Real Estate Investor vs Agent – Mark Ferguson (Interview) | 589

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real estate investor vs agent

Meet Mark Ferguson, a successful real estate entrepreneur, who helps agents and investors reach success! Learn what Mark thinks about the real estate investor vs agent debate, how he evaluates single-family flip opportunities, and why he thinks people should buy a personal house.

real estate investor vs agent

What You Will Learn About Real Estate Investor vs Agent – Mark Ferguson (Interview):

  • What Mark Ferguson did before he got into real estate
  • Mark’s best source for off-market deals
  • The value of holding the real estate license
  • Flipping or holding, what Mark’s preference is and why
  • How he evaluates single-family flip opportunities
  • His biggest win in the last 12 months and the lesson he learned from it
  • What Mark enjoys most about his work
  • What changes he has noticed in the market and how it has impacted his business
  • Why people should buy a personal house
  • Why debt is not bad
  • The 3 guiding principles for success
  • Mark Ferguson’s blog with free and interesting educational content

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Transcript:

Matt Theriault: Welcome to Thought leader Thursday right here on The Epic Real Estate Investing Show. I’ve got a hot show for you today. Stay tuned. Okay, so today I’m joined by the founder of Invest Four More. He believes smart people who want to win in today’s society and build a life they love, must learn how to become investors. This is why I think has attracted to him because it’s essential, you can’t do it without it these days really. He created his company to help people become real estate investor either as rental property owners, flippers, wholesalers, or even no owners, and he spends a great deal of the time helping agents and their success as well. I just want you to know who I’m talking to so it doesn’t … you don’t think he’s just another guru. He has flipped more than 150 houses over 1000 houses as an agent broker and owns 20 rentals, including a 68,000 square foot commercial property. Please help me welcome to the show, Mr. Mark Ferguson. Mark, welcome to The Epic Real Estate Investing Show.

Mark Ferguson: No. Glad to be here. Thanks for having me, and looking forward to it.

Matt: Great. Yeah, there’s a lot of things I could have said about you. I’d written them down so I didn’t forget. There’s so much more that we could have talked about. Tell me what you were doing just before you got into real estate, and what inspired that transition?

Mark: It was pure luck. I graduated from the University of Colorado with a business finance degree, and my dad had actually been a realtor for 15, 20 years before that, and I didn’t want anything to do with it. But I couldn’t find a great job, so I thought, I’ll just work part-time for him, and then that turned into me getting my license. He would flip houses once in a while, and it ballooned into a whole career and investing, and it was pure luck, but boy, I’m glad it happened that way, that’s for sure.

Matt: Okay, great. It was just it was in the family a little bit in the blood it took off and this is good money. Let’s keep going.

Mark: Yeah, and one of the biggest things that attracted me to it was I saw my friends who are in the corporate world in their schedule, and they made okay money, but they had no freedom, and they had no real paths. With real estate I can make my own schedule, it’s kind of up to me what I did, and that was the biggest draw to it was having control of my future.

Matt: Right. I mean, I think, yeah, I concur. It’s interesting. I was excited, actually looking forward to talking to you because you are an investor, and you are an agent broker. And I’ve been an agent, I was an agent for four years before I was an investor, so I kind of under understand, I think, but I was curious today, in today’s market, how do you differentiate between your say, a lead comes in and you’re talking to somebody? How do you differentiate, is this going to be a listing or is this going to be something I’m going to buy? Are those leads generated differently as well?

Mark: No, that’s a great question. A few years ago, I did things much different where I was kind of I would handle listings, and buyers, and be investing myself, but over the last couple years, I’ve tried-

Matt: Hey, Mark, my internet totally froze on that question so can you just start over.

Mark: All right, yeah. It’s completely changed over the last couple years where it used to be, I would handle listings, buyers, investing all on my own, but lately, I’ve really tried to differentiate myself where I am strictly doing the investing. If I have a seller lead, sometimes we’ll send marketing out or networking or whatever it is, my sole goal is to buy the property as an investment, rental flip whatever it is. Then if that doesn’t work, then I’ll hand the lead off to one of my agents and give them the referral because I, well, I don’t have time to be running around doing agent activities as well.

And two, I think it is much easier to get those deals if you’re focused on just the one, the buying side, but you can learn pretty quick into the deal from talking if it’s a good lead for listing or buying, and if it’s a good listing lead, then I’ll hand it off to another agent, and that way there’s no kind of conflict of interest either with me trying to say, “Oh, you really need to buy it,” when actually they’d be better off listing it.

Matt: Right, right, right. Yeah. Eventually, a mastermind group that the … if I got hundred of the most, I don’t know, successful real estate investors in the country, and there’s a lot of agents in there also. That’s pretty much the only way everyone’s been trying to crack that code and figure out how to get the best of both worlds, and how you just explained it, it seems to be the only way that is working for everybody in there.

Mark: Yeah.

Matt: I know you’re out there. I know you’re out there in the field. As you’re looking for your investment opportunities, what’s your best source for off-market deals?

Mark: It’s direct mail still. We send out postcards, absentee owners, elderly, and we try and do that consistently every couple months. I need to really work on getting that better because I mean, every time we send out a couple thousand, we get a deal or two, so it’s our best way for off-market. But I’m still getting more deals from the MLS than I am any other source, and being an agent is just a huge benefit to be able to do that, just because I can act fast, I’m not paying commissions so I save money over other investors. I have access to the MLS. That’s just been still a gold mine for us, even in a crazy hot market.

Matt: You you see real value in being an investor and holding your real estate license?

Mark: For sure. I say it all the time, I think I figured it, it was your last year, the year before we save $270,000 on commissions. Because I make a commission when I buy a property, whether it’s a rental or flip, if it’s on the MLS, and then I save the commission when I sell it when we’re flipping houses, I still pay a buyer’s agent but I don’t have to pay listing agent because the agreement with the agents who listed for me is, they do that for free because of the other perks they get. It saves me so much money. But the biggest advantage is getting more deals because I can pay less than other investors, and then I check my hot sheets like five times a day.

Matt: You mean you care to pay more?

Mark: Yeah. Yes, I can pay more because I have … Yeah, I pay less commissions, and so I check my hot sheets all the time, and as soon as a good deal comes up, I’m out there in half an hour looking at the property, making an offer, and a lot of times we’ll get those before other investors even though they’re for sale.

Matt: What market are you in?

Mark: I’m in Northern Colorado.

Matt: Northern Colorado, okay.

Mark: Really area. We’ve seen a 300% appreciation over the last seven years. It’s crazy.

Matt: It is crazy. Let me ask you this, if you’re … when you’re looking on the MLS, first of all, on your investment preference, are you looking more to flip more? Are you looking to hold more?

Mark: I love rentals. I think rentals are really the long-term strategy, but our market’s gotten so crazy, it’s really hard to find them. I stopped buying residential rentals in 2015 because the price to rent ratio is just didn’t make sense. But then I bought six commercial properties in the last couple of years and switched to that niche. I’m always looking for commercial stuff now, but for residential properties, we’re flipping 100% of them almost. We did 26 flips last year, and those are all rehabs. Primarily it’s flipping unless we find that really good commercial deal.

Matt: Got it. When you’re looking at the multiple listing service and you’re evaluating single family homes for flip opportunities, what are some of the things that you look for that stick out to you?

Mark: Some of the things I’ve learned over the years is number one, don’t take on the big giant project that you think is going to be amazing because there’s this huge profit potential, because those big giant projects almost always turn into just never-ending problems. We still make money on those, but just the time and effort and resources it takes to add on to a house or completely got it to the studs just rarely pays off. We have to buy houses that are more than cosmetic stuff, but kind of that middle the road flip or your maybe doing kitchens, baths, a roof, flooring, painting, that type of thing. Then, of course, we want decent profit potential. It’s really hard to find deals with all the competition around here but we still do find him. We kind of want to make at least $30,000 on each flip after all the expenses and financing and all of that.

Mark: Then as far as age, location, I’m not really concerned about that as much because we’re selling them fast, where with my rentals, I’m much more concerned with the age and location that those things …

Matt: Right. When you’re scanning through, you’re just really kind of looking at what looks under-priced basically?

Mark: Exactly. A lot of-

Matt: That doesn’t take too much work.

Mark: Yeah. People tell me, how do you go through all the MLS listings? How do you narrow your search criteria? How do you figure all this out? The thing is, I look at the hot sheets, which is your new listings. A hot sheet, I can pull up the new listing since the last time I looked. If I’m looking four or five times a day, there aren’t that many listings to go through. But if I have to look through the entire MLS, it can take some time. I’m looking through those all the time, and yes, I know my market really, really well. I was born here. I’ve been here for decades, so I know what prices are, I can recognize addresses, different areas, towns, and be like, “Hey, that’s a good price.”

Usually, at least every week, I’ll go through basically the entire MLS, everything that’s listed within 30 miles of me and go through each property just like, okay, what’s a good price, maybe what’s been on the market for three months, which is a really long time here. Are there have been a bunch of price reductions? Just to see if there are any properties I missed on my hot sheet, so it takes work. It’s not, it’s definitely easy.

Matt: Yeah, no one ever said this was easy. Simple, yes, but [inaudible 00:09:38], right? What’s your biggest win in the last 12 months, and what did you learn from it?

Mark: The biggest win by far was buying the building where I’m at right now. I’ve been wanting to buy a really big commercial property for years, and I actually have been working with the commercial broker because commercially-

Matt: [crosstalk 00:09:59] brokerages in right now.

Mark: Yes, exactly.

Matt: Okay.

Mark: Yeah. I started working with a commercial broker because I wasn’t super familiar with commercial, he was connected, I was not connected in that world, and it’s so different than residential. It’s just crazy. But he brought me this pocket listing, which was a strip mall that had a grocery store or restaurant, a coffee shop, another little office, and some vacant space, and it was just a killer deal. It was 2.2 million with what they’re asking for 68,000 square feet, almost five acres of a pretty prime location. The reason it was kind of cheap was the grocery store had real low rents, but they’ve been there forty years. There was some vacant space and there was a pocket listing, so he’s trying to double in both sides of it.

We jumped on it and I’m getting under contract for a little less than list price, and it’s just been a crazy moneymaker, and along with it, we’re able to take one of the vacant spaces, remodel it, started my own brokerage, moved in here, and it’s just been a ton of fun, really exciting, and then just a great investment. Like I said, there was a property down the street that sold for 5.5 million last year that had 40,000 square feet. It’s just, we got really lucky. It spoiled me too.

Matt: You have other tenants sharing the building with you?

Mark: Yeah, there’s a grocery store that’s been here-

Matt: Oh, I understand.

Mark: Yeah. 30. Same building, the restaurant, an office next to us. We still have one vacant space we’re trying to rent, and then the coffee shop is actually on a land lease, so they own their own building, could pick it up and move it if they wanted to, but they pay us to rent for the land.

Matt: Got it. Well, congratulations.

Mark: Oh, thank you. It’s scary but awesome.

Matt: Yeah, I know, it sounds like a huge win. Is there a lesson in there somewhere? How is this impacting how you move forward?

Mark: Well, like I said, it’s spoiled me because I keep wanting to find more deals like this. I bought this with a partner. He is a big deal and really helped me pull it off because he’s had more experience in commercial. He also did a bunch of flips back in the past and is also a private money lender for me too, and so he’s been a real help with it, but both of us we talked about it all the time like, “How are we ever going to find a deal like this?” It keeps spoiling us, but we’re still looking. I really, if I could have 10 of these, I’d just be perfect. But we’re always looking for the deal, kind of been doing some more off-market commercial searching. Hopefully, we’ll find some more stuff but it’s really opened my eyes to how leases work, how brokers work, how the lending works, it’s all so different on a commercial.

Matt: Awesome. What do you like most about what you do?

Mark: I think I like being able to do whatever I want, which is kind of why I got into real estate in the first place, and it took me a while to learn that as my business progressed, but yeah, for a long time as an REO, and hadn’t broker where I sold foreclosures for banks. That’s kind of what I really became successful, started hiring assistants to help me out, and that’s when I realized that I don’t have to do everything myself, I can take the tasks I don’t like doing and hand them off to my team. If I don’t like doing paperwork, if I don’t like doing taxes, even mowing my lawn, I can have someone else do it. I try to focus on the things I really love doing, which is finding deals, buying houses, and just kind of trying to grow the business.

The thing I love about it most is just being a business owner in general, but be able to focus on the things I love, which is really just finding great deals.

Matt: That’s great. What do you see happening in the market that has you excited, and how is it changing your business?

Mark: That’s tough. That’s a really tough question because it’s been crazy here. The median price in Greeley was 110 in 2011 or 12, and now it’s 320, so our market has gone nuts, a lot of Colorado has, and I think it’s slowing down now. We’re starting to see some indicators days on market are a little longer. I don’t see a crash coming like we had last time, I think everything’s much different. I can definitely see it slow down, I can see things pulling back a little bit, so we’re being kind of cautious right now and not going crazy with buying, but we’ve always been that way too, no matter how good or bad market with what we buy.

But it’s tough, I still am happy to buy great commercial deals if the numbers make sense, but we looked at one the other day where the owner said the tenant might get three or four months behind on rent, and then also didn’t catch up, we were like, “Well, that’s 20 to $30,000 behind they get,” so I was like, “That’s not a deal we’re going to do right now if the tenant’s that shaky.” I mean we’re just solid investing, and it’s not something we do too different in any market, but we’ve always tried to do a kind of the same way.

Matt: Got it. Well, Mark, I really enjoyed this. I can see why I was attracted to your channel because I’m still looking for somebody to bring on the show that I disagree with. But I see the person, I don’t really like that person.

Mark: I hate real estate. No.

Matt: Right. Well, we talked about real estate all the time, what do you wish you could talk more about that you don’t get the opportunity to?

Mark: That’s a good question. One thing, I love cars, but this is not a car show.

Matt: That’s fine.

Mark: Money, I think a lot of things that our society lacks are just money education on buying houses on investing, and I think there’s a lot of people out there maybe you can … I can provide some stuff you’ll disagree with me on.

Matt: Go for it.

Mark: [inaudible 00:15:33] themselves in their marketing over what they really believe. The Grant Cardone of the world who say, you should never buy your own personal house, I hate that philosophy. I think it’s horrible. I think buying a personal house is one of the best ways to get ahead in life. Like you said, getting a great deal on the best way is to get financing, lines of credit, mind blown market. I really disagree with that, and Kiyosaki says that a lot too. So two have the big real estate guys I really disagree with that philosophy.

Matt: You’re right, we disagree there. Well, good. We’ll have to come back and share and compare but go ahead.

Mark: But no, I just think buying a personal house is one of the best things for someone who’s just starting out can do if they really take their time to get a great deal, get great financing, and then kind of piggy bank on that house either to use it as a rental property if they move out or flip it after two years and pay zero taxes on the profit. A lot of people get stuck like, “Oh, I don’t have the money for an investment, I don’t have 20% down. I can’t get financing for the flip,” where they could do that with their own personal house if they’re willing to sacrifice live in a place they work on, things of that nature.

Mark: That’s something I don’t hear all the time, but I kind of disagree with some of the concepts going around about personal finance.

Matt: Right, so you wish you could talk more about that, is what you’re saying?

Mark: Yeah, a little bit I try to talk a lot about it, but on the podcast that usually gets more into the investing side instead of the personal side.

Matt: Right. You might have just answered the question, but I’ll ask it anyway. We’ll talk about personal finance specifically then, what is one commonly held truth that you disagree with? Is there another one besides buying your own house? That’s not really commonly held, but-

Mark: That’s a great one. That debt is bad. That’s one I really disagree, and everyone’s like, “Oh, I want to pay off all my debt. I want to pay off my houses. I want a 15-year mortgage.” I disagree with all that too, and a lot of people say, “Man, you’re just living on the edge on risk.” But I think debt is one of the most amazing tools you can use if used smart and wise. If you’ve got reserves, you’ve got backups, long-term debt to me against real estate, you got some of the lowest rates, some of the most secure debt you can have, and you can just make so much more money buying rentals, or flipping, or even investing in other things than the three, well, not anymore, but four or 5% interest rates that you can get on those loans.

I don’t pay anything off early. I have exotic cars that I have loans on because I can use that money to make so much more in real estate. There’s a lot of crazy stuff I do. At the same time, I have reserves and cash available. I’m not jumping over the edge in debt, but I think that all debt is bad is a very … is a myth that I’m not on board with.

Matt: Yeah. Alright, we’re back on in the agreement mode. Actually, the video that I release tomorrow, by the time people here to our interview, this one will already be public but is exactly that, how to leverage that to build wealth, and yeah, don’t panic. I’d say leverage as much as you possibly can to build, and when you’re done building, then you can go ahead and think about paying it off to preserve everything. But if you want to go fast, that’s what our society [inaudible 00:18:46] at once, right?

Mark: Yeah.

Matt: Leverage the way you do it.

Mark: It’s funny, one thing I’m kind of proud of, which is kind of silly as I paid off my car loan after six years without making one extra penny to the principal. Sounds like it’s really hard at the end. It’s like, “Man, I’ve only got like 1,500 dollars left. [inaudible 00:19:03]. No, not going to do it.” Beg every single [inaudible 00:19:05].

Matt: Right, right. Yeah, and I mean, even if the idea that even if the asset even just breaks even, you’ve done yourself an incredible service by you’ve hedged your … What do you call it? Your financial statement against inflation because you still have the asset that’s preserved, and then you’ve got then you free up your liquidity to take advantage of those opportunities and when these amazing commercial buildings come along, right?

Mark: Yeah, exactly, exactly.

Matt: Yeah, perfect. Mark, if there were three guiding principles for your success, what would they be?

Mark: One is always be honest, do things the right way. I learned that from my dad a long time ago. You see a lot of people who kind of cut corners, agents, investors, both of them to make a quick buck, and they kind of screw people over, and that always catches up to you. I mean, in the end, you’re going to lose people who could have made you a lot of money, lose their trust, if you don’t do things the right way. That’s one thing.

I always try to be as positive as I can. It’s not easy, but I like to say it’s easy to be positive when things are going great, but when things are going bad, that’s when it really comes into play of really analyzing the situation instead of getting mad, or angry, or sulking. It’s like, “Okay, what happened? How can we fix it? What can we learn from this?” I mean, that’s really one of the best ways you can make your business better is by the bad times.

Then finally, really just building cash flow is a concept that I’ve always loved, and just having that passive income come in, whether you’re working or not, if you get sick, if you want to retire, if something worse happens, that’s just something that everybody should have and almost nobody really does have in our society. Those are the three real main things I focus on.

Matt: I like it. Be honest, be positive, and focus on cash flow.

Mark: Yeah.

Matt: Right? I was just reading that that’s today’s retirees their biggest fear is running out of money, right, that they’re going to outlive their money, but if you got cash flow it replenishes itself definitely, right? Perfect. Mark, you do so many things, and you’re all over the internet, so I wanted to kind of leave this up to you if someone wanted to get in touch with you, what would be the best way for them to do that?

Mark: My blog is the best way, it’s investfourmore.com as invest F-O-U-R-M-O-R-E.com. People ask me what that means, and I started just for-

Matt: Just about to.

Mark: When I first started, I got for mortgages in my name in the big banks like, “Oh, you can’t have any more loans, you already have four” I’m like, “What do you mean?” Then you figure out you can get more than four loans, and that’s kind of what the whole InvestFourMore is, is getting more than four loans on rentals. That’s the best way, is on that site. You can email me [email protected]. I have a bunch of articles, free book on there, all kinds of stuff, and like you said, the YouTube, I think we have 300, 400 videos on there. We do videos of every flip, every rental, and then lots of educational videos as well just showing everybody what we’re doing.

Matt: Yeah, and that was great stuff, and that’s how I found you. Yeah, if you’re in the flipping, and you like what Mark had to say today, go to his YouTube channel, and certainly subscribe great information. You got his blog, he gave you his email address, so I guess that’s it. Thanks so much for joining us, Mark. I’m glad we’re able to make it work out this time.

Mark: No, no great to be on the show. Thanks a lot. Had a lot of fun, and yeah, look forward to talking to you again here soon.

Matt: Cool. Yeah, let’s do it again.

Mark: Alright.

Matt: Alrighty, so that’s it for today’s episode of Thought Leader Thursday. I’ll see you right here next Thursday on The Epic Real Estate Investing Show. Take care.