How to Find Real Estate Opportunities with Massive Equity?

Hey, it's Mark Podolski, the Land Geek. Your favorite niche real estate website, www.thelandgeek.com. and I'm super excited for today's guest, Marcus E. Maloney. If you don't know Marcus, he is really pretty incredible guy. He's a value investor and portfolio holder of residential and commercial units. Marcus has been named the Equity King for his impressive ability to find real estate opportunities with massive amounts of equity. Marcus, a high school dropout, went from GED to completing his MBA in 2011. Although his education has a major impact on his investment philosophy, the real impact came from his upbringing. Marcus Maloney, how are you?

Thank you. Thank you so much, Mark, for having me. I'm excited to talk to the Land Geek family man. It is truly an amazing honor to be here with you. So how are you today, Mark?

Markus. Man, I'll tell you, my pulse is normal, my respiration's fine, two cups of coffee. I'm excited to learn more about you because I'll be honest, there's not many people with your background. Would you mind rewinding the tape from high school dropout to literally the Equity King.

Sure, sure. So just to kind of make a long story short, I did drop out of high school three months before graduation. And the reason why I did that is because I wanted to save my family the embarrassment of me not graduating. And the reason being is because growing up, I grew up about 45 minutes south of Chicago, small little farming community, but we had access to inner city Chicago. And kind of growing up, my dad, he was an immigrant, first generation Panamanian here in the States. And he was just really, really firm, really, really strict because he understood the opportunity that we had here in the States. And I wasn't just. I wasn't performing at a high level. So he used to always ask me, you know, are you dumb or something? So once you continuously get asked the same thing, then you start to believe that false narrative. Well, am I dumb or something? Maybe I am, you know, So I went into my senior year and I just couldn't. Just couldn't cope. I just didn't feel like it was the place for me. I remember one time specifically getting a. Getting a math test put on my desk for my teacher. I didn't even try. I just wrote, I cannot do this and gave the paper right back to him. From that point on, I knew that school wasn't for me because I was always the person that was out looking for the next deal. What can I sell to put some money in my Pocket. And that was just from the way we were grew, the way we were raised. So dropped out of school three months before graduation. Sitting around, my mom said, well, what are you gonna do? So I said, okay, well, to satisfy her, let me at least go and try and take this GED test. Sat down, took the GED test, Mark. Got my results back, and guess what? You got it. Passed it first time. So now I'm ahead of the class. I was at first behind everyone. So now I'm a graduate, and the rest of my class is just now, you know, starting to graduate. So I fast tracked myself going through that. But, yeah, so then I went from that, went to college. Didn't do good at college, Kind of dropped out, you know, so you can see a recurring theme. It's like, start dropout, start dropout, you know, But I just wasn't focused at the time because, again, when I was at college, it was always, okay, I'm here. I'm broke. How can I. What can I sell to generate some money? I was always that type of person. And so dropped out of college, then went back, went and got my associate's degree, then my bachelor's, then my mba, you know, because I was always a firm believer in not failing or not giving up. So I was always persistent, you know, and that was just something that I. A good thing that I did get from my father is that, you know, you're a man. You just never give up. You always persevere and push through.

Wow, that's an incredible story. So let's fast forward, and how did you find real estate?

Okay, so getting into real estate, when I get. I'm trying to fast forward, but it all goes down through a journey, Mark. So I'm gonna make it very, very, very quick. So when I. When I graduated from college, my mom, she was an entrepreneur. She left her job with the state, and she started or picked up where my grandparents left off. And she had a nonprofit. She was bringing these inner city kids from Chicago down to the country, and those kids didn't want to go home. They didn't want to go back to the city. They didn't want it to stay on the farm. So now we. We started devising a plan. Okay, well, what can we do to keep these kids, you know, safe and from harm? So we started buying these properties and renovating these properties and putting these kids in these properties. We got a contract from the state, so we had respite houses, and I found myself constantly working with the contractors, you know, and everything like that. So that kind of pricked that bug of real estate. So then I fast forward, I moved to Arizona and from there I was like, okay, this is the time to start over. I really love real estate and I got into real estate using a $200 First Premier card. And Mark, if anybody know what First Premier card is, it's one of those aggressive lending cards where the interest rate is about 50 something percent.

Isn't that against the law market?

Yeah, it is, it is. But when you don't know any better, Mark, you know, you just, you just use what you have. So I was just resilient. I used that credit card and started direct mail campaigns and started that and was just reaching out to sellers. And that's kind of my break into real estate.

Wow. So tell me, what does it mean to be the equity? Why like you do that?

Well, because every deal that I, that I look to do, we look to position it from a position of equity. You know, what's the, what's this? There's two major rules in real estate. One is location, location, location, and the other one is you make money when you buy, so you have to buy. Right. So we always buy properties that have massive equity in it. That way it kind of limits the risk that we have. Even if it's a bad deal, we still got tons of equity. So we can position it however we want to position it. So just from my years of marketing and being able to talk with sellers, we're able to find ourselves in a very, very strategic position to where we get these properties well below market value.

Okay, let's talk about the properties. Where are you on the Monopoly board? Like, what neighborhood are you playing in?

We are playing in the Baltics, I would say kind of just. Yeah, yeah, the purple ones, once you pass go, you got, you know, the reds and then the purple. So it's, it's not the hood or the ghetto, but it's not, you know, it's just the average homeowner, they may work at 1.

May work at 70 to 1. 20.

Yeah, let's do that. 70. I would say 70 to about 225.

70 to 225. Okay. I feel like 225. Like you get the twos, like you're in the yellow.

Okay, well, maybe I'm kind of purplish yellow.

You're purplish yellowish. Okay, that's cool though. All right, so you're purplish yellowish and you're sending out offers. So are you buying these? You know, 80 cents on the dollar 90 cents on the dollar.

But instant equity, we're buying them more. So, Mark, at 40 to 60 cent on a dollar. Come on, Marcus.

So we are 40, 60 cents a dollar. How are you getting those deals?

I'll give you an example. I closed the deal. The ARV after repair value was 175. I was able to get the property for $51,000. Now I'm thinking going into the property that it's going to be rough. It's going to be beat up. Mark, when I walked through the door, I could have licked the floors. The property was that clean. New roof, the floors were just refinished. New ac, new furnace, new garage door. You know, it's just. I don't. Mark, I really can't even give you any science on how we do it and how I do it, but it's through persistence, you know, with that lead. I'll give you an example. With that lead, she gave me a call. We were talking. I told her, you know what? The property is in such good condition, because everyone says that their property is in good condition. You know that. So I said, well, if your property is in such good condition, why don't you list it with the realtor? List it with the realtor, because what I'm going to offer you is going to be pennies on a dollar, right? So she said, okay, I'll just list it with the realtor, but because the way we market, we find strategic niches and strategic motivated sellers that will give us a call and say, you know what? I don't want to list it with the Realtor. And that's what she said. We got off the phone. I'm thinking the deal was over with. Three months later, she gave me a call back. She said, you know what? Now that I think about it, I don't want to list it with the realtor. I know what you offered. I just want to continue forward with you. And I said, ma', am, I definitely understand, but my offer amount has not changed in those three months, and if anything, it may have went down. Are you still willing to move forward? And she said, absolutely. So what we did, we bought that house. I didn't have the money to buy the house. So I want to tell people that, too. You always don't have to have the money. I didn't have the money to buy the house. I was talking to my attorney that closes the deals for me, and he was like, man, this is such a good deal. I will give you the acquisition amount and whatever rehab amount in order for you to get this deal done. So went in, we gave him a 15% return on his money. But we went in, we bought the property for 50, we put like another 20 into it because it was some electrical things that we, that you couldn't see on the surface. So we're all in at 70. And we turned around and sold that property for 142 after all of the concessions and stuff like that. So. Wow.

You don't have to do too many of those a year to move the needle well.

Right, you don't have to. And that's one of the things that I tell people. It's not always about how many transactions you do because there's people out here that saying, you know, I'm closing 20 deals a month or I'm doing 200 deals a year, you know, but the average profit on those deals are two grand, three grand. Things like that. Where our average profit, you know, over the years that we've been doing it is about $11,000. So each deal we're making minimum. Well, I wouldn't say minimum, but on average about $11,000. But the majority of them are 20,000, 30,000, 40,000, things like that. Yeah, you do have the outliers like the one I just, we just closed, you know, but those outliers are good, you know, when you're still bringing in $11,000 on each deal.

So your model is really buy it, right. Fix it up and then flip it. You're not, you're not playing the landlord game, is that right?

Well, you know, what we do on some of them we do keep. And honestly I'm regretting that we sold that one because I could have kept it because we could have got like 1200, $1300 in rent every month on $50,000 invested. So, you know, look, hindsight, yeah, the upfront capital was good, but you know that, that back end exit strategy would have been even better. So we do wholesaling and then we keep some of the properties that we want to add to our portfolio.

Okay, great. So what's the biggest mistake you see making in your, in your investing niche?

It's that I'm making or that we're seeing?

No, no, no, you're making, you're seeing like other people make.

Really just going for the low hanging fruit, you know, Mark, it's with real estate, it's like everybody knows it's a relationship game. And sometimes when you get some of these sellers on the phone, they may not be ready to sell right now, but in five months, six months, or maybe even a year later, they're willing to sell at your price. But you have to be constantly talking to these people, constantly following up. So the thing that I see is people don't follow up as they should. It.

I see. Yeah. Lack of follow up is, I mean, you're right. This is a relationship business. People forget about you really fast. You've got to be following up, whether it's in land investing, niche, real, you know, real estate, wholesaling, it doesn't matter. Any kind of business. Like, it's a busy, noisy world and follow up is so critical and yet it's so fundamental. But for whatever reason, psychologically, it's like we don't want to bother anybody. Well, you're not bothering them if you're adding value to their lives. Show up. Show up. So, Marcus, I think your mentorship has been fantastic. And now we're at that point in the podcast where I'm going to ask you for your tip of the week. A website, a resource, a book, something else actionable for the art of passive income listeners to go improve their businesses, improve their lives. But before you give your answer, I've got to talk about our sponsor today. And our sponsor is flight school. Learn how 16 weeks up the mountain of land investing can literally transform your life. Start creating passive income. No renters, no rehabs, no renovations, no rodents. It's a one time sale. And then you get this passive income. Once your passive income exceeds your fixed expenses, you're working because you want to, not because you have to. The best way to accelerate is go up that mountain with a Sherpa. Scott Todd, he's done it thousands of times. He'll get you up that mountain quickly, safely and efficiently. Learn more. Go to thelandgeek.com training thelandgeek.com training all right, Marcus, what is your tip of the week?

Okay, my tip of the week, actually we already kind of talked about the follow up. But my tip of the week mark is I just want to make sure everyone is feeding themselves the right information. And what I mean by that is I have a daily routine in the morning that I do every morning. I'm an early riser. I'm normally up at 4:30. So between 4:30 and let's just say 6:30, that's my time to get my mind focused, prepped, prepared, and ready for whatever may come during the day. So I say my tip of the week is make sure you reframe or frame your day by having those morning routines like the miracle morning. So just making sure. You're feeding something positive in the morning and getting ready to attack those. Attack those negative outcomes that may come. Because in real estate, you're definitely going to get a lot of negatives, get a lot of no's.

What's your favorite part of your morning routine?

It's just my prayer and time of meditation, honestly. So, Mark, I pray, then I sit quietly and meditate, and then I write down some of the things that I'm hearing, you know, in my spirit. And then some of them, you know, I move out on them and definitely get out there and do them. And they've been a blessing. Actually, one of them is, you know, this podcast. I was set to do a podcast about two years ago. I kept putting it off, putting it off. Then one morning it was like, okay, I'm starting this podcast, set a hard date. And now I'm talking to, you know, people across the country, actually across the world, just because of the podcast and what I'm doing and everything like that.

Yeah, it's amazing, isn't it? It's. It's like free mentorship and then other people get to benefit from it. So my tip of the week is learn more about Marcus maloney. Go to marcusemaloney.com marcusemeloney.com Check out his podcast. Yours truly is going to be on it soon. So I'm excited about that and learn more. There's a wealth of information there. Marcusemeloney.com Marcus, are we good?

We are good, Mark. I just wanted to tell people again, like you said, go to marcusemaloney.com and the podcast that you will be featured on here soon, Mark, is the We Love Equity Real Estate show. So you guys are followers of Mark, come on over, listen to Mark, see how we do. I am going to take Mark through the ringer. So if you want to hear that, come on over to the We Love Equity Real Estate show and listen there.

Oh, that's good to know. Now I'm have to drink some extra coffee before I go on, so I want to thank the listeners and just remind them, look, the only way I'm going to get the quality of guests like a Marcus Maloney to even come on this podcast is if you do us three little favors. You got to subscribe, you got a rate, you got to review the podcast. Send a screenshot of that review to supportlandgeek.com I'm going to send you the $97 wholetailing course, how to double your money 3 days or less for free. So please do that. Please support us. We really, really appreciate it. Alright, well, since Scott Todd is not here today, Marcus, you're going to have to do this with me. And I don't think you know what I'm doing. One, two, three. Let's.

Let's.

Freedom.

Freedom.

Ring, ring.

Let freedom ring. There we go.

All right. Thanks, everybody.

Thank you, Mark. Appreciate it.