Episode 12 with Marc Brenner
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HIGHLIGHTS FROM THE PODCAST:
00:54 - How does Marc Brenner differ from normal real estate agents?
2:29 - Being a partner and the types of value realtors can add to an investor15:36 - Contractor attributes that are important for investors19:07 - Importance of availability & ability to buy fast in getting a deal under contract20:11 - Marc talks a bit about working with wholesalers22:42 - Areas of Atlanta Metro that Marc is excited about
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FULL TRANSCRIPT OF THE PODCAST AUDIO: Marc Brenner: It's scary, a lot of the wholesale deals you'll see are not any better than what you'll find in the MLS and sometimes they're more absurd, but it's like anything else you have to wade through a lot of crap to find something good. Spencer Sutton: All right, everybody. Welcome back to another episode of the Atlanta Real Estate Investor podcast. I am one of your hosts, Spencer Sutton, and I'm joined as always by my cohost Matthew Whitaker. Matthew, welcome. Mathew Whitaker: Hey, thanks. Thanks. I'm excited to be here. Excited about our guests today. Spencer Sutton: All right. So today we have got Marc Brenner with us and Mark's a local realtor in Atlanta. He is known as an investment property specialist in IPS. So Marc man, welcome to the show. Marc Brenner: Thank you guys so much for having me. I'm really excited to talk to you guys today. Mathew Whitaker: Well, we're excited to talk to you. I think one of the things that people need to know is that you just don't need to go out and hire your brother-in-law or the agent that would help you buy your house that you're going to live in to buy investment properties and that there really is a different skill set. And so one of the exciting things I want to cover with you is how you differ from normal agents just so that people have a better understanding of that today. Marc Brenner: Yeah, absolutely. So when I got into real estate, it was with the goal of parlaying it into full-time real estate investing. And along that path, I recognized that there's a massive need for realtors who can speak the language of investors and really help them achieve their goals. Less than 5% of active realtors have been involved in an investment property transaction. So that represented a big opportunity to me to provide some value to real estate investors while also educating myself about real estate investing for my own future. Marc Brenner: So really when you work with investors, it's not the same conversation that you would have with a typical retail home buyer. You really have to be sort of a counselor and a sounding board, and you have to be able to talk strategy and goals and you have to speak the language of an investor to be able to recognize when you can find a good deal and how to get that deal under contract. Like I said, there's not a lot of realtors who understand what makes it a good investment property or can have those types of conversations that need to be had to help a real estate investor be successful. Mathew Whitaker: The word that always comes to mind for me is partner. One of the things I think investors look for is partners and not in the technical sense, but in the, "Hey I'm going to look out for your best interest." And that's one of the things that I think people ought to look for in their agent and their property manager is somebody that can see the world the same way you do as an investor. And you're absolutely right, it's way different than that retail world. And one of the things I want to warn everybody is, I don't know too many agents out there that'll turn down business. So every agent will tell you they know how to buy investment properties. But I always joke when somebody says that, I say, "Well, you date your agent, unless you're buying multiple properties, but you marry your property manager." And so we have come behind on a number of occasions and said, "No, this is not something I would buy." So talk a little bit about being a partner and what types of value you can add to an investor. Marc Brenner: Yeah. So great question. I mean, and to your point, being a partner is really important because ultimately you're going to be making decisions based on some of the information that a realtor is providing for you. So you want to feel confident that that information you're getting from them is accurate, rental comps, sales, comps, the projection of a certain neighborhood. You're going to be deciding whether to spend your hard earned money on a real estate property based on that information, especially if you're out of state. So it's going to be really important to have that trust factor. Marc Brenner: In terms of value that I provide, I would break it down into three parts. And so whenever an investor reaches out to me, the first thing I do is talk about what is their personal investment philosophy? And this is something I stole straight from The Real Estate Guys Radio, who I'm a huge fan of and if you've listened to any of their podcasts, they'll talk about you have to understand what your goals are and what work you do and don't want to do in real estate. Marc Brenner: And one of the things, one of the most common questions I get is, "Where's a good place to invest?" The reality is that's not a good question to ask because the answer to that question is going to be so highly dependent on who you are, what your goals are, strategies, the work that you do or don't want to do. So the first thing I do with investors is to talk about what are their goals? What are their long-term goals? And then how can we tie that into a shorter term goals? And then all of those things, the work that they do or don't want to do will dictate the areas that we look at, the approach that we take. So really honing in on some of those questions to get clarity and focus. Marc Brenner: And then once we've got that fuller picture, it's about preparation. So getting their finances prepared and all of the variables in line to be able to move very quickly. And that would roll into the third part is helping them to execute at a very high level. So in this market, we were talking before the podcast started about how competitive it is, how low inventory is. Well, the way that you operate in a market like that is going to be very different than if it were a buyer's market and you need to be able to move extremely quickly in this market. Marc Brenner: And you need to not only have your offer extremely competitive and dialed in, but you also want to have a realtor and a lender even who are a really strong team, and will do some things that are going to give you a competitive edge in getting a deal under contract and that there's a lot of different things that go into that. So the way I see the value that I provide is first understanding what the goals are, then preparing them to be able to move quickly, and then executing at a high level. Mathew Whitaker: I want to dig into all those because I think those are great. Let's talk first about philosophy. When I think about investing, it's just like when people buy stocks, it's like you going to somebody who's an equity investor and saying, "I've got some extra money, what stock should I buy?" Well, I mean, that's a dumb question, just like, "I want to invest in real estate. What do I need to buy?" Even just within the house world, a small multi-family world, there's tons of different value versus cashflow. I mean, there's tons of different questions you can ask inside of that. And then that doesn't even take into account there's tons of different asset classes with real estate. So honing in on that. Mathew Whitaker: Spencer and I always talk about the first thing we would do is become an expert at one thing and that way you know what a good deal looks like when it comes down the pike. So let's talk about philosophy. I mean, what are some of the sub-questions you would ask an investor? I mean the first one I would say is probably talk a little bit about the first one I asked, which was value and cashflow and then maybe add some more to that. Marc Brenner: Yeah. There's a lot of things that are going to go into that. Everything from your budget, that's going to determine where we can or can't invest, to are you more focused on cashflow or are you more focused on potentially cashing in on some really strong appreciation? And that's going to really determine where we want to look and where we don't want to look. Also, what kind of resident do you want to have in your property? I have clients that who love section eight because it's a guaranteed check every month. And I have clients who would never touch section eight. So that's why I go back to where is a good place to invest, it's going to be highly dependent. I think, especially in the Atlanta market, there are so many great places to invest, but for many different reasons. Marc Brenner: And so when I have that initial conversation with an investor, I try to get a sense for what their experience is, what their budget is, will they be managing the property themselves, or will they be hiring a property manager? What is the neighborhood that they're interested in owning a property in? I have a lot of clients who, especially high net worth individuals who are looking for a place to store their money in a neighborhood that will be very safe and have steady appreciate over time. I have other clients who are really interested in getting in on the next up-and-coming neighborhood. So again, it goes back to the goals. You have a monthly cashflow goal. Well, that'll inform us how we're going to get there. A lot of times it'll come down to limitations, you'll have some limitation that's budgetary, and that'll cross places off the list. And eventually we'll get to a point where we can focus on two, three, four areas, and we'll have the strategy that we know we're using, and that paints a clear picture and helps us move forward at that point. Spencer Sutton: Yeah. I think this is great because I think a lot of investors, probably new investors, come into it not really having thought of all those things. I know I didn't, when I started buying houses, I didn't think about anything. I was just slinging deals. I was just a gunslinger out there. And really I think a lot about risk tolerance, because when you start digging into these questions, you start to reveal what is someone's risk tolerance. What kind of risk? If they're looking for section eight, maybe they're willing to take more risks than somebody who wants that steady appreciation, isn't looking for cashflow. So I think those are all great questions. Marc Brenner: Yeah. I think that's a great point. And just to quickly add on to that, something I forgot to mention, we always talk about timeframes. Most of the properties in Atlanta are going to appreciate, I mean, real estate traditionally appreciates to some degree, but it's going to be on different timeframes. And so if you're looking for sharp appreciation in the next three to five years, I'd probably point you towards a BeltLine neighborhood on the Westside, where I feel like there's signs in that area that have some significant appreciation. But if we're looking at another neighborhood in South Atlanta, well, that's still a great neighborhood to invest in, but it's going to be on a longer timeframe. It might be 10 to 15 years before it gets to the same place the Westside does. So I also like to bring in the concept of timeframes when you're talking about appreciation. Mathew Whitaker: So one question I would have is can you give me a quick checklist of, because that's number two is preparation, give me a checklist for the things an investor needs to gather up. I mean, they don't need to do that before they talk to you, but preparing to buy a house or preparing to buy an investment property, what do they need to have? Marc Brenner: The main thing is financing. We need to have a clear picture of what their financing options are. If it's cash, we need to have that proof of funds available. They probably want to have a good hard money resource. You never know when that will come in handy. And if it's more traditional financing, you really need a great lender partner. And that's actually something I've learned as a realtor over the years, having gone from using multiple lenders that I would refer out to now having a lender partner that has really made all the difference in the world. Marc Brenner: And really what that person is going to allow your realtor lender team to do is put in very competitive offers. And a purchase and sale agreement is all about timeframes that you can commit to. So it's going to be really important that you have someone working on your behalf, not only who can put in aggressive timeframes into that offer with low contingencies, but like I said before, you want someone who's going to speak on your behalf. Whenever we put in an offer on a home, my lender immediately calls the listing agent and talks about how it's going to be extremely easy to underwrite this person. They've already got most of the steps to go, how much experience they've had. And those are the types of things, it's really a game of inches in an extremely competitive market like this. So something like that could be the differentiating factor in your deal getting accepted. Marc Brenner: So the financing is a huge piece, having the pre-approval letter, also that helps you analyze a deal. How can you analyze a deal if you don't know what kind of interest rates you're looking at, what kind of down payment you're going to need to put down. So those would be some of the preparation and then the rest of it would be deal flow and having consistent routine for looking at deals, analyzing them, and then having that dialogue between myself and the investor. And then once you've created that dialogue and you've got all your ducks in a row, you start to understand the market better. You understand what a good deal is when it comes up. And at that point, you recognize a good deal more easily when it comes up and you're ready to move very quickly. Mathew Whitaker: Yeah. I think it's all about swings, getting a bunch of swings, and also being willing to put in offers and knowing that you may not get a bunch accepted, but it's a numbers game. I used to think of it as a pipeline when I was buying houses, is that I would shove as many offers into the top of the pipeline and all the good deals would fall out. You also mentioned something that I think is interesting too, because we've experienced this as well, is just like there are investor agents, there are also investor friendly financing solutions that understand the game, that understand how things work. Going to a big bank, unless you just have a lot of leverage with that bank, probably is not the best thing to do, but going to somebody that understands what's important to a seller can help you get deals done, especially if the house needs work. So just a few thoughts there. I'd be curious now about execution. I would imagine you're going to talk about how to build a good team around execution. And so would love to ask you what members need to be on that team? Marc Brenner: Yeah, so for execution, I think the focus at that point is really to get a deal under contract. The main components would be a realtor, a lender, and a contractor is probably going to be the next most important. The property manager of course is hugely important, but that's something that you can maybe wait a little further down the line. The contractor is going to be someone, especially if you're looking at off market deals, if you're looking at wholesale deals. And of course, to analyze the deal, you have to have a really good working knowledge of the condition that the property is in and what it's going to take to rehab it. Marc Brenner: But in terms of execution, what that looks like, like I said, is if we're talking about on-market properties, as soon as it goes on the market, seeing it the same day and getting offer in the same day, I'm even telling this to my retail clients as well, it's not a type of market where we can gather a list of 10 or 15 properties that we want to go schedule a date to see. The majority of those properties will be gone by the time you get around to go seeing them. So it's really about looking at the market every day or wherever your deals are coming from. And as soon as you see something that fits your buy box, you need to go strike and you need to stike strong. Marc Brenner: So getting the first offer in, a lot of times, I'm always amazed when those offers get accepted, but the reality is they do. So as a listing agent, I would never accept an offer the first day, because I want to gather multiple offers and drive the price up. But you'd be surprised how many listing agents don't do that. And if they get a full price offer or a very competitive offer and it's the first one in, you'll get it under contract. So that's some of what execution looks like. Mathew Whitaker: What do you think a good contractor, like when somebody is looking for a contractor, this seems to be one of the hardest things to do these days is to find people that are willing to work on a home since that's a really competitive market too, is finding these contractors. So talk about some attributes of a contractor that you think are important. Marc Brenner: Yeah. Well, number one, I would say that's something that your realtor should be able to help you with, that your realtor should be able to connect you with all the other members of your team, or at least people that you can talk to and vet. But a contractor can actually look like different things to different people. I work with a lot of out-of-state investors and so I have contractors for out-of-state investors that maybe I wouldn't pair with an in-state investor, because they have more systems in place to put a person who's out-of-state at ease. They're maybe more organized or professional to keep a out-of-state investor up-to-date on the progress of a project. But you're going to pay somewhat of a premium for someone like that. Marc Brenner: Now, if you're in-state, obviously it's always best to make a local connection with probably multiple contractors because like you said, they're extremely busy and especially in a market like this. But you really you want to do your due diligence like you would with any other member of your team. You want to speak with people that have worked with this contractor before, multiple people. If you have an opportunity to go visit their job site and see how they work and look at the work that they're doing. If you can get examples of rehabs that they've done before. You want to get pricing from them and you can compare that with other quotes that you get and see if it's in line. But it's like anything else, you want someone who's honest and someone who does what they say they're going to do, and that can be challenging. And sometimes you will hit and miss, but once you make that connection, it's an invaluable person to have on your team. Mathew Whitaker: It sounds like you're currently buying investment properties too. Is that a correct statement? It sounded like from the very beginning that you're also an investor. Marc Brenner: I'm not currently buying properties. So I'm building my real estate sales team, which turns out, takes a lot of time, energy and effort. My wife and I are in the process of turning our primary residence into a rental and looking for a multi-family property to house out. So I'm in the beginning stages of a personal real estate investor myself. So a lot of my time and effort and focus has been on building my sales business with the goal of using that capital to scale a rental portfolio. Mathew Whitaker: I think that's great. Do you have any idea how many houses or investment properties that you've helped people buy? Marc Brenner: I don't know the exact number off the top of my head, but I would say it's probably somewhere in the range of 25 at this point. Mathew Whitaker: That's great. That's great. One of the things I like about you Marc, and we saw your bio also on BiggerPockets, is just the amount of forethought you've put into this, the amount of hustle. One of our core values is hustle. So anytime I can always tell when somebody has that hustle in them. And if I was looking for an agent to help me buy homes, hustle would be the first thing that comes to mind because a lot of this is speed, a lot of it is consistency, a lot of it is want to. And sometimes agents get a little bit lazy when their business gets a little big. And one of the things I like about you, I mean, you're number six on the BiggerPockets bio is available, fast and professional. So talk about the importance of your availability, your ability to buy fast helps you get more deals. Marc Brenner: Yeah. So it goes back to speed so if a good deal does come in the market, I have to be available to go see it the same day and prepare an offer for you the same day. And also I put professional in there because you'd really be surprised how unprofessional some agents can be. And your agent's interaction with the listing agent can have a big impact on if your offer gets accepted. So even down to small things like calling the listing agent to let them know that you'll be submitting an offer, to tell them about your client, the way that you write emails, the way that you put an offer together, going down to making it a clean offer in one PDF with all the fields filled out sounds like small insignificant stuff. But again, it's about finding a competitive edge anywhere you can in a really competitive market. And so all these little things add up to increasing your chances of getting a deal under contract. Spencer Sutton: Marc, you've talked about a couple of times competitive market. I know we were talking about it before the show, deal flow so MLS is probably your number one source for finding properties. But talk a little bit about working with wholesalers too, because over the past 5, 10 years, we have seen dramatic increase in wholesalers out there. Some of them, just like you were mentioning with real estate agents, are professional and some of them are not so professional. So what are your biggest points and what do you look for when working with wholesalers? Marc Brenner: You shouldn't need a reason to trust a wholesaler. So you should have systems in place to where you can analyze a deal on its own merits. And you should never trust a wholesaler's opinion of ARV or rental comps. Again, you should have your team in place and someone who's a sounding board who you trust to give you those opinions. And it's all about deal flow. It's all about opening up as many channels for deal flow as possible, that's the biggest challenge for a real estate investor. And that's really what is going to make you successful, is finding great deals. So I do recommend clients don't just look on the MLS, especially if they're trying to do a strategy like BRR, it's just not going to happen on the MLS. And I need to set that expectation from the start. Marc Brenner: And so what I tell them is get connected with wholesalers. I have a few that I recommend that I can't tell you they're going to give you the best deal ever, but I can tell you that they're not daisy chaining the deal, and they're at least an honest person. It's scary, a lot of the wholesale deals you'll see are not any better than what you'll find in the MLS and sometimes they're more absurd, but it's like anything else you have to wade through a lot of crap to find something good. And a lot of times, like a contractor, like a lender, like a realtor, when you do find that person who's competent and who's putting out good deals, you really want to foster that relationship. And that's someone who can really provide you with good deals for many years to come. Marc Brenner: The other thing I would add on that is I tell almost every investor I talked to to consider doing a direct to seller campaign themselves. And I know a lot of investors have no interest in direct to seller marketing, but the reality is if you're looking to use real estate investing to create financial freedom or if you really want to do this on any kind of significant level, it makes sense on so many different levels to direct some of your capital towards a direct to seller campaign, because that's how you're going to get the absolute best deals. So that's another thing I set expectation wise with clients that I talked to. Mathew Whitaker: I'd be curious, pivoting a little bit, what are some areas of the Atlanta Metro that you're excited about? Marc Brenner: I'm so excited about Atlanta for so many different reasons. Atlanta is not the cheapest market in the world, but I think it's got such solid foundation. If you look at the amount of people moving here each year, if you look at the diversity of the job industries in Atlanta, and if you look at the severe shortage of affordable housing and affordable rentals. One of the values that I provide clients is tracking those big developments that are going on in the area. It can be really easy to do your due diligence and make reasonable guesses on what an area is going to look like in certain years. Marc Brenner: So you take like the BeltLine for instance, and the BeltLine has probably had one of the most significant impacts on neighborhoods that it runs through of anything, any development that's happened in Atlanta. And if I could own real estate, anywhere in Atlanta, it would be near the Westside trail of the BeltLine. And what's cool about that is you can look to the East and see what those areas have become, areas like Inman Park, Edgewood, Kirkwood, all of the really hot hip areas to be in. You can see that happening slowly on the Westside, along the Westside trail of the BeltLine where the Lee and White development is, you see a lot of the retail development already there, a lot of attractions for millennials. But you have neighborhoods in that area that with a lot of distressed homes and that are more affordable. And so I just think that's an extremely safe bet for just really significant change and appreciation. So that'd probably be my number one, Westside, near the Westside trail of the BeltLine. Marc Brenner: I'm a huge fan of the Tri-Cities in South Atlanta. So College Park, East Point, and Hapeville due to the proximity to Hartsfield Jackson. If you're not familiar with airport city or aerotropolis, you should Google that, just hundreds of millions of dollars being poured into these areas and mixed-use development, housing, retail, that I think it's reasonable to assume is going to have a significant impact on the home values in those areas. You've got the Fort McPherson development that I know has been put on hold, but I think will eventually break ground and that's going to have a huge impact on an area like Venetian Hills to the west. Marc Brenner: And then you've got like Grove Park, which is just north of Bankhead, which is going to be the largest park in Atlanta, larger than Piedmont Park. Microsoft just announced that they bought the development Mark Teixeira was developing in that area. So you're going to have a big Microsoft campus in presence in that area, which you can imagine is going to have a big impact on the housing market in that area. Those are just a few, there's a lot more, there's a lot of developments in Atlanta. It can be really informative for where you want to look for an investment property. Mathew Whitaker: If you haven't been to Atlanta recently, Atlanta is booming. It is incredible just driving around 285 and just seeing all the development, there's cranes everywhere. Even if you just drive through the city, you just feel the energy and the excitement that's going on and the big push that it has. And obviously Atlanta is sprawling. It's getting bigger in terms of just on a map, it's just getting wider and it's just a really great city. And I'll tell you one thing that I think is that, and some of the data's starting to back it up, is that people are moving from the Midwest and the Northeast down to the South. And Atlanta is a cosmopolitan city that has a feeling of some of the Northeastern cities and the Midwestern big cities, but just a little bit different, maybe government, obviously a warmer climate so has a lot of great things going for it. Spencer, anything you would add? Spencer Sutton: No, this has been great. Marc, listen if somebody wants to get in touch with you, how would they do that? What's the best way to get in touch with you? Marc Brenner: Yeah, so they can book an appointment with me using a Calendly link in my website, which is marcbrennerrealty.com. And my name is spelled M-A-R-C B-R-E-N-N-E-R. The other way that they can get ahold of me and another probably piece of value that I could add to them would be check out my YouTube channel, Living in Atlanta. This is a channel that's designed to help folks relocating here from out of town, understand the Atlanta market. But I found that investors have also really found it useful, especially if they're out-of-state, to understand what's going on in Atlanta, familiarize themselves with the neighborhoods and some of the developments that are going on. Spencer Sutton: Awesome. Well, again, this has been great. So thanks for being with us and listen, if you have not already subscribed to the podcast, go ahead and do that. If you found value, leave us a five star review. This is the way other people find this podcast, and we hope that it adds a lot of value to you. So we will be back with another episode in two weeks.
