Posted on: July 20, 2020

Today’s guest is a force to be reckoned with in the real estate world. Dubbed as the Equity King, he has the amazing ability to find real estate opportunities with massive amounts of equity.

Marcus Maloney has come a long way from his first taste of real estate at just 12 years old. Today, he has completed over 3.3 million worth of wholesale transactions. While he still wholesales virtually in multiple states, he also invests in cash flowing rentals.

Marcus has also mastered the art of turning marginal profit into significant equity position. In this episode, Marcus candidly shared some of the wisdom and techniques that has helped him achieve the success he’s now enjoying.

This episode will inspire and motivate, so you owe it to yourself not to miss it!

Key Takeaways

  • What the Chicago market is like
  • The importance of having someone you can work with when you’re new
  • How he found a partner
  • The benefits of holding rentals virtually versus in your own backyard
  • What the 2% rental price rule is
  • Why it’s ideal to have a property management team
  • Why you need to be prudent with your money
  • One of the benefits of getting into wholesaling
  • The reason he ended up in Phoenix
  • How people can get ahold of him

RESOURCES:

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Episode Transcription

Lauren Hardy:
Welcome to the Wholesaling Inc podcast. I am your host Lauren Hardy. And, if today is your first time ever listening to this podcast, I want to welcome you. Today, we have an awesome episode with another fellow virtual investor. He’s based out of Arizona. His name is Marcus Maloney. Marcus, welcome.

Marcus Maloney:
Hey, Lauren. Thank you for having me. Thank you Wholesale Inc family, for having me.

Lauren Hardy:
Well, I’m happy to have you. I just got to know you a little bit today, because I was on your podcast. What is your podcast name?

Marcus Maloney:
We Love Equity Real Estate Show.

Lauren Hardy:
We Love Equity Real Estate Show.

Marcus Maloney:
Yup, you got it.

Lauren Hardy:
It was fun. I enjoyed being on it and I said, “You know what, wait a second, why are you not on mine, being that you’re another virtual investor?”

Marcus Maloney:
That’s right. And, what did I say? I said, “Hey Lauren, come on, let’s do it; let’s just go ahead and rock and roll”.

Lauren Hardy:
I know, that’s how we are. We Just go with it. We roll. We’re off the cuff and that’s what we’re doing today. So, super stoked to have you. So, okay; tell me a little bit about yourself, first of all, where do you live?

Marcus Maloney:
I live in Phoenix, Arizona. So, well not really Phoenix, but I’m in the Southeast Valley. So, I’m in Queen Creek area of Arizona. So, I’m about 40 minutes Southeast of Phoenix. And, I wholesale here in Phoenix. But, my main business now, has transitioned virtually to the Chicago Market. So, we’re in Chicago, wholesaling in quite a bit and I have rental properties there, and we’re looking at expanding and doing some more things in that Chicago Market. And also, in other markets in the Midwest, Indianapolis, St.Louis, Milwaukee.

Lauren Hardy:
Awesome. Awesome. I can’t say I know anyone who wholesales in Chicago, so I am excited to meet you. I always get excited when, I meet someone who’s doing deals in areas, that I’ve just never met anyone doing deals there before; so that’s really cool. Tell me a little bit about the Chicago Market.

Marcus Maloney:
So, the Chicago Market is very progressive. It’s a little bit different. Well, it’s a lot different from the Phoenix Market, in the sense that, it was behind as far as the downturns. So, with Phoenix, got hit really, really hard, really, really quick. Phoenix, California, Florida, Las Vegas got hit really quick, really hard. Well with Chicago, that area got hit, but it was like a long progression. It wasn’t all of a sudden, it was slow; so you could still pick up houses for $50,000, $40,000, some even $30,000, where on a next block, a fixing flipper was doing it and selling it for $200,000. So, we really saw the spread difference there and it was like, “Sure, let’s do it”. And, actually I got into it on accident.

Lauren Hardy:
Wow. Okay, how did how’d you get into it?

Marcus Maloney:
Well, I was doing deals here in Phoenix. And like I always do, I’m on Instagram, Facebook, Twitter, and things like that, and I was just posting some of the things that I was doing. And, my wife’s best friend reached out to me and she was like, “Hey, you know what, my mom passed away like three or four years ago and I have this property and I need to sell it now”.
So, I was kind of in this situation where like, Yeah, I could do it and make some money or what if this thing goes South, and now my wife’s best friend is really upset with me; and then that means my wife is upset with me, and then as far as the relationship… But, I was just really transparent, I told her, I said, “Hey, we work with investors, I can get this deal done for you”. And, I just found out what she wanted; and at the time I was JV’ing with a realtor in Chicago and I said, “Hey look, this is what I have, this property, and the seller is very, very close to me, I want to get it done, so I need everything to go smoothly”. And, we ended up doing it. We got the property under contract for a 100,000 and we turned around and sold it for 125.

Lauren Hardy:
Awesome.

Marcus Maloney:
Yup. So, she was happy. We were happy. Everybody was happy.

Lauren Hardy:
Well, that’s great. And I mean, I always say, I tell all of my students, find a partner that you can joint venture with; not just when you’re going virtual. I mean, of course I say this, when you’re going virtual, always at first JV with someone. But, even when you’re just getting started, JV is a really good way to… Like, when you’re getting started, just feeling more confident that you have this partner you’re working with. And so, that way, they have the answers, they’ve got the buyers, you don’t have to stress so much when you’re trying to sell the property, it makes them money. So, that’s cool, that, that was what you were doing. How did you find that partner?

Marcus Maloney:
You know what, it was funny. I was doing some other things in Chicago. And, I knew I kind of wanted to shift there because things in Phoenix were really starting to ramp up and the prices were starting to get crazy. And, I was putting some ads out on Facebook and on Craigslist, that’s how you tell how long ago this was; and he reached out to me and he was like, “Hey, you know what, got any deals, let me know, and I can help you move them”. And I said, “Perfect”. He sent me over the JV agreement and it’s been history. We were doing deals. I’m not JV’ing with him anymore, but we did, I would probably say about a dozen deals, if not more together. And, I’m a strong advocate, just like you Lauren, to JV and partner, that’s actually how I got started.
When I first moved from Chicago to Phoenix, I didn’t know the landscape. I didn’t know what was the good area, what was the bad area or anything like that. But, I knew I wanted to get back into real estate. And, there’s some direct mail, sent it out, was trying it, and I got a call from the seller; and got the property under contract at the ARV. This is how you know, I didn’t know what I was doing. Got the property under contract at the ARV, and I sit there out, I had a few buyers, I think I had like eight and I sent it out. Everybody was like, “Dude, you don’t know what you’re doing, you know, this is wrong, blah, blah, blah, blah, blah”. And, I was starting to feel real down about myself. And then, one guy just, he hit me up and he was like, “Hey man, I see you’re out there trying, there’s a lot of people that talk about doing it, but you’re out there doing it, you’re not afraid to make the mistakes, come on into my office, let’s sit down and let’s talk”.
Started talking with him and I became his acquisitions manager. I’m not sure if you guys know of Justin Colby. And, Justin Colby, I was acquisition manager for him and Gable Strowski. And, we were doing deals and I felt really, really comfortable on the phone, I could talk, I was closing deals over the phone, I was like, man, “This is great”. But, I told them going in, I said, “Hey, you know what, I always been a solopreneur, an entrepreneur, I can help you guys out, I’m willing to learn, I’m willing to do whatever you guys want me to do”. But, eventually I’m going to go out on my own, so we got to that part, where I went out on my own and the rest has been history. Actually, Gab now is, partnering with me on deals in Chicago. So, my once mentor is now a partner, so JV’ing definitely works.

Lauren Hardy:
Yeah, no, absolutely. I mean, you have to partner with people who know what they’re doing. When you try to learn it and be a hero and do it all your own. I mean, you are just going to either a, look like fool, screw up, lose money, there’s so many ways that it could go wrong; So I love that you did that. And I mean, I think that, that’s cool that you worked as an acquisition manager from high volume people like that. I mean, what better experience, if you don’t have any experience in this business, but you have that opportunity, why not. So yeah, that’s really cool. So, yeah. And, so you went from Phoenix, but there’s a ton of Phoenix investors. I mean, we know that Phoenix is just full of our industry, so you’ve chose Chicago. It sounds like you were from Chicago. Now, what are you doing now in Chicago? So, you’re are you’re wholesaling a little bit. Are you doing some buy and hold?

Marcus Maloney:
Yep. We have a portfolio that we’re building. We have about six doors now, no seven doors now. And, we’re actually aggressively buying more. I was just out there this past weekend, walked a couple of properties, talked to a couple of sellers and things like that, to see if we can get some properties under contract. So, we’re still very active in Chicago. What I want to tell people is that, if you’re getting started and you don’t know what to do; only thing you got to do is look at the bread crumbs and the trails that’s left from other people. Don’t be afraid to get out there and make the mistake. I got to the point where pride became too expensive. I had to let my guard down and say, you know what, “Whatever I got to do to learn this business, let me get out here and do it”. And, that’s exactly what I did.

Lauren Hardy:
I love that, you are not only like wholesaling virtually, but you are building a rental portfolio virtually. And, I tell people like, “Virtual works with any disposition strategy”. So, I built homes virtually, I flipped home virtually, I did the wholesaling and I’ve held rentals virtually. But, let’s talk more about rentals, because we don’t talk about that as much. Like, wholesaling virtually, is like the thing that most people think, off the top of their head, but like holding a rental portfolio virtually is absolutely doable. What are reasons why somebody would go virtual holding a rental versus in their own backyard?

Marcus Maloney:
Well, what happened was that, the price points here in Phoenix just became too expensive. The numbers just wasn’t making sense. Anytime, you purchase a property for $300,000 and your rent is, 15, 16, 17 hundred dollars. It just wasn’t making sense, where I can go to Chicago to a market that I knew, and I could buy a property for $30,000, put maybe another 20 to 30 into it, but then rent it for 1500. So, I was looking at the money that could be made and I was like, “Well, why buy in Phoenix when I can buy in Chicago, less exposure, but more money”. So, that’s what we started doing.

Lauren Hardy:
Yeah, 100 percent. I mean, that’s like a 2% rental price rule.

Marcus Maloney:
Yep. This quick story. I was watching this property. It was a duplex and the guy had it for sale on the market for like $65,000. And, I was just kind of watching it, really wasn’t thinking about pulling the trigger. I was just like, “Well, let me just see what happens with this property”. Well, it came off the market, didn’t sell. So I said, you know what, “I’m going to grab my yellow pad of paper, and I just sent him a quick message because I looked up the property up on the assessor’s office, got the address, sent them a message. I said, “Hey, you know what, I noticed that your duplex didn’t sell on the MLS, are you guys… Did you pull it off or are you still interested in selling?, Give me a call”. Immediately, probably three days after I sent the letter, I got a call and he was like, “Hey, you know what, I am interested in selling it, what would you be willing to offer”? And I was like, “You know what, I think 50,000 bucks, is a decent offer for the property”. He was like, “Sure, let’s do it”.
So, got the property for 50, I put another 20 into it. The first floor’s renting for 750 and the second floor is renting for 625, 675. So, it worked out. And, I started, when I was doing the first role, building the portfolio, I was doing it all by myself. I was like no management or anything at first, because we would go in and we would rehab the properties and we will make sure all of the mechanical’s was sound. Everything was sound, so it wasn’t like we had to worry about any damage or anything like that.
Well, low and behold, I had one property and I got a call in the middle of the night and it was about four o’clock in the morning. And I was like, “Wow, this is my tenant, definitely not good news”. So, he gave me a call and he was like, “Man, the garage is on fire”. Yeah, it was a detached garage. So he was like, “The garage is on fire, you know what I called then? I called the fire department and everything like that, what do you want me to do”? I said, “Well, you called the fire department, nothing I can do now, it’s four o’clock in the morning, I’ll give you a call in the morning”.
Gave him a call in the morning. They put the fire out and I just called my insurance company and they cut me a check and I had my contractors to go over there and redo the garage. It was really nothing else that I could do. And then from there, I was like, “You know what, I need to really start putting a property management team in place”. And, that’s when I started putting a property management team in place because we started buying more properties in. I couldn’t fly from Phoenix to Chicago just to watch some properties.

Lauren Hardy:
Absolutely. Yeah. I mean, when you virtual, it is so tempting to nickel and dime everything and squeeze [inaudible 00:14:56] for as much juice as possible by trying to do it all. But in the end, you are probably going to waste money, doing it that way in mistakes. So, maybe you thought you made a little bit more money here, you’re going to probably screw something up on the other end, perhaps something bad happen.
So, it is important. Like when you’re virtual, you got to get help, you’ve got to get your boots on ground. You have to set yourself up as if you are there. You’ve got to have eyes in the sky. If it’s not you, it needs to be somebody else that’s there, that you can call up and say, “Hey, you know…” That, first of all, if it’s property manager, like the tenants should be calling the property manager for [crosstalk 00:15:36] … You have better things to be doing, still like really cool. You were living in Phoenix, it wasn’t making sense to buy rentals there. You didn’t let that stop. You went back to, it sounds like your hometown in Fargo and made it happen there and that’s great.

Marcus Maloney:
Yeah. And, that’s what I tell people is, there’s opportunities out there, it’s not in your own backyard, maybe you need to go two hours away or maybe four hours away; you can still find deals. You can’t let roadblocks stop you from doing what you’re trying to do. And, that’s definitely what I tell people.

Lauren Hardy:
Yeah, absolutely. A lot of times people go virtual out of necessity and, I mean maybe we’re lucky it was a necessity thing that took us there. But then look, I mean, you figured out, these returns that are banana’s compared to where you’re like, now you’re not even looking back, you’re…

Marcus Maloney:
Yeah, I don’t even look at rental property here in Phoenix, because I’m like, “Well, what I can pay for a rental property here, I can buy two units or four units there and make more money there”. Naturally, you don’t get the appreciation that you would get here in Phoenix, but we don’t invest for appreciation; we invest for the long term. So, it’s like, “Hey, why not”?

Lauren Hardy:
Yeah, yeah. For the consistent cashflow.

Marcus Maloney:
Exactly, exactly. And, that’s what it’s all about. And, that’s the wealth building that I tell people. Yeah, you may have to get started with wholesaling because you don’t have any money to just start it; but once you start closing those deals, you have to be prudent with your money and you have to put some aside and say, “Okay, this is for taxes, this is for my longterm wealth strategy”. Because you can’t always wholesale for the rest of your life. Well, some people can, but for the wealth building component, definitely needs to start owning some.

Lauren Hardy:
Absolutely. And I mean, yeah, that’s one of the benefits of getting into this business. Wholesaling is a way that you can get in, when you don’t have money upfront. It’s like anybody can do it, right. You don’t have to have a rich upbringing or rich [inaudible 00:17:54] that helped you get into it. I mean, wholesaling, I started with no money. I started with a credit card. It was a way for me to get into this business, get into real estate investing with no money, but now I know how to find discounted off-market deals. And now, the other end of it is, building that wealth through owning property. That’s the end goal, really at the end of it, is owning these deals, getting that consistent cash flow and you’re doing it. I mean, you’re the real deal. So, I think that’s amazing. And, I definitely want to hear more about it when you start going into other territories.

Marcus Maloney:
And, the funny thing about it, Lauren, you said she got started with no money. I mean, the reason why I ended up in Phoenix is, my wife, she had a job and I had a job lined up, but once I moved my family and everyone out here, my job got pulled away from me. So, I was here with absolutely nothing. I had, if anybody knows what a first premier credit card is, that’s like a predatory lending credit card and I had a $200 limit.
And, my accounting practices was okay, I get $85 worth of overdraft fees, so I added that into my account, like okay, I don’t have zero, I had $85 worth of overdraft fees that I can use on his credit card. And, I just started with the direct mail, sending out those mail pieces. I will send out 50 a week, 50 a week, 50 a week and then, one just popped and the rest was history. So guys, if you out there, you don’t have any money, don’t let that stop you. There’s money out there. You can definitely find a way. If you don’t have the money, you just have to use your effort, you got to use what you have.

Lauren Hardy:
Yeah. You got to use your effort then. And, there’s plenty of ways that people without money, even if you don’t have money to market, you can make this business work. It’s, I call, beating the bushes a little bit, but you absolutely can do it. It just takes a little bit more effort. So no, that’s really cool. So, let’s shift gears now. So, you now have a podcast. How can people get ahold of you?

Marcus Maloney:
Sure. I mean the podcast is, We Love Equity Real Estate Show. You can find me there. All of my social media handles are, @MRCS Maloney. I have a YouTube channel where, nothing but free content, everything from just starting, as a wholesaler, all the way up to doing multiple deals, you can find that information there. And my website, which is Marcus, E as in equity, maloney.com. So, you can definitely find me just MRCS Maloney.
And, I am a contributor on BiggerPockets, was actually just on their podcast, show number 386. You can find me, just Google my name, I’m out there.

Lauren Hardy:
Perfect. Perfect. All right, well thank you so much for being on today. I’m excited. I’m glad we got to meet and I look forward to hearing a little bit more about your journey. If you end up in other markets, keep us all posted.

Marcus Maloney:
I will and thank you so much, Lauren. Thank you, Wholesaling Inc family. I really appreciate the opportunity, speaking to you guys. And always in parting, just remember to enjoy the journey.

Lauren Hardy:
Love it, love it. All right. Thank you. Take care.

Marcus Maloney:
Thank you.

Lauren Hardy:
Bye. All right guys, that’s all I have for today. If you guys like what you hear, please subscribe to this channel. And, if you guys want to learn more about my coaching program on virtual investing, I want you guys to go to www.wholesalinginc.com/virtual and apply there. All right guys, take care.

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