Mistake Free Real Estate with Marck De Lautour | 432

Chris Miles has the opportunity to talk with Marck de Lautour about mistake-free real estate.

Marck de Lautour graduated with a Masters Degree in International Business Management, from the University of Missouri – Kansas City. He is the Founder and CEO of SBD Housing Solutions, a Turnkey Investment provider based in the Kansas City area. He has been investing in real estate since 2002 and has successfully flipped over 1,100 homes in the United States of America. His property management firm currently manages a total of 560 rental homes.

Tune in to hear Marck’s amazing story.

Chris Miles (00:00):
Hello! My fellow Ripplers. This is Chris Miles, your Cash Flow Expert and Anti-Financial Advisor. Hey! I’m welcoming you out for a wonderful show. A show that’s for you and about you. Those of you that work so hard for your money and you’re ready for your money to start working harder for you now. So you work because you want to, not because you have to, so you can have all that freedom, that cash flow, that prosperity. Today, not 30 or 40 years from now. If the market just happens to smile on you the right way, but right now, to ensure that you have that life of freedom, that life of comfort and ease, but on top of that, more than just having that life of comfort, right? More than just having that wealth, it’s much, much more because as a Rippler, you’re here to create a ripple effect in the lives of others, not just your family, which is great to create a legacy, but the lives of those around you to bless more lives.

Chris Miles (00:56):
And guys, that’s the real purpose of creating wealth in your life is be wealthy in all areas, not just with money. And so guys, so appreciate having you guys here, you guys have been bingeing. You guys have been, you know, downloading and going crazy with these episodes. I appreciate it. Those of you guys that have gotten 50 episodes, good job! You got 300 and some odd more to go. So keep going. But you know, Hey, I appreciate you guys sharing this and really making this ripple effect possible for me through your lives. As you are able to create a ripple effect through others, check our website WWW.MONEYRIPPLES.COM There’s great stuff on there, including blogs, including even videos of this show that you can watch on there. So check that out. So today guys, I got a special guest, a guy I’ve known for a few years now and definitely someone that I admire and respect greatly.

Chris Miles (01:41):
It’s actually somebody we’ve been talking about getting on this show for a while and now we finally made it happen, you know? So this guy is Marck De Lautour and one of the big questions I get from many of you is okay, Chris, with everything going on in the world, should I, you know, should I really be investing in real estate or is real estate the best way to go? Or is there something else? And that’s exactly what I brought Marck here to do, because some of you guys, I mean, some of you guys wonder like, Hey, is it going to go to heck in a hand basket, right? You know, from, you know, to make it, you know, G rated for you guys on this show. So anyways, let’s, you know, a little bit about Marck, you know, Marck De Lautour who were actually graduate with a Master’s Degree in International Business Management at The University of Missouri, Kansas City, He is the Founder and CEO of SBD Housing Solutions, which is a Turnkey Investment Provider based in the Kansas City area.

Chris Miles (02:27):
He’s been investing in real estate since 2002 and it’s successfully flipped over 1100 homes in the U S his property management firm currently manages a portfolio of about 560 rental homes. And so the big thing of course, guys, that I’m just like, I’ve had a few other Turnkey Providers here before Marck is definitely one of those guys in the KC area and it’s knocked out of the park. So Marck, welcome to our show!

Marck De Lautour (02:51):
Chris. Thanks mate. It’s really good to be here.

Chris Miles (02:54):
So tell us, obviously, like I know, you’ve been here to Missouri for quite a while, right? Tell us a little bit about your backstory because we could tell by your accent, you’re not from Missouri or Missouri, sorry.

Marck De Lautour (03:06):
Yeah, no, actually the irony is I’ve actually lived in America longer than I’ve lived in New Zealand, which is quite strange, but now born and raised in New Zealand went to a private boarding school, which I think developed my leadership traits from a young age. Very entrepreneurial came over here to get my undergraduate degree on a tennis scholarship actually. So I played four years of collegiate tennis and then stayed on to get my MBA. While I was there, I fell in love, got married and, and stuck around. So I always say that tennis brought me to this country, but love kept me here.

Chris Miles (03:38):
I know that feeling. That’s how I got stuck in Utah. It’s like, wait a minute. What happened here? Now? I got my wife and kids and they say you know that here you are that’s home, right?

Marck De Lautour (03:48):
No truly blessed. I love Kansas City. And you know, I only graduated with my MBA in 2001, so I’ve never had a job, Chris, I’m a little bit unique in that. I you know, had the blessing of my partner, my wife who actually we celebrate 20 years married next year. Yeah, she was able to support us from the beginning when I just wanted to go and try flipping a house and stumbled across and made all the mistakes along the way I have made them all. But yeah, we’ve now successfully flipped, like you said, over 1100 homes, which sounds like a crazy amount, but you know, it just starts with the first one, right? In that first one, we happen to make money. And so just kept on going and I’ve never done anything since it was really the downturn in 2008.

Marck De Lautour (04:35):
When things changed for me though, and that’s when, you know, the Turnkey Operation became a reality money was very tight. And I actually got burned from a bad business relationship at the time. And so I kind of got back after being, you know, a millionaire by the time I was 30 suddenly got back to literally zero, all the, my I’d built up, we had 120 rental property. Had a really good you know salary coming from the business and all that got stripped away and I was back to nothing. But, through all of that, I was you know, would flip to probably at that stage about 400 homes. You know, I had a really strong business. We’ve been in business to get a seven years. I’d been the sole operator with two silent business partners. And even though they become became unsilent and kind of, it became a two on one operation that kind of led to the downfall. It was certainly an opportunity for me to say, Hey, look, I know what I’m doing. I’m just going to keep doing the same thing over and over. And that’s when it led to, well, how about I just do it for other people and use their money to get me through this downturn until I can do it for myself again.

Chris Miles (05:39):
Right. It’s interesting. Cause like you went from tennis to turnkey, which is interesting. Right? But you know, I love the fact that you went and you got burned because a lot of people’s fears, especially those have never really been much in real estate is getting burned. Right? And essentially, cause you have a book that just came out called Mistake Free Real Estate, you know, and obviously it hasn’t been mistake free for you. So tell us more about that and just some of the lessons that you learned.

Marck De Lautour (06:06):
Yeah. Look, the mistake is very much, I mean the the title of the book, Mistake Free Real Estate is very much tongue-in-cheek. But the idea is that partnering with a Turnkey Provider who has already made all the mistakes and real estate is a really good way for a passive investor to avoid those mistakes and be able to invest in real estate mistake free. So yeah, no, it look I’ve you know, bought the wrong house. I’ve bought a house with termites. I bought a house with a crumbling foundation. I’ve had vandalism with AC’S getting ripped off and I mean, you name it. But what you learned through all of that is how to avoid those mistakes from happening in the future. And you know, I think anyone who can be knocked to the canvas but keeps getting back up, I think that would be a good description of my early years and, you know, through resilience comes the power to you know, educate and learn and help others through that same process.

Marck De Lautour (07:00):
So yeah, I mean, look, my real estate mistakes have really been, I’ve been very blessed. I mean, they’ve been few and far between with, you know, through the first 400 homes, I’m proud to say we actually never lost money on a real estate deal. You know, because buying on the courthouse steps were just getting massive rips at the time through a largely untapped channel of acquisition. And so we were able to go and buy houses for 30, 40 cents on the dollar. So, you know, even if you have termites in the house, no big deal, you rip out the wood, you replaced the bed wood with the new wood and you move on. And you look for that. And the next one, if you have an AC unit ripped off or vandalism, sometimes you use the insurance because that’s what it’s there for.

Marck De Lautour (07:40):
Sometimes you just roll with the punches and you figure it out and you move on. Or, and honestly there were times when we got upside down on a house, but the great thing about real estate is it can still cash flow. So, you know, you don’t realize a loss if you don’t sell. And so we would just sometimes just hunker down and get it looking as good as possible. And even if we were all in for house at a hundred thousand, that was only worth a hundred thousand, well, let’s just cash flow it. And in five years time you know, you can either sell it at that time or continue to cash flow it. So I’m a buy and hold investor at this stage in my life. I know that I’ve you know, I’ve made enough mistakes to know where to buy, what to buy, how to buy it. And so now we’re just trying to lead others through that same through those same paths, Chris,

Chris Miles (08:26):
You know, you mentioned some that there’s a big difference in mentality between that. And like when people try to invest in the stock market, right? Because what you just said was key is that you say, when you know, with the value of the home goes down. Right? In that case, and that doesn’t happen very often. I mean, out of the last six recessions,

Chris Miles (08:41):
That only happened once. Where we actually saw values decline from point A to point B of a recession, right? From beginning to end. And that was the last one. You know, I’m not saying that won’t happen again. But what you said was key is that even if you, your value goes down you said the same thing people in the stock market will say, which is, well, as long as you don’t sell, you don’t lose money. But the main difference though, is that you’re actually getting paid. You know, we’re in the stock. You don’t, there’s not cash flow in the stock market, but with real estate, there is. And so for you, the value is like, well, value is irrelevant. If it’s paying great cash flow, if it keeps doing what I hoped it would do, who cares? Because if its stock is declining so that the stock lost 20%, and then you pull money out, that’s, I mean disinvesting, right? That’s actually pulling out money. So if say you lose 20% and they pull out another 10, now you’re down 30%. There’s no way you’re going to get back up to where you were. And like you said, like, Oh, now I just have to hope I don’t run out of money too quickly. Because I just pulled out money when I was losing. And that doesn’t happen with real estate.

Marck De Lautour (09:44):
Yeah. Look people asking the wrong questions, Chris. People are asking, you know, how much is it to buy that house? What they should be asking is more like, you know, I liken a house to an ATM machine. Okay. It’s just a box that money comes out of. So instead of asking, how much is it for that box? They should be asking with how much I have to pay for it? How much does it give back to me each month? Or how much is this box returning to me every single month? Because a, like an ATM machine, you have to have dialed in maintenance and management to make sure that that ATM machine is primed at the pump that it’s still able to cycle through and spit the cash out. That the cash is still cycling in each month. AKA attendant is paying on time. And so management is key and that’s obviously one of the four pillars from, from the book.

Marck De Lautour (10:29):
You know, we talk about you know, dialed in property management, but they’re just asking the wrong question this day and age, I mean, even if I have an investor that saying, well, you know, I want to make sure my house has equity. I’m like, well, I can give you a house with equity just done cash flow very well. I would tell you not to buy that one, but I’ve got another one that cash flow is really, really well that you may have to pay a hundred percent of market value for today, but if you’re not going to sell it down the road, what does it matter? What it’s worth today? You just want to buy houses that are really strong cash flow.

Chris Miles (10:58):
Yeah.

Marck De Lautour (10:59):
That’s the key.

Chris Miles (11:00):
It is. If it keeps paying you, there’s not really a reason to get rid of it, you know? And I know it’s one of your beliefs in real estate is kind of key to, for, because most people that are nervous about getting real estate. I mean, I think turnkey is a great way, because like you said, it’s more done with you in the sense it’s somewhat done for you because you’re managing the property. You’re taking care of all the hassle, you’re finding the right properties for them. Right? But the other thing too, is that sometimes they get people saying, well, maybe I’ll just start off buying one. You know, what do you think about that philosophy?

Marck De Lautour (11:32):
I think it’s awful. In fact, we don’t allow it when people come on board with us. So we insist that they buy a minimum of two or three asset minimum two, but we prefer three. So our ideal strategy for an, a new onboarded investors, you buy three assets up front and then one per quarter for the next four years. And lo and behold, you’ve got 23 assets after four years and then you’re aggressive or four or five years. And then you start aggressively paying down those assets. So we scale with leverage and then power down the debt, you know, real estate is best done at scale. It, you know, to have one or two assets, you have one bad little experience and people are crying. Oh my gosh! my cash flow is all gone. Or, you know, I’ve got, I’ve got a hundred percent vacancy.

Marck De Lautour (12:15):
It’s like, well, yeah, you have one house. I mean, if the tenant moves out for a month you know, you might be burned. But if you have 20 homes and one person and moves out, then it’s no big deal. I’m look, I’m a believer in real estate. I’ve been doing it a long time. I own 70, you know, single family goals, myself you know, proud of the fact that, you know, I am choosing to work rather than needing to work. I, the cash flow that spits off from those 70 assets is enough to support my family. And we’ve been aggressively powering down that debt for a long time now. So I think our cumulative is somewhere around a 50% LTV. And you know, that’s enough to really give you some nice cash flow through that time period.

Chris Miles (12:53):
Right. And do you refinance along the way? Or you just try to just keep powering down and paying down that debt until eventually it’s paid off?

Marck De Lautour (13:00):
Yeah. Good question. I mean, those investors that bought in with us about 10 years ago, absolutely. That refined now into one note. The other thing I, you know, when you’re buying one at a time and using leverage, it is a little cumbersome. I got to the point personally, where I had, you know, about 40 different loans on 70 doors. And it was just kind of, you know, each year I’d be having to refi’s and you know, wondering what the rates were going to do? So, finally actually in January this year. Thank the Lord. I was blessed to actually you know, do a massive right term refi. And so now I have one loan on all of my assets. So which is, which was great. And a couple of reasons, one you know, I actually, I was, I’d paid them down to about 30% LTV.

Marck De Lautour (13:44):
So I actually did a cash out up to 50% LTV debt free on my personal home and a couple other things that I was able to infuse the business with some additional capital and real estate is a great thing, right? I mean, I had held these assets all the way since 2002, three, four, five, six. I mean, I’m just an accumulator of assets, but through asset accumulation, you have options. You can obviously, you know, if people think of real estate being very illiquid, I disagree. I think it’s pretty liquid because you can always again, given time you can always pull some cash out. You can pay it off. You can, if, so, if you have more capital, you can pay it down and get more cash flow. If you need a bit, you know, a chunk to go make another transaction, you can leverage it and then go take that cash and infuse it into another deal that you’ve got going. So we were fortunate in January to be able to do a, so now I have on one loan portfolio, it’s been nice.

Chris Miles (14:38):
Yeah.

Marck De Lautour (14:39):
That didn’t work 10 years fixed at 4% buddy. So but the plan is to have that paid off in 10 years time as well. I’m kind of done with the debt thing,

Chris Miles (14:48):
Right? Yeah. Just get it done with for you, right?

Marck De Lautour (14:50):
Yeah.

Chris Miles (14:51):
Well then they’re free and clear. And then you got the cash flow it’s, you know, other than the property management fees is basically your profit, you know.

Marck De Lautour (14:57):
It’s pure profit. So, you know, the math for us in Kansas City is about a thousand dollars per door per month after management fees. So once these things are paid off if you have 20 assets, that’s about $20,000 a month of passive income. So again, with our investor clientele base, we’re saying, Hey, scale up to 20 doors, then aggressively pay down the debt. And so that you can get debt-free you know, scale up in five years, aggressively pay down debt in five years. So in 10 years we’d like to have them completely debt-free and with about $20,000 a month of passive income.

Chris Miles (15:28):
Gotcha. Awesome. Well, now if people want, this has been an awesome stuff and I know people want to get this book and get access to it. Because I know with your system, the great thing is they can have a big portfolio, but not have to worry about managing all the little details you handle that kind of stuff for them. You know, if people want to learn more about your system or about, or even get your book, what would they do?

Marck De Lautour (15:49):
Sure. So you can visit our, We have a landing page for the book specifically. Our company is called SBD Housing. It’s out of Kansas City, Fostering Key Provider, but for the book specifically a WWW.MISTAKEFREEREALESTATE.COM So jump on there, check it out. You can download a free chapter if you like, what you see, just click through and Amazon will print and ship it to you. So, yeah, it’s amazing times.

Chris Miles (16:13):
I love it. Awesome! And you have a podcast as well, coming out called the MISTAKEFREEREALESTATEPODCAST right?

Marck De Lautour (16:18):
Yeah! That’s going to be very new. We’re just kind of accumulating a, you said 400 episodes of your own. I’m like, wow! That’s impressive. How long have you been doing the podcast to get to that number of episodes?

Chris Miles (16:29):
We’re in our sixth season right now?

Marck De Lautour (16:31):
That’s impressive. Well, congratulations, Chris! That’s awesome.

Chris Miles (16:34):
Thanks.

Marck De Lautour (16:34):
Yeah, we’re very much on the infancy of that. You know, the irony now, as you all know, is that we actually don’t need any more investor clientele, to be honest, because it’s an inventory issue. I mean, if you just have 30 investors that are buying one per quarter, that’s 120 doors. Well, we only spit out around 150 doors a year. So I mean, we don’t really need to onboard that many new investors. But having said that I’m passionate about educating and explaining to people, you know, what the turnkey model looks like and how to identify good Turnkey Operator.

Marck De Lautour (17:03):
There are some people out there in the industry that, you know, say they’re a Turnkey Operator, but all they have done is that partnered with a Property Management Company. So they buy and rehab an asset and then sell it to you. And then they’re like, Oh, by the way, there’s another guy that’s doing the Property Management. That’s an inherently flawed model and that is not full turnkey. I dissuade anyone from going down that model because they get burned typically with a non-performance on the warranty issues. And then also the management companies now. Oh, great! Now we’ve got another guy to come in here and gouge through fees and maintenance. So read the book if it resonates with you. Literally, my I put my email address right there on the website, so people can reach out to me if they have any questions.

Marck De Lautour (17:45):
I’m just passionate about people doing it the right way, because you know, passive and real estate for the longest time period, Chris has just been, it’s been ignored as a retirement vehicle. And I feel like everyone from a young age has just taught, Hey, when you start your job starting this in the stock market. And it’s just the wrong mentality and real estate is available to those that have a small nest egg and can start really powering down and aggressively going off to some real estate. It’s a, it can be done passively. It is risky when you are doing it yourself. In fact, I say in the book. One of the, you know, the most risky forms of assets out there are, you know, stocks, individual stocks, but another one that’s highly risky is self-managed real estate for actively working, you know, professionals.

Marck De Lautour (18:34):
I mean, if there’s a dentist that’s doing you know, real estate on the side, that’s an extremely risky venture for him because he doesn’t have the experience, but Professionally Managed Turnkey Real Estate is one of the safest vehicles out there. Truly it’s very, very hard with a buy and hold mentality to lose money in real estate.

Chris Miles (18:53):
I totally agree, man. Well, man, I appreciate this so much again, everybody checkout WWW.MISTAKEFREEREALESTATE.COM Right? To get the book and then definitely check out his podcast and MISTAKEFREEREALESTATEPODCAST as well and follow Marck. That’s awesome stuff. Great information, Marck. I really appreciate it today.

Marck De Lautour (19:10):
Thanks, Chris. Really enjoyed your time, buddy.

Chris Miles (19:12):
You bet. And everybody else. Hey, remember listening is one thing, doing is another, don’t be a listener or hear the word. But be a doer as well go and make it a wonderful and prosperous week! And we’ll see you later.