Episode Transcript
[00:00:00] Speaker A: I listened to him and I built a rapport with him where he said he had other investors, he had probably 12 other offers from other investors that they didn't listen. They just kind of beat him up. So I understood what his problem was and solve it. So whenever I look at a deal, there's two things I always want to know. Why are they selling and what are they planning on doing that capital. Because if you can figure that out, that's how you can be creative enough to structure a seller financing deal.
[00:00:36] Speaker B: Hey, everybody, and welcome back to another episode of Trust this, the podcast for real estate entrepreneurs in Florida. Today I have a wonderful guest, Mark Monroe. Mark lives in Boca Raton, Florida. He's the host of Real Estate Power Play, the podcast for real estate investors. He's also an Amazon bestselling author of Creative Real Estate Investing how to Buy Real Estate with no Money and no Credit. And he's also a mentor and coach to real estate investors across the country. He's got tons and tons of followers around the country who follow his advice. And Mark, I'd just like to welcome you in today to Trust this.
[00:01:18] Speaker A: I really appreciate it. Thanks so much for having me on. I'm excited. You know, we've been been following you for quite some time. We're in the same world and last time we jumped on a phone call. It was really refreshing of speaking with somebody at a level that kind of understands a lot of it. So, you know, engaging at a high level, if that makes sense when it comes to the whole creative real estate world, finance, land, trust, and the whole entire process of it. So really enjoy that.
[00:01:46] Speaker B: Yeah, I did too. And one of the things that came out of that was, you know, while I'm primarily focused on Florida, you nationwide and, you know, at 24, you, you told me you left real estate and banking and investing and got into just to real estate investing. What motivated that and what initial experience shaped your career as to why you did that?
[00:02:15] Speaker A: Well, what happened was a lot of my clients were investors and I became friends with them. And then I just saw the type of numbers that these guys were making. You know, I was, you know, I was doing their finances. You know, as I said, I had a real estate banking firm up in Washington, D.C. area with 107 loan officers. And I was starting to see these financials coming in of these people that had tons and tons of real estate. And I'm like, all right, how are you guys doing this? And then I'm learning, saw some of them doing a little creatively and Then I started putting my real estate banking background, mortgage banking side of it, and I started seeing how all this stuff can kind of work. And I originally started out doing what was called the sandwich lease options back in the day, and then I evolved into doing these other type of strategies. But I've been doing the land trust stuff.
I don't even remember how long ago I started. It was in the 90s. I starting to use the land trust strategies and helping them out and kind of just kept things. And it's evolved, you know, the regulations and everything kind of evolved over the years and which, you know, it's part of the game.
[00:03:15] Speaker B: Oh, yeah, Yeah. I think staying on top of the regulations is a big part of it for. For any industry. And if you're going to be serious about anything you do, you got it. You got to stay tuned in to news and podcasts and information that's coming out about what's going on in your industry, because regulations can change from year to year, and what you were doing last year may not be allowed this year. And a lot of people, a lot of people don't, don't pay attention and.
[00:03:40] Speaker A: Make sure you're getting your information from reliable sources because there's a lot of misinformation out there that's floating around. A lot of it.
[00:03:47] Speaker B: Yeah, I run into that just lawyers. I mean, they're lawyers, sure. And they do what I do, but they're based in other states and they're out there talking like, well, this is how it goes, how it happens in every single state in the country. And I'm sitting there screaming at the top of my lunch going, no, no, no. In Florida, we do it this way. In North Carolina, you do it that way. In South Carolina this way, and in Texas that way. And a lot of people just don't think. Real estate regulations and rules are extremely different from state to state. So getting with the right person in those states is the thing you got to do. But for you, you've done it nationwide, so you've probably gotten a big breadth of knowledge of how different things work in various states. How do you keep up with all that?
[00:04:33] Speaker A: It's challenging. You need to rely on people that knows the regulations in that state. Well, you hope they know.
I did something one time many years ago. I went into a state using a wrong type of contract and the language and went in there and I thought everything was good, no issues. And then what happened was my contract got ripped apart when I had to go to evict somebody because I was Using the wrong type of agreement language in a contract. And everyone was just looking at me like, what, what, what, what is this language? What is all this? And everybody's just like, you know, so make sure whatever you're doing when you're doing business in the state, always. And over the years, I've built up a really good referral network and it's easier nowadays, but back then it was hard. You had the Internet, but it wasn't like, resourceful. It is today.
[00:05:24] Speaker B: Right, right. You can get so much information out there, and I think that's part of it, too.
And I've said this before, people don't pay for information anymore because you can get information for free. What people pay for is application.
And whether it's a lawyer, a consultant, bankers, financial folks, whatever it is, you're paying for them to apply the information that they know to your facts, to your situation. And so many. And yeah, you pay for that, but that little bit you pay should make you a lot more money than you'll ever lose over time.
[00:06:00] Speaker A: Well, what happened to me on this example way back in the day, I wanted. I want to save a thousand dollars, you know, so I'm just going to use my own contract instead of using the one having an attorney in that state end up costing me $47,000 instead.
[00:06:13] Speaker B: Oh, yeah, no.
I had a Texas contract come across my desk the other day, and it was. I was representing the seller here in Florida, and a wholesaler out of Texas had just sent their Texas wholesale contract in, and my buyer, my seller wanted to get out of it. He wanted out of the contract because he'd gotten a better offer from someone else. And he's like, you know, this and that. So I looked at their contract and I'm going, yeah, this is unconscionable in Florida. You can't do this in Florida. You can't. So I just sent him a letter saying, you can't do X, Y and z. Plus they had the wrong property in their contract, but it actually worked out for the best because then they came back and said, okay, okay, how about this? We'll use the Florida contract, your Florida contract, and we will pay. Is he willing to do it? If we pay him the same amount, but we buy the property that he thought he was selling us because he owned three properties. And they put in an offer and he thought based on their offer, they were offering on his cheapest property rather than his middle property. And we ended up working it out just fine. But because they had used a Texas contract in Florida. That was totally unconscionable. I was able to go, yeah, yeah, you can't do all this. And got him to back down. But at least we got the deal still worked out there like that.
[00:07:33] Speaker A: Nice. Congratulations. That's awesome.
[00:07:36] Speaker B: Now, so you deal with a lot of creative financing. I heard you say sandwich leases in there. I know what those are. A lot of people don't. Why don't you explain that first? Because since that was sort of your entree into creative financing and getting creative deals. Explain what.
[00:07:54] Speaker A: I think it's a great strategy for people getting into the creative real estate world because it's, it's less risk. There is still risk involved. But if you don't have a lot of capital, a lot of times people are coming into this world nowadays and doing these deals and they're just locking them up and doing wholesaling on these creative financing deals. And it's very, very dangerous doing that because if you're putting your end buyers, I mean, there's so many, so many different things that could go wrong. But a lot of people don't even know about the consumer protection regulations when they put that end buyer into their property. And the investor's like, well, my hands are free. I'm. It's the seller's responsibility. You're the one that structured it. So keep that in mind if you're the investor. But what happened was back in, when I started doing my first deals, I really did a lot back in 1997, doing the sandwich lease options because the market was kind of like where it is today. What. But we had a lot of inventory today. We don't have much inventory. But back in the interest rates jumped up to like seven and three quarters. And homes are sitting on the market for three, six, seven, eight months at a time. And people couldn't sell their homes. So I said, hey, would you be willing to rent the property to me for a few years? And I close on it, I'll take care of the maintenance, repairs. They're like, oh, I need my capital out of my property to go buy this next one. Well, my background real estate bank. I said, okay, this is what I'll do. I'll refinance your property at 80% loan to value. Give that cash so you can go buy it. And then I would do like a five, a five, one arm. You know, back then it was popular. The arms nowadays are not very popular, but because the rates were at seven and three quarters, I could get a rate around like five and a quarter fixed for a Couple years for two years and then adjust. And I'm like, oh, by the way, Mr. Seller, your new home, I want to do that loan. So I make money off the refinance. I'd make money off the new loan and then I would put a tenant buyer into the property and they would put an option fee down. An option fee is like a down payments, non refundable. So off of one lead, I was making roughly about $35,000 on the front end on that. So that's how I originally started back in the day doing that thing. Nowadays you probably, I don't recommend doing it because it was a little bit of, little, a little bit of conflict of interest back, you know, nowadays trying to do that. But back then it was great. I was upfront with everybody, told the seller exactly what I'm doing, putting an end buyer. Because I knew what I to put the end buyer into that property. I knew what the qualifications were going to have to be for them to be able to get the financing in two or three years on that property. So that's how I originally started out doing it. And I got into these with no money down because the seller was getting that cash and he thought that was, you know, some of the, you know, was getting that cash that they needed. So I want 45 days where I have to make a payment. And so that's kind of what. So you're going under a lease agreement with a seller allowing you to sublet it and you can put, you can do it for Airbnb tenant and buyer in the property, wherever you may be.
[00:10:50] Speaker B: So yeah, yeah, I used to do a lot of sandwich lease options. I don't, I haven't had many in, gosh, yeah, years, I guess because of that. And it is, it is really. Everything's more regulated since the financial crisis of 2008 through 2012. There's a lot more regulation around everything.
Exactly. You know, you wrote the book, the book Creative Real Estate Investing and you emphasize purchasing properties with little money, no money, no credit. So what are some of the biggest points out of that book? What are some of your biggest tactics and strategies out of that book that people have found most useful?
[00:11:35] Speaker A: I would say the number one thing where people really go wrong and they don't go wrong, but they just. When you're doing a seller financing strategy and when you're sitting there and you're talking to a seller, you have to look at it like this. It's like a marriage. You're going to be in a contract with these people you're in a long term commitment. So the first time when you're talking to these people, you have to think about your spouse. When you first went on that date with your spouse, you guys got to know each other. And that's really what it comes down to. 80% of my conversation is just building rapport and getting to know them. I'll give you a quick example. One of my students, members of my program had this one gentleman in Georgia and he was, he was open to seller financing.
He only wanted, I don't know where in Georgia, I can't remember where it was, but he only wanted $128,000 for this home. But he wanted $30,000 down. It did not make sense putting $30,000 down, $120,000 home. However, I still got on the phone, I have on the phone and my mentors on there, my mentee, and then I started talking to seller. I got to know like his most important thing at this stage in his life was his dog. I got to know the breed of his dog, got to know he had five children, he has grandkids. I found out he's a huge Atlanta Falcons fan. I found out he banks with the credit union, he's got good credit, he's retired, and he lost his wife. So this conversation, as we're getting to know each other, he's getting to know me as well. So it goes on for about 30 minutes. So I go, so I come back and hey, Robert, what do you plan on using with that capital, the $30,000? He goes, oh, I need $25,000 for a camper. And then I needed some spending money. I go, camper. I go, what do you plan on doing with the camper? He goes, oh, I'm going to go to West Virginia and the New River. Then I'm going to go to Chandra Mountains. Then in Ohio or Tennessee and Ohio, everybody listening and even yourself. When's the last time you guys been camping? Think about that. And so, and I started when you went camping, where did you go? Just think of yourself right now. Where did you go? Who, who did you go with?
Did you kayak? Did you hike? And then what kind of food did you eat?
So as I'm going through that exercise and he's visualizing what his life is like out there camping and spending time because he was going to whitewater rafting, then he was going to be in a camp on a camper with a bunch of his friends. So he's starting to visualize his mind what his life is like. So then I come back to him. I go, robert, I go, I notice that you've been trying to sell this property for about two months and you open a self financing. What seems to be the problem? Because everybody's offering me a low down payment on a home, like a much lower and or down payment. And I said, robert, I'm going to be frank with you. Nobody's going to put $30,000 down when they can go get an investor loan and put less capital down and probably rate about the same, but a property a little bit more desirable. But this is what I'll do. You mentioned that you belong with a credit union. You have good credit or they have great rates. I'll give you $3,500 down, you go ahead and take a loan out for the camper for the $25,000. And what I'll do is on the 20th of every month, we'll automatically have the payment pulled directly out of our account, sent directly to the credit union to make the payments on your behalf. And what we'll do is we'll create a Gmail in that portal so whenever there's a notice that goes out, it goes to my bookkeeper and it goes to you. So we got that deal for $3,500 down. Because I listened to him and I built a rapport with him where he said he had other investors, he had probably 12 other offers from other investors that they didn't listen. They just kind of beat him up. So I understood what his problem was and solve it. So whenever I look at a deal, there's two things I always want to know. Why are they selling and what are they planning on doing with that capital? Because if you can figure that out, that's how you can be creative enough to structure a seller financing deal.
[00:15:21] Speaker B: I think that's so important. Listening is ten times more important than what you're saying to them and you're selling the deal to them.
And anytime you're selling, you need to be listening a lot more. And you're talking because you need to hear their pain points and pull that out. There's an old story about two kids were fighting over an orange. Little boy and little girl. They needed the orange and finally they brought it to their mom. And their mom said, stop fighting. She took the orange, she just cut in half and handed it each half. And then she saw the little girl peel the peeling off and throw away the orange. And then he, the little boy peeled it off and ate the orange. And she said, wait a minute, you just wanted the orange and you wanted the peeling. So instead if she had just taken that extra mint and said why do you want each one? Why do you want it this orange? The little girl would have said I just need the peeling for shavings on this dessert I'm making. Little boy would have said I just want to eat the orange. And she could have just given one, the peeling one, the orange. And I think that's so important is people need to listen a lot more and they can solve problems for their sellers as well as their buyers when they do that.
[00:16:36] Speaker A: Yeah, it should be in. It absolutely should be a win for everybody. It should be a win for the seller, a win for your buyer and then you make a little bit of money along the way. So it's a win for everybody. And you're just using your knowledge to help sophisticate and make it make. It's a win for everybody. I can't tell you how many times, I mean I remember doing this one deal as a subject to deal and the lady was two months behind, she was facing foreclosure and I did a four year term on it and when she got paid off at the end, she called me up and she was so happy because at her credit score at that time was 804.
[00:17:10] Speaker B: Yeah, yeah. And that's the thing too. A lot of people don't realize it was subject to. That's actually a selling point for you to buy a property subject to the mortgage. You're going to look, I'm going to take it over and your payments going to be made, your credit is going to improve compared to what it is right now. We're going to, we're going to help you out this way. What going back to seller financing, are you seeing a lot of that right now?
[00:17:35] Speaker A: I do. Problem that you're having right now in the seller financing world is that the properties, the principal and interest, the PITI and all the fees, there's not, they're not covering the rents. So that's what I'm seeing right here in Florida. I was just looking at a deal in Jacksonville where the rents were $700 less than what the new mortgage payment, you know, because the interest rates jumped up, the tax insurance jumped up. So it's kind of an, it's a weird balance right now.
So that's kind of what I'm seeing a little bit out there in the marketplace. But there's different markets. Some markets are doing okay, you know, where the rents are working in favor. So you have to look at Your market and see and then.
And how.
Because usually when I sell a property, I put an empire into a property. I try to stay as close as possible to the market rents in that area. Because you always want to look at worst case scenario what happens to that property if you have to take it back and you got to put a tenant in there. You don't want to be upside down. And the same thing when I look at people doing Airbnbs, I always tell people, make sure when you underwrite, you know, I can't tell you how many times, especially in the Orlando area, people are taking these deals down and underwriting it off of Airbnb numbers and not underwriting it off of long term rental. And now look at what happened in the Orlando. It's just oversaturated right now.
[00:18:56] Speaker B: Yeah, well. And I think what I'm hearing there is experience.
It sounds like you have experienced probably the Great Recession 2008 through 2012.
What are some of the things that you learned from that time and what are some things there that you would never do again because you had done them leading up to that knock and wood.
[00:19:20] Speaker A: I didn't get burned too bad because I learned that around 9 11. During 911 we had a kind of an issue back then on a, on a small scale was nowhere near the big in 2008. But I got a taste of it then and I felt a little bit of financial pain on a couple deals.
And that's kind of where I learned it. So then going forward, I always learn, learn always.
I'm always look, there's three things I always look at when I'm looking at a deal. Why is the buyer, why is the seller selling?
What's my extra strategy? Who's my buyer? And then what's my risk? Those are the three things I always look at because you can always get a great. You can always take down a seller or financing deal boat. Is it worth the risk? You know, and that's kind of how I always look at it. I'm always looking at like the angles of where's the risk? Because when I put somebody in that property as an end buyer, if they stop paying, I step up to the plate and make the payment. So I'm always making sure that I'm always analyzing. In the beginning of my career, I was just putting people in and not looking at it. And we didn't have to really underwrite back then of making sure they could afford it. Even though you did do your numbers and make sure. Nowadays there's consumer protection regulations to make sure they can afford it. So those are the things I always kind of look at when I'm looking at those.
[00:20:39] Speaker B: How do you find your values of the properties? What are you looking at to make sure you're not overpaying or going too crazy on a property?
[00:20:50] Speaker A: I just look at the comps, depending on the property and depending on the area, sometimes I will give whatever the value is at that time.
If, if they want a shorter term, then I need equity in the deal. I tell them, if you want a better price, I need a longer term for that property. I need at least five years, minimum. I prefer seven to 10 years because I need its time value of money to make sure that property value is going to come back. But if say they want a two or three year term and they want top dollar, I'm saying, I'm sorry, I need at least 20% equity in that deal maybe. So that's kind of where I look at, and I look at the area of, Is this area going to appreciate how much? What is the average appreciation? I usually do about 3% per year. That's usually what I look for.
[00:21:44] Speaker B: So you've looked out over the past few years where it went up much higher than that, but you're probably fine now where it's not.
[00:21:50] Speaker A: Yeah, I don't look at that. Even when the market was doing that. I still. Because you knew it was going to shift at some point. You knew it was unsustainable.
[00:21:57] Speaker B: Yeah, yeah. What goes up does come back down to the median.
So you've done over $450 million worth of transactions more than that now. Yeah, yeah, I think you're much higher than that now. What, how did you scale? How, how did you do that? What did it take it just.
[00:22:20] Speaker A: Over the years I go through stages like, and where I want to, like, okay, let's ramp it up. Let's work with a bunch of people, you know, put all the systems in place. Nowadays I tend to, I don't want to work as hard. I don't want to grind it that much anymore, if that makes sense. I want to, I enjoy it, I keep doing business.
But there's a stage there in my life there where, you know, we're, we're grinding and going and you know, getting working to 10, 11 o'clock, 12 o'clock at night. Nowadays I'm just, I enjoy it and I enjoy my time. I every, my mornings now I sit there and I will meditate, work out. I really don't start working now until 11:30, until about 5, 5:30. That's usually what my schedule is. And in winter time now on a Friday, I only work for about two hours on a Friday because it's beautiful. But there was times there where, I mean, I was just a whole team, had great managers and it's just constantly. But I enjoy it. It just, it seems like it's. I don't know, it's just, you have hiccups that come along, but it's part of the game and you just, you just deal with it and you just move on.
[00:23:28] Speaker B: When you were scaling like that, what was, what were some of the biggest pain points you had?
[00:23:34] Speaker A: I'm sorry, the biggest what? Pain.
[00:23:36] Speaker B: Pain points.
[00:23:39] Speaker A: Getting. Putting the wrong people in the wrong driver's seats and that and that pulling the plug quick enough, you give somebody an opportunity to kind of. And you know, it's not going anywhere. You're just kind of prolonging it. That's probably one of the biggest things is like, you gotta be know, quick to hire, quick to fire type of thing.
[00:23:58] Speaker B: Yeah.
[00:23:58] Speaker A: If that makes sense.
[00:23:59] Speaker B: Yeah.
[00:24:00] Speaker A: No, but once you get the good team and you have good people take care of them and just treat them like how you want to be treated. And that's really what it comes down to. Treat, treat your people as your seller. And if you treat them that way, then it's going to prolong and it's going to go slow, you know, roll down to. And just make sure you guys are always doing the right things. Always, always, always do the right things. I mean, I can't tell you how many times we look at a deal and it just didn't make any sense for the seller to sell it to us when they just need a little bit advice. And if you do that, I mean, you just pay it forward and it always comes back to you.
[00:24:36] Speaker B: Yeah, I've had a lot of real estate investors over the years that that's one of the things they do. They go in, they'll go into a house and go, this house is too nice. You just need to sell it and list it and sell it because you will make much more money. And I think those folks do a lot better in the long run than the ones who go in and try to. No, no, no. You get it for much less.
So we talked about, you started out with sandwich leases, seller financing. You got land trust involved. You got, how do you shift, how do you know when it's like, oh, okay, sandwich leases are going out. Now let's get in seller financing. All subject tos are coming back how do you know when those are happening?
[00:25:17] Speaker A: Well, I think they're all there.
You just gotta make sure you're doing the correct way in that state. Because certain states have different regulations. That's one thing.
The way I look at it is I listen to the seller and depending on the seller's needs, I think of a tool belt. A tool belt is. Each tool is a certain strategy. It could be a subject too. It could be an agreement for deed, it could be novation, it could be. So depending on what the seller's needs are, that would determine what tool I use. Like if a seller is not financial distress and you go in there and I try to pitch them a subject to hey, Mr. Seller, keep the mortgage in your name and transfer the deed to me. And they're not financial, they're going to look at you like you're crazy. So you have to go ahead and I won't even bother pitching that. I'll pitch a different type of strategy that they'll understand. Like maybe an agreement for deed or land contract, depending on the area, what you call it, something on those lines. So you have to kind of understand what, what's going on with the situation with the seller and what makes sense for the seller and if they have a realtor involved or their attorney to make sure it's a win for everybody.
[00:26:20] Speaker B: Now you've got TI assets. You, you founded that.
What unique investment opportunities does that focus on and, and what sets it apart from everybody?
[00:26:32] Speaker A: So that one is more the commercial world. You know, I, I do multifamily. We just closed on a portfolio mobile home park, four parks in South Carolina, and we actually just closed on another one in Virginia. So the tis, it's just more of the commercial world. And then I have another one that focuses different entity that focuses on the residential. And then I have another entity that focuses on the coaching. So, you know, when you're, when you're in it quite a bit, you have different LLCs for different businesses, if that makes sense. In the real estate game, we all have a lot of them.
[00:27:08] Speaker B: Which one do you enjoy the most?
[00:27:12] Speaker A: I actually enjoy helping people, believe it or not. Like people like investors coming in. Because a little bit about me, I grew up in Vermont in poverty and I didn't have any money whatsoever. And I remember at my father left at a young age, I remember I was like 7 or 8 years old and my mother really had no education. So for breakfast, lunch and dinner, all we ate for breakfast, lunch and dinner for three months straight was Kraft Macaroni. And cheese out of a box, that's all we ate, so I can't touch that. So I grew up with nothing. And what happened was I had to do odd job to help put food on the table. So at 15, I had to go to work at McDonald's. And on top of, you know, growing poverty, I had a severe cage case of adhd. So I did I succeed in that environment. I was like doing 100 things at once. My mind was going crazy. So I was a senior in high school, worked myself up in high school, and I ended up becoming a managed store manager managing 170 employees while I was still in high school. And that's what he ended up paying for my schooling. And that's where I really learned the business world of understanding. However, at that age, I didn't respect the dollar, but I understood how to. The people skills. I understood how to look at things to make things work smoothly. And, and then I just learned. I did the Carlton Sheets thing, you know, I did my first thing and I, I just wanted to learn a lot about real estate. And then I discovered how to buy real estate with no money. And I always thought you needed money and credit. I always thought you needed that to kind of get going in the business. And then once I discovered you could do this. I want to help people that are stuck or they came from a situation where they feel that they can't go anywhere. Knows that that's really what I enjoy.
[00:28:57] Speaker B: Wow, okay.
How do people, if they want to start, have you as their mentor. How do they get into that?
[00:29:07] Speaker A: Sure, you can go to my website. It's Mark M A Arcade. The minus sign, Monroe M O N R O E Mark Monroe. In there you have all the links. Or you can just Google me, Mark Monroe Real Estate. And you'll see all my information come up and you can always follow me and reach out through the channels that way. But yeah, and then, you know, I love to like connect with you a little bit more, Joe, and then talk a little bit because I, I just, I really, I get, I geek out a lot of times on when you, when we talk, you know, when we get into like learning how to do these deals creatively but also make sure you're doing them properly with regulations. And that's. And I just enjoy that. It's kind of like, I don't know, it's just, it's a high, if that makes sense. You know what I mean? Because you can kind of like, oh, wow, you can do it this way and that way and, and Just make it a win for everybody.
[00:29:57] Speaker B: Yeah. And it's, it's, I mean, that's where I really step in a lot of times, you know, somebody calls me and I had one the other a few months ago that it was out of California and they were using a self directed IRA plus their own money to help fund this purchase. But it was a reverse 1031 exchange and all this other stuff. And I'm sitting there going, wow, okay, yeah, this, you definitely need me.
[00:30:23] Speaker A: It's fun, isn't it?
[00:30:24] Speaker B: Yeah, it's definitely complicated.
I think we ended up though, unfortunately, just the way it was structured, there was just no way they could ever do what they wanted to do.
They, and they wanted to use a land trust in, in Cal, a Florida land trust in California to do it. And I was like, well, we can set that up to make that happen, but I can't be your trustee. We'll have someone else be your trustee, a resident of California. I said, but then I know I'm not a California lawyer, but boy, I know that California's got something about trusts and taxes and they don't like it and they will stick it to you. So we ended up having to send them off again, other professionals locally in California to talk to, because the tax code in California for state taxes in California is just another world. And they ended up, they just couldn't make that deal work. There was just no way. But at least they found it out before they went in and invested all this money and did it and then completely destroyed their ira, you know, and then faced penalties and interest and everything on that, on doing that.
[00:31:25] Speaker A: And we've seen it before. People go down these rabbit holes and don't investigate properly. I can't tell you in all my years, the number one thing is you have to, have to have great people on your team. A really, really good attorney, not just title, but a really good attorney and a really good finance guy that you work with. I highly recommend those two things. You need those because they will keep you out of trouble and make sure they definitely know what they're doing in their experience. You have, it's the number one thing. Because otherwise you can go down this, like you just mentioned, you go down this path and you can spend so much money and then come to find out, oh, I'm sorry, you have to start all over again.
[00:32:06] Speaker B: Well, and I talked to so many people who come to me. I was just on a meeting right before we got here today and I was like, you know, I'm so tired of Getting that call twice a week now on average of people saying, boy, I really wish I had found you before. I went to this attorney in Miami or this lawyer in Jacksonville or wherever they went who charged me $20,000, and they've set it up and it's completely wrong. And my name is everywhere. There's no privacy, no asset protection, no nothing worked the way it was supposed to work because they didn't know what they were doing. And that, you know, it drives me crazy. I'm like, well, if you just found me first, you know, it would have made everybody.
[00:32:48] Speaker A: It's sad. It was. It's crazy because in the same thing, in the seller financing world, you have these people out there that are just genius at marketing, that knows a little bit about something, but they don't know the whole topic. And people are just gravitating, thinking they're the master. But there's a lot of times they don't know what they don't know because they're still. But they're such huge influencers where you have to kind of take a step back and if you see somebody that big as an influencer, just be very cautious of it and like, really find out how long they've been in business and really dig deeper. Because what I found is the people that are not huge influencers that have been in the business longer, they're a lot more knowledgeable than just what an influencer that's really good at marketing. Does that make sense, what I'm saying?
[00:33:36] Speaker B: Oh, absolutely. No. I was just talking about this in the last meeting too, because I was at a summit of 3,000 lawyers in Atlanta a couple of weeks ago. And one of the things that one of the speakers talked about, he said, look, there are lawyers out there who are not as good as you, but they're better marketers. So they are taking business from you even though they are not as good as you and vice versa. There are lawyers out there who are much better than you, who you are taking business away from them simply because they're not good at marketing. So why not be that great lawyer, great entrepreneur, great whatever you are, coach, mentor, whatever you are, and marry that with marketing. That gets you out there in front of everybody.
And two, yes, not only take what an influencer has said with a grain of salt, look behind, look at their experience and look at where they are. I do this all the time. I hear lawyers talking all from all over the country. And never ever do this with a land trust. Never ever do this with an llc. And I'M going. And in Utah that may be absolutely correct, but In Florida that's 100% wrong. And it drives me crazy because they've just got this better marketing than I may have at the time. So I have to answer it on my social media and get out there and try to get ahead of it to do that.
Now you've got a podcast too, and probably like me, I mean, you talk to a lot of different people. And one of the things I see are themes that sort of run through. What is a theme that you have seen run through all your podcasts of all these different people? Some themes that you've seen common to a lot of folks that you've. You've talked to over the years.
[00:35:23] Speaker A: A thing.
[00:35:27] Speaker B: Or challenges.
[00:35:29] Speaker A: What's that?
[00:35:30] Speaker B: Or challenges that they're all facing.
[00:35:35] Speaker A: The challenges. It seems like a lot of times it's capital. They're always trying to, they always need capital to be able to do more deals. That seems like one of the challenges.
That's probably. Or people don't know about them and they know and they know something really good and they just, they're not people, like I said, never heard about it. Like, I've been on some, I've had some guests on. I'm like, oh, wow, that's great. I mean, there's some really super intelligent people out there that you can learn so much from just as us bringing them on as our show. Like, wow, that's great. And you just like, you gravitate, you know, towards those individuals because you want to be around people. You know, we always talk about, hey, let's be around like minded individuals. But I also, for me, it's not just that type of mindset. For me, it's also like perspective. All they will look at something. I like that as well. You know, how are they looking at that and why they're looking at it and just analyzing and how they're saying it. I'm like, wow, it's. That's fascinating, you know, because you want those people. I don't know. I'm gravitated towards really intelligent people that get how to do certain things in the real estate world versus just pushing numbers and doing volume. Does that kind of make sense?
[00:36:47] Speaker B: Oh, yeah, yeah, no, absolutely. I mean, and sort of to that point, one of the things I've noticed among the more successful people that I've talked to through the podcast over just this past year, you mentioned meditating.
That seems to be a theme throughout. They all, the most successful ones all meditate. They all or they journal or they are, you know, they study stoicism or they're. They're doing something always to keep their mind clear and to grow at the same time. And those. That seems to be a central theme that I see among the more successful people that, That I talk to out there.
[00:37:35] Speaker A: Yeah. And time. They don't have enough time in a day. That seems to be the other one.
[00:37:40] Speaker B: Yeah. Yeah. Well, and. And truly successful people who. True visionaries who are always coming up with ideas. Yeah. You never have enough time in the day to ever get everything done that your. Your brain's coming up with all the time.
[00:37:52] Speaker A: I. I don't know, Elon, how I. We all talk about this. I don't know how Elon Musk does it. You know what I mean? That guy is like, I don't think he sleeps at all. He has like, two days in one day.
[00:38:03] Speaker B: Yeah. And he's a real micromanager, too. I couldn't do the way he works. I mean, he talks about, oh, yeah, I slept on the floor and watched how they did this to. On the assembly line so I could tweak this little process. And I'm like, I would never do that because I hire people who will. Who. Who should figure that out, you know?
[00:38:23] Speaker A: Well, did you hear about the thing when he took over Twitter, they had three, like, server firms, and he was. He was flying back home on Christmas Eve from San Francisco. Going back home, I think it was where. Texas. I don't remember where it was. And he had his two cousins, and they talked about, like, hey, why don't we just, you know, what to do? Because they're saying, oh, it's going to take six months to shut this server farm down. He goes, no, you have to do it in six weeks. And then towards the end, he goes, no, you got to do in six days. And they're all looking at him like, there's no way. So hen and his two cousins turned the plane around, went to the server farm in Sacramento, and with his bodyguards, they went in there and ripped out Christmas Eve. Took all the servers completely right out themselves. Use. Use the U Haul truck on Christmas Eve. And that's what they did. That's how fast he gets stuff done. He just rolls his arms up and just like. And people are like, you can't do it. Sure, they had some issues there for a few days, but the servers end up working themselves out. But it's just. I don't know how he does it and just get stuff done immediately.
[00:39:23] Speaker B: Well, and I think that's I mean, that entrepreneurial mindset is just do it, get it done. Because done is better than perfect, number one.
And take the risk. They're willing to take the risk. I mean, whether it's J.D. rockefeller, Andrew Carnegie, Thomas Edison, Tesla, whoever it was who took that risk, they were willing to bet it all, you know, just to see. It's like, well, I'll. I'll risk it and see what happens.
It's crazy. It's just crazy.
[00:39:52] Speaker A: And I think the other number one thing that really stood out from when I was coming up is the really successful people, especially ones that have multi, multi, multi million dollars, is when they want something done, they get it done immediately. They don't prostate, oh, I'll do it next week, or this. I mean, it's done. Like, the time that they even think about putting it off, they've already completed that task and moved on. That's one of the biggest, biggest things that I've seen being around people. Like, I remember twice, really good friends of mine spent some time with them, like, being at their home for, like, you know, several weeks. And I just watched how they got stuff done. Boom, boom. And then another one that I known they own, they're really, really successful in the commercial real estate. And just how fast they get things done, they don't waste any time whatsoever. They don't put anything off. It's just done.
[00:40:44] Speaker B: Yeah. One of the things I used to do is called toleration audits. And if I got stuck one day or if I was just bored, I would sit down, just write down as many things as I could think of that I was tolerating, you know, oh, my windshield wipers are leaving a streak on my windshield every time that it rains.
The. The garage door is squeaking every time it goes up. And I just keep a list of them. And then if I had a day where I just felt like I wasn't getting anything done, I go to that. That list. I go, okay, what is something I'm tolerating? I'm gonna go fix this right now. I'm gonna get new windshield wipers filling this car right now. We're gonna take care. And then it just starts this ball rolling that day, you know, and over time, I don't have a list anymore because I don't tolerate things anymore. It's just. You just get to the point where you're like, oh, that's squeaking. We're gonna go buy a new one today. We're gonna stop this now. I'm not putting up with that. And I think that does it. You. So if you, if you're not putting up with little stuff, the big stuff comes along, you're like, yeah, we're just going to get this done. And your, your staff can go crazy. They're like, you just keep coming up with more stuff and you keep pushing so hard. And I go, yes, but we, we chip away at it every week, every quarter, every year. We just keep chipping away at it. And they come back at me sometimes and goes, okay, that's a great idea. I know you want to get this done right now. What are we not going to get done? Because you want to get this done right now? Because we either don't have time, we don't have people, or we just. We just don't know where to even begin to get this done. I go, okay, some of those we can make. Let's make that next quarter. And I'll keep rummaging around in my head and playing with it on the Internet for a few weeks until I figure it out so that when we talk about next time, I'm going to have all your answers and we're going to get this thing done.
[00:42:23] Speaker A: Well, look at yourself. I mean, where are you right now?
[00:42:27] Speaker B: I'm in Ash.
[00:42:28] Speaker A: What house are you in?
[00:42:30] Speaker B: Yeah, exactly.
[00:42:31] Speaker A: So, I mean, it just shows, like, where you're at and if you stick to it, what you can achieve and enjoy yourself. I mean, you're in a beautiful home up in North Carolina right now, enjoying the holidays instead of being down in South. So the results speak for themselves.
[00:42:48] Speaker B: Yeah. And you, you're always trying to get. That's one of the things I try to get to where I work on my terms, where I want to work. And we've set up the technology and the processes and the people in place to where we're able to do. And it's not just me, it's anybody in our firm now is almost at that point where they can all be anywhere and work from anywhere when they are able to do it. Look into the future.
What are some emerging trends, opportunities? We're here at the end of 2024, coming into 2025. New administrations, new financial outlook, new tax changes. What are some trends that you think we're probably going to see in 2025 when it comes to real estate investing?
[00:43:31] Speaker A: I think it's probably going to stay the same as this, like this year. My, my opinion, I don't think the rates are going to come down as people really thought they would be that quickly. Even with this previous Administration, they kept saying the rates are going to come down. I still don't see it coming down. I mean, there's just the inflation levels are still there.
We're gonna have to go. I mean, you know, I don't want to get political, but our country went through some pretty hard times in the last few years financially on everybody. And I think at some point with this credit card debt and people like living over the means right now, I think we're gonna feel a little bit of hard times, a little bit for a little bit before things get better. That's my, that's how I think I see it. I could be wrong, but from the seller financing world, I like this. This is great opportunities. You know, people that can't sell their homes or, you know, they. There's not a lot of equity now. Yes, there is a lot of properties that do have equity, but, you know, the sellers are starting to come being realistic. And I do see, and I don't know, I could be wrong about this, but I see Florida and Texas, a lot of inventory coming online. So I'm curious how that's going to play out because, you know, the. During the four years after Covid, everybody was flocking to Florida, Texas and all that. Even the builders, and the builders been building like crazy. But now I see a really short, like if you look at like some of the areas that didn't do well, like Boston, San Diego, those areas, there's such, still such housing demand in those areas. I see the prices still kind of going up in those markets where I think Florida, I don't know what's going to happen. You know, Florida, we have a couple headstrongs, you know, we have insurance that's kind of taken away. And I do see some inventory coming online. But I still see people love moving to Florida. So hopefully it's not going to be hit like we did last time, but that was, that was a whole different animal.
[00:45:25] Speaker B: Yeah, I think Florida, you're probably going to see a lot of money spent on people hardening their homes, better windows, better roof, just preparing, you know, for more floods, higher winds. I mean, we got hit this year. Two really good hurricanes hit us pretty good. And I do see a lot of opportunity there for people who are in the home hardening business.
And you're going to have to get your insurance down. Otherwise your insurance is just going to make it too expensive to live there. Taxes, real property taxes, I see those leveling off because values are leveling off.
We had that big run up there for a couple of years. But I agree, I think things are going to calm down a lot on values. So that's going to keep the taxes pre level and once people get used to those tax bills, I think that will help them. But it will take some time for the rents and everything to get up to support those higher taxes and higher insurance payments. And that's what I'm hearing from a lot of my multifamily folks is people just can't make deals work simply because the insurance is so expensive on multifamily.
They just, they're backing out of deals left and right. As far as building new multifamily or buying existing multifamily, they're like, I can't make this work with the insurance. I'm going to have to be paying every year on this property or the reserves and I'm going to have to set aside for improvements that the lender is going to make me do over the next two years to harden it to get the insurance down. I can't afford to make this deal work. So we're seeing that a lot on the multi family side as well.
[00:47:05] Speaker A: Yeah.
[00:47:06] Speaker B: So something's going to have to change there as well. Maybe the government giving more incentives again for hardening new windows, new doors, new roofs, lifting up things off the ground for flooding and those kinds of things and preventing flooding.
[00:47:24] Speaker A: Yeah, I'm underwater and I have to, over the next three to five years, I have to raise our seawall by 16 inches.
[00:47:30] Speaker B: Yeah.
[00:47:31] Speaker A: Because of. Yeah.
[00:47:33] Speaker B: And that's the thing. I'm seeing a lot of condos on the beach. These big condo projects, they have seawalls, same thing. And you've got a, you know, 150 foot long seawall that now you have to raise that. And it's already been hit by two hurricanes in the past two years and it's already, you know, pretty well damaged. These, these large condominiums are also having trouble with that. Plus just the condo laws that had to change after Sunset Towers. I mean that's, that's been a big game changer in the state of Florida when it comes to condominiums.
So yeah, I think it's going to be tough and in Florida for the next year or two. But I think if we can get insurance under control, things will start settling back down. And yeah, people always, people want to move to Florida still.
[00:48:16] Speaker A: I actually think at some point the condo market, because of what we're going through, if you start buying it at the right time, I think you could really come out really well because you Know, the condo community is starting. They've been feeling the pain for the last two years, you know, and I think maybe in the next six months to a year, I think huge opportunities, because a lot of these condos will be fully reserves, because that's one of the biggest things. And they're getting hit with those special assessments and everything. But I do think at some point, like you said, it's going to level off. And I think there'll be some. There's some good opportunities in there. You know, the good old days of grandma coming to Florida to retire in a condo. I think those days are gone, you know, unless you're in a, you know, you know, Century Village or, you know, the Villages or something like those. But, you know, because of that, it just become expensive.
[00:49:04] Speaker B: Well, in part, it to another opportunity that we see, especially up here in North Carolina and probably along the west coast of Florida now with these hurricanes that came through. We saw this in 2004 in central Florida when we got hit by four hurricanes in four weeks. Suddenly you have a lot of damaged properties and people go, I'm just not going to rebuild. I don't want to deal with it. Whatever. And you can get properties, you know, rock bottom. You bring them up to new code, you can sit on them for a year or two and then resell them for multiples of what you paid for it, because the. The land's just not there and, you know, anymore other than what you.
[00:49:41] Speaker A: And one of the things I really noticed, I'm sure you probably see this. If you look at a community that's been hit with a hurricane.
Look at it three to five years later. So much money has gone into that community. And that community's thriving because you have insurance, you have federal government. There's so much. Look at what happened in Daytona beach, in Ormond beach area a couple years ago. They got so much money that came in there, they're building this huge Mary out there, all those. I mean, it's just crazy what's happening. And no matter where it happens, if you watch a community where a hurricane came through, look at it three to five years later, it's just exploded.
[00:50:18] Speaker B: Yeah. And we're going to see that up here in western North Carolina, where I am right now. It's. This hurricane came through and it was devastating. I mean, it devastated an area the size of the state of Massachusetts. It just flooded. And you see as you're driving down the interstate, you look over and you just see these massive boulders that the water move these boulders and they're spread over fields that had never seen water, you know, for, for 100 years. And now they've, they've got boulders just strewn across them as a riverbed because they had become a riverbed for a day or two. And you look at that and you're like, okay, yeah, this was a lot of destruction. And then, yeah, you see all the federal money and all the insurance money coming in and then you see a lot of investors coming in and buying up these lots near the water and everything because they know, eh, you're probably not going to get hit with another hurricane for another 10 to 20 years. So at least for 10 to 20 years we can, we can get this, build on it and do well and harden it, make it higher, harder to withstand future storms like this because.
[00:51:15] Speaker A: Absolutely, yeah, we're not going to have.
[00:51:18] Speaker B: Yeah, we won't have more storms, but the storms that are coming are more intense and I think that's what people are learning. It's like we're not necessarily having more storms, we're just having stronger storms, whatever. Whether it's blizzards or, or droughts or hurricanes, it's. Or tornadoes, you know, they're just stronger. They're stronger.
[00:51:37] Speaker A: My buddy just bought in Fort Myers and then three weeks later, the first storm came through. He had a foot and a half in water, right. And then the next one he had three feet, three feet of water. So what he did now is all the downstairs because it's two levels. He is just making all the walls concrete. So if it comes again, he just gets the power spray and just power sprays it all out. He doesn't have to worry about ripping out, doesn't have to worry about the mold. So he's like, hey, I don't care if another one comes. I just, you know, if it's coming, I just move my stuff upstairs and just get my power spray hose. You know. That's all he's doing now.
[00:52:12] Speaker B: Yep. I think that's kind of hardening we'll start seeing, especially out near the coast. Of course, even in Orlando, you know, I'm looking at replacing all the windows on the back of my house with at least Category 3 windows now in Orlando because. And that's going to be, I got prices. It's going to be over $100,000 just to replace all the windows and sliding glass doors on the, on the back of the house. I'm like, that's $100,000.
So. And then a generator. You know, you start looking at generators, you start looking at adding starlink as a backup Internet access to the house. And you know, things like that. Because it's like, well, if we lose power, you lose water, you lose this, you lose that. You got to, you got to have some backups for it.
[00:52:54] Speaker A: Have to be self sustained. You know, that's, that's really what it comes down to. It's just like, all right, let's be self sustaining. Like that's, I mean, you really need. But I have friends like in Ormond Beach, I have these guys that live in this beautiful area and you know, he lives in the old heirs of JCPenney the home. And it is on one of those areas and they're going, they just, they're going naked, you know, up there with, you know, no insurance. And you know, their insurance is $27,000 a year. And they did have some damage, but the damage was only like 18, $20,000. So. And he hasn't had insurance in the last four years, so he's still coming out ahead at the moment.
[00:53:33] Speaker B: Yeah, I had a client who had 40. He had 47 homes in Florida and it had just gotten too expensive to insure him, so he decided to go naked on all of them. He no insurance on any of the houses. The very next week, one of the houses burned to the ground. He said, okay, well, maybe that wasn't the best decision ever made. But he looked at it and I think that was the first and last thing that he had happen. And since then he's been fine, just self insuring, you know, setting money aside to rebuild some of them or repair them as time went on. So, yeah, I think you are going to start seeing that, especially in areas like Florida where people just go, I own it straight out cash.
I'm not worried about interest rates. I'm not worried about the taxes because I can afford those. And I'm not even worried about insurance because I can just rebuild it if it gets destroyed. I'll just rebuild the house if I need to.
[00:54:24] Speaker A: That's exactly what they're doing.
[00:54:26] Speaker B: Yeah. So one of the things I always do with all my guests is when we get to the end, our, our mission is to help people aspire to a better life. So one of the questions, the last question I always ask my guests is, who has helped you aspire to a better life?
[00:54:45] Speaker A: Wow. I could be. That list could go on. Depends on my journey.
I would probably say my grandfather, you know, because, you know, my father left and he lived next door and he had a small business and I kind of looked up to him, you know, for years and years I never really realized that until probably when I wrote the book. And that was one of the questions I was going through. I'm like, wow. My grandfather was probably the one that really inspired me the most as being an ethical person, you know, who I am. That made me humble. And making sure you always do the things are the right things. That's. And just treat people the way you want to be treated. I think that's probably. But the list could go on and on because throughout the years in different lives, I've always looked up at people and I've always had mentors. Even today I always you, you have a mentor, you outgrow your mentor and then move on. And I will still be friends with a mentor.
[00:55:44] Speaker B: That's wonderful. That's great to hear Everybody. Mark Monroe. Mark-Monroe.com is best way to get in touch with him. We'll put everything down in the show, notes for his book and everything else. Mark, I want to thank you again for coming on Trust this today. And until next time, everybody trust this.
[00:56:02] Speaker A: Thank you, Joe. Bye bye.
[00:56:04] Speaker B: Thanks for listening to this edition of Trust this. If you got something out of it, please press like and subscribe and give us a five star review to help us reach others who can benefit from this series. Until next time, keep aspiring to a better life.
