BiggerPockets Real Estate Podcast - 280: The Key to Making Great Deals (Hint: Overlooked Properties!) with Mark Hentemann (Writer for TV’s Family Guy!)

Episode Date: May 24, 2018

On today’s show, we sit with Mark Hentemann, a writer and producer for TV’s Family Guy who also invests in Los Angeles real estate! Mark shares his incredible success stories, which include his trick for finding overlooked properties, house hacking for massive profits, adding value and utilizing the 1031 exchange—plus more! Mark’s strategy for filtering data will save you tons of time and help you find the deals others are missing. Listen and learn how Mark got into real estate investing through house hacking—and how that led to an $800,000 profit on his first deal! This episode is absolutely packed with motivating advice and fantastic ideas for getting started. Bonus? It will make you think and make you laugh! In This Episode We Cover: Mark’s day job as a writer for Family Guy The first deal that gave him buyer’s remorse Having a friend as a first tenant Selling that first deal for $1.27 million The $250 dishwasher story What’s a 1031 exchange? Buying with solid fundamentals Finding low-cost-per-square-foot buildings Having the perfect open house Finding deals in today’s difficult market The river mentality in regards to moving forward The people on his team Finding people in the BiggerPockets community His metric called “leverage cost per square foot” And SO much more! Links from the Show BiggerPockets Forums America Arias Instagram Profile BiggerPockets Events BiggerPockets Webinar Family Guy 1031 Exchange Guide BiggerPockets Podcast 274: “Because of These 3 Simple Rules, I’ve Bought Over 600 Units and Never Lost Money” with Paul Morris Marcus & Millichap Loopnet Linkedin ZipRecruiter Family Guy – everyone throws up (video) Family Guy – Wheres my Money Stewie & Brian (video) Books Mentioned in this Show So Good They Can’t Ignore You by Cal Newport The Complete Guide to Buying and Selling Apartment Buildings by Steve Berges Sapiens: A Brief History of Humankind by Yuval Noah Harari Fire Round Questions What was your worst home renovation fail!?! How are some unique ways you earn/save extra money? Are anonymity and self management possible? What’s your second favorite investment after real estate? Tweetable Topics: “It’s really valuable to be able to sit back and wait for the deal to come to you.” (Tweet This!) “Everyone’s got an opinion on why things are a bad deal.” (Tweet This!) “Leverage is the one common denominator.” (Tweet This!) “When you make the money, handle it well, be careful, don’t waste it, invest it.” (Tweet This!) Connect with Mark Mark’s BiggerPockets Profile Mark’s Company Website Email Mark Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 280. I bought it $435,000. I put down $43,500. I didn't know about that FHA loan where you could go even lower than that, but I got 10% down and sold it for $1.27 million. Whoa. And made at the end of the day about $835,000 on my $43,000 investment. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small.

If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Stay tuned and be sure to join the millions of others who have benefited from BiggerPockets.com. Your home for real estate investing online. What is going on, everyone? This is Brandon Turner. Today's host of the Bigger Pockets podcast here with my bald friend, Mr. David Greta. What is going on, Brandon? How are you, man? Man, I'm really good. I'm fantastic, actually. I'm waiting for an appraisal to come back on a

property I'm trying to buy. So fingers crossed that it comes in high enough. Otherwise, I got to renegotiate, which is not bad, you know, but whatever. What about you? What have been up to? This is your house in Hawaii, and I know I've been involved in it. I feel like we're waiting to see if the baby's going to be delivered and I've been there for you during the pregnancy. We were negotiating this thing together. It's pretty cool. It is, it is pretty cool. I'm looking forward to it. So, anyway, so what else you've been up to? I'm actually doing awesome. I just got back from Atlanta where I got to fly out and record a segment for CNN.

No, Atlanta's awesome, man. That place is like blowing up right now. The plane ride across the country wasn't so great. But shout out to Emmy winning producer America Arias. That's her Instagram name, America Arise. She heard me on the podcast, reached out and said, hey, we'd like to bring you in to talk about the top five most profitable housing markets in the country because I wrote the book on long distance investing.

And I got to go out there and record a blip for CNN. And it aired not too long. So it was pretty cool. That's fancy. Look at you growing up, putting on your big boy pants. I'm proud of you. Yeah, I wear a suit and everything. If you guys can see, Brandon, right now,

he's wearing a denim shirt. We call it his handsome shirt. It is my handsome shirt. Whenever we were like, that's a nice shirt. Everyone says, that's a nice shirt. I'm like, I know, it's my handsome shirt. I have like one shirt that kind of tries to make me look handsome. This is it.

All right, enough about handsome shirts. Let's get on with today's show. Today's show is fantastic. I know we say that all the time. But, man, like this guy today, Mark Hentiman, he is a writer, a comedy writer for a little show that nobody's probably ever heard of called Family Guy. It is a fantastic show. That was sarcasm, David Green, in case you don't know sarcasm.

I know you know analogies, but I'm not sure how you are on sarcasm. And he's a comedy writer, but he also owns over 100 units. And he talks about how he's been able to do that. Tons of good stuff, like talking about house hacking, how he started with house hacking, on a deal that led to $800,000 in profit. He goes into in-depth on how he analyzes deals using the price per square foot method, which is something that we don't talk a lot about here.

His advice on filtering could save you so much time when you're looking for deals. And a lot about just buying properties that everybody else has turned off from. You guys will love that as well. It's like how he still finds deals in today's competitive market. So a very, very good show.

But before we get further and deeper into this episode, let's get to today's quick. Quick tip. All right, today's quick tip is go to biggerpockets.com slash events and look for an event in your area. There's networking events happening all around the country all the time. Go look for one in your area and I want you to register to attend it. You can just click a little button that says, I'm attending, and then attend it and actually show up and go meet people. It's like people who get together with other people, like you're naturally going to get more excited about real estate, learn from people, learn what works, what doesn't work.

And you're going to, you know, have a way more likely chance of pulling out. off some cool stuff in the near future. And if you don't see an event in your area, you get to start an event in your area, which is super cool. So find a little like restaurant, bar, club, daycare center, whatever, and host an event at you, bigger pockets, an event. I don't know, what we call them, meetups, events, networking things. I've actually, if you're in Northern California, check out mine. I do every single month. I do a meetup. Yep, different topic I teach on every single time. The last one was on how to analyze an investment property. We've done them on the Burr method and out-of-state investing. It's something cool.

every single month. So check out if you're near me. And if you're not near me, like Brandon said, make up your own. You get to be the man. You get to be the man or the woman if you're... The woman. So, cool. Did you know, your house gets bored when you leave? I can't actually prove that, but it probably misses out on the action, the footsteps, the late night fridge raids. Yeah, when you're gone, your place is basically on unpaid leave. It's sitting there in the dark thinking, I could be contributing right now. Your side room wants a side hustle. Even your Wi-Fi is like,

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That's Indeed.com. slash rookie. Terms and conditions apply. Hiring indeed is all you need. Most investors spend more time chasing deals than reviewing their insurance. But a quick coverage check can be fast, easy, and one of these smartest ways to protect and even improve your property's cash flow. As the months get colder, frozen pipes, icy walkways, and seasonal wear and tear can increase the likelihood of claims. And traditional insurance companies aren't always built to handle these claims quickly or smoothly. That's why more real estate investors are turning to steadily. They focus exclusively on landlords, whether it's a single-family rental, a burr-builders risk

policy, or mid-term holiday guests. You get fast quotes, flexible coverage, and protection for property damage, liability, and even loss of rental income. Now is the perfect time to review your rates and coverage. Get a quote in minutes at biggerpockets.com slash landlord insurance. Steadily, landlord insurance designed for the modern investor. And like I said, today's show is awesome. Mark Henteman, super cool guy. Let's get to Mark. All right, Mark, welcome to the Bigger Pockets podcast.

Good to have you here. Hey, great to be here. Yeah, so this is kind of a cool show because you have kind of a unique job. I love talking to people who have unique day jobs, but you're also a very active real estate investor. You're crushing it. You're killing David and I. And so we're going to talk about that.

But first of all, what is your day job? and why is it kind of cool or why do I think it's cool? I've been a writer in television for a while. I am currently on Family Guy. I've been one of the original writers on that show. I've created a couple shows, run several shows, including Family Guy, and written in late night for David Letterman. And yeah, that's kind of the career path I started down the road on

and been lucky enough to kind of stay gainfully employed. Nice, nice. So I got to ask you before we get into the, the real estate stuff. Like, I'm sure you asked this all the time, but like, were you like funny growing up? Was that like a thing? Or do you learn to become funny? Or are you funny?

Are you just actually a really lame guy in life? Yeah, I would be terrified to be a stand-up comic. Okay. I don't know that I'm that, but I've always been like this head in the clouds, kind of weird ideas, conceptually weird. And so I think I always had a knack for expressing ideas. in writing or whatever. And I loved comedy from an early age.

So I was drawn to it. And luckily, it worked out. It was hard getting into the business. But yeah, you know, I wouldn't, you throw me up on a stage. I'd be petrified. But in a writer's room, I can be, I can be funny when I'm relaxed. Nice. That is a-

There's a lot of, a lot of very introverted writers. Are there? Very funny people and very smart people. But, uh, well, you have nothing to worry about Mark, because there's only a quarter million people listening to you right now. No stress. All right. All right. So let's get into your story about real estate. Like, how did that begin? I mean, what was your very first deal?

Or maybe even, let's even go before your first deal. Why did you even get the idea? I think I'm going to go get into real estate. Maybe that leads into your first deal. Yeah, I mean, it coincides with those, that first season of Family Guy. I had moved out to L.A. I had been broke through most of my 20s. And I got to join this new show that was starting up called Family Guy. and I wrote with my first couple script payments for that show, I finally had some money in the bank.

And I was looking for a new apartment. And while looking for an apartment, I went into an open house and a broker said, you know, why are you throwing your money away on rent when you could be putting it towards a mortgage and own a house? And I was like, I'm in the entertainment business. Do you think I want the responsibility of a mortgage? Like my show could be canceled tomorrow and I could be out of work for two years. You know, I didn't want that kind of responsibility, but she, she, we had no idea that family I was going to last more than a season. We were like, oh, this will be here and gone.

But she made some arguments and as to why it could be a good idea. And I said, basically, you know, the only way I would ever consider buying a house is it would have to be the best investment I have ever made. Don't show me any cute, charming houses. I want rough around the edges in a marginal, but improving location. And that's the only way I would consider because it would have to be like a fallback financial, you know, bedrock for me. And so we parted ways. I figured I'd never hear from her again, but two weeks later, she calls me and she said, I found the property you need to buy, but there's a catch. You need to become a landlord. And I was like, a landlord. Like that doesn't sound very fun at all. But I met her at the property. It was a duplex from like the 1920s.

It needed a lot of TLC. The owners, I remember were the owners were raising goats and chickens in the backyard in the middle of Los Angeles. And they were planning to move to Kansas to dig a hole and build an underground house and live off the grid. But the broker was like, I think this is a good opportunity. And I was standing there looking at the building. And I was like, yeah, It is. I could see this could be a great property if some effort was put into it. So, you know, I made that big step and pulled the trigger and took that leap into the unknown. And it was at LA. So of course, there were 15 other offers and it was immediately a bidding war. And I was, it became like the most stressful two weeks of my life.

My offer was having to be raised like $15,000 every day. I was on this roll. roller coaster ride where I had no idea where to get off because I had no sense of the intrinsic value of this property. You know, I couldn't sleep at night. I had started at $350,000 is what was my original offer. And after two weeks, I was at $435,000. And that's where I won the bidding war. And I was immediately had tremendous buyer's remorse. I thought this was the worst decision I had ever made and would probably be bankrupt, possibly because of this dumb decision I had made. But, you know, I tried to embrace it. I moved in. And my first tenant was a guy that I worked with named Mike Henry. And he does the voice of Cleveland and Herbert and Consuela, if you've ever seen

the show. Yeah, yeah. Yeah, so he was my first tenant. He was a good tenant to learn how to become a landlord with because he was a huge pain in the ass. I had to basically threaten to evict him on a weekly basis. But, you know, we were still, still friends. But, yeah, I hope he doesn't watch this. No, it's funny about that I rented my very first property was a, well, first rental anyway, was a duplex. And I rented it to a friend of mine. He ended up getting arrested and hauled off to jail. That was, that was fun. But like, since then, I, I do not rent to, yeah, I do not rent to family or friends anymore. I've actually gone back on that a few times and every time I regret it. Do you do you have any rules like that?

Like you do not rent to family or friends anymore? Are you all right with that? Right now I am completely in multifamily. So I have a management company that manages the whole thing. So I don't really have too many friends that are asking me for housing. Yeah. So no, I kind of have escaped that since that time. But it was fun.

You know, I tried to embrace being a landlord. I mowed the lawn, tried to fix it up. I needed a ton of help. We did, we completely redid the kitchen, redid the exterior of the house, tried to restore it to its original character. And, you know, after five years, I sold it. And, you know, did phenomenally well. I was lucky to be in getting my first deal during an upswing in the market. I didn't know it at the time.

I thought we were at the peak when I bought. But, yeah, I bought the numbers are, I bought it 435,000. I put down 43,500. I didn't know about that FHA loan where you could go even lower than that, but I got 10% down and sold it for $1.27 million. Whoa. And made at the end of the day about $835,000 on my $43,000 investment. That was a good investment.

That turned out very well. Yeah, it was kind of a life changer. Not only did it give me a financial cushion for the first time in my life, but I was hooked. I had found this practice, this investing habit and practice that I wanted to do for the rest of my life. I didn't, at that point,

I kind of shrugged and said, I don't care when I get spit out of the entertainment industry. I am going to do real estate investing until I'm 100. And yeah, and I've tried to do that. I love that. I love that. I got other friends that have been on the show before and people have known that they're

in similar, or at any point in time, like, it could just, you know, the job could stop, whether it's, you know, professional athletes or musicians or producers, whatever. Like, and it's funny, like, we, we think of people in your kind of line of work and you've even kind of mentioned it. It's kind of a, you might lose your job at any point, sort of a business. But at the same time, like almost, in today's world, almost every job is like that. I mean, like, there's no such thing as job security anymore, the way that our parents maybe had it, you know, back in the whatever, or back in the day.

You know, everybody's job is potentially gone at any given point. Like, yeah, it's kind of a cool time, too. It's like everybody's carving their own path and everybody's an entrepreneur to some extent. Whereas 30 years ago, you just get be a company, company man and ride it out. Well, here's what interesting about your story. And it relates perfectly to today. What year was this by the way you bought this? I bought in 2000, sold in 2005.

Okay. So you thought in 2000. and you were at the height of the market. And clearly it had a long way to go. Yeah. Today, I keep hearing the question over and over and over. Like we have these webinars every single week on bigger pockets. And I get this question is, should I wait until the market drops again?

Because we have to be at the peak right now. So very similar thought process, we must be at the peak, right? Right. What do you say to people who might ask that question to you? Like, are we at the peak? Should I wait to buy? Like, how do I know? Yeah.

I would say be very careful. I think bull markets in the real estate industry tend to go on longer than anybody expects. And that could be kind of like a seductive tempterous that could be very dangerous. Because I remember I thought in 2000, we were done and it was going to go down very soon. But it went till 2004 and then 2006. And we're setting records every year. And it feels like we're kind of doing that now. And yeah, so I would go in small if you're a first timer, go in small, going on something with cash flow.

But be careful. And, you know, people say never try to time in the market. But real estate cycles, the years that they happen are not very predictable, but the cycles themselves are very predictable. So just be aware and be a little bit careful. there's something that really jumps out to me there, Mark. You overpaid in your mind at the time, right? You wanted to pay $350. You ended up paying $4.35.

In my experience, I would bet you there was five to 10 other buyers that said, this is ridiculous. That guy paid way too much. This market is so crazy, expensive. Let him have it if he's going to pay that much, right? And now five years later, you sell for $1.27 million and you make $835,000. And I bet you did not care that you spent an extra $50, $55,000. to get that house, right? It's easy for us to focus on when things don't go our way and just think,

well, that's always the way it's going to be. And then we like ignore a story like this where who cares what you had to pay to get that house? You made it a performing property. You put it in great condition. You bought in an area that was appreciating and you cashed out huge later on. And I'm always trying to get people to stop thinking about the list price. Like that's where the value of the property is. You know, your property was valued for what it was. Five years later, it had nothing to do with the price that you paid for it when you bought it or what that realtor happened and listed at. As far as trying to time a market and knowing,

should I buy now or should I wait, can you talk a little bit about how that property cash flowed and how that played into your piece of mind that you didn't worry about if you overpaid? Yeah. And you know, I got to say while I owned that building, I was not celebrating. I was not being like,

woo, you know, this thing's charging upwards. And it boils down to what I was fretting about. And this was my first deal. And there's a lot of things I don't do now that I was doing on that first deal. When I was operating that deal and being a landlord in this duplex, what I was fixed on usually was the dishwasher that broke down next door that was going to cost me 250 bucks. And I was like, oh, man, what a mistake. Why did I get into this?

Like, why did I do this? And this was three years down the road. I wasn't paying attention to appreciation. And it goes to like, I have this theory that real estate, unlike every other vehicle in the financial world, the things that you're not, the hidden things that you're not paying attention to, in real estate, they work in your favor. And in every other aspect of your financial life, they're working against you. The things that you can't see are usually working against you. If you're investing in stocks, you've got layers of fees that you're not aware of. You could have front loads, back loads, or the company could decide to make a stock issue

and dilute the value of your shares. There's all these things. But in real estate, like while I was fretting about that $250 that was going to eat up all my cash flow that month, I was not at all paying attention to the fact that I had my loan payment on auto pay. And in that loan payment was about $1,500. worth of principle. I was getting depreciation that my accountant was figuring out.

I didn't know how to calculate that at the time. And that was probably contributing 500 that month. I was also getting riding a wave of appreciation. It was probably adding $4,000 a month to the value of that property. And then I had leveraged it. And I had leveraged it at 10% down. So I had a 10 multiple. So I was gaining like $55,000 a month.

but all I was aware of was that $250 broken dishwasher that I was like, this is a big mistake. What am I doing? Isn't that amazing? Brandon and I talk about that all the time, like the mindset that you have to get into so powerful and you have to protect it because there's always something that wants to steal that from you. I remember the second house I bought a drunk driver.

It was a house on the corner and a drunk driver turned the corner too sharp, went across the front lawn and ran into the fence that separated it from the neighbor. and an insurance company wouldn't pay for it. I had to pay like $700 to build a fence. And I remember kicking myself saying, why was I so stupid as to buy a house on a corner? I should have seen this coming. Like, nobody would have done this, right?

And that's all I was focused on. That was my $250 dishwasher. And now that house has appreciated a quarter million. It's on a 15-year note. And it's like $800 a month of principal that I'm paying off. And I mean, if you just own real estate long enough, eventually if you can ride out those cycles because it cash flows, you're going to make money.

And Brandon and I have these conversations between ourselves. all the time that you could go by a place in Malibu for $10 million and you could lose a couple thousand dollars a month. And as long as you could ride that out, do you think it's going to be worth less 20 years later in Malibu than it is when you bought it? You know, like getting stuck on those details of the small things can really rob you of the future. And it sounds like once you sold it, you had a windfall of what you had. You realize, oh my God, I'm going all in on this. Can you tell us about what came next after you sold that property? What'd you do? Yeah. And you know, I'll mention an interesting thing that I was reading a lot of books while I was living in that duplex and learning

about investing, landlording, and accounting. And so I approached my accountant at the sale, and I said, hey, we've got about $800,000 in gain. You know, can we, is it possible for me to take advantage of both the primary resident tax credit of $500,000 and also 1031, the next door unit as a rental property in my accountant said, yes, you can. And we basically, you know, took $500,000 tax free. And then we took the other $330,000. And I 1031 exchanged that into a 14 unit building. That's awesome. For those people who don't know what that is, I mean, look up 1031's a 1031 exchange over on bigger pockets. But the short explanation is, yeah, you sell a piece of property, you make a bunch of money. You, you,

if you do it right, there's a bunch of rules to follow, you can roll all your profits into the next deal. But what Mark's saying here is even cooler than that is because he lived in the half the duplex. There's also the IRS exclusion on if you live in a house for two years, that's your own home, that you can potentially offset, you know, if you're married up to $500,000 of gain. So like you just capitalize on both those things and just did like awesome, which is another reason by having a good CPA is really important or knowing the stuff yourself because those little rules. probably saved you, I don't know, hundreds of thousands of dollars there. Yeah, yeah, absolutely.

And yeah, and during the time that I was living there, maybe like two, there was a couple years where I was just learning how to become a landlord and getting comfortable with real estate investing. But I was hooked while I was living in that duplex. And I started buying other properties. I bought a fourplex after that one and then picked up another fourplex out of foreclosure. and then 1031 exchanged the duplex into a 14 unit building. So I was all in on real estate at that time.

And I was spending a lot of time. I loved it. You know, I was obsessed with it and I loved it. It was a passion for me. I would come home from work. And it was just going over to the opposite side of my brain from writing, you know, jokes all day to this. But I also became like an evangelist for real estate investing to all of my colleagues.

I was to everybody that I worked with, I was like, dude, you got to, you got to get into real estate investing. You know, this industry has so much uncertainty to it. You got to build yourself, this financial foundation, and you got to be smart with your money. But yeah, nobody would take that step on their own. So I eventually decided to buy a building and I was going to bring them in. It became my first syndication. And of course, that was 2008. October of 2008. Oh, the great time to. And I had five friends of mine and we were in escrow.

And a week after we removed contingencies, Lehman Brothers crashed. And then the entire economy collapsed, led by the real estate market. And I was like, oh, crap. You know, these guys are all smart asses. I see them every day. They're never going to let me hear the end of this. And I'm going to lose all their money. But, you know, luckily, we bought right. In contrast to that first duplex that I bought, I have been cheap ever since. Like, I am a low, I hunt for low cost per square foot. I hunt for undervalued buildings that I could buy for less than their replacement cost given L.A.'s, you know, the building codes and all that stuff in L.A. And that's what I did on this 14-unit building. and but we rode through the the entire downturn.

We were, I'm sure we were underwater, but it didn't matter because we had cash flow and we eventually sold that, that building and everybody tripled their money. That's awesome. Knock on wood. It was a little terrifying and nerve-wracking going through it, but, you know, made out okay. And is that because you, you know, because you ran the numbers ahead of time, maybe you budgeted for the fact that the market wouldn't go up forever? Or did you just get lucky or you held it long enough to recover from that?

Or, you know, how'd you get through that? I think it was a little bit of all of those things. I made sure there was cash flow. I was nervous, jittery about the market. And you know, interesting phenomenon, and I think this happens to a lot of people, is I was one of those people that were watching the market set records every six months in terms of prices and watching it go up and up and up. I had a portfolio.

I had a lot of buildings at the time. So I was happy to have skin in the game. I was happy to be benefiting from that. But I also was like, you know, it had been a little bit of time since I had bought. And so the market dipped 10%. And I was like, yes, like finally I can take advantage of this dip and then ride it as it reverts to its

upward trajectory. But that's not what happened. That 10% dip was the beginning of the roller coaster plunge. But we bought it. It was a distressed sale. The sellers were suing each other. B bought it at a good discount. And it was a strong cash flow building in a B, B class location, a B class building.

So I think there wasn't a ton of movement, knock on wood, with those rents while we owned it. And although banks became more stringent and, you know, the values took a plunge, we were able to just ride it out. Yeah, that makes a lot of sense. What I hear like you're saying is if you, I mean, you basically bought with solid fundamentals in place. Like you had, there was cash flow there. You weren't completely going crazy with anything.

You just bought with solid fundamentals. And so when the market does go up and down, you can ride through that. Just like we said earlier, if you can hold on long enough. Now, a lot of people get into real estate, they can't hold on long enough and they end up losing it because they don't have good financial backing from the job or from whatever. But it sounds like you had a good, you had that going for you. So again, I think that translates so much into today. Like, yeah, we might be at the peak.

We very well might be. I'm still buying, though, because I'm just buying on solid fundamentals. I'm not letting the fever of 2007 of, I'll just buy a horrible deal and appreciation will save me long term. Like as long as we're not. Yeah, yeah, we're not chasing it. So you started buying a lot more deals until an eight happened. I mean, over the next 10 years now, what happened?

Maybe we can go to the end. Like, how many units have you purchased now? Like, what do you have? And then let's go backwards and kind of fill in the spaces. Right now. So I've exclusively been in multifamily. I've tried some other things. I've tried condo conversions.

I've bought vacant land. I've tried flipping houses. But mainly my sort of sole focus is multifamily. I now have 130 units and across 15 buildings. I'm in escrow to buy a new one. But yeah, that's kind of where I am. Despite having a bunch of buildings that I owned during that downturn, I also knew that it wasn't going to last forever. I, you know, clearly there was an overreaction.

There was over exuberance leading up to the plunge, but I knew there was exaggerated fear. And I was waiting like, you know, David, like on your podcast, you mentioned waiting for that, the bottom of the market to get in it again. And I was kind of waiting for that. And once I saw it turn, I started to buy aggressively. And yeah, I bought a 20 unit. I bought a 13 unit in 12 and 13. I got a show picked up that I created that took me out of the real estate for like a year and a half, probably in a great time to have been continuing to buy.

But then, you know, I probably bought eight buildings since the downturn. And like I said, my most recent one that I closed on was a 36 unit building and I'm in escrow now with a seven unit building. And yeah, continuing to buy, but like really, it's got to have really strong fundamentals. And I'm going for really low cost per square foot. So why multifamily, Mark? Yeah. Why multifamily? I, you know, I realize that because I have a full-time job that I really enjoy, I needed something that.

that I could give to a property management company. You know, I don't want to be involved in the property management. I want to oversee it and I want to be aware of everything that's happening, but it's not a good use of my time and just multifamily. Like the economies of scale was what drew me to it in the first place. And I think ever since, even when I was in that duplex, I was looking across the street at the fourplex across, you know, and it was jealous. I was like, oh man, that would be better to have four.

And then next door to that fourplex was six. I was like, yeah, it'd be even better to have six. Like, because when somebody moves out, you're not hanging there with an empty building. What I love about what you're describing is that you're not looking to real estate to be your savior salvation from a job that you hate. Like you've separated them. Like, real estate needs to stand on its own fundamentals. And my job needs to stand on its own.

If I'm unhappy with my job, then I need to do better at it. You know, I just read the book yesterday on the plane. So, so good they can't ignore you. Such a good book. I love that book. Oh, it changed. It confirmed everything. that I was thinking inside, like, oh, other people think this too. And they talk about being so good at

what you do that you earn what he calls career capital that you can exchange for a better job. You know, I think a lot of people are looking at real estate to be this like magic bullet that's going to rescue them from an unhappy life. And they end up making bad decisions because they're trying to force something that's not working. You've separated them and I like it. And you recognize multifamily is the best vehicle to get me what I want. I'm not going to stop working on this awesome career that I have. I'm trying to be the best writer, the best producer. I mean, you're involved family guy, which is one of those popular shows that's on television. You mentioned strong fundamentals, which I know is so important to being successful at whatever you do, including real estate

investing. Can you share some of those with us? What are you looking for in a deal that gets you excited so you pursue it? Yeah. Yeah. And I think to your point, it has benefited me that because I have a job, I've been able to be very patient because sometimes you see investors anxious to get in and almost they force it on some things. And it's really valuable to be able to sit back and wait for the deal to come to you. So that was something that I've had the luxury to do because I didn't quit, walk away from a job and need real estate cash flow to survive. But some of my fundamentals, my fundamentals are like I said, real estate is this, you have to synthesize multiple metrics. There's all these metrics that you hear about a building.

And, you know, my one that as I mentioned, I zero in on is cost per square foot. You're comparing apples to apples. It feels to me like the most honest metric. Cost per unit has caveats to it. It could be what bedroom mix is it, how much square foot. Cap rates can be fudged by the brokers. And then they don't always tell the whole story. GRM is half the story because you don't have expenses.

But cost per square foot, I always, that's my first. filter if I'm going out of hunt. If I go on loop net and want to look, start doing a search of the 20,000 buildings in LA that are for sale. I'll make a really low cost per square foot as a filter and then see what comes up. And usually it'll be like 25 buildings. If I put a ridiculously low cost per square foot and then I look at those 25 buildings and 22 of those buildings will be in terrible neighborhoods. But there's a couple that are in interesting, you know, up-and-coming neighborhoods that may not be great now, but they're on the rise. And that's when I get excited, and that's where I kind of start my search.

But like I said, I look for up-and-coming neighborhoods as a lot of investors do. I also like to draft off of major development. Like once you find that in LA is a huge market, it's a dynamic, strong economy market. So it's a good place. It's a nice city to have to be invested in. But within this city, there's a hundred neighborhoods. Some are accelerating and others are decelerating. And some of the most prime neighborhoods in the city are decelerating because they're mature markets.

So I look for those like, you know, those accelerating markets that are affordable now. And because they're affordable and well located, they're accelerating and they're appreciating quickly. Can you give us an example of that? Like something that you bought that you were like, you know, oh, I see development happening here. to buy there? Has that like just so we can get a clear picture? The two things that jump to mind is when I I'm not from L.A. I'm from Cleveland, Ohio. And when I moved out to L.A., I came from New York. And I, the first, one of the first impressions that I had of L.A. is I got here and I got to Hollywood. And I was like, oh my God, Hollywood is a dump. Like there was drug dealers and prostitution.

I'm like, how could that possibly be? This is like a brand. that's known worldwide. There's nobody on earth that doesn't know Hollywood. And the architecture, the history, it's what a resource it has in the city of L.A. In Hollywood. And there's no way this is not, is going to stay the dump that it is. So I was like, I started watching and I saw, I was reading about Hollywood. I was like, I want to be in on Hollywood before it turns because I know it's, it's, I got my whole life and I know it's going to turn.

And I saw, you know, there was this redevelopment committee of private money that put like $4 billion into like, we're going to revive Hollywood. And then I watched, there's a great thing if you live in a big city is you go to the city planning website. And in L.A. we have a map of development, of major development. And you could look at the city and see where all the big developers are going. And you can you can look at those projects. It's like if you compare it to stock market, in a stock market, people would kill to have a crystal ball. But anytime there's like a new product that a company has or some innovation, it's immediately baked into the stock price. But in real estate investing, you kind of do have that crystal ball.

You go to the city, you look at these major developments. You could see exactly what they're building and where. And this is going to take five years. And that neighborhood might be a dump right now. and you could get in and buy a B-class building, do your own value add, and then let this development come in, and you could ride that wave. Yeah, I love that because, like, I mean, it applies to anything, like, big or small deals. I mean, you should be looking at where is the path of progress happening.

And it's not like you can't make money if you're not buying those areas. But, man, if I see a Starbucks going into an area, I assume, like, my assumption is that Starbucks has way smarter people to do market research than I'm ever going to do. If I see a Walmart going in somewhere, right? Yeah. Right. Let the professionals do what they do. And I'm just going to not reinvent the wheel.

I'm just going to piggyback on them. Or a stadium if there's like a new stadium goes in somewhere. I'm like, oh, well, that's a really good indication that there are smart people moving things around there. Yeah, I bought near the L.A. Rams Stadium that's still being built. In Inglewood, I got two properties down there. Right. And I had to ride the nervous wave of it was between Englewood and Carson, this other location.

And I was in escrow. and I had to close and I'm like, all right, I'm going to double down and bank on Englewood. And luckily, they chose that. You know, it's kind of like drafting like race car drivers will get behind another car and they won't use as much of their gas or their energy because the other car is they're breaking. I first learned about this through open house teachings by Joshua Smith. He's a big realtor in Phoenix. And he talks about how to have like the perfect open house.

And what he does is he looks to hold houses open that are right next to grocery stores because he knows a grocery store spends so much money advertising their sales to get people to come in over the weekend that they're driving all this traffic. And he wants you to see his big open house sign on your way to the grocery store. So you stop by and he collects your information and then they can follow up with you and make you a client. That's really smart. Like we, I'm always saying we don't have to know everything. We don't have to learn everything. We have to have the right people around. You know, Mark, you had your CPA come up with this great plan when you brought it up to him. So you saved money on a 1031 and you save money on a primary home residence exclusion. You took that money and re-invent.

invested it and turned it into 136 units or whatever you said. You bought near the Ram Stadium. So you recognize, hey, they're already going to be spending tons of money to revitalize this area so that people want to come here. I want to buy the property before that happens. You know, there's there's countless examples of this. And it's why I'm always telling people, you got to get out of this cash flow mindset where all you think about is cash flow. And then you end up running to a turnkey provider and saying, oh, I want to buy a house from a turnkey guy because it's cash flow. It's just a lazy way to invest. There's so many other things that you need to be considering and open your mind to these possibilities because you would never have

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that is not being run very well and revitalize it and make it worth a lot more. Can you tell us some of the ways that you're taking these deals that don't look like deals and making them into good deals by targeting low price per square foot? Yeah, I, you know, last year I finished a like an eight month renovation on two side by side five unit buildings that were just, we're in a great neighborhood. They're in Korea town in Los Angeles and, you know, really did maybe more of a renovation that I wanted to, but I knew going in that they needed new systems. They needed new heat. They needed upgraded electric, some of the major systems, but did kind of a ground up renovation on that. And I also, you know, my last building, I guess this I bought for a very low cost per square foot. But after 18 years of experience, I was looking and I was doing my filter where I, you know, just looking for what's got a really low cost per square foot. And is it in a good neighborhood? And I spotted this building. I was like, this is remarkably cheap. And I had done some deals with this broker. So I call him. I'm like,

hey, is this thing still on the market? And he was like, it's about to be. And I was like, oh, wow. And he's like, but my advice to you is run the other way. And I was like, what do you mean? He's like, this is the third buyer that's about to fall out. There's lawsuits. There's multiple tenant lawsuits on this property. The sellers are in distress. They're getting clobbered. And he, you know, his description of it was like, he's like, this is a building that like kind of a predatory law firm had seen a gold mine in, in that he was going to initiate these tenant lawsuits. And he was successful on the first one and then followed it up with going to other tenants in the building and doing these multiple and he went actually back in time to previous renters.

So the seller was just getting killed. And I was like, all right, well, you know, obviously the seller is not going to sell. He can't sell a building that has legal exposure to a buyer. And the broker was like, no, no, he's got to, he's got to address all this and give you an assurance that that everything is addressed. And I was like, this is kind of an interesting deal. So I went to my team. I'm lucky enough to have a good team in place now. And I went to my attorney. I said, can I do this? Can I take on a deal like this? And he was like, you absolutely can. You need an indemnification agreement which absolves you. It's a document from the seller that absolves you of any exposure, legal exposure. I went to my insurance agent and said, how can I protect myself? And he's like, yeah, you could do this. You need liability insurance. I went to my property manager. I said, this seller is tried to manage this building himself and my property

manager. All of these people are also multifamily investors. So it's good. They've got tons of experience. And my property manager was like, yeah, what you do on day one, you put out a notice that all issues must be submitted in writing. You get a, you get a completely thorough paper trail of everything that you're doing. And you make repairs promptly. And he's like, you have no, you'll have no problem. He's like, We've invested in buildings like this. They're good opportunities, but you've got to be careful. You've got to dot your eyes and cross your T's and stay on top of it.

But you could profit from it. And eventually a predatory law firm is going to give up. They're going to realize that you're not the opportunity that the previous seller was. And they're going to go find another building. You know, this is so fascinating because, you know, so many people out there will look at a deal like that and say, I would never buy X, Y, Z, or an agent or a lender or broker, whatever. We'd be like, no, you should never do that. That's a horrible idea, right?

Everyone's got their opinion on why things are a bad deal. For example, you should not buy that house because it's got a bad foundation. You should never, and people make these general rules, right? You should never buy a house with a bad foundation. Or you should never buy a house in that neighborhood. You should never buy a house or a property that's being litigated on because it's just going to be a drama. But that is where opportunities are in today's market.

And for those people willing to ask the question, like you're asking, how do I get through this? How do I buy it even though there's litigation on here? That is what turns you from just one of the many people complaining about there's no deals in my market to somebody who's actually closing stuff. And that's what I love about that. Yeah, there was a ton of fear surrounding this building and it seemed like opportunity to me. But you didn't let, yeah, I'm sure like you probably fearful as well a little bit, like not sure what to do. I don't want to screw up, but you didn't let that stop you. And that's, that's what's so cool about your story is. You just did it anyway. Just be very, yeah, be very careful.

We interviewed another investor from L.A., say market azurean, Paul Morris, and he talked about barriers to entry. He always wants to find something that has barriers to entry. And what you're describing is a huge barrier to entry. This scared everyone. This is the big, mean, fire breathing dragon that all the other investors are running away from. And you're like, no, no, no, I just need an indemnification agreement. It's a shield that will stop the fire from hitting me. And you push forward and you got to the gold.

And Brandon pointed it out, your mindset was how do I get around this problem, not, oh, there's a problem, let me run away. And if you want to be a good investor, you need to just. embrace the fact right now, you make money by solving problems. That's what termites and foundations and lawsuits and everything else we're talking about here, those are problems and that's how you get properties at good prices and that didn't scare you and you went forward. Can you tell us a little like, how did you build that mindset? But yeah, this building, I think it was my experience. I was ready for a challenge with this. And when I, when there was a lot of fear and the price was going down, I saw that it was at a price

point that was very attractive. Like it was almost half of what it should have been. And it became, I went to my team and I'm like, I went around the horn and I'm like, how do you solve these problems? And can I, once I talk to everybody, can I be comfortable continuing forward on this deal? I don't know how I've gotten to that point. I feel like, I feel like trying to break into the entertainment industry has conditioned me in a way. like you've got to be relentless to get in and you've got to be prepared to deal with failure,

frustration and setbacks. And, you know, I remember those in my early 20s, you know, trying to break into the entertainment in the writing business. And I eventually realized like you just got like almost become numb to the emotional side of that stuff and be like a river moving forward. Like you just have to move forward, take steps forward all the time. And there's a. going to be like boulders in your way, trees falling in your path, but you don't stop and you don't get flustered, you don't get all frazzled and get in your own head. You just keep moving forward. And that's, you know, writing you can always write, you know, right after someone has rejected your script. And you can do that with real estate too. Yeah, that's, oh man, that's such good

advice. Because I'm, I mean, are you trying to say that you didn't become a writer and producer for family guy in your first try that you didn't just walk in there and say, listen, I'm a genius and it's time you all recognized it and got the job. Yeah, no, not at all. Yeah, so what I'm picking up is that you develop this like river mentality. Maybe you couldn't articulate it when you were learning it. Later on, you learned that that's what you were doing through all the failures that you experienced in this one part of your life.

But because you wanted it so bad, you pushed through that and develop this mindset, that now became a weapon that you can use and all kinds of other things. You know, like I don't know anything about your finances, but I'd venture to say you've probably made more money in real estate than you have in your career as a a rider or at least close to it, you know. And that's from skills you learned working as a writer, you know, and now that you've learned them in real estate, I'll bet you whatever your next pursuit's going to be, you're going to do even better at it because of these things you've built up. That's what the ladder of success is like. It's taking skills you've learned in one area of your

life and applying them into the next area of your life and pushing forward. One thing you mentioned that I know you can, you attribute a lot of your success to is the team that you've built up. Can you tell me a little bit about how you built them, what the team members are, and then how you use them so that you can be a river that's always pushing forward. Yeah, you know, I built them over time and two new investors, for example, you know, when I try to give them advice, I know the value of a team and you want them to build their own team, but sometimes it takes you to have a deal or something to be working on to kind of bring them into the picture. But my team, you know, evolved over time. You know, I've got a loan broker who is great and he's an investor. The interesting thing is

everybody that is on my team in every aspect of it is also a multifamily investor. And they've got hundreds of years of investing experience between them. And I use them, you know, not only for the services that they provide, but they're all my mentors. And we talk and we discuss problems and opportunities. And, you know, I've got my loan broker who, you know, I guess I don't get too kind of crazy or creative with financing. I always get a pretty good leverage. from him. Leverage, in my opinion, is hugely important. It's dangerous. It's tricky. I always feel bad saying that. But if I look back across all my investment performances, the one common denominator in the highest returns I've received is leverage.

But anyway, that's my loan broker who helps me with that. I've got an insurance broker who he and his brother are huge investors. They've got probably 900 units. And they're like my age and but they started out in the insurance business and started buying LA real estate in like the early 90s. And then I've got my property management company. They are like third generation multifamily investors in LA. They're one of those old school families where every family member is somehow involved in the real estate business, but they do the property management firm. And let's see, I've got an escrow officer, a guy who owns the escrow company. It's right across from pretty close to where I live.

And he's great, really good guy, and he's been doing this for 40 years. Yeah, in my book, I talk about the core four you want to put together, the four people you need that if you have them on your team, you can buy money in or buy property in any market. And one of the things that I pretty much demand is that they're also investors themselves. I want my deal finders to be investors. I want my property managers to be investors. I want my rehab guy to be an investor because they just help you in so many ways other than just doing the one job they're doing.

They bring experience. they bring advice, they bring another set of eyes to look at a deal. They bring me referrals. They bring me, you know, deals themselves. It's that if you were working with other real estate investors, it helps your own business. So like amplifies and exponential increases how quickly you learn because you're around all these people that do it too. Can you tell me, Mark, in this market we're in today. It's obviously a hot market. You're in a hot market, L.A. It's incredible. You're finding deals out there right now. Where do you do want to find them? What's your secret? You know, I have, I hired somebody and I hired somebody off of bigger pockets, you know, a little bit ago and he's my asset manager and now he manages my

portfolio. But, you know, where, how do I find deals? I still, I get brought a ton of deals get email to me almost on a daily basis. A lot of them off market. Half of them are off market. Half of them are on market. And, you know, off market deals get a ton of, a ton of press as being this great thing. I find a lot of the off market deals. more expensive than the on market deals. And then sometimes brokers will bring me a specific deal that he knows, that he or she knows that I'll be interested in. And often I will.

But you know, I don't know why this has happened, but I find a ton of deals still off of loop net. You know, I just go on. I'll come home from work. I'll have been in like, you know, wacko land of comedy all day. And I'll be like, I want to just, I just want to go on like the,

the math side, the hunt, like look for, look for deals. And I'll go on loop net and just start using different filters and looking at, looking at demographic shifts, looking at reports. Like, I don't know if you guys look at like the Marcus and Milichap annual like survey. What is it called? Like the Milken annual outlook report. There's a couple that like give you tons of like growth population, job growth, data, even within particular cities. Like I could look at the L.A. You know, there will be six pages on L.A. But they do that.

I like looking up those. But yeah, loop net. I'll do the filter for low. Look for I literally, you know, I think L.A. probably has an average square foot cost of about maybe high 300s. You know, it's anywhere from 250 typically to like. like 750 if you go out to the coasts. I usually set the filter at like $230 a square foot.

And you know, there'll come up a batch of buildings that are small enough for me to sift through. I'm not getting 10,000 listings. But, you know, I bought my last building that 36 unit. I got that for $178 a square foot. Wow. And you know, it's like, you know, this is, I'm just going to sit on this, but this is already, you know, probably worth double once the litigation. cloud goes away. Yeah, that's, that's so cool. I want to point out something kind of neat here that you do

that we haven't really talked a lot about, but it applies to everybody no matter what size real estate they're trying to do. Like in the market, if you're looking on market, like with a real estate agent or whatever, there's a lot of properties for sale. So I love that you're like setting a filter, a very simple filter and yours is price per square foot. What that does is it takes the 20,000 properties on the market drops it down to 25 or 50, something much more reasonable for us to look through. So I talk a lot about one of the filters I do is if I'm trying to buy a house, like a single family house, I'll look for a two-bedroom house that has over a thousand square feet. It's like a really simple filter and it drops off 99% of properties out there because I know if there's a two-bedroom house that's like, you know, 12 or 1,300 square feet, I can probably

turn it into a three or four bedroom house. And so I can add value. So like that simple filter helps me like really narrow down what I'm looking for. Because people will spend forever just going, I don't know. There's so many properties on the market. Yeah. Yeah, yeah. Filter, filter.

You end up going in circles when you've got all these different metrics to balance. That's why I love the cost per square foot. And I usually then take it further because, yeah, it gives me a batch of like 15 to 20 properties to look at. And then I add a second. I've created a filter. I don't know if other people do this, but this makes sense to me is I not only want a very low cost per square foot, but leverage has been the great driver of return in my. investing experience. So I have a metric that I've created. It's called leveraged cost per square foot.

And I apply it to like whatever the eight or ten candidate buildings that I find. And nine times out of 10, whatever building wins the leveraged cost per square foot metric is the building I'll buy. That's cool. That's cool. I really like that a lot. So yeah. So I guess, that would be the advice I got to everybody and I think you'd probably agree is like find a metric. Like again, if you're not looking for larger multifamily, maybe maybe this price square foot isn't the right metric. Maybe it's number of bedrooms. Maybe it's, maybe it's square footage. Maybe it's just square footage period. Maybe it's a certain neighborhood. But whatever you do, yeah, I love that. And then, uh, and kind of figure out what what defines a good deal for you.

So I think the reason people are afraid to filter is they have a scarcity mindset and they're afraid I'm going to lose that great deal. I'm not going to find it because my filter was too thin as opposed to having an abundant mindset, which is there are so many deals out there, I need to narrow down so I can find the one that's perfect for me. And just that little tweak of I'm not going to let fear dictate the decisions that I make in my investing. I'm going to let, you know, like logic dictate that. Obviously, you need filters. Like, it's so much easier to be overwhelmed by properties than it is to find the ones that are going to meet your criteria. And what you've done, Mark, whether you realize it or not, was you set a metric that was so specialized you only were looking at problem

properties. You were going to find something that you could go in and add value to because that price per square foot was so low. And by doing that, you increased your ads of success. Before we head over to the fire round, I want to ask you, can you tell us a little bit more about how you found this person on bigger pockets that you hired? I think that's kind of cool. Yeah, I put out an ad on both bigger pockets and LinkedIn and zip recruiter. And I got flooded with hundreds of applicants. And yeah, this guy, you know, I met and interviewed with several people, the bigger pockets, I'll say, give you guys a plug. Everybody I met on bigger pockets was awesome. And they were, they were passionate, they were enthusiastic, they were smart. And it was a

really tough decision. I ended up, I'll give him a shout out. His name is Robert Ott. He was up in San Francisco in the tech world. He had grown up in a real estate family and invested with his his mother. So he knew real estate, but he had been part of like three startups that were all successful, but he realized he didn't want to be writing code. And he had made the decision he wanted to pursue real estate. And I tried to convince him to come down here and work with me and be my asset manager. And I'm trying to teach him everything I know, but he's bringing tons of value. He's breaking down all the numbers. You know, I have such a crystal clear picture of my portfolio. the economics of every building.

And it's great. It's really nice. And we're growing. So what all is he going to be doing for you? I mean, when you say asset managers, is he taking care of former properties and new ones? Just kind of being your right hand man on all that or what?

Yeah, yeah. I just said, would you be willing to come down here? I want to grow this. I'm now at like a critical mass where I've got, you know, 130 units. Cash flow is there.

We could grow. It's just I, my time is kind of limited. I have the experience. I want somebody who's hungry, who's smart, and could take at this point all aspects and kind of do a little bit of everything. But eventually, you know, maybe he'll specialize in one specific aspect of it.

But right now I'm calling him my asset manager. And, you know, he helps me with acquisitions too. He helps me with property management. We're trying to reduce expenses, add value, all those little things, adding storage, all these like initiatives that we're coming up with that will add value to the properties. That's super cool. Yeah, the reason I ask that too is, I mean, one, because it's, it's always cool to see like relationships form and build off bigger pockets, you know, like, I don't know. I, I love that about the community. I mean, working with people from the community,

you know they're kind of in the same mindset. But also, I just love the fact like that you did this, because I've been thinking about this for months now that I need like this person in my life to come live, like that would move near my area, work with me in my current property. is help buy new ones, like just to be there. And I haven't officially decided I'm going to do it yet, but I'm going to have to talk to you more about that later on how that's absolutely. Yeah, that's cool. Yeah.

Yeah, it took me 10 months of thinking about it, 10 months of telling myself, I need to do this. I need to do this. Finally pulled the trigger. So he's living in one of my two bedroom units. He's a resident acting as a resident manager of that building. But he's getting, he's getting such a great vantage point of how the operations are going on the ground floor. And it's great.

It's really fun. He's a great guy. That's super cool. Super cool. All right. So this has been fantastic, but we're not quite done yet. We're going to shift gears here

and head over to the world famous fire round. Fire round. It's time for the fire round. All right. Let's get to the fire round. These questions come direct out of the Bigger Pockets forums. So we're going to fire them at you right now. Mark, are you ready for this?

I think so. Number one, what was your worst property renovation fails? Do you have any good stories about property renovation fail? Property renovation fail. You know, my worst property renovation fail would be I got caught in the, do you remember the correction that they're double dip when in 2010? I think, you know, I think the market plunged in 2007 and eight. The real estate market started going down in 2007.

The whole economy collapsed. in 2008. In 2010, it started to improve and then it did a double dip. Well, I was trying to time the market and in 2010, I bought a house and it was a cool, it was a house on an acre of land in LA, one of the last remaining acres of land. There was an old Adobe house. So this is a single house family, single family house story that I tried to rehab. I ended up bringing in some partners and we, I was going to live in the building in the house, but then I decided I wanted to live closer to work because I wanted to have like a two-minute commute and that's where I live now. But so I didn't want to give up this opportunity.

So I brought in, I think, like four other friends and we invested and we were going to do a flip. It was like a $600,000 flip that we did on this building. And we got caught in the double dip of the downturn. So we didn't get the upswing that we were hoping for. It was a lot of work. It was a great learning experience. I saw every aspect of all the construction, and it was major. But at the end of the day, I think, like, so in a 600,000 renovation, I think we ended up,

like $8,000 down. And so I paid everybody back. I was not going to have a loser deal on my track record, but, you know, a learning experience. I wish I put in so much time into that thing. Great learning, but no return. All right. Well, I like that you share that story, though.

That's cool. I mean, it just shows that like even when like you're a good investor, you've done good things. Like, I've made mistakes. I've bought properties. I lost money. It happens. So. Got to be a river.

That's right. That's right. Zen. All right. Let us know. What are some unique ways you earn or save extra money? And I think coming from a producer of family guy, you might have some cool stories about this. Unique ways that I earn or save money.

Yeah. How do I earn or save money? I earn money through one way that I never expected to earn money is through voiceover. I never set out to be do voiceover. But you pitch jokes in the writer's room. And sometimes they'll be like, oh, yeah, go into the record booth and do exactly that. Have you been on family? Have you had a voice on family guy?

Yeah, yeah, I've got a couple. Not big ones, but I do like, I play Peter's coworker. His name is Opie and he's brain damaged. And of course, of course they give me the brain damaged character in a voice. Would it be rude to ask you to do it right now? He was in an office character that he's sitting across from. And you want Peter to be the lowest man in the totem pole. So I had this brain damaged coworker who was somehow higher up than was a supervisor.

Peter, but this was his voice. It was basically, one, la, la, la, just complete, complete nonsense. Do you ever write yourself into scripts to do these voices the same way that Brandon Turner will quote himself

on a podcast and not tell people it was his quote? I did that once, all right? One time, David Green, one time. He's got a reputation for doing this all the time. He's always getting outed for quoting himself. It's really funny. He just knows that he would look at it. arrogant if he actually said that this was his profound thought.

So he'll just say, I once heard. And he'll say it in like a Confucius voice or something. So it sounds really. I did it one time. One time. That was hilarious. It was a good quote though. It was a good quote.

And it was something I had actually written. And so I was reading something I wrote. And I just didn't tell David what it was. A wise man once said. I don't think I put it that one. No, you did it. All right. I'm moving on.

Enough making fun of Brandon time. Anyway, so you make extra money sometimes by doing voice. That's cool. Yeah, I do an ostrich too. Oh, really?

He's an ostrich that shows up sometimes and all he does is go, ha ha. I've heard that. I've heard that. You have, yeah. They were making fun of me because that's how I laugh at people's jokes in the writer's room.

For some reason, they turned that into an ostrich. That's hilarious. All right. Well, I'm going to go on to the, Next fire-round question. But first, do you know my favorite family guy?

This is totally random. My favorite family guy moment of all time was, okay, there's two of them. I was just going to throw them out there. The throwing up scene were like, I think it was Peter maybe, Ipecate or whatever that's called. I picket. Yeah, that scene was the, I still think that's the funniest thing I've ever seen on TV. And any show of all time, I still laugh hysterically. And I will send that to people randomly, the YouTube clip of that.

And then the money where, was it, Brian goes around, like punching Stewie or is a vice Oh, give me the money. Yeah. Give me the money. We were doing like a Sopranos thing. Yeah, yeah, yeah. Where's my money? Where's my money?

Yep. So good. Those two things I share constantly to people. So anyway, good work. You have a good show. Number three, totally unrelated to that. But do you believe it's possible to self-manage and still remain anonymous? Here's the question.

I close my first single family house next week. The property comes with tenants occupied. There's two individuals renties. in rooms. I found out that both have a criminal, violent, like violent criminal record. So I prefer they don't know that I'm the landlord. Has anyone self-managed a property while also remaining anonymous? How would I do that? Any attention to ideas? Yeah, I mean, the easy answer is a management company. You know, personally, personally, I'm a little, you know, shy about, you know, maybe it's because

I'm in the entertainment industry. Like, I don't want them to see my name on TV and then, and then think that for some reason, you know. I don't know. I don't know what it is. But if people had a criminal past, I would, I would be inclined, I think, to get a management company. I like in I'm impressed by good management companies that that just know what to do. That's, I mean, David, maybe you were, you were bringing this up on your podcast. It's like, it's so great in such a relief when you're in all these crazy weird situations and then you talk to your management company. Like, yeah, we've dealt with this 100 times. And they're like, that they're like it'll be done tomorrow um i really like that it frees up your life you know it lets you enjoy life a little bit it's a cost it's an expense to embrace but uh but if you calculate for it yeah calculate for it so if you had to self-manage mark would you just do it in one of those crazy voices so they don't know that it's you pretend to be someone else right and then document My experience.

Just create a character for dealing with that specific tenant. And that's how you talk to them and that you have your own name. You can get away with that, right? Because you've got experience dealing with these kinds of things. Yeah, maybe your whole landlording would be a bit. I expect that to be a family guy character someday. The landlord. All right.

You know, my favorite family guy little segment is the two bald guys on the elevator where they have like a secret between bald guys and two guys get in. And everybody walks out the door closed and one of them like leans over and licks the other one's head. And it's like implying that that's what all bald guys do when they get alone. And we have a friend Bo Eckstein who's also bald and like people are always sending us that little, that little clip. The cult of bald guys.

Yes, exactly. Let me just set the record straight. We don't do that. At least I haven't invited into that cold yet. There's still time. All right. So here's a cool question for you, Mark. What is your second favorite investment after real estate?

Oh, wow. You know, my second favorite investment is private equity, I guess. You know, I'm not a huge fan of the stock market, but I have had success when I like talking to people who are doing something interesting that are specializing in a very specific area and they're committed to it. And I like to see a good track record. And, you know, talk to me after they lose all my money and I'll have a completely different story. But so far, I've had a pretty good, a pretty good track record getting not phenomenal returns, but very solid returns. Okay, I think you're being a little modest here because we didn't talk about this on the show, but you have a brother who actually. Yeah, yeah, my brother runs a hedge fund. Like a typical New Yorker, hey, he's 20 and I'll take care of everything. Right. But tell us a little, like, is he outperforming you or are you outperforming him? I was hoping to avoid this question.

and so he doesn't get mad at me. I think you said enough. He invests in my real estate. He invests in my real estate deals and I invest in his hedge fund. And yeah, you know, he had a 35% year a couple years back, which was phenomenal. But on the whole, he likes to, you know, he's asking me to find more buildings. He wants to go in on more multi. He really likes multifamily as a guy who's on Wall Street investing in the market.

You navigated that like a politician, marketing. Not answering my question at all. Long story short, real estate's not a bad investment vehicle, folks. We're just going to leave it right there. All right, Brandon. All right. Well, let's move on to the last segment of the show. But before we do, let's hear a quick word from Mindy Jensen on what is going on this week

over on the Bigger Pockets Money podcast. Student debt is a huge problem and it continues to grow every year. On Monday's episode of the Bigger Pockets Money podcast, we talked to Travis Hornsby from student loan planner about different options for paying back your loans. Travis also shares things future college attendees should consider before choosing a major. The episode actually runs a little bit long because Travis had so much to share with us. Okay, thanks, Brandon. And now back to the famous four. All right, thank you, Mindy, as always. Make sure you guys check out that show. It's fantastic. It is a super fast growing show. They've had some really, really powerful guests on

there. And they've had David on there. So you guys will love that show. Definitely check All right. All right. So let's get to today's famous four. All right. These are the same four questions we ask every guest every week. So Mark, I'm sure you've heard before, but let's see what you've got to say. Number one, what is your favorite real estate specific related book?

Real estate related book. Favorite real estate related book? You know, possibly the one that hit me at a time when I was trying to learn everything about multifamily was Steve Burgess's. I think it's the complete guide to investing in apartments. I love that book. Yeah. And that was like I had gone through slogged through a number of books that felt like they were more fluff than content.

And I really was like, all right, this guy's delivering a lot of, there's a lot of great stuff that I'm digesting here and will keep with me. Yeah. I love that one. Okay. What about your favorite business book? My favorite business book. You know, I like a lot of the ones that people.

people mention all the time, but I'll throw out a new one just because I read it fairly recently. The book was called Sapiens and it was written by Yuval Noah Harari and he's an anthropologist and a historian and a scientist and he traces the human race from its earliest stages up until where we are now and it's relentlessly thought provoking. It's not outright a business book, But it's tracking like where we've been and where we're going to. And it tracks capitalism and how it's changed society and all these different things that have changed society. And then at the end, it speculates about where we're going.

And I think so much of business and so much of investing is trying to grasp where we're headed. And I think a book like that, I walked away smarter and opened up my mind in a business sense as well as just a great, a great read. I've not read that yet, but it's on my list. That's just the best feeling, though, when you walk away with that feeling of, oh, man, this just gave me a new way of looking at the world that's going to make me better. Yeah. All right.

Can you tell us about some of your hobbies? I grew up in Ohio. I'm living in the dense city of L.A. So when I have free time, I get out to the mountains. I like to get out to the woods. I like to ski, run some, you know, run some of those, like mud runs or do some races. I sit in a writer's room, so I really got to get out, get out, do something physical outdoors, ideally. I have three little girls that are the best.

I like to spend time with them. You know, got a great job that I like going to, like the friends that I have there. So, yeah, try to help people. I love, you know, I really enjoy, you know, trying to help people, trying to get into, whether it's the writing, the entertainment business. You know, I see younger versions of myself, and it's a hard journey. and try to help people if I can. That's cool. This is a random, not part of the famous four,

but I'm wondering, do you ever talk to people like in the industry? I mean, like, are you proselytizing like real estate to people around you, like that are making maybe like, yeah, I don't know,

not necessarily actors, but just people in the industry that make good money. Are you saying, hey, guys, look what I'm doing because this might not last forever. Are you doing that? Yeah, yeah, I do that.

I do that to a fault. And I try to, I try to hold back. I try to not be talking all the time about real estate. But yeah, I mean, the people that are that are smart that have good heads on their shoulders, I tell them, like, get your finances in order. Like don't be a slob like so many people in this business. The entertainment business model is nowhere near as good as the real estate investing model

as far as an economic or a financial model that to go down. There's so many agents, you're paying agents, lawyers, managers, your taxes are high. But you make money, but that's why I just tell them, like, that money into something that's a good vehicle. And yeah, let it grow. And please, you know, set yourself up because this won't last forever. Someone in the writer's room was telling me just the other day,

he's one of the showrunners on Family Guy right now. And he's like, yeah, he was a lawyer. He was like a Harvard lawyer that was a New York City District Attorney before becoming a comedy writer. And he's like, yeah, you know, with all my lawyer friends, their careers kind of take off after age 60. Like they're getting, you know, they're, they're in the government getting political appointments. But he's like, when you're a comedy writer at 60, you're kind of done. Yep. So that's part of the reason I'm like, yeah, you know,

when you make the money, handle it well, be careful. Don't, don't waste it. Invest it. I'm, I have a dream of writing a book called massive income to passive income because like there's this problem in the in the entire like everyone who makes really really good income like massive income and like I just define that as anything over like you know six figures and above but like they're really bad at putting their money long term and they just kind of get caught up in this is what life is but like how do you take massive income how do you make a good career but turn it into something that's generational wealth so I'll get that writing someday done but yeah I mean Jesus like you you buy a you buy a building I tell this to all my my uh

my entertainment friends. Like you write a script and maybe you sell it and maybe it gets made, maybe it goes away. If you buy a building, you've, you've just bought a stream of cash flow that will last you the rest of your life. It will grow every year and you could pass that onto your children. Yeah.

Like you just can't beat that. Yeah. And you don't have to do anything. Yeah. It's so true. It's so true. We love real estate. So speaking of that,

a lot of people love real estate and they want to get into real estate, but they don't. My final question is, what is it that separates successful real estate investors from those who give up, fail, or never get started? You know, I'm going to go to kind of a cliched one, but it's perseverance. It's, you know, moving forward all the time through thick and thin, when you're discouraged. You know, just keep going forward, learn it. Keep learning. Keep growing and keep making effort every day.

Like a river that never stops flowing. That's exactly right. Yeah. It doesn't matter what falls in it. It just carves its way right through. Right, right. Okay. Mark, tell me where can people find out more about you?

I have a website that's called quantum capital ink.com. They can reach out to me on bigger pockets. I also have an email address, Mark, at quantum capital inc.com. But yeah, we could put the love meeting people on bigger pockets. I get really busy, you know, but I'll try to try to respond to everybody. that reaches out. Cool. All right.

Well, good deal. Mark, those been fantastic. It's been, you know, just I love talking to people about like just multifamily real estate,

growing their wealth. You know, even if you have a good job, like just looking outside of that and saying, I'm going to prepare for whatever eventually is going to come. And I think that's just fantastic. You're doing that.

So keep it up. And we'll have to have you back on the show again sometime in the future and talk about your next few deals. Yeah, keep up the great work on your end. I was in, I got in real estate before you guys were around. and you guys have bought turned this thing that was opaque, murky, scary, something that was

unknowable and you've made it knowable and friendly and it's just amazing. So great work. That's the same way that I describe the evolution of Brandon's beard. All right. Thank you, Mark. All right. Thank you. See you.

All right. That was our interview with Mark Hentman. That was a fun interview. That is a fun guy. and I had a really good time talking to him. That's my favorite type of investor is you can talk real estate, you can learn, and you can laugh at the same time. Yeah, me too.

I love that. Yeah, I always wonder about like comedy writers. If they're like, funny people or if they're really like boring, they're funny. He's very funny. He's very funny. He's very funny. And I love the fact that he like makes good income right now. I mean, we didn't talk about that.

But I'm assuming he's making good money. And then he turned it into something that's going to last a long time, massive income to passive income. And that's what's all about. So very cool. Yeah, you got to make hay while the sun shines and then convert that into passive income that you can benefit from all the way into retirement. There you go.

Now, if only we can become writers for family guy. We should have asked. We should ask while on the recording. That way he'd feel obligated to say yes. Next time. We got to bring him back on. Now, yeah, and we'll just ask that time. All right, let's get out of here.

Make sure you guys, if you guys are not yet subscribed to this podcast, make sure you do So in iTunes, you can do it. On YouTube, you can do it. You can call up your mom and subscribe with her. I don't know. Does that make sense? Probably not. Anyway, subscribe.

However, you have to subscribe and then get somebody else to subscribe as well. Spread the news about what we're doing here at BP and what real estate can do for your financial future. So anything you want to leave us with, Dave? If the writer from Family Guy is buying real estate, then everyone is buying real estate. Share this with your friends because you never know how many other people are interested in this and you just didn't realize it. And with that, this is David Green for Brandon Handsome Shirt Turner. Signing up. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place.

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