50,000. And then what we did is we turned around and sold it for 150,000. Wow. We charged and I’m going off a memory here, but we charged 9.5%. Wow. We did a 30 year term. Wow. No loans, no balloon.
00:31:43:26 – 00:31:44:07
Rod
Wow.
00:31:44:07 – 00:31:53:27
Mark
Just draw it all the way out. and then basically, I think that investment ends up by the end of the whole entire thing on a $50,000 purchase, we end up at about $400,000.
00:31:53:27 – 00:31:56:18
Rod
Well, sure, but you got the future customized future value.
00:31:56:19 – 00:32:10:29
Mark
Money, for sure. And that’s if it drags all the way out. But what was funny about that is it had a bunch of trash inside. So so we had our guy go in and haul it all off. But we gave it a nice deep clean, right. But our photographer went inside and granted, he’s been in a lot of houses, right?
00:32:11:01 – 00:32:16:19
Mark
He said, Mark, this smells so bad even a maggot would gag. No kidding. But somebody still bought it.
00:32:16:22 – 00:32:38:09
Rod
I you know, I’ve seen I’ve seen the most destroyed property. Well, see, that’s the problem, though, you know, like, I’ve got a couple assets that I’m taking over in, in Cincinnati, and I walk in and my ex-partner screwed these up so bad, and they’re just so bad. The entries ways were so bad. The laundry rooms were destroyed.
00:32:38:11 – 00:32:44:19
Rod
And I’m thinking of most anybody that would rent these I don’t want, you know. So it’s that. But I mean, you’re selling it. Did you get some money down.
00:32:44:19 – 00:32:50:04
Mark
Yeah we did. We got 20 grand down. Okay. So we ended up only being in I mean basically with rent. So for about. Yeah. Right.
00:32:50:08 – 00:32:57:00
Rod
Right around. Wow. Wow. Yeah. Okay. Talk about some other creative financing that you may have done.
00:32:57:02 – 00:33:03:03
Mark
I mean, that’s that’s pretty much I will just say, like, in terms of creative finance, that’s pretty much the realm at which we.
00:33:03:04 – 00:33:04:01
Rod
So seller financing.
00:33:04:02 – 00:33:07:00
Mark
Seller financing mostly. Yeah. And I’ve done a subject to before.
00:33:07:01 – 00:33:09:16
Rod
Right. Okay. Let’s talk about that for a second. What is that. Yeah.
00:33:09:19 – 00:33:11:28
Mark
So basically it’s where you’re taking over their existing.
00:33:11:28 – 00:33:14:13
Rod
Mortgage and you’re not paying it off. You just take over the payment.
00:33:14:13 – 00:33:15:18
Mark
They stay on it.
00:33:15:20 – 00:33:33:27
Rod
It’s called subject to financing. I had pace more being here talking about it a while back. there are some challenges with it. I didn’t call him out on it too much, I don’t think. Did I? Did I call him out? No, I didn’t call him out. But, you know, the challenges are number one, there’s always a do on sale clause in a mortgage or a trustee.
00:33:33:27 – 00:33:53:19
Rod
So. So although it’s extremely rare that they would ever do it if you took over somebody’s payments, usually I don’t even find out about it. But but there’s also a lot of risk, not just to a, there’s risk to the seller because if you don’t make the payments, their credit’s destroyed, number one. But there’s also some risk to you which you described.
00:33:53:20 – 00:34:06:13
Rod
I even thought of if they want off that loan and they tell you I want off that loan, you say no. They say, well, I’m going to call the bank and let them know you took it over. of course, that’s a double edged sword because then their credit gets destroyed. So I don’t think that’s a real valid threat.
00:34:06:13 – 00:34:26:10
Rod
But but, you know, I did quite a few of those back in the day. and, you know, there’s also I will tell you, be careful of this. Okay. there’s something called equity skimming. If you take over somebody’s mortgage like that. And then they threw people in jail for this back in 2008. Now you take over somebody’s mortgage like that, and you collect the rent.
00:34:26:10 – 00:34:41:28
Rod
You don’t pay that mortgage called equity scheme and you will go to jail. So keep that in mind. You know, those of you hotshots that want to go out there and, you know, buy houses and do this subject to loans, just be very, very careful with that. But, I’m not gonna say don’t do it. Just be be wary of it.
00:34:42:01 – 00:35:03:25
Rod
Now, in my world, in the commercial multifamily, we’re seeing some creative stuff happening too in this market because it’s tightening up. Sales are down 90%. Yeah. commercial lending is down 50% right now. I just saw that article yesterday. And so, you know, sellers are being creative. The ones that have to sell, in my opinion, anybody in in the commercial multifamily space that’s selling right now has to sell.
00:35:03:28 – 00:35:24:24
Rod
We just looked at a really nice package. I can’t say where it is because, but but really nice package of three properties. And I’m like, man, this has got low debt. It’s well occupied. Why are they frickin selling right now? Because it’s not a good time to sell. But, but some of the things that that sellers are doing, for example, are staying in a deal, like, like, you know, you’ve got to raise 10 million in equity.
00:35:24:24 – 00:35:39:19
Rod
Maybe they stay in for 5 million of that. Gotcha. They use their equity as part of the deal on the you know, stay in as a as a as a partner. Yeah. So you know there’s some creative stuff like that happening. Of course there’s seller financing. You can sell or finance a big apartment complex. I’ve seen it done.
00:35:39:22 – 00:36:01:20
Rod
Yeah. Help somebody buy 500 units that way. so so that’s their, I wish I could think of some other creative strategies because there are quite a few, actually, in my world. you need to get seller credits for different things, for repairs and things like that that offset your down payment. do you use your commission at all when you buy property?
00:36:01:20 – 00:36:02:18
Rod
Do you throw that in or.
00:36:02:20 – 00:36:12:28
Mark
I mean, so base. Yeah. So basically what we used to. Okay. but now what we do is we basically do the minimum, right? Like, whatever the brokerage wants. The minimum. Gotcha. We just slap that on there. So actually.
00:36:13:03 – 00:36:15:28
Rod
How come you don’t become a broker and have your own place? Man?
00:36:16:00 – 00:36:19:00
Mark
Just the responsibility. Oh, okay. Yeah. I mean, yeah.
00:36:19:00 – 00:36:36:08
Rod
So I was, by the way, just this little interest you. Yeah. I was a broker when I was 18. Wow. You could do it. Bet this is 1978. So some context. You could actually become a real estate broker and have your own office through education. And I did it through education. Wow. now they got smart. You need some freaking experience before you could have your own office.
00:36:36:12 – 00:36:37:13
Mark
Yeah. Rampant.
00:36:37:16 – 00:36:43:05
Rod
But, yeah. No, I was an actual broker, right when I turned 18. Wow. Got it going. This is in Denver. In Colorado?
00:36:43:05 – 00:36:43:25
Mark
Yeah, yeah.
00:36:43:25 – 00:37:02:29
Rod
But, Yeah. So. So have you ever. You know, this is something I. This is how I bought hundreds of properties in Denver. It was knocking on doors of people in foreclosure. Yeah, literally for almost ten years. have you ever gone after foreclosure lists and done anything in that arena at all, or auctions or anything like that?
00:37:02:29 – 00:37:14:06
Mark
Now? Haven’t bought any from auction, haven’t bought any off foreclosure lists? what we did do is we bought a Segway to go have some of our guys go knock on doors just to ride up and down the streets. And you know what a great idea.
00:37:14:08 – 00:37:18:22
Rod
I tried to find a Segway there. So cool, I couldn’t even find them. They don’t make them anymore. It’ll make the big ones.
00:37:18:22 – 00:37:28:18
Mark
Yeah, yeah. No. It’s awesome. I mean, they’ll just ride up, I mean, because basically they’re like, hey, it take me an hour to knock on the street, right? But if I had a Segway, I could do it in like 15 minutes. I might say less. Yeah.
00:37:28:21 – 00:37:37:10
Rod
Ride. You know, they have this little scooters now, but I like those big Segways. I did those in Paris and Rome, but they. You can’t buy them anymore. I was going to buy one for around here.
00:37:37:10 – 00:37:53:24
Mark
Well, what’s funny too, is like, I’m just one of those guys that anything we can do that saves time, right? So even when we send text messages, you have to send it automatic one at a time. Yeah. And so one of my guys found a mouse clicker tool that all he has to do is click start and it’ll send it automatically form one tap at a time.
00:37:53:24 – 00:37:55:24
Mark
No kidding. And it saves some time. Sure, sure.
00:37:55:24 – 00:38:12:11
Rod
You know so yeah I mean they have these new platforms. I use a texting platform where I can text, you know, all thousand participants in one of my boot camps. Yeah. You know, like that. Yeah. so it’s the technology is amazing. how else have you harnessed technology for your flipping and wholesaling? What what CRM do you use?
00:38:12:11 – 00:38:13:20
Mark
So we use commissions inc.
00:38:13:20 – 00:38:16:01
Rod
Commissions inc. Okay. Yeah. It’s like a business out.
00:38:16:04 – 00:38:17:12
Mark
Yeah. It’s like a boomtown because.
00:38:17:12 – 00:38:20:03
Rod
There’s there was there was another one prop
00:38:20:05 – 00:38:20:17
Mark
propeller.
00:38:20:21 – 00:38:21:04
Rod
Propeller.
00:38:21:06 – 00:38:28:01
Mark
Oh yeah. A lot of people use propeller. Right. we use commissions, I think because what happens is we draw a lot of leads for our agents.
00:38:28:01 – 00:38:28:28
Rod
Gotcha as well.
00:38:29:00 – 00:38:36:16
Mark
And through that. Gotcha. But then our investment team, we have them use it because what’s nice is we use mojo dealer. and it integrates with Mojo.
00:38:36:17 – 00:39:02:27
Rod
Gotcha. Yeah. I used to belong to a, a mastermind in, collective genius up in Tampa. These are all the biggest flippers wholesalers in the country. And I joined it, too, because I was going to beef up my mastermind. But, give them a shout out. They do a really nice job. Collective genius. Yeah, but but, you know, it’s not cheap, but, I joined it literally just to get ideas for mine because I host probably the largest in the by the world, really about 40 billion in assets in mine.
00:39:03:02 – 00:39:18:25
Rod
Yeah. So, you know, everybody thinks this is all easy and there’s never any setbacks or hurdles, which we know is definitely not the case. Yeah. You know, I call them seminars. Okay. So tell it. Tell us about a seminar. a real kick in the. You know what? and maybe the lesson.
00:39:18:27 – 00:39:40:21
Mark
Okay. Yeah. So what I did is I, I’ve got one that stands out in my mind. so I was buying properties as rental properties in a small, remote town outside of Dallas-Fort worth and having tremendous success. right. Just getting them for cheap, nice houses, renting them. No problem. I mean, it was perfect, right? So I thought, I’m smart.
00:39:40:24 – 00:39:45:11
Mark
I’ve got this down. Right. I’m going to go do this in another city and actually another state.
00:39:45:13 – 00:39:49:07
Rod
Oh another state. Yeah. Yeah. Okay. Well that’s okay.
00:39:49:07 – 00:40:08:06
Mark
So I started and I went up into Oklahoma, took the same model that I was doing and started in a city up there. It was a metropolitan city. So that kind of rules out everything except to in Oklahoma. And so yeah. So anyways, so I did that. I bought for started off strong. Like I was like, man, this is working.
00:40:08:06 – 00:40:24:17
Mark
So then I had a guy that wanted to sell me his package of rentals and he had about eight. And so I bought them all. And this was all within a year, right. And next thing you know, it was like one of the houses had a bullet in the roof. You know, one of the tenants slipped off the porch.
00:40:24:19 – 00:40:25:14
Rod
Lawsuit.
00:40:25:16 – 00:40:33:01
Mark
that like just basically it was just, it was a nightmare. Like it was an absolute nightmare. And then I’d have people move in for a couple months and then leave.
00:40:33:01 – 00:40:34:05
Rod
How were you managing up there?
00:40:34:08 – 00:40:35:25
Mark
I had a property management company.
00:40:35:25 – 00:40:37:03
Rod
Yeah, and they probably suck.
00:40:37:05 – 00:40:51:26
Mark
The first one I hired suck. The second one I brought in was better, but I didn’t. I didn’t scout that out before well enough. Yeah. so I was just losing money right and left. And so I was finally like, man, I gotta stop the bleeding. But, you know, at that point in time, it was almost like, well, hey, you know what?
00:40:51:26 – 00:40:54:02
Mark
Things are starting to turn around.
00:40:54:05 – 00:40:55:07
Rod
When was this?
00:40:55:09 – 00:41:10:17
Mark
this was back. this was about this. Actually, I sold my last one in covet during Covid. Wow. So basically what happened was at that point, things started looking like they were turning around. but a buddy of mine said, hey, Mark, it ain’t turning around. It’s only for the time being, right? You need to get out.
00:41:10:19 – 00:41:24:07
Mark
And so I got out. I ended up losing, you know, probably 25, $30,000 on all of that. Oh, that’s not bad. But which wasn’t a hard. Yeah. It wasn’t like a terrible experience. But at the same time, that’s the one that I was like, man, that that definitely, you know, well.
00:41:24:07 – 00:41:45:10
Rod
I got you beat. Yeah. And not that I want to one up you on on stupidity but I’m going to right now. I bought 200 houses in Memphis in one year. Now I bought houses, three bedroom, two bath, 1500 square foot houses for $1,500. Wow. And regretted it. Okay, $3,500. 5000. Regretted every single one of them. Yeah.
00:41:45:10 – 00:42:01:16
Rod
You know, if you come to one of my bootcamps, I always dog Memphis if you lived there, you know what I’m talking about. But the food’s good. The Corky’s barbecue’s good. Yeah, yeah. No, no, I don’t even want to fly over Memphis airspace. No, no, I just had such a bad experience there. I still own, I don’t know, 8 or 10 properties there.
00:42:01:16 – 00:42:20:15
Rod
But the problem also is it becomes a stepchild. Did you say did you have that dynamic because you’re not seeing it? Yeah. You’re relying on other people. I, I had a property manager there embezzle 100 grand. Carter. Cold, cold. Carter. She signed it. she signed a, a confession. And the police there sucked so bad they didn’t do it.
00:42:20:16 – 00:42:21:01
Rod
Oh, so it.
00:42:21:01 – 00:42:21:17
Mark
Was.
00:42:21:19 – 00:42:42:02
Rod
Just. It was. It was such a bad experience back then. They had they had, you know, if you filed an eviction, someone could file a chapter 13 bankruptcy and delay the eviction and do it time and time again. They called it a wage earner plant. So if you filed an eviction, they’d get six letters from attorneys that say, I can stop your eviction and these people didn’t realize they were filing bankruptcy.
00:42:42:02 – 00:43:03:07
Rod
And luckily they had a new, legislation called back. But back in, I forgot when it was oh five or something, and that wiped that out, thank God. But I had to deal with that. People not paying. But anyway. Okay. Okay. Yeah. so let me ask you this. You know, I get a lot of people that want to get into this business.
00:43:03:07 – 00:43:11:17
Rod
They want to they want to, you know, they’re tired of the rat race. They’re tired. They know their family deserves more. give them some advice.
00:43:11:20 – 00:43:27:01
Mark
You know, for me, like when I got into the business, I will just tell you I did not want to get in initially at all, right? And it took a family member telling me, my dad over and over again, you need to get into this business. And I’m so, so thankful I did because it completely changed the trajectory of our life.
00:43:27:01 – 00:43:47:09
Mark
Right? But the thing is, I’m going to tell you the biggest thing for people as they get into the business wanting freedom, flexibility and financial gains. Right? The problem is they sacrifice one of those because they have too much of the other, so they start having too much freedom. Now all of a sudden the financial, the flexibility starts going away.
00:43:47:12 – 00:43:58:21
Mark
Right? Interesting. And so for me, like I would just say, anybody getting into this business, you have to start off and know it’s going to be a grind, it’s going to be mentally challenging.
00:43:58:23 – 00:44:03:22
Rod
I have to, grind for a few years like most people want. You live the rest of your life like most people can’t 100.
00:44:03:22 – 00:44:15:17
Mark
Percent, right? Yeah. And I remember I told my wife when I first started what my goal was, and this was a simple goal for me. And I said, and, you know, granted, I went from a teacher salary in Texas, which is actually pretty good. I was making like 60 grand.
00:44:15:18 – 00:44:16:00
Rod
Oh, wow.
00:44:16:02 – 00:44:16:22
Mark
Which isn’t bad.
00:44:16:23 – 00:44:18:14
Rod
No, not bad or surprising. Yeah.
00:44:18:18 – 00:44:38:13
Mark
So so then I go into real estate and I told my wife, I said, hey, you know, I said, I want to save a $100,000 in the bank. At the end of my first year in real estate. and she goes, she laughed. and like, not that she wasn’t supportive, but she just laughed. She kind of chuckled, and I went, I know it’s a big goal now, and sure enough, I hit it right.
00:44:38:16 – 00:44:44:06
Mark
You know, I sold 68 homes that first year, but I had my tunnel. I had my tunnel vision on, and I didn’t know what what.
00:44:44:06 – 00:44:45:06
Rod
Was the why.
00:44:45:09 – 00:44:47:29
Mark
The why was just to basically create memories with my family.
00:44:47:29 – 00:44:48:07
Rod
Yeah.
00:44:48:07 – 00:44:49:24
Mark
You have kids? Yeah, I have three.
00:44:49:24 – 00:45:02:26
Rod
Well, yeah. Yeah. The bottom line is you just got to go do it, okay. And push through. Have your goals. You know, if you come to one of my boot camps, first thing we do is goal setting on steroids, because how the hell do you get anything if you don’t know what it is? Right? I don’t know what it is you want.
00:45:02:26 – 00:45:09:23
Rod
You got to know what your why is. Because that’s the driver. Yeah. So talk about any, Did you have any mentors besides your dad?
00:45:09:26 – 00:45:19:23
Mark
I did, I had I have two mentors. I had two at the time. one of them was really instrumental and basically helping me get into the rental space and helping me buy my first house, you know?
00:45:19:28 – 00:45:21:00
Rod
Where did you meet him?
00:45:21:02 – 00:45:22:27
Mark
so he’s known me ever since I was a baby.
00:45:23:03 – 00:45:23:23
Rod
So it’s a.
00:45:23:26 – 00:45:24:12
Mark
Family.
00:45:24:12 – 00:45:26:03
Rod
Family friend. Oh, nice.
00:45:26:06 – 00:45:36:01
Mark
and so, you know, and then somebody else was somebody that I actually ended up hiring. that I actually sought out, And, I mean, that was a game changer for me. Yeah. You know.
00:45:36:01 – 00:45:37:02
Rod
So you believe in mentors?
00:45:37:02 – 00:45:40:24
Mark
Oh, 100%, you know, because, I mean, you know, I played sports, right?
00:45:40:24 – 00:45:42:00
Rod
And so it’s a coach.
00:45:42:00 – 00:45:54:18
Mark
Yeah. And one one somebody told me, they said, Mark, why don’t you have a coach in business? And I was like, well, because I don’t need one. And they said, oh no, no, no, business is no different than sports. And that was life changing for me. Yeah.
00:45:54:18 – 00:46:12:18
Rod
No question. I mean, you look at Michael Jordan at the height of his career. He had five coaches. Yeah. Best in the world. Yeah. Had five coaches. You know, and you know basically you’re paying for speed, you know, can you do it on your own. Sure. But you’re going to have seminars, okay. You minimize the seminars, you pay for speed.
00:46:12:23 – 00:46:31:19
Rod
Yeah, a bottom line. So, as in this journey, I’ve got maybe 1 or 2 more questions in this journey. it’s a question I like to ask. Talk about any epiphanies that you had, any moments. You’re like, okay, now I freaking get it. Okay. Where you were doing something a certain way and you’re like, okay. And you discovered something.
00:46:31:21 – 00:46:40:06
Mark
You know, for me, I think the biggest thing was, is when I was focused on just retail real estate and I was just I had my blinders on, you know, listen.
00:46:40:06 – 00:46:42:10
Rod
Up, agents and brokers, okay? Keep going.
00:46:42:10 – 00:47:01:15
Mark
When I had my blinders on, I realized that what I was doing was helping create wealth for other people. But I wasn’t taking the opportunities for myself. Yeah. And so somebody had told me like, hey, Mark, you need to do this, right? Which was get into the investment space. Yeah. And at that time I was like, you mean to tell me that people are going to sell their house for $0.50 on the dollar?
00:47:01:18 – 00:47:06:20
Mark
And they said yes. And I didn’t ask my whole entire career, I’ve always been like a sponge.
00:47:06:21 – 00:47:07:03
Rod
Right?
00:47:07:03 – 00:47:22:12
Mark
I always just wanted to know what can be done. And then I’m going to go try it and I will fail. There will be times I will fail. But but if I can fail faster or that’s it, then I can I can basically increase my revenue. That’s it. And that catapulted me beyond belief.
00:47:22:12 – 00:47:38:20
Rod
Nice. I got to, I got to I went to a mastermind for digital marketing and met Sarah Blakely, the billionaire owner of Spanx. you know, the women’s undergarments that hold it all together? Yeah. She told me that her dad used to ask her and her brother pretty much on a weekly basis. What have you failed at this week?
00:47:38:23 – 00:47:41:14
Rod
what a great question to ask my kids so they don’t fear failure.
00:47:41:16 – 00:47:42:16
Mark
That’s an awesome question.
00:47:42:16 – 00:47:52:22
Rod
Well, I really appreciate you coming down here, brother. I’ve really enjoyed the conversation. It’s not something we normally talk about on this show, flipping, wholesaling, things like that, but I you had a tremendous amount of value, and I appreciate you.
00:47:52:22 – 00:47:53:21
Mark
I appreciate you having me.
00:47:53:28 – 00:47:54:17
Rod
No question.
