BiggerPockets Real Estate Podcast - Still Doing Deals... Thanks to These 2 Pivots With Marcus Maloney (Part 2, Post-Coronavirus)

Episode Date: June 12, 2020

Yesterday, Marcus Maloney showed us how he built his deal-finding machine. Today, he tells us how he's hanging onto it by making two big shifts in his business. When the pandemic hit, lenders got nervous... and that put a couple of Marcus' deals in danger. So did he give up? No! He tapped his own network of private lenders to provide financing to his end buyers—a win-win-win. Plus, Marcus tells us why he's shifted focus to the Midwest since we first spoke and how he worked out a deal with a "great tenant" who wound up unemployed and unable to pay rent. Wondering how to adjust your business to the new normal? Check out this episode, and subscribe to the BiggerPockets Real Estate Podcast so you won't miss the next one. In This Episode We Cover: The problems Marcus ran into in mid-March How he plugged the gap with private money Developing relationships with private lenders before you really need them Why he's concentrating on a lower-priced market How he negotiated with a resident who could no longer afford rent And SO much more! Links from the Show BiggerPockets Forums BiggerPockets Podcast BiggerPockets Podcast 386: Starting Out With $200 and Investing for Profit AND Cash Flow With Marcus Maloney (Part 1, Pre-Coronavirus) BiggerPockets Podcast 352: No Driver’s License, No Money, No Excuses: How Diego Corzo Blazed a Trail to 18 Doors BiggerPockets Webinars BiggerPockets Radio Podcast 001: Building a Successful House Flipping Business and Losing Millions with Marty Boardman BiggerPockets Podcast 382: No Money Down BRRRR Investing with Josiah Smelser (Part 1, Recorded Pre-Coronavirus) Check the full show notes here: http://biggerpockets.com/show386-5 Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 386 Part 2. Actually, during COVID-19, we learned quite a bit. We learned that we can tap into other markets pretty quickly, you know, and actually pretty affordably. 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's going on, everyone? It's Brandon Turner, host of the Bigger Pockets podcast here with David Green for a follow-up to yesterday's episode. What's up, David? What's going on? This is David Green, bodyguard to Brandon Turner and a suitcase carrier at times.

Bodyguard from like 2,000 miles away. Yeah, you're like Whitney Houston, and I'm like Kevin Costner. Remember that movie? The Bodyguard? I never saw it, but I just saw the song from it. That's exactly right. Yeah, so we got a great show today. We are following up with Marcus Maloney, who we just interviewed a couple weeks ago.

I believe I was in Hawaii when we did that. That's when we took those pictures on Instagram of us, like, rolling around on the grass in your front yard that went viral. Oh, that's right. That was then. Yeah, that was. Marcus gives us kind of an update on what he's been up to, how he had to pivot, where he started buying, what he did with the houses that he had under contract that he lost his buyers for. It's really good stuff for how he changes business when the economy change.

Yeah, he's also got some good thoughts on like the rental side of things. He has some rentals. We didn't really talk a lot about it yesterday, but on today's kind of follow-up episode, we do. If you didn't listen to the yesterday's episode, go back and listen to that one. That's today's quick tip. It's listen to yesterday episode.

Maybe before this one, though, you technically could do it in either order. But if you want to know more about who Marcus is, I'd go back to listen to yesterday's right now and then come back to this episode to learn about how COVID changed his business. There are two kinds of real estate investors, those who have reviewed their insurance,

and those who think that they have. Most don't realize their coverage wasn't built for how they actually invest. Vacancy periods, rehab, rehabs, short-term rentals or LLC-held properties. These gaps surface only when filing claims. That's why investors work with NREG. They specialize exclusively in real estate investors,

understanding portfolios, risk at scale, and cash flow protection. One claim can erase years of returns. If you own a rental property, don't assume you're covered. Have NREG review your insurance with someone who gets investing at NRE.com slash BPOD. That's N-R-E-I-G.com slash B-Pod. For decades, real estate has been a cornerstone of the world's largest portfolios. But it's also historically been sort of complex, time-consuming, and expensive.

But imagine if real estate investing was suddenly easy, all the benefits of owning real, tangible assets without the complexity and expense. That's the power of the Fundrise flagship fund. Now you can invest in a $1.1 billion portfolio of real estate, starting with as little as $10. The portfolio features 4,700 single-family rental homes spread across the booming Sunbelt. They also have 3.3 million square feet of highly sought after industrial facilities, thanks to the e-commerce wave. The flagship fund is one of the largest of its kind. It's well diversified, and it's managed by a team of professionals. And it's now available to you. Visit fundrise.com slash BP Market to explore the fund's full portfolio, check out historical returns, and start

investing in just minutes. Carefully consider the investment objectives, risks, charges, and expenses of the Fundrise Flagship fund before investing. This and other information can be found in the fund's prospectus at fundrise.com slash flagship. This is the paid advertisement. Here's why savvy real estate investors are obsessed with bonus depreciation. It lets you take that rental property or commercial building you own and depreciate most of the cost against your income. Legally, 100% IRS compliant. That's instant cash flow improvement. Cost segregation guys is the number one firm nationwide, specializing in identifying these faster depreciating assets in your property. They've completed tens of thousands of

studies across all 50 states from remote cabins to apartment complexes. So if you own investment property, this is a no-brainer. So visit cost segregationguise.com slash BP for your free proposal and find out how much you could save this tax season. All right. And with that, let's get to today's show. Let's bring in Marcus Maloney for the follow-up interview. All right, Marcus, welcome back to the Bigger Pockets podcast. How you been, man? Man, I've been doing pretty good. Thanks for having me again, Brandon. and David. Yeah. Yeah. So last time we talked, you know, David and I were hanging out here in the Seashed in Maui, and you were off in, I believe you were in the Phoenix area, right? And you were

investing in a couple of different places. You're doing a lot of stuff. Make sure if you're listening to this everybody now, go back and listen to yesterday's episode to learn kind of Marcus's story. But for those who weren't or won't go listen to that episode, they're like, no, screw you, Brandon. I won't take your advice. Tell us a quick recap. Who are you and kind of your real estate niche? What do you focus on? All right, Brandon. Well, I'm a buying, whole guy, but I got started with wholesaling. We still do wholesale and also here in Phoenix, but we're primarily virtual wholesaling in different markets. One of our main markets is Chicago. And kind of during this whole COVID-19, we had to pivot a little bit. And I'm sure we're going to

talk about that. So that's who I am, man. So I have a small portfolio that I manage outside of the Phoenix market. And we're doing deals here in Phoenix and in Chicago. All right. I love that you said that word pivot. Because let's just go on. What does that mean to pivot? And in business, there's a lot of been a lot of good books written about pivoting. What does that mean? And why is that important? Well, pivoting is just basically knowing that the track that you're on and really having hindsight, seeing that something is about to change in the market or in your business industry and being able to turn, change your directions. And those who are able to pivot quicker than the others or their competitors really

stay ahead of the curve and stay ahead of the game. So pivoting is just being able to have that foresight to see change coming in the industry and being able to make that change yourself and still stay profitable. Now, I'm not a basketball guy, but I believe, isn't that a basketball turn? David, I know you're a big basketball game guy. Marcus, are you a basketball term? Yeah, yeah, yep. Yeah, it's just change the direction.

Okay. All right. So you're going to change your direction and you're going to pivot a little bit, which is what a lot of people are having to do from COVID. a good example, a buddy of mine has a bunch of vacation run, And the COVID thing happened and he's like, oh, crap, I can't pay my mortgages. So he pivoted quickly and started filling in all his vacation rentals with emergency like health workers.

And so it was a very quick pivot. And so that's what you're talking about. And that's what we're talking about today is how you were able to pivot. So why don't we go into that? Like, how did you deal with COVID? Like, what happened during that thing? What did you see in your business? So during COVID, we were right before everything got shut down.

We've done a ton of marketing. And we had a few days. deals that were in the pipeline that, you know, these were wholesale deals. We were, we wasn't actually one of them we were going to do to rehab ourselves. So we was going to do to fix and flip. But with COVID, some of our lenders and some of the people that we were investing in, they kind of pulled back a little bit, you know, so they wasn't lending. And I'll give you just one quick classic example. We had a buyer on the line for one of our properties. And the lender sent out an appraiser. An appraiser was appraising very, very, very conservatively. We had the ARV at 250 and he came back at 180, 185.

And due to that terrible appraisal, you know, that kind of scared the lender, scared the buyer, and they backed out. Well, what we had to do was we had to contact some of our other private lenders and say, hey, we understand what's going on in the market, but we have a slam dunk deal. Would you be interested? We vet the deal. Would you be interested? Would you be interested? and partnering with this fixing flipper that we know that has done deals with us before, has a track record, would you mind lending to them? And they absolutely stepped up to the table and did it and we was able to get the deal done. So that was kind of one of the ways that we pivoted by, you know, using some of our own resources, some of our private lenders to help the flippers

that couldn't get those deals closed. Yeah, that's really smart. Because at the end of the day, it just means that, hey, like, if your buyer or your buyer's lender or whatever, like they coming back out. You just, rather than going, well, sucks, can't do anything. I better go and watch some TV. You're like, no, like, how do we step up and overcompensate and how do we do a better job to make sure that this product works that well? I think that's very cool. We've done that before in my business as well, where an appraisal comes in low on a property that we're selling and then the buyer their, their appraisal comes in low where we'll just say, hey, we're going to give you another two weeks. You've got to get another lender. And then you get another lender. The under orders a different appraisal.

lo and behold, all of a sudden it appraises where you needed it to. And I think that there's, it seems very simple to us, but to a lot of people who aren't as experience investing, that seems brilliant. And it really just is born of pivoting. Okay, plan A didn't work. What's plan B? And Marcus, I think that's something you've done really, really well in your business. Do you mind sharing with us a little bit about, I know I'm getting you away from real estate. We'll come right back to it, but just what you feel like you went through in life that got you to think this way where instead of saying, I can't do it, so I quit, I can't do it, so let me find another way. Yeah, absolutely. I mean, it goes back to my childhood, my dad, as you guys, for those who are

looking, I have a Panamanian flag up behind me. He's from Central America. And being an immigrant coming over to this country, it was always, you find a way to get it done, no matter what, you know. And that's one thing that I can say about the immigrants that I know is they never take no for an answer. You know, they always find a way, okay, if this didn't work, this has to be the answer. And he really instilled that into me and my brother when we were younger is, hey, if plan A didn't work, what's plan B? If plan B don't work, what's plan C? You know, and he would always challenge us to try and find ways for us to think outside of the box to come up with other solutions. And I just apply that in our real estate, real estate business. That's awesome. Yeah,

we did an episode back in the day with a guy named Diego Corso. I think it was episode 352. I mean, the guy had like, he was a, you know, his family, he was a dreamer, you know, they call him the dreamers, right? So they came in, his parents moved here when he was just a little kid. He had no driver's license and he was like taking a bike to work to work every day. He'd put like a suit and tie and try like build his like web design business. Like it was just like, it was such a ridiculous story in such a good way. Because it's like, this guy had every reason to not make it as a successful anything. And yet he just kept saying exactly what you said. He just kept pushing going, no, okay,

that planet didn't work. let's go to plan B, let's go to plan C, let's go to plan B. What about somebody who, let's say, listen to the show, and they are not that way? They are not, they're not, you know, they don't have that immigrant mentality of like, I'm going to make it work no matter what. Is there any suggestions you have for people developing that? I know it's a hard question, but how does somebody develop that grit to stick through things? You know what?

I start with discipline, Brandon, and it's the small things that you have to start with. So each day, you know, if you say, I'm going to wake up at 5 o'clock in the morning, then that's what you set yourself to do is each day at 5 o'clock in the morning, I'm up, you know, and then at 7 o'clock, if this is your time for meditation and prayer or something like that, then that's what you do at 7 o'clock. So it's that building that internal determination

and that internal discipline in order to then that helps spawn that grit, because then you start seeing, okay, well, if I can be consistent in these small areas, I can be consistent in these larger areas. and I'll find a way to get it done. And not only that, you'll start attracting people that have that similar mentality and you can feed off of their energy as well.

That's so good. Yeah. What is the quote? How you do anything is how you do everything? Yep. People wonder why they can't succeed in business. And I'm like, well, did you, you lied to yourself this morning with what time you're going to wake up.

You lied to yourself about eating healthy breakfast and you had, you know, marshmallows in your cereal. Like, stop lying to yourself. Start treating yourself as like a respectable person. that you wouldn't lie to. That discipline is huge. Yep, yep. That's, I mean, that's one of the key things I would say in any business, especially being an entrepreneur. And sometimes we have a lot of solopreneurs so you don't have anybody that's over your back, you know, saying, okay, at this time, you have to do this, one, two, and three. And that's why some employee mentality people

just can't make it as a entrepreneurs because they don't have that discipline. Yeah, yeah, because they It was used to, like, you know, they go to work. And if their boss doesn't tell them what they do, they sit down and play on their phone until their boss tells them what to do or whatever. Yeah, it's like that. Exactly. Brandon, that's such a good point. I'm working on a new book for Bigger Pockets right now,

specifically for real estate agents because there's not very good training for agents. And I was thinking about what is one of the things that makes it hard for real estate agents to succeed. But really, it applies to anybody who's getting into any form of entrepreneurial or independent contractor business. It's not just being an agent. Anything where you don't have a boss. telling you, go do this, most people struggle with because your mind is like conditioned to think a

certain way. So agents go to the office and they sit there in an office all day and it tricks you into thinking you're working and so you're getting paid, but you're not getting paid just being there, right? As investors, we're working when we're on our computer, answering emails, making calls, but you're not making money unless you're putting something in contract. That's really what the good entrepreneurs understand. So part of being successful in real estate investing is understanding that your mindset of the employee is getting in the way. Employees don't really have to solve problems very often. Something goes wrong and they raise their hand and say,

Supervisor, there's a problem, go deal with it, and then they cover their butt. So they're okay. You don't really have to figure out how to do something when you're employees. It's usually somebody else's job. You just focus on staying your little lane that you're in. And then you get in this world of real estate investing and you're a business owner. Every problem is your problem. Everything could require a solution that can make you a whole bunch of money.

completely different world. And a lot of people are drawn to it because they like the freedom of it, which is a great reason to be drawn to it. But with that freedom, you have to understand, you're taking responsibility. There's not other people that come fix stuff for you. When the appraisal comes in low, when the rehab's not going well, when the tenant trashes the house or when you can't find the tenant that you thought, all of that is your responsibility to fix. And that's why we talk so often about mindset, because a lot of people want the quick answer. Well, just tell me what I'm supposed to do. That's an employee way of thinking. What does the manual say? When this happens, I'm supposed to do that. And their minds looking for the solution that's worked in the past,

but in this world, there isn't a quick answer. It's different for everything. You have to take the principle that we're teaching and apply it to the solution. And one way that screwed up a lot of people was COVID-19. It was different, right? It was like you're an employee and you worked to this company and then new management came in and they do everything different and you just, you can't figure out what you're supposed to do. So I'd like to know, Marcus, what are some of the ways that you specifically had to pivot your business, and how did you come up with the solutions that you did? So one thing that I look at, David, is to much as given, much is required. So a lot of people want a lot of stuff. They want to see, they want to reach that end goal, but they're not willing

to put in that work, you know, that discipline work. So some of the things that we had to do and pivoting is here in Phoenix, the price point for homes, you know, $300,000 and above, well, Well, in Chicago, you can acquire some properties at $40,000, $50,000. So what we did to pivot was we focused more so in that Chicago, that Midwest market, because the risk was a little bit lower. So instead of, you know, being on a hook for a deal that's going to cost you $400,000, we said, hey, we'll be on a hook for a deal that costs us $100,000. Can we make the same profit on a $400,000 house versus $100,000?

Absolutely. you know so we took that mindset of instead of planning our own backyard let's pivot and start looking at some of these things that we can do over here still make the same amount of money but we just had a few different things that we had to work out i love that because i've noticed the pattern that coastal markets like the west coast and the east coast overall they tend to shoot up in price and then crash down really hard there's very there's a lot of undulation whereas midwest markets and some of the south Yeah, tell me about that. I clearly prepared for this podcast today. I don't know about you guys, but I showed a race. So Midwest markets, they're kind of just flatlining. I don't know a fancy word for flatlining, right? But what you're saying makes a lot of sense because when there's risk,

it makes sense to move to the market that's going to be less risk, less reward. When it's less risky, then you go to the markets where you can get a bigger profit. And that is a very simple principle that makes a very big impact on how safe your business is run. I love that. Yeah, and that's just one of the things that we had to do. So we looked at that. So we pivoted most of our marketing to the Midwest. And then also what we did was we had some lenders that really wanted to do business with us.

Well, at the time, we wasn't really focusing on a lot of fixing and flipping in that market. But we had these lenders that were sitting on the side, you know, raising their hand saying, hey, you know what, how can we work with you? How can we work with you? So when we had some of these deals that were kind of falling apart due to lending concerns, then that's when I picked up the phone and I called some of these private lenders and said, hey, you know what, you've been wanting to work with me during the good times. There is some little challenging times right now, but if you can work with us through these times, then the good times would be even better. So we brought them to the table and they worked with some of our end buyers on some of those deals.

Were they a little skittish at first because they wasn't working, directly with us on the fix and flip? Absolutely. But we ease those concerns letting them know that, hey, here's what we have on this property. Here's the specs. Here's the ARV. Here's the amount of work that we had our contractor to go through and see. So what you're getting, what you're lending on is something that we personally vetted. So at the end of the day, they felt comfortable and putting their cash up, you know, with the fix and flipper to get the deal done. Now, you've been investing for a number of years now. you've got these, you know, contacts you've made of these potential private lenders. Now, some people listen to this show right now are going, whoa, I want that.

I want somebody that I can just call up and be like, hey, I need your money and they'll just give it to you. How do you get there? How did somebody who's listening to this? How do you start getting that network, that building that relationship with private lenders? So one thing I do want to tell people, just like we was talking about, it takes time to build those relationships. You know, things don't happen overnight. For example, with me, I've been blogging on bigger pockets for almost eight years. years now. So in the beginning, it was a struggle. I was like, nobody's reading my content,

nobody's looking at my YouTube videos and things like that. But then it starts picking up steam. So it goes back to discipline and back to consistency. So for someone that's looking to really start building that rapport with hard money lenders and private lenders, you just have to get out there and you have to be consistent at what you're doing. So if you're a fixing flipper, document, let people know exactly what you're doing, share it on YouTube, share it on Facebook, on Twitter everywhere and let people know what you're doing. And then also you have to pick up the phone and you have to contact people. Get out of your comfort zone.

Go to some of these rear meetings and things like that and let people know exactly who you are and what you're doing. You know, the more you talk, the more I'm like, that's what I'm writing in this book. And I'm almost thinking instead of writing book for agents, I should just write a book for anyone who's a salesperson or an independent contractor. How do you make money? Because that's so right. Like, Brandon, how many times have you noticed that in so many,

of the businesses that we mortgage lending, real estate agent, wholesaler, house flipper, contractor, that the successful people are the ones that are talking all the time about what they're doing and what they're looking for. All the time. Yep. It's because, go ahead. Go ahead. And one quick, one quick thing, Brandon, and I speak of consistency because I was doing these Facebook lives. And I mean, I was getting absolutely nobody. I mean, no guests, you know, no visitors, no views or anything like that. And I was like, you know what? I'm just going to keep doing. it. I'm going to keep doing it. And then all of a sudden I started sharing it. Me and my assistant started sharing it. And now we have a pretty strong following. And it was just because

during those times when I didn't think that it was working, it started working later on down the line. Well, two points on that. First one, I'm also, because David and I are competing, sort of. We're both writing separate books right now. I think I'm running a multifamily right now. So in the book, I just talked about this section. I actually talk about Byr. And I think I learned this actually from you, David. One of the benefits that you talk about, so I just stole your idea and put it in my book, so thank you. Well, I think I re-labeled it and made it sound better.

So here you go. It's called the do-learn repeat cycle, all right? So the idea is the one of the reasons burr is so powerful is because it allows you to do more deals, even if you were making less money initially. And this also applies to like lending. Like, why would you pay all cash for a property versus, you know, lending, getting a loan? it's the more frequency you can do, the faster you do that, like, do learn repeat cycle. You do something, you learn from it, you do it again.

You do something, you learn, you do it again. And every time you repeat that cycle, you get better and better. So if you do one deal every eight years because you have to spend eight years saving up for your money, that do learn repeat cycles very, very slow. I should write a book called do learn repeat. I'm doing it. So this idea, and I'll credit David for the idea. See, David, I'm a nice guy.

Anyway, the same thing applies to like, I guess, the planting seeds is where I want to go with that. This idea of like the content you produce now, the Facebook live, the Instagram live, the social network, that stuff might not give you any results now. When you first write a blog post or when you first start going to Rea meetings, the same thing applies there. Or if you're going to host a local real estate club. Like in the beginning, it is more important that you develop that do learn, repeat cycle over and over and over. so that down the road, down the road, those seeds have grown into trees, right? Like, yeah, you're going to do it 50 times and have nobody show up. I mean, my first webinars, my first year of doing webinars of Bigger Pockets back like five years ago,

we're just so bad. The first podcast, don't go back and listen to the early episodes of the Bigger Pockets podcast. They were awful, right? But every episode, we'd learn, and then we'd repeat it and we'd do it again, and we'd learn and repeat it. So, anyway, I like that point you made there about, like, just put yourself out there, start building the relationships now for the networking and the, the context you're going to need five years from now.

Yeah, that's what I hear you saying. Yeah, start doing it now. And us having this conversation really is the fruit of those seeds that I planted five or six years ago writing blogs because I said, hey, one day I'm going to get on and I'm able to talk to Brandon and be on a podcast. And now, hey, it took me five, six years, but I'm here. You know, and that's what I tell people is you don't have to always look for that instant gratification.

You have to go through the trenches. and when you go through the trenches, then you begin to respect, you know, the profession and the craft that you're in. Yeah, people want to eat apples from, watch this analogy, David, then I'll let you take it. People want to eat apples from their apple trees

that they never planted, right? They want to enjoy the apples from the apple trees that they never planted. That is a quote. You can put that on Instagram right there. So this is what Brandon does really well is he takes other people's ideas and makes them better.

I've noticed that. Our friendship works this way, Marcus. I'm basically like the toasted oats, like Cheerios that aren't really Cheerios, right? Just a big bag that says toasted oats of white bag with black letters. And then Brandon comes along. He's like, ooh, I like this. And he puts the B on it and he gets like these cool colors. He calls them Honey Nut Cheerios.

All the kids love it. He puts a cool toy in the box. And then he gets all the credit. And I'm just like, toasted oats generic Dave over here. That's exactly what it's like all the time. But I learned a lot from him from how he does things his style. You're really good, Brandon. And here's the thing. I bet you Brandon was not that good at doing this when he first started.

He had to do, do, what was it? Learn, do repeat. Do learn, repeat. Do learn repeat. Your way to excellence. And then I would add on what happens is it becomes do learn repeat, teach scale. Then, then you get to learn the new thing. See, this is your analogy of all the bridges that people build. And you're trying to build a bridge from California to Hawaii and you're building 20 bridges at once. You can build more than one, but wait until you finish the first bridge. Do learn. repeat, teach someone else, now they're doing it for you, scale where several people are doing it, then go build your next bridge. And that's, you know, that gets into the systems that we're all creating. There are two kinds of real estate investors, those who have reviewed their insurance,

and those who think that they have. Most don't realize their coverage wasn't built for how they actually invest. Vacancy periods, rehabs, short-term rentals, or LLC held properties. These gaps surface only when filing claims. That's why investors work with NREG. They specialize exclusively in real estate investors, understanding portfolios, risk at scale, and cash flow protection. One claim can erase years of returns. If you own a rental property, don't assume you're covered. Have NREG review your insurance with someone who gets investing at NRE.com slash BP pod. That's N-R-E-I-G.com slash B-Pod. For decades, real estate has been a cornerstone of the world's largest portfolios,

but it's also historically been sort of complex, time-consuming, and expensive. But imagine if real estate investing was suddenly easy. all the benefits of owning real, tangible assets without the complexity and expense. That's the power of the Fundrise Flagship Fund. Now, you can invest in a $1.1 billion portfolio of real estate, starting with as little as $10.10. The portfolio features $4,700, a single-family rental home spread across the booming sunbelt. They also have 3.3 million square feet of highly sought after industrial facilities thanks to the e-commerce wave. The flagship fund is one of the largest of its kind. It's well

diversified, and it's managed by a team of professionals. And it's now available to you. Visit fundrise.com slash BP Market to explore the fund's full portfolio, check out historical returns, and start investing in just minutes. Carefully consider the investment objectives, risks, charges, and expenses of the Fundrise Flagship Fund before investing. This and other information can be found in the funds prospectus at fundrise.com slash flagship. This is a paid advertisement. You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast? Easy. Just use, indeed. When it comes to hire,

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And speaking of results, in the minute I've been talking to you, 23 people, just got hired through Indeed worldwide. There's no need to wait any longer. Speed up your hiring right now with Indeed. And listeners of the show will get a $75 sponsored job credit to get your jobs more visibility at Indeed.com slash rookie. Just go to Indeed.com slash rookie right now and support our show by saying you heard about Indeed on this podcast. That's indeed.com slash rookie. Terms and conditions apply. Hiring, Indeed is all you need. All right, rental property, Listen up. Our friends at Dominion Financial already have some of the best DSCR rates in the industry. Now they're the fastest, too. They just launched 10-day DSCR closing. That's right, 10 days. And they're

still the only lender with a DSCR price beat guarantee. That means faster closing, the best terms, zero guesswork. That's Dominion Financial. Check them out at biggerpockets.com slash dominion. Again, that's biggerpockets.com slash dominion. And Marcus, you're kind of in the middle of that. For people that want to follow in your footsteps, what was the one thing that you felt like when I figured out how to do this part right, my business really took it to the next level?

You know what? I'll give you two answers to that. One was internal. One was just my internal self-confidence, because I was just so fearful. I was so scared that I was going to make a mistake. I was so scared that I was going to do things wrong. to where it took me so long in order to do step one to where I just didn't have that confidence.

You know, so I just want to tell the listeners, don't worry about having all of the answers. Don't worry about having every tool in your toolbox. Start with what you have. If you have a hammer, start with that. You know, start with a hammer. You'll go and find a nail. You'll go and find the wood, so on and so forth. So it was really the first thing was internal.

I had to get out of my own way. And then secondly, because I started building that self-confidence, then I was able to go out and find strategic partnerships to where I didn't have to try and do it all on my own. So it was getting out of my own way, having that self-confidence and then finding the right people that can really push me along my path a lot further. And I was really just getting out there, again, networking, still have to have that education, still have to sit behind a computer for hours and learn and learn. get on webinars and things like that.

But that was basically the two things. Awesome. Really good stuff, man. All right. Well, what do you see going in the future now? I mean, what do you see happening

with the next few months? I mean, I'm not going to have a crystal ball, but where do you see your business headed? Are you going to keep doing what you're doing? You're going to keep pivoting. And what does lead gen look like in the future as well? I'm curious that.

Okay. So some of the things that we're going to do, actually during COVID-19, we learn quite a bit. We learn that we can tap into, other markets pretty quickly, you know, and actually pretty affordably. So we're going to look at looking into more markets in the Midwest versus staying on the coastal city. So the Indianapolis, St. Louis, Chicago, those, those metros. So really just pivoting with our marketing and looking

at those areas and building relationship in those areas. So if anybody is in the Midwest, you know, reach out to us and we can definitely help you out and get you started, you know, and real estate investing. That's awesome. Very cool. All right. Well, I guess that's probably about what I got to go. I guess there's one more topic I wanted to cover because you also own some rentals.

And we didn't talk a lot about them last time. But what's COVID done to your rental properties and what have you changed or pivoted or adapted during this time? What have you seen? Well, you know what, Brandon, we've been pretty stable. I mean, we don't have a large portfolio. So it's not like we have hundreds of thousands of units. but the units that we do have, we were pretty consistent on keeping our tenants abreast of what's going on.

We had one tenant. I'll give you an example. We have one tenant. Perfect tenant. Excellent tenant. Always paid rent on time. Actually paid rent early. And she worked for bed back and beyond.

And she gave the property manager a call and she was like, hey, you know what? I paid my rent up two months. I know I can live out for at least these two months. but this is really becoming a headache and it's, you know, additional stress in my life. Is there any way that I can break my lease because I won't be able to pay? And I talked to the property manager and I told her, I said, look, what we can do is if we can find a tenant in her stead before the month is over, I'll refund her the rent that she paid in advance. That way it can help her move.

She was going to move with a family member. said that way she can have something to bring to the table. And with that being said, the property manager agreed she was able to move. We were able to get someone in the rental and we refunded her that credit, that rent credit instead of just hoarding on to that rent. You know, it wasn't going to make or break us, but it was going to make her break hers. So we said, you know what, we'll pay it forward. Here, here's the return of your June rent. And we gave that back to her and she was definitely happy. And that's what we're all about is just making sure, you know, our tenants, the people that we do business with definitely enjoy doing business with us. Yeah, very cool.

How do you guys feel about telling your tenants up front? Here's your lease. This is the way it works. However, if you ever need to break it, this is what we'll do. Don't trash my house. Give me notice. Let me find another tenant. And if I find one, I'll let you out early without penalty.

And if I don't find another tenant, then I'm going to hold you to it. I haven't crossed that bridge, but that's a good idea. The only thing that I'm fearful about is you're giving that tenant an out. Normally what we do is you can start seeing a track record of a tenant. They'll start paying rent late, things like that. That's when you step up to the table and you had a conversation and you say, hey, you know what, we noticed that you've been paying your rent late. Is there anything that we should be concerned about or anything that we should know?

That way we can try and help you out before it gets. a place where we have to do an eviction, then that eviction is tied to your name and now you won't be able to rent anywhere. So let's have that conversation up front and see how we can help versus going through that whole eviction process. Brandon, what do you think? It's kind of like that conversation you and I had, I think you and I had it the other day about like as is. You know, like when you sell a property and you say, let's say you're going to sell a property and then you're debating back and forth and negotiating with the buyer. And then the buyer says, I'll pay you a million dollars. You say, fine, but that's as is.

We're talking about how that entire phrase as is is completely irrelevant. Because like, and people use it, I mean, agents use it all the time. And I hear investors use it. It's completely ridiculous because like, okay, let's say I say as is. And then two weeks later, you come back to me and like, well, I know I was going to buy your property, but we just found this like nasty, you know, infestation. So we're walking unless you, you know, unless you pay for it. And I can be like, no, I said as is.

And you're like, well, sorry. I know, but rules change. So in other words, it's completely non-binding and whatever. that's kind of how I see this situation is like you could always add it later you could always tell people later hey if you want out to your lease you know if you know because somebody asks you you can yeah sure here's what I want you to do don't trash my unit but by proactively doing it ahead of time you just like show all your cards ahead of time to everybody versus the ones that you need it I guess I guess my thoughts were if you have a tenant who gets a new job they're moving out of state

they're they're going to move they're going to break their lease if they if you don't tell them that then they're going to wait till the very last minute tell you three days before they're gone, you're going to spend 30 days finding a new tenant. If they know they have a chance, hey, if I give him enough notice, he can advertise it and find another person, it benefits me because I'm not going to be held to pay the damages. You're more likely to have them give you the heads up. But if you don't find a tenant, they're still on, there's, what is the word I'm trying to, they're still on the hook. They still got to pay the money that they would have to pay. Do you deserve a downside to that? I think it's all your communication with the,

with the tenant and your rapport and relationship with the tenant. Most people want to do right, you know, albeit you have some people out here that are just sickos and crazy, but most people want to do right. And if you do right by them, then they'll return that jester and nine times out of ten, they'll do

right by you. So if you consistently make any repairs to the unit, you know, or anything like that, then they'll let you know, hey, because I went through that situation. I had a guy, you know, just kind of moved into a tenant into the property, been there for about four months. And he was like, hey, you know what,

I had an excellent opportunity. I need to move, but I'm not moving for, you know, another 45 days. How can we handle this? And I said, hey, you know what, it's better for you to let me know up front and we can make provisions and handle it then. And that's exactly what we did. But if you're one of those tenants, those landlords that don't fix anything, you know, when they call, you don't answer, then naturally they're not going to have that same respect for you. So it's not going to be reciprocated. And they are just going to leave in the middle of the night. Yeah. Yeah. It's side note, as is is exactly what Brandon said. Don't. That is one of the most like biggest scams in the real estate industry. As is means nothing, right? Like if you have a contingency in the contract that lets you

back out and or you didn't put a deposit down, you can tell them anything you want. What you do is, just say, yeah, I told you as is. I'm not buying the house. Well, why not? Because there's a plumbing leak. Oh, well, what can we do? You can give me three grand. Now as is means nothing. Yeah. That's how that works. So don't fall for this like, it. It reminds of like when you're a little kid and you say like jinx or something like that and you think that's like it's going to work on a grown up like there. Oh, he said shotgun. I don't get to sit in the front. Your dad doesn't care. He's putting you in the back. Doesn't matter if you said as is or not. Yeah. Yep. Yep. It's just like crossing your fingers. Yeah. There you go. But my fingers were crossed.

The judge doesn't care. Exactly, exactly. Oh, funny. Hey, Marcus, before we go, we don't need to redo the whole, you know, famous fork, we just did it yesterday on yesterday's show. But anything you've been reading or consuming lately

that you want to recommend anything you've been like, again, whether it's reading a book, watching something that you've just been learning from or any educational stuff that people should check into? Yeah, man. You know what? I'm speaking about pivot a lot. You can see behind me,

I got Jenny Blake's book, Pivot up there. And I started reading it right before COVID, you know, so it was a perfect time. And so guys, going through this, going through this time with COVID-19 and everything else like that, pick up the book, you know, $12, read it. It's good. It's strategic on how to shift, you know, your thinking and shift, you know, what you're doing. And if you're coming from the corporate world or a W-2 employee that helps you shift that mindset to being a entrepreneur. Yeah, awesome, man.

Yeah, and side note, if you guys want to learn more about appraisals, if we didn't mention this, episode 382 we did with Josiah Smelzer. He is a real estate investor and an appraiser, and he gives some really good behind the scenes information about how appraisals work and how to talk to an appraiser. To me, it felt like we were talking to a guy that used to work for the IRS and we're like, okay, how do you put your taxes together in a way that you won't get in trouble? That's what that episode felt like. So definitely go check that one out too. There's some good tips there. I like it. All right, dude. Well, thank you so much, Marcus, for being on the show. today. And again, if you did not listen to Marcus' first episode, go listen to yesterday's

episode where he tells you a story. It's got a lot of really great tips and really fun lessons on stories in there. So go check it out right now, everybody. And we'll end with this. Marcus, where can people connect with you? Where can they find out more about you? My YouTube channel, YouTube.com slash MRCS Maloney. You can find me on social media everywhere. My handle is MRCS Maloney or my website, Marcus e.moloni.com. All right, Marcus, thank you so much. This has been fantastic. Appreciate you a lot.

And thank you for all the good advice. You've been put out in the Bigger Pockets community for years. I know you've benefited thousands of people you've helped. So thanks. Well, thank you so much, Brandon. Thank you, David. Thank you, Kevin. Guys, always remember to enjoy the journey no matter where their journey takes you.

All right, man, thank you. All right. This is David Green for Brandon. Do Learn Repeat Turner. Signing off. 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,

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