The Norris Group Real Estate Podcast

Turnkey Real Estate & Direct-to-Seller Success with Marck de Latour | Part 2 #897

• The Norris Group, Craig Evans

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Marck de Lautour graduated with a Masters Degree in International Business Management, from University of Missouri – Kansas City. He is Founder and CEO of SBD Housing Solutions, a Real Estate Investment firm based in the Kansas City area. He has been investing in real estate since 2002 and has successfully flipped over 2,000 homes in the United States of America. His property management firm now manages over 700 rental homes.

Marck’s investment firm specializes in delivering quality rental investment opportunities to passive investors looking to deploy their capital outside of the stock market into alternative investments. The SBD team’s mission is to help investors deploy $1 billion into Real Estate by 2030.
He also loves to invest in multifamily apartment complexes and has successfully raised over $10mill to deploy into assets through the Midwest.


In this episode:

  • Residential Real Estate Preferences and Market Efficiency
  • Technology and Scaling in Real Estate Business
  • SBD Housing Solutions and Business Divisions
  • Collective Genius and Mastermind Communities
  • The importance of education and continuous learning Real Estate Investors
  • The biggest impact of Collective Genius on Marck's career
  • Advice for New Real Estate Investors



I Suvived Real Estate is on October 25, 2024

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The Norris Group originates and services loans in California and Florida under California DRE License 01219911, Florida Mortgage Lender License 1577, and NMLS License 1623669.  For more information on hard money lending, go www.thenorrisgroup.com and click the Hard Money tab.


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Narrator:

Welcome to The Norris Group real estate podcast, a show committed to bringing you insights from thought leaders shaping the real estate industry. In each episode, we'll dive into conversations with industry experts and local insiders, all aimed at helping you thrive in an ever-changing real estate market. continuing the legacy that Bruce Norris created, sharing valuable knowledge, and empowering you on your real estate journey. Whether you're a seasoned pro or a newcomer, this is your go-to source for insider tips, market trends and success strategies. Here's your host, Craig Evans. The Norris Group, proudly presents, I Survived Real Estate. industry experts discuss evolving industry trends, real estate bubbles, inflation, and opportunities emerging for real estate professionals. We want to thank our Platinum partners. uDirect IRA Services, San Diego Creative Investors Association, White Feather Investments, MVT Productions, Inland Empire Real Estate Investment Club, and Realty 411 Magazine. See, isurvivedrealestate.com for event details, information on all our generous sponsors and to connect with our speakers.

Craig Evans:

Hey, thanks for joining us again for part two with Marck de Lautour. You've always and I know this is gonna sound like I'm jumping, but I actually I want to circle back in what you just said, but you've always been in residential. Is that correct?

Marck de Lautour:

Yeah, yeah. I've dabbled and yeah, always residential, yes, never commercial real estate, yep. So Single Family Guy, through and through, we've obviously dabbled with some multifamily and done some larger syndications, but mainly on the minority GP side, rather than, you know, just because we had so much capital trying to, you know, throw itself through our organization, we couldn't deploy it into enough single family assets, so we started doing syndicating some bigger deals. But, yeah, always residential.

Craig Evans:

Is there a reason why you like the residential over multifamily?

Marck de Lautour:

Oh, so you're saying, Okay, so I'm thinking residential as a multifamily and single family. You're as opposed to commercial, but...

Craig Evans:

or, or even commercial.

Marck de Lautour:

Yeah, well, I mean, look, I mean when you when you can go buy a house for 20 or 30 cents on the dollar through the channel that we were getting it, I've never, you know, the irony is, people think that I'm risk tolerant, because I buy kind of in this really speculative way on the courthouse steps. But the irony is that I'm actually, I went about the first, I don't know, 14 years of my career, with never losing money on a deal. I mean, it was such a sure thing, I would only bid on the short thing. So I'm actually far more risk averse than most people would think, and so I hate losing money on a transaction. You know, if you lose 20 grand on a deal, you know, or 40 grand on a deal, it's like you've killed two deals on the back end because of the wasted time and effort and energy. And trust me, I'm not perfect. We've lost a lot of, as you get further away from the transaction and further away from the decision making, you're obviously going to lose money on transactions. And I've done my fair share, and we had some major lessons in 2022 and 23 but that being said, yeah, I feel like it's always been the single family game, where we can go and get our biggest rips and the biggest margins. There's just so much inefficiency, and I think that's why Wall Street jumped into the single family game is because they realized, man, this is like an inefficient marketplace here with commercial or multifamily, you've got big money chasing it, and big money is smart money, versus someone who just lets their house go. You know, we're walking through houses and excuse to be rude, but like dog poop and clutter and and, you know, just disgusting homes that once cleaned out and refurbished, get top dollar. There's nothing structurally wrong with it, but if someone lets their house go that much, you can go and take advantage of that and get a really amazing deal on the front end. And then you roll your sleeves up, clean the property up, and you can make some pretty good ropes.

Craig Evans:

I've heard you mention, as you're talking about through your growth, you've talking about leads, things like that. Is there a technology that you're using? Is there are that you either were or are using to get you and your company to where they're at now?

Marck de Lautour:

Yeah, so our company now, we're at Salesforce platform, so and highly our reporting is that, you know, a really, really strong level. So I just have dashboards that I look at, you know, if you'll allow me the car analogy, you know, I'm kind of sitting in the driver's seat now and pushing on some pedals and looking at a dashboard to see what we can and cannot do and for that matter, probably more on the passenger seat with Chris Jones and my CEO, is more driving the car itself, and I'm kind of navigating just telling him where to steer, but the car is rolling down the highway doing some pretty increasing velocity without getting the speed wobbles. One of the things that we used to do is when I put my foot on the accelerator and we'd buy more houses, you'd find that processes and systems were not in the point where scaling would actually hurt your organization. Now we're at a point where scaling is actually, you know, just dropping revenue the bottom line in a much more clean way. So when you ask about technology, I automatically go to our system of record, which is Salesforce reporting. So when we spend like we know exactly how much, when we spend money on marketing dollars, we know exactly the ROI on that marketing dollar. We know how many times the phone rings based on that one advertisement that we send out. So now, once you get that level of reporting coming back, now you could be more confident knowing that if you're getting a 4x multiple over here on this ad versus a 2x one over here, you're going to double down and do more of this. And so yeah, we are spending a lot of money, you know? Well, we're small, small operation, but spending around 150 grand a month and direct to seller marketing to make the phone ring. We have three inbound lead managers. They answer the phone, they set appointments. Then we have three guys in the living room that go and help people solve these problems that they're having. And yeah, that is now leading us to do, you know, somewhere in the 150 to 180 deals a year, and hoping to get even more, so.

Craig Evans:

Walk me through from the from the aspect of full turnkey, then. Really, what does was, does SBD Housing Solutions do?

Marck de Lautour:

Yeah, so kind of three divisions of SBD. We have the property management company, which is sitting over here, managing 700 doors. We have about 20 employees in that company. Then we have a fix and flip operation, which is, you

Craig Evans:

As you've grown this business, you know, I'll be know, where the turnkey stuff comes out. And then we also build new construction, but that's more through partnerships with builders, where we sell, and that's kind of the where we're selling turnkey, you know, in 2002, one another massive pivot we made was, you know, we were turnkey, everything, right? So, you know, you could get cash flow, cash flow and rental candid. I mean, you know, I know this is our first time properties, and we're selling to our investor base. But when interest rates went from 3% to 8% in 2002 you know, we had to pivot, because investors were suddenly turning their nose up at opportunities, and, you know, less aggression from their seat. And so we were looking at properties and thinking, man, this was going to be a turnkey, but I guess we'll just flip it now. So we'll just put it on the MLS and sell it. And so the physically talking. Faith is a big part to me. That's who I am. benefit of the interest rates rising was that, obviously the appreciation in the market allowed us to really get some increase, and we were able to sell the sell out of the asset. So it wasn't that we were stuck with them, but our model kind of changed. And what we found was that when we started looking at what our investors were wanting it was they didn't like used product, if you will, used a new right? So used houses that might I make no bones about who I am, what I believe, right? So I'm have, like, you know, a roof or siding or just stuff that would just happen to it. I mean, the the big rip on single family real estate is that it does require constant and good property management, but also some maintenance, you know, as it goes. And so we said, well, new construction kind of overcomes that. And then the other thing pivoting to new construction was that we would, we looked at new construction anxious to hear, I know, as I've listened to you talk things like single family, but it just didn't pencil. But once you went duplex or fourplex, it actually stole pencils. And so because you get multiple doors under one roof and one lot, we were able to spit out some really quality new construction duplexes and fourplexes that would kind of check off the, you know, the four pillars of real estate, cash flow, appreciation, depreciation and the ability to scale with leverage. And we would get all four of those and our investor base started really that, you've got the 10 beliefs that have guided you. Can you enjoy that. And so that's what we're stuck to now. So as a turnkey provider, per se, we've gone away from the rehab used 1970s, 80s, and 90s inventory to new construction duplex, fourplex, and we've found that it's been pretty popular. tell me a little bit about those?

Marck de Lautour:

Yeah, sure. Look, the, you know, you mentioned faith, and I immediately go to my spiritual faith. And I, you know, I'm a believer that, you know, obviously, that the Christ is our Lord and Savior. I think he kind of leads my decision making first and foremost. But from a business perspective. You know, I'm also realize, I think humility is a big part of being a leader. And you know, every organization rises and falls to the level of their leadership, and so as goes the leadership, As goes the organization. And I think that part of my internal battle has always been just to try and become a better version of myself, a better father, a better husband, a better leader of the men and women in our organization. And so I think that's why my affinity to the Collective Genius, to other Masterminds that I've been a part of, to my my massive library that that's right here, to my connections with people like Bruce Norris and Daniel Marcos, I had a CEO coach with Daniel for the better part of 14 months, and just always trying to level up and be a better version of yourself, I think is what we're all called for, podcasting, listening to audiobooks. It's all a part of the journey. And I think the biggest thing is just not quitting, right? I think that's the difference between a winner and a loser, is the losers end up quitting, and winners are just like, hey, the race is not over yet. I'm going to keep on going. That's a consistent message I get from those that continue to win. And I think that's what we're called to do, is just be the best version of self. No one's perfect, no one. Everyone's going to make mistakes. In fact, last you know, one of our most recent ones is where I was a minority GP in a syndication deal down in Georgia that's gone bad, because it's just had terrible property management. And so, you know, I'm now thrusting myself in to try and resurrect that deal, because we have really good property management here at SBD. And I said, Look, you know, how can we, you know, engage? How can we add value to where our GP needs help, and he needs help with operational oversight. He lacks accountability in the workplace, and so we're stepping in to try and overlay accountability process and systems through a property management firm to try and help him out of that situation. But, you know there's always room for improvement, and we're always trying to get better. And I think you know what people like, there's let you know when we hire a lot of millennials and Gen X, and so when those individuals are coming through your organization that's searching for more as well, and I think you've got to give your your staff a chance to come in and pour in. They're not just going to do it for money. No one cares about the money that an organization's making. But if you can tie it into a purpose or a why, and our Why is to transform the communities in which we live in and provide people so two things, right? Transform communities and make it, give real estate a half, give investors a hassle free way of investing in real estate. We believe that the real estate industry, for the longest time, has been so clunky and everyone it's really difficult to invest in real estate, as opposed to the stock market. We can go on E trade, click a button and you own Coca Cola. You don't need to know anything about the processing plant in Atlanta, Georgia, or where they get their cocoa beans from, or anything like that. It's like for, you know, a coffee shop or Coke or whatever you invest in with Starbucks or Apple, you can go and choose to invest in whatever business you want. We're trying to make it where real estate investing can be that easy as well and have a trustworthy organization to do it. And so our passion of being transparent, holding people accountable, holding ourselves accountable, having clear communication, is kind of what drives our organization to be the best that we can be. You know, I've held the title of CEO and our organization now, probably for longer than I deserved it, and it's really only been the last two years that I feel like I'm actually, you know, that I could actually say I'm kind of acting and performing as a CEO. I think that title inflation has happened in a real, meaningful way in the real estate space. And people give out, you know, call themselves CEO, and they hire a COO like that guy doesn't even know what process and accountability looks like. So we're actually, we give a talk, Chris and I about, you know, this exact thing about, you know, the different ways that an entrepreneur and a maverick entrepreneur can get help. Because it could just be an executive assistant, it could be an operations manager, an operations specialist, a director of operations or a COO, there's, like, many ways, many ways that you can get operational help along the way. But when you go looking, just because you're a young guy that wants help, and you're looking for COO, I'm like, dude, a COO title comes with a $350,000 price tag, like you really wanted to do that, and then when they realize that, they're like, Oh no, okay, so it's Hey, bring your expectations of what you really need back down. And think that's where we've been able to get a message across to some of these younger real estate investors that are coming through. Yeah. Look, I, you know, I have a two companies now, property management company, a fix and foot real estate company, and I'm kind of CEO over both. And so my job, you know, again, everyone in our organization is responsible for two things. Mine are big ideas and big relationships. So I'm kind of the brand ambassador. I get out there, I tell people what we're doing and how we do it. I create better banking and financial relationships. I create some big ideas. I go find the syndication we want to do. I go find the land that we want to develop. I find talent to bring on board the organization. That's kind of my role right now. But as far as, like, running the businesses, that is 100% on Chris and my COO, and he

Craig Evans:

and I'm so grateful for your time. But one of the does it extremely well. things that I've heard you talk about now, and I mean, I know your background with it. But for a lot of our listeners that are especially, you know, we get a lot of listeners that are brand new in the real estate investment space, talk to us about Collective Genius. You know, your your time with that, with the organization, and what it does as a whole.

Marck de Lautour:

Yeah. So if an investor came up to me and said, Mark, I've got $10,000 I've never invested in real estate before. What property should I buy? Or what should I do? I would say, well, just realize that you're embarking on a journey that is going to be a, you know, let's pretend this person's 30 years old. So you're going to embark on this journey that's going to be a 30 or 40 year journey, and you're asking what your first step should be. Think of yourself as the CEO of an organization that may look back 40 years from now and want to make sure that they were making wise decisions. Do you think that CEO should be educated in the space that they're about to invest in? And I said start like, you know, jumping on YouTube and get the free education. Yes, but go, take a course. Go spend five grand from a guy that that understands what they're doing, that's been there, done that, and then challenge that theory by going to another course of a different guy and spend that, you know, $10,000 on two $5,000 courses that you can go get a really good education on, and start using the right forms. Because the right forms, the right processes, the right mindset, really attributes a lot of the early stage success. So I think the mistake people make is to jump in with just because they've saved up some money they want to go buy their first asset. I think the greatest asset you have is the knowledge that's back in the decision making that you can make in real estate. So for those newbies, I would say, you know, if you're the CEO of you incorporated, you know, just be careful that you wouldn't want to fire yourself after the first investment. So how about we just go educate yourself and go down that track before you get much further. So that would be my estimation. And what I did, I've always invested in myself again, going back to that, leveling up your own knowledge base and leadership base. So read ferociously, right? So turn the TV off and start reading books at night, would be my first encouragement. And then surround yourself with people that have been there, done that. Because what I've found to be in my experience, is that people that are super successful will share their knowledge with an abundance mindset. They'll say, Oh, sure, I'll spend some time with you. I get people all the time they just, you know, reach out and say, Hey, can I get five minutes of your time? And it's always not a problem, you know, we'll do what we can to get our schedules aligned and jump on a call that five minutes always turns into 30. But it's like, hey, if I can give back. If you give, give, give. And this is one of the things I learned from Jason Medley. It's one of his quotes that I love to give, that he always says, 'If you give, give, give, the scales of receiving will always tip in your favor." And I found that to be just so true. And so I've had so many people give and invest in my time and knowledge that it's just a pleasure for me to give back in that same way. So Collective Genius, I began my journey with them in 2016 so it's been nine years. I've been part of this organization now, and I've actually been blessed that the last three years has been in the leadership capacity where I'm on the the leadership board with them, and so I've got to to befriend guys like like Bruce and enjoy my time. And I think he's been impacted as well by this, by with the community that he's come to to appreciate and love like I do, but it's just really a bunch of like minded individuals that are trying to get better, and are coming with an abundance mindset of saying, Hey, I'm going to make sure that we don't all make the same mistakes, and let's learn from each other, and they in a way that can can benefit, you know, the areas and communities that we serve.

Craig Evans:

As we're wrapping up, I guess, what do you think the biggest impact that Collective Genius has had on your career?

Marck de Lautour:

I think for sure, it was allowing me the chance to pivot through the these different tweaks that I've made. I believe that a a mastermind community like that, like the collective genius. For me, I know there's others that people may be invested in, but a mastermind network like that is an insurance policy against downturns, and there's been so many pivots and things we've had to do along the way, whether it be, you know, the Covid-19 pandemic and what that was doing to real estate. I. And Property Management specifically. I mean, gosh, trying to collect from people during that time period was was amazing. That's, again, another podcast of how we got through that. But then also, when the foreclosures on the courthouse steps just dried up, I could see that coming, and I knew that was going to happen because I saw it from the, you know, Kansas City is kind of one of the last adopters of most of these trends. And so when I saw California and Florida and Colorado and Vegas and all that Phoenix, all these sites that were they were just getting more and more people into the auctions. And then auction.com is a huge organization that really impacted the courthouse steps. It used to be me and two other guys on the courthouse steps, and most of the time just me, I just go and buy a house. It would just kind of me there, and suddenly, like, 20 people would shop like, what are you doing? You know, how dare you come at these public auctions, you know, thinking that was my little space, but, you know, giving me an opportunity to say, Okay, well, if that's going to go away, what's my next? And it's like, hey, sell a direct marketing is probably the way to go, and how everyone else is doing it. So I would relate to someone that had gone through that same story as mine, where they would, you know, they Hey, they'd say, Hey, Marck, I used to buy, you know, 200 houses a year on the courthouse steps, and now I'm doing it this way. And this is what you could do. You can find success there. So I think they were a guiding light, kind of a North Star. And it's not that the organization, the genius of the organization is that it uses the mind set, and it can move and flow with the knowledge of the member base. It's very member driven. And so you know Jason, the most humble guy that I know, is never, it's never all about him or what his knowledge is. He provides this canvas for the knowledge base of the investors to shine and members to shine through. And I think that's the best thing, is that you truly have because knowledge is fluid. It's always changing, and you can always adapt. And so, you know, the genius this week may be, you know, preaching, but then he'll be receiving the sermon the next week. When the tides change, and we need a different life lesson. So you're always giving and receiving. And I think that's the, yeah, the genius of the group. Last week I was out at collective genius in

Craig Evans:

Very cool. San Diego, and leading, we've actually, we have four groups now. So there's the premier group, which is kind of the one that Bruce comes to, and is most, you know, guys that are doing 100 plus deals a year, but now we've leveled down twice. So there's a group that does kind of like 25 to 75 deals a year, and then below that, it's people that are just doing their first or second flip. So it's Elevate, Select, Premiere. And then there's a CEO group that just has 25 guys in it, and I lead that group there as a CEO. So my role now is to facilitate these really, really high end conversations with guys that have elevated out of their business and are looking for what's next. But a lot of them, at one of the guys in the room was struggling with it, because he doesn't have a COO and he just has, like, a couple operators where he's been getting told the exact thing to do the entire time he hasn't done it. And finally, the oldest accountability group is, like, in the next 90 days, you are going to find an operations manager to come in, our Director of Operations, to come in and lay because he's just getting he'll get burned down. He said, because he's a younger guy, super successful, like he had a million dollar month last month, you know, so super successful guy, but he's just very hands on the wheel. And I'm like, dude, you've gotta get you'll burn yourself out, whether it be now or later. You got two young kids, the time will come, and if you don't have operations in place, you're constantly going to be losing people here, there and everywhere. If you don't have that level of accountability. Marck, I can't. Again, I can't. Thank you enough for your time. I know it's you got a busy life and you got to get onto other things. But again, I appreciate you pouring into our listeners. We can't wait to have you on the panel at I Survived. And again, we look forward to seeing you there. So for everybody listening. We are grateful to have you on today. Look forward to seeing you guys next week, and also out in California at our I Survive Real Estate event, raising funds for Make-A-Wish. Super excited about doing some great stuff there. So, till next time, we'll see you soon. Thanks guys.

Marck de Lautour:

Thanks Craig.

Narrator:

We'd also like to thank our Gold Sponsors, Inland Valley Association of Realtors, Keystone CPA, NorCal REIA, NSDREI, Pasadena FIBI, PropertyRadar, The Collective Genius. See, isurvivedrealestate.com for event details. For more information on hard money loans, trust deed investing, and upcoming events with The Norris group. Check out thenorrisgroup.com. For more information on passive investing through the DBL Capital Real Estate Investment Fund, please visit dblapital.com.

Joey Romero:

The Norris group originates and services loans in California and Florida under California DRE license 01219911. Florida mortgage lender license 1577 and NMLS license 1623669. For more information on hard money lending go to thenorrisgroup.com and click the hard money tab.