Through $40k Failure with Faith: Mark Passerelli’s Journey from W-2 Employee to Real Estate Entrepreneur

00:00:00
If you are working at w two and considering becoming a real estate entrepreneur, this episode is for you. If you are a real estate entrepreneur, this episode is for you. Mark Passerelli is a friend of mine. I've known him for well over a decade. And we walked through his story of becoming, going from a w two employee, a contractor.

00:00:30
When I say contractor, he was a carpenter and worked for a home remodeling company, and going from that to becoming a real estate entrepreneur and how he decided to take the leap. And we talked through toward the end how he lost $40,000 on a deal, which was a huge chunk of money for him. It still is a good chunk of money for him. And but we talk about how his faith was critical in getting through that time and how God really showed up for him earlier in the episode. We talk about a five year period of darkness and I guess rebellion, you could say how he strayed from his faith.

00:01:12
So faith is a critical element of this episode for sure. Toward the very end, at the very end, we talk about some tricks to get mental fitness in check and some things that Mark does on a regular basis to really keep himself motivated, keep himself healthy from a mental standpoint, and how he's been able to weather the storms that inevitably come along with real estate entrepreneurship. We talk about, you know, how the family life plays into things and how it's not just about, you know, your real estate deal and your professional life. We really get a glimpse behind the scenes as to what it might look like for somebody who quits their w two, doesn't have a ton of income, doesn't have a ton of savings, and takes that leap to go out on their own. Mark's in the Maryland flipping and rental property space.

00:02:08
He's somebody that adds value in every conversation, wants to add value in every deal, and just a really good person, very relatable person. And this is a very relatable episode that you're going to really enjoy.

00:02:26
Welcome to from adversity to abundance, the go to podcast for real estate entrepreneurs seeking not just to thrive, but to conquer with resilience and mental sharpness each week, join us as we dive into the compelling world of real estate through the lens of mental fitness, where challenges transform into opportunities. Get ready to transform your mindset and expand your understanding of what it takes to succeed in real estate. Let's explore these stories of triumph and resilience together.

00:03:03
Welcome, everybody, to another episode of the from Adversity to Abundance podcast. I am your host, Jamie Bateman. And I'm thrilled today to have with us a friend of mine, Mark Passerelli . Mark, how are you doing today? Good.

00:03:15
Thanks for having me on, Jamie. Appreciate it. Absolutely. Mark is an entrepreneur. He's a real estate investor, the owner of Phoenix Estates.

00:03:25
And Mark used to be in my house quite a bit, working on our home. I can't believe it's been almost ten years since we, uh. You were essentially remodeling, like, half of my house, which was. Yeah, which was awesome. But, uh, probably probably the worst experience of your life.

00:03:43
Right? Seeing me every day, I've tried to. Yeah, that's why I forgot about it. I've just pushed it out of my memory. Yeah, no, um, no, that's actually, those were good times.

00:03:53
But. But, Mark, how are you doing today? And what are you up to today? Good, yeah. Doing well.

00:03:58
Um, so as Jamie mentioned, I'm a real estate investor, so currently investing in buy and hold properties, doing some flips, and just started doing some wholesales as well. So that's kind of what I'm. Kind of what I'm getting into is the real estate field. Been doing it for about four years and really, really enjoying it. It's giving me a lot of freedom and kind of allowed me to pursue things that I, that I wanted to pursue.

00:04:32
Yeah, I'm excited to dive in because as we, as we briefly touched on before we hit record, I've got some, some real gaps in my knowledge about your story. And, you know, if you see those, like, somebody goes on a. Well, I know you've lost weight as well, but if somebody does a diet and that you see, like the before and after pictures, it's like, wow. Um, because I have not been plugged into every detail of your journey as much as I'm sure you would have loved that. No, I'm kidding.

00:05:00
But it's just when you sent me an update with your bio and I was like, wow, I had no idea that you have 20 some rental properties and you've done all these flips and everything, and it's like, what have I been doing this whole time? But no, it's really impressive. You know, just from my vantage point. And I know we're going to get in to more detail here, but it's very impressive just seeing, you know, quite honestly, you were the guy working on my house and I'm not trying to put that down and put you, you know, in any way. And now it's like you're a legit real estate investor.

00:05:38
So not that you didn't have value then, but it's just impressive what the, what you've been able to accomplish. Um, and I know it hasn't been easy, and we're going to dive into some of the adversity that you've been through. So before we jump into your backstory right now, say, in the next month, what's your focus professionally? Yeah. So right now we're working on a bunch of rental properties that we purchased, and we can dive more into this detail later, but essentially we're doing the burst strategy.

00:06:12
So we're buying them at a discounted price, adding value through the rehab process, and then kind of refinancing out of them. So we have numerous properties that we're working on right now. And so for the next month, the goal would be to kind of close out those deals and get some more flips going because the flips actually this year haven't been as. We haven't done as many flips as we wanted to, but we've done more rental properties than we've wanted to. So.

00:06:45
Interesting. Kind of like averages itself out. Yeah. I'm curious to dive in later on how the BrRrr strategy has still been working, given today's Market conditions, too, because I've done that as well. And I think, generally speaking, it's not as easy to do right now.

00:07:02
I'd say real estate investing is not as easy to do as it was 510 years ago. So obviously you've got to be good to continue to be profitable and productive. Yeah. So. And I can't wait to jump in and figure out how, like, the mindset around kind of deciding when to work, you know, leave your job, essentially you were working for somebody else and then you weren't.

00:07:29
And that's a big decision and a big transition. But before we get there, let's jump into your backstory a little bit. Where do you want to start? Yeah, I mean, I think just. We'll just start at the beginning.

00:07:41
Right. So I wanted to talk about my faith a lot as well, because it's something that's really important to me. So grew up in a christian family, christian home, always, you know, going to church, doing all those types of things. I think I accepted Jesus into my heart when I was pretty young, like four or five. Right.

00:08:06
And you kind of go, almost like, go with the flow. Right. With your family. Right. Your parents, not that they force you to go to church, but it's just you're going to church because your family's going.

00:08:19
Right. It's. And you're kind of going through the motions. Right, right. You haven't, you know, you haven't researched as a five year old.

00:08:25
Like, you haven't researched, like, Islam and any other. Yeah, yeah, yeah. Religion out there. So you kind of just follow in your parents footsteps. Right?

00:08:34
Sure. And that's. And that's. I feel like how my faith was growing up, and then at some point, you have to turn your parents faith into your own. Right.

00:08:47
Like, and whether that's when you go off to college or whatever, you move out of the house. Like, your parents aren't forcing you to go to church anymore. Right. You have to decide to make that step yourself. So I don't want to get ahead of ourselves because that's a little bit later on, but let me just kind of go through my journey.

00:09:07
This kind of relates to the real estate, some of my background. I started getting interested, honestly, in construction and real estate type stuff when I was pretty young. We had an addition put on. On my parents house. It was an in law suite, and I think I was, I don't know, 1112, maybe.

00:09:27
And I just was fascinated watching the process and seeing, like, the different phases and, you know, watching the framing go up, and because it was at our house. Right. I got to see the whole process, and that was just such an intriguing experience for me. And so I think that kind of started the gears turning in my head, like, how. How can I do this type of stuff?

00:09:50
I've always been kind of an active guy. I've always liked working with my hands. Been an athlete. Right. I'm not like, a sit at your desk type of guy, which, oddly enough, what I do most, you're doing now.

00:10:03
Yeah. Right. So, got involved in, I think, when I was 16 years old, I started working at a construction company, remodeling company. We installed kitchens. I mean, Jesus was a carpenter.

00:10:18
I'm just. Hey, that's right. Just trying to follow in his footsteps, Mandy. So. And we actually.

00:10:24
For that company, we worked on a house that the guy who owned the company, he was flipping to Baltimore City. I have no clue. He could have made $100,000 or lost 20 grand. I have no clue. What I do know is I was like, man, this is awesome.

00:10:40
I don't have to work for a client. We have free access to the house, because in home renovations, it's. It's. It is. It's tough sometimes working with clients.

00:10:51
Not that they're tough people. I mean, there are tough clients. Right, sure. But you have to work around them and. And.

00:10:58
Right. You know, their schedule and all that type of stuff. So that, that part of the house flipping intrigued me early on. Yeah. Because this is a.

00:11:06
Just a. It's a vacant property. That's an investment property. You could work at 10:00 p.m. if you wanted, you know, as long as.

00:11:12
You'Re not making too much noise. Yeah. Bothering the neighbors. Right. So.

00:11:18
But I just. I never. I never really took the action to make those steps happen, to, like, get into the real estate field. And this is kind of where some of the mindset stuff comes into play. Right.

00:11:33
I realized, you know, I don't know, eight years ago or something that I am just a life procrastinator. And what I mean by that is just everything I do. It's like, oh, I can. I can do that tomorrow. Like, I'll do that later.

00:11:46
I'll do that later. And that's how I was, like, my whole life. Right. And it kind of affected my grades in school and things like that. Like, I just didn't.

00:11:56
I was like, oh, you know, I'll do that later. And then the next thing you know, I have to write a ten page paper in, you know, one night, and it's like, you got to cram it in. And. Yeah, so I had to shift my mindset at some point, and that's, that's. That happens kind of later on in my story, but kind of worked for construction companies off and on throughout, you know, my.

00:12:20
My early adulthood. Yeah, I have actually have a college degree in cybersecurity, and it's collecting dust on my shelf. The entire. I think I remember when you were. You were doing that, I think.

00:12:34
Yeah. So it's one of those things where it took me eight years to get the degree just because, like I said, I just. I didn't care about the classes. You know, I wasn't doing well. I was taking off semesters, going back, and I felt like.

00:12:50
I felt like I was kind of trying to follow in the footsteps of my brother. My older brother. He's seven years older than I am, and he's a computer engineer, and I'm like, oh, man, I got to do that because I look up to him and all that, and then I finally realized that, like, that's just not me. I gotta pursue what I want to do. Right, right.

00:13:13
Well, and so just like, because I observed you, I mean, you were the main person, honestly, consistently working in our house, and that's a small, you know, window into your. Your life. But what I observed is you were always on time, always working hard. So I don't want the listener to get the impression that you're saying you were lazy, like, from a, from a day to day physical standpoint. But.

00:13:39
And correct me if I'm wrong, but what I'm, what I'm gathering is maybe from a strategy or, or life, like, big picture intentionality type thing, like, who am I really? What. What skills? You know, what should. What's my mission here?

00:13:56
What's my purpose? Maybe that was. You were avoiding that and pushing that off. Is that fair to say? Yeah, that's fair.

00:14:03
I mean, I've always been a really hard worker. Like, when I'm. When I'm doing something, it's like I try to put my all into it. Yeah. But I think I just lacked the mental, you know, like, savvy of, like, how, you know, how can I improve my life or how can I.

00:14:21
What do I actually want? It's just, it's just you kind of going with the flow. Well, and as much as I want to be, you know, pile on and beat you up. No, I'm kidding. But I think that's super common, right.

00:14:31
It's just pretty. I think a lot of our listeners can relate to that, so it makes sense. So, kind of working through my life, right? I'm 16. I was a carpenter.

00:14:42
Moving into, like, my early twenties. I went through a period where, like, I stopped going to church probably for about five years, and I just wasn't following Jesus. Like, to me, like, as a christian, like, my. My sole purpose is to, is to follow Jesus and. And to trust in him as my savior, right?

00:15:07
I'm a sinner. I need to follow Jesus. I need to put my faith in him that he is my savior, right. And I still think I knew those things and I still believed those things, but I wasn't, like, if you looked at my life, you would have said, like, this guy's nothing, doing what he believes in, right? I was.

00:15:27
I was living out, you know, on my own with a couple other guys who were drinking, smoking weed, like, every day, like, just doing all these, like, crazy things, right. And I won't dive, like, too much into that, but it's, you know, it's. It was an issue. Like, it was. I was.

00:15:45
I was addicted to. I was addicted to weed. Like, I felt like I had to smoke every single day to, like, to get through. It's not like a physical addiction. It's like a mental addiction type thing, right?

00:15:57
Dependency. Yeah. And so that, I mean, that. I think that was part of what affected my mindset of, like, you know, I'm just, I'm just smoking and having a good time. Right, sure.

00:16:09
It was a short term, day to day. Yeah. Mindset. And then sort of in my later twenties, I came back to the church and kind of rededicated my faith in Jesus and kind of stopped all that type of stuff. I'm not.

00:16:29
What do you think? What was the change? Like, why the. Because I think it's easy to go, drift away. So I'm not quite as interested in why that happened.

00:16:38
But why did you come back? I just, I just always knew that it wasn't right, like, so that as a Christian, you believe in, like, the Holy Spirit, and the Holy Spirit works in your heart. And I constantly felt this, this tug on my heart, like, hey, what are you doing? Like, yeah, like, let's go here. And I just was kind of, like I said, I'm a procrastinator.

00:17:02
I was like, you know what? I can go back to church tomorrow. You know, I'm still a Christian. Sure. But I'm just going to put that off.

00:17:09
I don't feel like doing that right now, know. Right. And your sins are forgiven. Right. So.

00:17:15
Yeah, absolutely. And, yeah, that's how it works. Right. Like, sure, God forgives all of our sins through Jesus, but it's. You can't just say, oh, my sins are forgiven, let me go, you know, do all these crazy things.

00:17:29
Right. Yeah. That's something that gets left out these days, is the repentance side of things. But we'll. I'll stay off my soapbox for now.

00:17:37
Yeah, yeah, yeah. So, I mean, one thing that I attribute it to. So I. My brother was a missionary, and he ended up coming back to the states for good, and he invited me to come play soccer. Soccer is one of my greatest passions in life.

00:18:01
I absolutely. I still play today. Nice. Played all through high school. I played one year in college.

00:18:07
It's just a, you know, a community college. It was no big deal, but nothing like your story. Still impressive, though. Yeah. So he invited me to come play soccer with this young adults group at, at the church.

00:18:21
And I started, you know, playing soccer, and then I started going to the church where the young adults were from, and that's kind of how I, how I came back. I just, you know, I think I felt for a while like I wouldn't be accepted because I knew the things that I had been doing. Right. But that's a false reality that we try to. Maybe that was just an excuse, like, hey, I'm not gonna be accepted.

00:18:49
I don't. I'm not gonna go back to church. Right. But I felt accepted in this group, and so I felt like, hey, I'm gonna. I'm gonna go back to church and.

00:18:56
See how it was. And it's. It's been like. I feel like my faith is so much stronger and different now than it was prior to this. Just because I went through this time of darkness, it helped me realize my actual need for Jesus a lot of times.

00:19:12
Yeah, go ahead. I was just gonna say, a lot of times, if you grow up in a christian home and you don't have a period of darkness, you kind of just, like I said, go with the flow. Right? Yeah. You take it for granted.

00:19:21
I realized in my own mind how much I needed him. Yeah. Gotcha. What, um, approximately what year was this that we're talking about that. That you kind of returned to the faith?

00:19:33
Um, probably about eight years ago. Okay, that's so. Yeah, got it. So you were working on my house. I was probably working on your house, yeah.

00:19:54
Gotcha. So. And look. Yeah, I just did a ten week small group at my church called rooted. It's.

00:20:04
I think it's a national program, but, I mean, some of the. Not that you want to get into comparing too much, but some of the stories that I think we all have this kind of natural, like, oh, I'm not good enough. Everybody in the group's gonna know more of the bible than I do or something. Like, something along those lines of, I don't measure up, or I've done too many bad things to be accepted. And then, man, once you get to know, like, these other guys in the group I was in, wow.

00:20:36
It's like, some of the stuff they've been through or have chosen to do. And again, I'm not putting. Not minimizing things I've done or anything, but it's just like, okay, we've all. We've all fallen short, right? Yep.

00:20:53
So that's really comforting once you realize that nobody can really throw the first stone. Right? Yeah. Yeah. And something I.

00:21:04
Something I relate to, like your podcast from adversity to abundance, is, you know, I went from this time where I had. So two. Two of the friends that I was hanging out with at that time have passed away from drug overdoses. Wow. And, like, to think that, like, that could have been me, right?

00:21:28
Yeah. Now, they were. They were, you know, involved in some. Some other crazier stuff that I was never really involved in. Sure.

00:21:36
But I could have easily. You could have gone down that path. Gone down that path. And, you know, it's. It's just something I think about, you know?

00:21:45
It's like. Yeah. To go from, like, this dark time in my place where I could have, you know, died maybe right to where I am today. And I still have, you know, I still have a ton of room to grow right in my faith, in my business, you know, in being a good spouse and father, like, all those areas I still need to grow in. But it's good to look back and look where you came from, because it's like, man, look where I was and look where I am now, you know?

00:22:13
Yeah, well, I haven't read the book, the gap in the gain. I should, but, dude, I've read it. Is a great book, okay? I just recently read it. Like, awesome.

00:22:24
That's just what popped in my head when you just talked about that. Looking back and appreciating how far you have come and how much growth has been accomplished, if you will, is important. And I know as entrepreneurs, it's very easy not to do that. It's very easy to just look forward and the next deal. Okay, so let's cover the last eight years, both from a mental fitness standpoint and an actual real estate investing standpoint.

00:22:56
First, how did you decide to quit your job? What did that look like? Yeah, it was so right when Covid started, I was working for a remodeling company, and we had a furlough. I don't know. It was maybe eight weeks or something, and it just gave me a lot of time to think about what I wanted.

00:23:21
Right. I had a lot of free time to kind of do some research. Sure. About a year or so prior to this happening, I had been listening to podcasts. Like, biggerpockets was a big one that I started listening to and started reading a lot of books.

00:23:39
And I'll be honest with you, prior to me, like, listening to bigger pockets, I don't know, the last book or if I ever read a book for pleasure or for, like, to gain knowledge by choice, right? Hey, you have to read this book for school, and I'm gonna cliff note it and barely read it anyway, right? So, like, that is. Yeah, that is me. And I think.

00:24:01
I mean, part of it was because, like, I always struggled with reading. Like, my reading comprehension was never the greatest, and so I. I would read something, and then a page later, I'm like, I have no clue what I just read. And so it's like, why should I read? I'm not gonna understand this stuff.

00:24:18
Sure. But on biggerpockets, they always talk about they always ask each guest, or they used to. I don't know if they still do. But I don't know either. What are your top three books that you like to read?

00:24:30
And one of the ones I kept hearing was rich dad, poor dad. Sure. That was the first book that I had read, and it blew my mind just to think differently, how I had been thinking about assets and liabilities and just different mindset of thinking. And so after I read that book, I just started reading all these other books and listening to podcasts and stuff, and I was trying to just gain as much knowledge as I could before making the jump into real estate. Sure.

00:25:05
Well, I think it's, I had a similar, you know, might have been a little bit earlier, but of course, I'm a little bit older than you, too, but no similar thing where it's just a mindset shift and it's just like you surround yourself, you know, it's not like just changing your thoughts by that by itself can just make you wealthy overnight or something like that, or just create success instantly. Of course, that's, that's kind of ridiculous, but I mean, but, but it's amazing how your thoughts do lead to your actions and your behaviors and your habits, which is really what ends up producing results. So I know we're going to get there, but I had a similar kind of, I guess, mental transition in around 2014. Yeah, right. Probably when you were working at our house.

00:25:53
But 2014 2015 is when I really started getting serious about listening to bigger pockets podcasts, different podcasts and reading books. And it just, the mental shift that it creates for you when you change your thought environment is you can't be overemphasized. It's, it's just so valuable. I think a lot of people, like, who don't do that type of stuff. Yeah.

00:26:18
It's kind of bogus. Like, oh, yeah, you know, your mindset. But it's, I mean, it is so true. Obviously, you still have to take action. Right.

00:26:25
You can't just have this, this great mindset and all of a sudden things are going to start happening. Right, right. But. Exactly. It's, I don't know.

00:26:32
I don't remember who said the quote. It's like, whether you think you can or you can, you're right, probably. Right. Yeah. Yeah.

00:26:37
So it's like you have, and I think some of it's a confidence thing, too. Right. Confidence is a huge momentum builder. It's huge in my, in my opinion, in any sports, in, you know, business. Just, it's a great mindset tool.

00:26:56
Yep, for sure. And I know for me, I switched to, okay, I stopped and. And it's easy. Like, this isn't. I still fall into the negative mindset stuff.

00:27:08
So I don't want anyone to think that I'm saying I'm perfect with this, but. But I definitely had a. An intentional shift toward. Wait a minute. What are my strengths?

00:27:18
What are. Who's on my team? Okay. My father has been a real estate agent for decades. I used to work for a title company and a mortgage broker that.

00:27:26
I never considered that a real strength, right. Or valuable experience. You know, all these things, you just start looking at your network and who's on my side? What are. What resources do I have?

00:27:39
And it does create a shift toward the positive and toward confidence of maybe I can do this first deal, something like that, as opposed to, oh, I have to work this full time job and I don't have time, or it's just a mental shift, which is really powerful. So you started listening to all these podcasts, reading books. For me, cash flow quadrant was actually more powerful. I liked rich dad, poor dad, and it is definitely a mental, like, encourages you to think differently. But I liked getting into the kind of the difference between an entrepreneur, self employed, business owner, investor, and employee I think are the four in his other book.

00:28:24
So take it from there. How did that kind of education and intention of soaking up all this real estate and investing knowledge, how did that eventually turn into you quitting your job and maybe doing your first deal? Jeff? Yeah. So early 20.

00:28:46
When did Covid hit 2020. So early 2020.

00:28:51
I was up late, like, you know, researching stuff and kind of trying to figure things out, and I just. I just pulled the trigger. I was like, I'm going to start an LLC. And I don't advise, like, making big life decisions without consulting your spouse. And my wife has been absolutely amazing, like, biggest support of mine, you know, because it hasn't been easy on her either.

00:29:19
The transition, like, it's. It doesn't just affect me. Right. It affects her and our whole family. Yeah.

00:29:24
But I woke up the next day, I was like, hey, I, you know, created an LLC. She's like, you did what? Like, what. What's going on here? I mean, she was on board, but it just was like a surprise to her.

00:29:34
But I just. I just was sick of not taking action. Right. Yeah, I think that's a huge thing. Is the analysis paralysis.

00:29:41
You can think about something so, so much that you just. You overanalyze and you just don't take the action. Now, I'm not saying just do things without thinking about it, right? But you can only think about something so long, and then you just have to do it. And you're going to make mistakes.

00:29:57
Right. But that's how you learn. You know, you're going to figure it out, right. So I started this LLC, and I think something that's interesting and for anybody who's a not an entrepreneur yet or is, like, trying to get started, you don't have to have any money to start. I literally had no money to start the business.

00:30:24
We had money, but I didn't want to use our savings or anything. I just wanted to try to get it started. So I had an agreement with my wife. I was like, all right, I'll figure out how to get the money to start the LLC in the business on my own. So I literally, I took a bunch of old Pokemon cards and video games and sold them on eBay and made enough money, I think it was like 1500 or $2,000, to kind of, like, start the LLC and get things going.

00:30:51
And so I just want to, you know, I don't want new entrepreneurs to, like, be like, oh, I don't. I don't have any money. Like, how am I going to get this started? Just figure it out, you know? And that's what I did.

00:31:02
Right. So I bought my first property in 2020, I think may or something, I'm not sure. We also had a baby, like, right around that time, so there was a lot of stuff going on, especially with. COVID There's a lot going on, right. So we got Covid.

00:31:21
Right. We have no help from our family because, you know, it's like we couldn't really see each other. We have a new baby. I'm trying to start this business. I'm still working a full w two job, right.

00:31:33
And I was trying to do all of that at once. And I felt like I just wasn't doing a good job at anything because it's like I had too much stuff going on. I wasn't home very much. I wasn't helpful to my wife and the kid. I was going to my w two job, but I wasn't fully mentally there because I was also trying to do this flip at the same time.

00:31:57
I think maybe in September I realized it is I just have to quit. Like, I cannot do both at the same time. And I was, I just, I just took that leap of faith, which was, it was tough. It was really tough. My wife was working at the time, so it made it a little bit easier.

00:32:13
Right. So, because you know when you go into real estate, if you're going to flip a house or anything. Right. Yeah. You don't have a paycheck for however long that first flip takes.

00:32:24
Right. And so I don't think I paid myself for the first five months that I started it, but it did help out that my wife was still working. Yeah. And so, yeah, it was definitely tough. Can you say who you were working for?

00:32:39
I can. Do you want me to. Sure. Smith House. Yeah.

00:32:43
So we had Dave Smith on a prior episode for the Listener to go. Go check that one out. Great. I think it's, yeah. Great company.

00:32:51
They do fantastic work in Maryland, custom high end remodeling. And I think maybe some ground up construction. Not sure. But, yeah, I think it's cool that obviously you can speak more to this than I can, but you had exposure to the investment side of things before. And now, even if Dave isn't specifically in real estate investing, their company, I mean, he built that from scratch.

00:33:21
And I know you were a big part of the growth of that, his company. So I just think from an entrepreneurship standpoint, you got to see some of the ups and downs and the pain points and the successes of Smith House and the growth they've had. So I'm sure that benefited you as well.

00:33:41
Speak to. So people say, well, don't have, don't quit your job. And there's no, there's no one size fits all, right? We know that there's, everybody's situation's different, but people say, well, wait till you have enough, you know, income that matches your w two income from your side hustle before you quit. We know what you actually did.

00:34:02
But what would you say to that about that guidance? Yeah, I would just say sometimes I think people use stuff like that as an excuse because they're just afraid. Right? Yeah, I think if you say, I need to get to this before I do this, that can hold you back. Right?

00:34:20
Yeah. So it is going to be, it's going to be a risk, right. There's, I mean, it's, to me, it's kind of like a slightly high risk, but even higher reward. You're going to, you might have to take a step back. Right.

00:34:36
So I would say if you have some reserves in the bank, right, for four or five months worth of living, can you afford or can you stomach to not have a paycheck for that amount of time, knowing that you're going to come out on the other end and start to rise, you're investing in yourself. So you got to believe in yourself. You're betting on yourself. Absolutely. Yeah.

00:35:00
And that's kind of the mindset thing, too, is you have to, if you don't believe in yourself, why should anybody else believe in you that you can do it. Right. So you have to. Yeah. Don't be arrogant about it.

00:35:11
Right. But, like, you have to have this mindset of, I'm going to get this done no matter what. And to me, it was like, I'm willing to do anything I have to do because I know it falls on my shoulders to provide for my family. There's nothing that I'm not willing to do. Like, yeah, I will never go back to a w two job, even if my real estate career failed, not because I didn't, my employer was great, but it's the freedom and the ability to build my own thing that I was looking for.

00:35:46
Yeah, it was definitely hard early on. It put some stress on our family, on our marriage, just because I wasn't there as much as I wanted to be. So, you know, that was tough. That was probably one of the hardest things. But now I'm able to be home more than I was before.

00:36:08
Yeah, that's awesome. And when people talk about that income, matching your income thing, I just always think, well, okay, if you're matching, let's say, Mark, you were making 75,000 working for Smith house. Obviously, I'm just making numbers up, but no idea. Dave. Oh, Dave always sends me everyone's paycheck.

00:36:27
No, yeah, right, right. Um, it was just a guess, but, you know, and then you're making 75,000 consistently through your flips. I know that's, like, nothing's consistent with flipping, but. And then you quit your w two. Well, you still lost $75,000 in income, so you're still, like, taking a big cut when you quit your w two.

00:36:48
So no matter what it's like, it's not like, it's just, oh, you feel no pain when you quit your w two from an income standpoint. So the point is, there's never a perfect time to do it. And I am not sitting here saying everyone should immediately quit your jobs and go jump into entrepreneurs. Trust me, it is not easy. And it absolutely can have an impact on your marriage.

00:37:14
And your relationships can be super stressful. Just entrepreneurship in general. So, you know, I like to keep it real on the show, and it's. It's not all rainbows and butterflies and unicorns and. But I 100% agree with you.

00:37:30
I mean, you know, most people are just procrastinating. If they think they want to be an entrepreneur and they're not doing it yet, do it now or do it in the next year, set it up in the next year to be able to quit your job if this is really what you want to do and bet on yourself. And heres the thing. I know you said youd never work at w two again, but lets say it just absolutely failed. Your business was total failure, and then you tried another one.

00:37:55
Total failure. Do you think you could get a job like you had before? Oh, absolutely. And I honestly think I bring more value to the team now than I did before. Right.

00:38:09
Because I have a different mindset. I know what it takes to run a business, and that's something that I can always fall back onto. Right. And so that, that was my mindset. Like, if, if it fails, if I need to go back, I can, I know, you know, I know several companies that would probably hire me in a heartbeat.

00:38:31
Right. And so that gives me comfort. Yeah. Even if is what I like to say, even if this happens, I'll be okay. Yeah.

00:38:38
So, yeah, but there's a, there's, I don't know if it's anybody has this quote, but I heard it on, like, a motivation, I listen to a lot of, like, motivational, like, violations of people actually on YouTube. And the one guy said, if not now, when? Right. So it's like, now, when is the time? Now is the time.

00:38:57
If you really want to be an entrepreneur, figure it out. Don't, don't quit your job today. Right, but, but sit down now and figure out, like, what is it gonna take for me to take those steps, right? Is it, it might be a month from now, it might be two months, but, like, make that sit down now and figure out what are you looking for. It's different for everybody, right.

00:39:18
What you want is different than what I want. So it's gonna look differently, but these steps are the same. You gotta take action. You gotta have a goal in mind of what you're looking for. Right.

00:39:30
Instead of having, like, I should quit my job someday mindset. It's okay. Not today, but okay. I want to do it in six months. Okay, then backwards.

00:39:39
In the military, we had reverse engineering. Backwards. Right. Backwards planning, because we were in the army and those were more simple terms than reverse engineering, but, yeah, you like, okay, then what do I need to accomplish in five months then? What do I need to accomplish in four months?

00:39:53
In three, two, one. What do I need to do today then? Right. Okay, so your first deal. How did that go?

00:40:03
And then I know you had a major loss on a deal in Deep Creek I want to get to. So exciting. Yeah. Let's focus on your losses. Right.

00:40:13
We not talk about that one. No. Yeah, so I'll kind of dive into a little bit like, yeah. How I funded it and all that type of stuff. Because there's a lot of different, a lot of different ways to do things.

00:40:25
Yeah. You know, there's more than one way to skin a cat in terms of real estate. Now is this, this is your first deal that we're talking about? Yeah. So my very first deal, I think purchase price was around 100,000.

00:40:39
We bought it off the MLS on an auction site, Hubzu. Okay. And I had my agent like we, my good friend was an agent and we used to like just go look at properties and this one kind of like fit Fitzhe our criteria. So we bid on it, had to up our bid a little bit but ended up getting it immediately had buyers remorse. I was like, what am I doing?

00:41:04
I'm buying this house. I have no clue what I'm doing. Right. Sometimes I still get nervous when I buy it. Is it going to be good or bad?

00:41:10
Who knows? But I had no money. Like I said before, I had $0 to my name in terms of the business. I have my own personal savings or whatever, but $0 in the business right now. Cause we're just starting.

00:41:26
So I'm like, all right, how do I, how do I do this? Right? It's not like it's, it's the versat poor dad mindset. Like, oh, I can't do this cause I don't have money. Well, I don't have money so how can I do this right?

00:41:38
I had another friend who wanted to get into real estate but was working a full time job and didn't have time, but he had the cash available. So I coupled his cash. So he funded all of the, it's called a gap funding, right. So when you buy a property, typically a lot of investors, or most investors will use what's called hard money and you pay a premium for the interest and they charge that upfront fee to use their money. And it's generally more expensive if you've done no deals, right.

00:42:13
So the more deals you get, the less expensive it gets and it gets easier to come. Bye. But they won't lend on the entire deal. Generally they'll lend like up to 90% of the purchase price and then like maybe 100% of the rehab. Right.

00:42:25
So I have to come with 10% down and pay for closing costs. So I used my friend to and said, hey, man, like, you go into this property, you fund all of the money I need, and we'll split the cost 50 50 of the profit, whatever that is. And he was like, all right, let's do it. So. And I did all the work, right.

00:42:45
I'm a licensed contractor myself, so I did a lot of the work myself, but I obviously had to sub out, like, some of the trades and things like that. So halfway through the deal, I was like, okay, this 50 50 split scenario is not going to work in the future. I wasn't going to back out on it now. So I went to him and said, hey, I know this is working now, but in the future, this is not going to work just because it was. It was a ton of work.

00:43:12
Right. Um, and mind you, I want to just. This was 2020 still, just to paint the picture. So it's like everything, like, the world was shut down. Like, so just the fact that you're still taking action, I think, is impressive because.

00:43:25
Yeah, it'd be so easy to say, well, let's see how the next year shakes out with Market conditions and things. And so just want to point that out, that the fact that you're still moving forward during that time, you know, is just impressive. All right, so you're doing all the work. You bring the sweat equity. He.

00:43:41
He put the money up, and you're supposed to do a 50 50 split of the profits. Yeah. Yep. So we get. We get to the end, we list the property, and I think, I mean, this is when the real estate Market, like, just skyrocketed.

00:43:53
Oh, right, right. You know, everything was going for over asking. I don't remember exactly. I think it was like, 20 or 30k over asking, which I almost, like, fell off my chair when my agent called me and said, oh, we got this offer in. I'm like, oh, wow.

00:44:08
Now, we didn't make that much money. I think we only made, like, 40 grand. So, like, had we not got the over asking that we got, like, it wouldn't have been that great of a deal. Right. But my mindset was, if I break even on this first, like, that was my goal.

00:44:22
I don't want to lose money on this first deal. I just want to get a deal under my belt. If I break even, I've learned the process. I've built some relationships. That was my, know, bottom line.

00:44:32
So to walk away with, you know, I guess, 20 grand from the sale, a little less than 20 grand from it was huge. Absolutely. I mean, plus you got the education, you got the, you started your track record to say, hey, I have this successful deal under my belt for the next one. And you made money. I mean, that's win win win.

00:44:55
Yeah. Yep. And I still use that same, the same guy as like a private lender. It's just not an equity based lending. It's just a interest type thing.

00:45:05
Yeah. It's a loan. Yeah. Yeah. So that's kind of how my first deal went.

00:45:10
And I was, I mean, I was hooked after that. It's like, okay, how do I keep, how do I keep doing this? Now they're obviously, and we'll get into this. They're not all wins. Right?

00:45:18
Like, yeah, sometimes you lose money, but. Yeah, but I think that's, that's interesting. An interesting point, though, is because is the fact that that can, you know, if you'd lost 20 grand on your first deal. I don't know. Yeah.

00:45:33
I mean, I do think about that. It's like, okay, if you lose 20, 30, 40 grand on your first flip, like, that might be it for you to be honest. Yeah. And so I think that's what scares a lot of people away, but, yeah, you know. Yeah, obviously that's not what happened, so.

00:45:48
Okay. And then how many deals did you do before you got to this, the deal we're not going to talk about?

00:45:58
I don't know, maybe another five deals or so. Okay. And just your goal with all this, your strategy is what, fix and flip and then peel off some rentals if it makes sense or what's your approach? Big picture. Yeah, big picture is rental portfolio.

00:46:18
Like, that's big picture. Um, I want to have a rental portfolio, uh, maybe up to at least 60 rentals, 60 doors. Um, because I think that gets me the, the truly, truly passive net income that I'm looking for. Now, you say, I say passive. It's a full time job.

00:46:39
If I'm managing those properties, that's a full time job just to manage 60 rentals. Right. But where I don't have to look for other deals. And it provides the income that I need and that's my long term retirement. Right.

00:46:56
So in 30 years, I'm 30. I'll be 36 this year. Actually, tomorrow I'll be 36. Thank you. And so in 30 years, in theory, all of these rentals are going to be paid off because that's generally what I do as a 30 year mortgage.

00:47:13
Throw your note. Yeah. It'd be nicer if we paid them off earlier. Right. If we get a lump sum of cash.

00:47:21
Like, maybe we throw some of that cash at them to kind of pay them down a little bit more. But in theory, in 30 years, they're all going to be cash flowing a significant amount. Right. So that's my retirement, and I can sell one property probably per year. And just from the sale of that property, it probably pays for my expenses for whole year.

00:47:42
So that's kind of my mindset of, like, why I want to rent a portfolio and why I've chosen, like, 60 doors is kind of like the minimum that I, you know, if I, if I get to 60, I can stop. And that's not just like a, hey, I want 60 doors. I thought through, like, the reason behind it. How much money do I need? How much are they going to bring in all that stuff?

00:48:01
Sure. And so, but in 2020, you might have been a little more focused on flips because you needed the income. Correct. Large chunk of capital that comes in all at once to pay your bills for your family. So in 2020, I think I just did that one flip.

00:48:20
Okay. And then in 2021 is when I started ramping up, like, I think we did, like, five rental properties in 2021. It's hard for me to keep track of, like, the years. Like, it just kind of all melds together. Right.

00:48:35
And then, you know, I think we did, like, four or five flips that year. But it's hard for me to remember chronologically what happens, like, when. But, yes, that's kind of a general. Well, I'm helping you work on your story, but. So, okay, let's talk about deep creek.

00:48:53
The deal we said we're not going to talk about. Yeah. Adversity to abundance. Right. That's.

00:49:01
That's the point of the show, is to talk about the real, you know, pain points in some of this stuff, because if you can't handle, you know, pain points and adversity, you should not be an entrepreneur. I mean, it's an everyday. It's an everyday thing. Absolutely. So what happened?

00:49:21
What was the talk us. Talk us through the deal, the details on this deep creek deal. Yeah. Deep Creek, Maryland. Sorry, but deep Creek, Maryland, for those listening who are not familiar, is a.

00:49:33
A popular vacation spot on a lake in western Maryland that can be nice in both all seasons. Really? So it's pretty and it's really grown a lot. Ski resort close by. It's got a nice lake.

00:49:47
Yep. Yeah. So here's the deal. Okay. We bought a property that we turned into an Airbnb.

00:49:57
Like, that was the goal. So because we wanted a, we like the deep creek area, we wanted a kind of like a vacation house that we could go to that was also cash flowing. So that, so it was like, okay, Deep Creek is a pretty good Airbnb spot. So we bought this house. It was tough to find like contractors and people to work on it because it's, you know, it's, we're in Baltimore and it's like 3 hours away right from where we live.

00:50:25
And so it was just a hard process to find that. But then we finally, eventually found the people that we needed to use and things were moving and grooving. The property turned out, well, air quotes, it appraised for significantly more than what I thought it would. And so if people don't understand the process of, of like burring, which is the buy, rehab, rent, refinance, repeat strategy. Yeah.

00:50:57
The goal is to, is to buy houses undervalued, add value, and then refinance out of your short term hard money loan and cash out all of the cash that you've invested and sometimes more. Right. So it appraised for such. And it all, it's all driven on the appraised value appraisal after you fix it up, after what drives everything. Right, the ARV?

00:51:21
Right, the ARV, yeah. So it appraised for significantly more than what I thought it would. And I was like blown away. And I'm like, man, I need to buy all these properties in Deep Creek because this thing is insane. What kind of numbers are we talking about?

00:51:37
Yeah, so it appraised, I think we bought it for like 100,000 and maybe put 150 into it. Oh, wow. And it appraised for like 480 or something crazy. So. So we cashed out a significant amount of money.

00:51:55
Sure. After, you know, now those numbers sounds like, oh, it's cost 100,000. You put 150 into it. Well, you made like, you know, $200,000. Well, that's not true because there's a lot of other lender fees and like all these other things.

00:52:09
So, yeah, holding costs, it's probably closer to like 60,000 or something that they cashed out. Okay. Essentially we had this, this cash flowing Airbnb that we got paid $60,000 essentially. Yeah. To own.

00:52:26
I mean, it's not like income, but it's because you're, you have a different, you just have a different loan. So you've leveraged a different loan to basically have a little bit more money. Yeah. So I'm like, okay, wow, this is incredible. I'm going to start investing heavily in deep greek.

00:52:43
Right? Well, here's the issue, and for any new investors out there, you got to know your area that you're investing in. I thought I knew it because I had done one deal, and I was puffing my chest out and, like, man, I can do anything up here. Well, come to find out, like, the contract that we had used did not do a good job. And we didn't know this until afterwards.

00:53:08
Right. Like, the kitchen sink was never connected to the main drain, and we had a garbage disposal. So there was like. We were like, what is that smell? Like, we went up there.

00:53:19
There was all this food in the crawl space. I'm like, dude, come on. Wow. So what happened was we bought another property up there because I was like, I need to start heavily investing in Deep Creek. It wasn't as close to the lake, and so the Market right around the lake is very good because that's where investors buy there.

00:53:42
Right. But we were maybe. This new property was maybe ten minutes off the lake, whereas the first property was, like, right on the lake. Right. Totally different Market.

00:53:52
Even though it's, like, fairly close. Right. Like in Baltimore, if you have a. Household block by block. Yeah.

00:53:59
Right. So it's kind of the same thing. Whereas, you know, it might be the same zip code, but it's, like, totally different value. My brother has a house in little Italy, and if you go a little bit northeast, it's extremely different. Yeah.

00:54:13
So I experienced that, you know, firsthand. So we bought this property, had the same contractor that we worked on before. This was prior to us realizing his quality of work was not great, and we put it on the Market. So we finished the rehab, put it on the Market, and I think we put it on for, like, 325. And this was back in, like, September or October or November or sometime towards the winter season.

00:54:48
And we had, like, one showing I in several weeks. And this is when the Market was like, you know, you get 30 showings in a weekend, offers and, you know, multiple offers, and you're under contract in less than a week. Not a good sign. Yeah, not a good sign. So then.

00:55:04
Then we dropped the price by, like, 2020, 5000. Still not many showings. Dropped the price another 25,000. Still not many shows. So, like, we dropped at 75 grand.

00:55:15
Right. And we were projecting to make, like 50 off of it at our original price. This was a flip that we were working on. Just so I'm clear, right? Yeah.

00:55:23
You still have the short term rental that you. That you can use, right. At this point, I still. Not today. Right.

00:55:31
At this point, still had the short term rental up there. Right, right. And you're trying to sell this flip. At the same time. And the short term rental was going okay.

00:55:37
You know, it wasn't cash flowing as much as we wanted, but it was still cash flowing, so we were fine there. Gotcha. Yeah. So in my mind, I am like, I'm freaking out because I'm like, okay, we might lose. How much are we going to lose on this property?

00:55:52
I don't know. How long is it going to sit on the Market? It had been on the Market at this point probably five months. Wow. And we had, like, maybe six showings and no offers.

00:56:03
And I'm just like, okay. And I still haven't done that many deals and I don't have a ton, a ton of capital in the bank to, like, suffer through, like, a huge loss. Sure. Because we had, at this point, we had already bought some other rental properties and had to invest some of our cash into those rental properties. Right.

00:56:22
Uh huh. And you had, like, some more kids at this point. And I think we may have. So we had one for sure at this point. And I think.

00:56:31
Yeah, I think we had. I think we had had our second at that point. Yeah. So there's a little more pressure from that angle, too. Definitely a lot of pressure.

00:56:37
Yeah. Yeah. And so I was in a pretty dark place. Like, very, very dark. Like, depressed is a strong word.

00:56:48
But, like, yeah, you know, I'm generally not a depressed person. I don't generally get. Have depression, but I was, I was, like, on the verge of, like, do I need to stop what I'm doing and go back to work or something? Yeah, it was tough. And it definitely, I'm thankful that I went through that experience because it helped me grow on my faith.

00:57:11
And I'll explain that in a minute. So we finally got an offer on the house we were going to lose, I think the offer. I think we lost, like, over 40 grand on it. But interestingly enough, before we got the offer, we were like, okay, let's sell our Airbnb because we can make a profit off the Airbnb. And it was just hard for us to manage to.

00:57:37
We were self managing it. It was tough. It was tough to do from being 3 hours away. Right. So my wife and I talked.

00:57:44
We were like, all right, let's just sell the Airbnb, and that'll release some stress and, you know, hopefully we'll. We'll get some cash to, you know, kind of offset this loss. Yeah. And this is where, like, my faith, because I believe that that God has a plan, everything in plan and in place for me. It's really tough for us to trust in that a lot of times, especially as an entrepreneur, you're like, all right, where's my next deal?

00:58:10
What's going on? You know, what's happening, right? You like to control everything. I do, I do. I like to control.

00:58:15
There's a lot of that questioning between me and God. Like, are, I'm trying to trust you here, but what is going on, you know, with this property? So before we were under contract on the house that we were losing money on, we put the Airbnb up on the Market. We ended up getting an offer on the house that we lost money on and on the Airbnb. So we were under contract on both, and they both, we sold and settled on them on the exact same, same day.

00:58:49
Wow. Which to me is, like, mind blowing. Like, God really had this in plan, right? Like, that was not an accident. And the proceeds from the one house that the Airbnb that we sold and the loss from the other house that we flipped, the flip, were almost like a net even.

00:59:08
Like, so we almost broke even. So we lost, like, you know, 40 some thousand on the one, and we gained, like 40 some thousand on the sale of the Airbnb. So that, to me, is another. Was another testament, huge blessing. I mean, it could have been so much worse.

00:59:21
I mean, obviously, you know, if I didn't lose the 40 or 50,000, like, that would have been nice. Right? Sure. But it has. It helped.

00:59:30
Has helped me. It helps me even today. I think back to that time often when something's not going the way that I want it to go. Yeah. Is that, hey, there's a plan that is set in place, and I may not know or see what that plan is until after it happens.

00:59:44
And I think I can. I try to use that in all facets of my life, not just in business. Love that. So that was. That was hard.

00:59:53
That was tough. Yeah. I'm glad I went through it because it has helped me grow to where I am today. So now you're seeking out more adversity. Yeah, that's right.

01:00:02
I just look for bad deals to buy because I want it to grow. I want to be so much more thankful. But. So a couple of quick questions, because we're about out of time, and I do have some rapid fire questions for you, too. But did you consider.

01:00:18
I'm sure you did, but consider renting out the other, the second property, the flip? I did. I mean, I looked at all different options. I was like, okay, if I rent it out, how much? Because I was going to lose money each month if I rented it out.

01:00:32
But I'm like, is it worth, I like to look at all different angles. I was like, okay, is it worth losing, you know, $500 a month or whatever, right. Like spread out that loss. Spread out the loss, right. Or is it better to lose 40 grand at once?

01:00:45
Right. And I was on the verge of saying, I'd rather just lose 500 a month, because I can stomach that. If I had millions and millions of dollars in the bank, a 40 grand loss is no big deal. Right. But I'm still, I was still a newer, and I'm still new today, right?

01:01:00
Yeah, you know, newer. Right. As a newer entrepreneur, its harder to stomach those things. Yeah, the thought crossed my mind. It just didnt make sense.

01:01:12
And when the offer came in, it was like, okay, lets just cut our losses and move on. Well, the other thing I want to point out too, is for the real estate investor out there whos looking for deals, you dont know what the seller has going on. So in this case, Mark had a lot of things going on that had nothing to do with that short term rental. Yes, the short term rental, the craftsmanship was less than desirable from your contractor, and yes, you made money on the deal. Yes, you were self managing.

01:01:47
But the property itself, it sounds like, was in a good location and is still a good investment for somebody. What I'm saying is they don't know about your other deal. That is really taking your focus away from the short term rental. And so people say, like, why would the seller, there must be something wrong with this, the seller selling this, you know, it's like, well, they may need to sell for some other reason. And I know you absolutely, you buy deals at a discount all the time.

01:02:15
So you know this as well as anyone, but it doesn't mean that there's just something inherently wrong with this property, is my point. Whoever bought that deal from you really solved a big problem for you. Absolutely. And it wasn't just because of that property by itself. So there's a lot of factors that go in.

01:02:37
There's a human element and there's a Mark's personal story and the family elements and all this that plays into that particular deal that you sold. Um, you know, when people say, well, why is this guy selling this? There must be something wrong with it. Well, he might just need to sell for reasons completely unrelated to the property itself. Um, and I should say there's always, there's always a.

01:03:01
A form of motivation. You just got to figure out what it is. My motivation was I need to sell this because I need to offset this other loss. Right, exactly. You know, somebody else who's selling is, might have a complete different motivation.

01:03:14
Yeah. So if you look at the deep creek experience, those two deals as a whole, what were one or two of your biggest lessons learned?

01:03:25
Focusing on, like, having, having a laser focus on what you're trying to achieve. Because I'll tell you, as soon as I sold those properties, I felt like my business was so much more healthy or, like, successful. So, I mean, it just was a very big distraction because, number one, it was so far away, it was hard to get. Like, I, as an entrepreneur, I'm like, let's get stuff done. Like, if I have to do it myself, I'll go do it, but I'm not going to drive 3 hours to go change a light bulb or something.

01:03:59
Right. Whereas if I have a property in Baltimore, I'll just drive, you know, however far and change something really quick if I absolutely need to. Yeah. So I think. I think I got distracted and was trying to do maybe too many things at once, and I wasn't fully submersed into my own Market before I started to go try to tap into another Market.

01:04:23
I think that was a mistake that I made, and that's a common. Yeah, it was common entrepreneur. It was kind of bittersweet selling the Airbnb because it was like, you know, a place that I like envision our family going to for years to come. Right. And it's like, okay, we're going to.

01:04:39
We're going to pay this down. It's, you know, we're going to have this for however many years. But in hindsight, it was the best thing that we ever did in terms of getting rid of it, just because it, it kind of relieved a lot of stress. It helped us offset that loss, and we learned a lot of lessons kind of moving forward. Well, you still have time to get another deep creek property.

01:04:57
You're only, what, 36? You said tomorrow? Yeah. Yeah. All right.

01:05:01
Are you ready for rapid fire questions? Let's go. All right. What is one thing that people misunderstand about you? Um, this one's a tough one.

01:05:12
Misunderstand about me. I don't know. I. I think sometimes, um, I've always looked young. I don't know if this is, this is a good answer, but I'm just going to go with it.

01:05:24
I've always looked really young. Right. And so I think people look at me I've had so many comments over the years of like, oh, wow, like, you look so young to be, you know, doing this or doing that. Like, I don't know how old people think I am, but part of it's like, I can't grow facial hair, right? So, like, this is, this is like a week worth of facial hair for me.

01:05:43
So you did that for the podcast? I did, yeah. Specifically, you know, I wanted to look a little older. So I think. I think people maybe, um, uh, have some sort of preconceived mindset of, you know, who I am because it's like, oh, this ten year old, like, how much.

01:06:03
How much knowledge you should have at this point. Yeah, yeah. Um, if you could give your 18 year old self some advice, what would that be? Don't smoke so much. Bleed now.

01:06:16
Um, I think just taking action, like, I honestly think that taking action is one of the biggest things that people miss about doing anything. And, for instance, like, you know, people will say, oh, you know, I'm just, I'm praying that God will provide x, y, and z for me. And it's like, okay, yeah, that's great, but he's not going to do that for you if you don't take the action. Right? Like, I heard this quote.

01:06:46
It was from Andy Andrews has a book. What's it called? The seven decisions. Okay. Do you know, do you know Andy?

01:06:55
Haven't read that one. No. He also read the Traveler's gift, which is really. Oh, I've seen book. I know who you're talking about.

01:07:01
Yeah. It's just a fun book to listen. It's kind of like a story. Right. But anyway, in the seven decisions, he says he makes the comment, and I think he's a Christian as well.

01:07:10
God promises to provide a. For the bird, right? That's a scripture. In scripture it says, yeah, he provides for the sparrow or whatever. Yeah.

01:07:20
He doesn't, he doesn't promise to put the worm in the nest. So I took that. I'm like, that is, I mean, that is like, so good, right? Like, you have to take the action for him. You can pray all you want, but if you're not taking action, nothing's going to happen.

01:07:34
Yeah, absolutely. My wife and I are working through the chosen series, and Jesus and the disciples definitely took a lot of action, that's for sure. What is one or two books that you could recommend besides the ones you've already mentioned?

01:07:53
It's funny, I thought about that as I was coming on, because I was like, if he asked me, I'm going to recommend the traveler's gift or the 76, but I would say either one of those books or, um, I mean, I really, I go back to rich dad, poor dad. It's probably not the greatest book I've ever read, but it was, it was a good book, and it's what kind of started my whole mindset shift. Right? Yeah. And, and mindset is everything to me.

01:08:24
Um, I constantly have to work on my mindset every day about, you know, what, what am I thinking? What am I, what am I trying to achieve? Things like that. So I always go back to that book as one of my go tos or any biggerpockets book. They're all, yeah, and my book.

01:08:45
Right. Or I was going to say there's a book right in the background right there that's phenomenal. From adversity to abundance. That's what you meant to say. Yeah, I failed that question wrong.

01:08:58
What is one thing that you've seen in real estate investing that's controversial or potentially unethical? Just broadly speaking, yeah. I think there are some investors. I think house flippers get a very, like, get a bad rap, you know, oh, this house was flipped. It must be trash.

01:09:17
Right? And that, I mean, that is the case for some, like, sure. You know, there are some, some flippers who I've heard. It's like, okay, you know, there's, there's rotted wood in, in the walls. Cover it up with drywall, you know, leave it.

01:09:31
Yeah, yeah, leave it and just hope nobody notices. So. But to me, like, I don't, I don't care if it costs me more money. I would rather fix those things because of who I am. Right.

01:09:43
I don't want to sell somebody even if they're never going to know or never going to see it. I don't want to sell somebody a house like that. Right. So I think there's an easy, it's easy for real estate investors and entrepreneurs to get caught up in, like, I gotta have more of this. I gotta have more of that.

01:10:02
I gotta have more of this. And maybe to, like, you know, screw somebody else over just to, like, help yourself. Sure. Now, that's not to say, like, most of the people in our real estate field. Like, it is kind of like a, it's a large group, but it's kind of a small community.

01:10:16
Like, most of the people are helpful. So I don't want to say that give all these people a bad rap. I'm just saying if there was something negative, it would kind of be those types of things. I mean, unfortunately, fortunately and unfortunately, there's a low barrier to entry to become a quote unquote real estate investor. And that can take on many, many shapes and sizes.

01:10:37
But therefore, and same thing in the mortgage note space where I'm more focused, theres some shady people and yes, its probably less than 5% of the group, but there are ripple effects. So looking forward in the real estate investing space, whether were talking Maryland or just broadly, what are some emerging challenges that you see for real estate entrepreneurs moving forward? Yeah, I think, I think the change in the Market potentially, it's still pretty good today. I mean, I've seen it depends on the area. So, like when Covid first hit and I find myself lucky because I feel like I got in at a good time, right.

01:11:22
Because right when I got in, it was like houses were selling over, over asking and everybody was waiving inspections. And that type of stuff is still happening today, but in specific areas. Right. So, like, I had a house in the city recently that sat on the Market for like four months. Nice house, like decent renovation.

01:11:44
Just the price point was higher and it was surrounded by other house. Like, other, like the neighborhood was nice, right. But you go one block over and it's like not a nice neighborhood. So I think that's a challenge moving forward is even for me, like, trying to figure out like, what is the Market doing? It's just a little bit harder.

01:12:06
But I do also think that that brings opportunities because I think that people are going to be nervous. People are, people are always nervous and scared about the Market, right. Especially like with like the election coming up and stuff like that. I don't want to get into politics, but that type of stuff affects the Market sometimes. Right.

01:12:23
And so for me, like, I'm definitely making sure that I'm, when I'm analyzing deals, I am giving myself a good margin. I'm still making offers, still trying to buy properties. Just, you got to buy, right. To make it work, be a little more careful. Makes total sense.

01:12:41
So who should reach out to you? Who are you trying to connect with? I know you deal with hard money lenders, private lenders. You need a lending source in general, and you need deal flow. Those are kind of, and you, obviously, you need subcontractors and things to do the deals, but who are you trying to serve and who should connect with you?

01:13:01
Yeah. And I didn't talk about this that much, but I do want, like, I want to bring, it's part of the reason why I was excited to come on the podcast I want to bring value to anybody, right. Bringing value. There have been so many investors that have brought me value and I want to return that favor to whoever, right. So anybody who's a new entrepreneur or trying to get into the real estate field, I'm happy to answer any questions or help them out in any way I can.

01:13:32
And I'm always trying to make connections with other private lenders, which private lenders are like just regular individuals like your uncle or friend or whoever, to invest with me. I always want to make connections with other wholesalers. And it's not just about like, what can I get from you? It's like, hey, how can we work together? Like if you're a wholesaler, you bring me deals.

01:13:58
You bring me value by bringing me deals. I bring you value by buying your deals. Right. So it's kind of, it's kind of like a circle of value type thing. Sure.

01:14:06
No, I love it. Anybody who wants to reach out to me. Yeah, listen, I've been doing this for four years, so I still have a lot of, of room to grow, right. And sometimes when I'm in a room with other higher, higher level entrepreneurs, I'm like, man, I don't know anything. Yeah, but then, but then when somebody who doesn't know anything talks to me, I feel like I have so much.

01:14:28
Information to share with you how much you've learned. Yeah. Right. So, and you've been doing, I mean, yes, actively four years. But, you know, like I said, you've been in construction most of your life.

01:14:41
You've had worked for investors and entrepreneurs most of your life before becoming one yourself.

01:14:51
Youve been involved in real estate and construction for longer than four years. But absolutely, I hear what youre saying, theres always a ton more to learn and somebody thats way ahead of you. But we forget. I do mentorship in mortgage note investing in some of the, sometimes I forget that some of the questions I'll get are, how do I start an LLC? I'm just like, oh, I forgot.

01:15:15
That's a thing that you have that's important. How do I get a bank account? Oh, I need to get an ein from the IR's before I can get a bank account. That's right. These little things that you might take for granted depending on how far along you are, and also your path is very different from somebody else's, like you said before.

01:15:36
So you're going to have, even if someone's ten years in and you're only four years in, you're going to know things that, that person doesn't know. So we can all help each other. And I can tell from the Facebook groups that I've seen you in that you're always trying to add value and make it a mutually beneficial scenario so you can grow with. With others and. And, uh, you know, that's.

01:15:57
That's what we need more of. I mean, capitalism and entrepreneurship gets a get. Get a bad rap because of a few bad apples. But ultimately, we're trying to add value, like you said, and flippers, generally speaking, add value to a neighborhood and, uh, and add value to everyone they come in contact with. Um, so, awesome.

01:16:19
Well, Mark, where can our listeners reach out to you? Where can they find you? Online? Yeah. Um, we don't have, like, a massive social media presence.

01:16:30
I mean, well, now this episode's out, so that's going to change, right? Yeah, we're just going to, you know, go. We're going to go from one follower to, you know. Yeah. So you can.

01:16:42
I mean, you can reach out to me on Facebook. I have, you know, my own Facebook, but we also have a. And spell your last name. P A s s e r e l l I. So you can reach out to me on Facebook.

01:16:56
You can find us on Facebook and Instagram as well. Phoenix Estates is the company name. Why'd you pick that name? It's a faith based thing for me. So actually, I have a tattoo of a phoenix, and I was trying to think through.

01:17:16
This is kind of a long story, so I'll try to be as short as I can. The. The Phoenix to me is, like a revitalized. Revitalization of my faith, right? So, like, the Phoenix, like, it dies and it turns into ashes, and from the ashes comes a new.

01:17:31
A new Phoenix, a new bird, right. And restored. And that's kind of how I feel, like, my faith. Like, yeah, I had this faith, but then I, like, I kind of had to, like, die to myself and, like, from the ashes, like, God brought me out of those things, and so that means a lot to me. Sure.

01:17:48
And I was. I was trying to, like, as I was coming up with a company name, I was like, how can I. Like, how can I incorporate my faith? Because ultimately, like, that's one of my main goals, is to share my faith with people. Right.

01:18:00
And so it kind of. And it kind of works into, like, revitalizing houses, right. Like, I'm taking these houses that are kind of, like, trashy, most of them, and turning them into, you know, trying to better the community by it, right. Fixing up houses and. Yeah, yeah, I had a guy work, who worked for me for a long time, Stephen Berkey, and he had, his company name was Phoenix Notes.

01:18:21
And I never, I never asked him why it was called that. So I have to follow up and ask him. But I'm glad I asked you. Yeah. One last thing I wanted to say I was thinking about is, in terms of mindset, is I think exercise is severely underrated, like, absolutely.

01:18:41
With mindset. And because, and I'll tell you why. So I used to work for, like we talked about before, a higher end remodeling company. Right. A lot of these people were pretty successful.

01:18:50
Yeah. And I noticed that because you're in their house a lot. Yeah. You get to know who they are. Right, right.

01:18:58
Most of them had some sort of exercise routine. Like, they would go to the gym or whatever. I. And it kind of, like, I was like, why is that, okay, the act of exercise doesn't make you successful. No.

01:19:10
But it, it, like, primes your mind and gives you a routine of doing something. And I have been, I've been, you know, I'm an athlete. I've been on and off, like, exercising. Right. But I, over the last, like, three or four or five months, I've been, like, really exercising a lot more.

01:19:29
And it just, especially in the morning, it primes my mind for the day. Right. So I would just say, if you're newer to entrepreneurship and you're not exercising, or even if you are an entrepreneur and you're not, I would highly recommend, and I don't honestly do it, even for that long. Sometimes it's like 30 minutes, sometimes it's 20 minutes. Right.

01:19:50
But it's like some sort of exercise. Listen, weights and running, that just gets me going. So I just wanted to throw that in there. Probably need to weave in a more intentional set of questions about, you know, tips for mental fitness. But couldn't agree more.

01:20:05
It's, I won't get into it too much, but I've been pretty heavily focused on, on mental health in the last couple of years, not, not just for me, but, um, you know, for various reasons, but, uh, it's so, I mean, exercise consistently is top three in, you know, just contributing factors to healthy, you know, mental conditioning and relationships. Exercise, diet, I think, are the three that kind of are always there. But I couldn't agree more. It's like, even if you don't want to do it, it doesn't mean you should. I mean, sleep is critical, too, but, yeah, I've been doing a cold plunge in the morning, actually now, and I.

01:20:51
Am all about the cold plunge. It's so good every morning. And there's some mornings it's easier than other mornings, and some mornings it's just a matter of, it's much more of a mental thing than anything else. I'm like, no, I'm, I'm in charge. I am in charge.

01:21:05
And I'm getting in this, in this cold plunge right now. Yeah. And there. And it's been pretty. And it's only been a few weeks since I got it, but, oh, man, it's been great.

01:21:14
And I've been doing it consistently for about a year. And that's awesome. It's like everybody laughs at me. And I've been taking more cold, cold showers now than baths because it's, it's, it's easier for me to. Because with the, with the bath, I have to, like, fill up the tub and it just takes a longer period of time.

01:21:32
Yeah, but the cold showers, it is so revitalizing. Like, you get out, it's awful getting in, right when you get out, you feel so good. And I think Tony Robbins, I think I heard something of Tony Robbins said where he's like, he's training his mind to do something right away in the morning that he doesn't want to do, and he's training his mind to just do it without thinking. You don't sit there and contemplate, should I get in the cold shower? I don't even think about it.

01:22:00
I get in, I turn it on. And it's like, yeah, he's been doing it for years. I would recommend that as well. It sounds goofy, but it works, right? Absolutely.

01:22:11
And just so you know, I am going to play pickleball here in a little over an hour, so I'm getting my exercise in. Pickleball, man, that's an old man sport, I thought. Exactly. Exactly. It's way more fun than I expected it would be.

01:22:28
But Mark Passerelli , this has been awesome, my friend. This has been great. Thanks for, thanks for joining us and sharing, you know, opening up about the loss in Deep Creek, but really so much more than that. More about your faith and overcoming, I guess, your own personal negative thoughts and beliefs and things and just reconnecting with your faith and how that's contributed to your success. I think there's so many other things I could point out, but those are some key highlights that I got from this episode, and I know our listeners got a lot as well.

01:23:05
So thanks a lot for joining us. Appreciate it. Yeah, thanks for having me. And to the listener, out there. Uh, please check out our website, adversity to abundance.com.

01:23:15
that's the number two. And we love five star reviews and we love it when you share episodes with your friends and family. Thanks for listening everyone. Take care.

01:23:30
Thank you for joining us on from adversity to abundance. We hope todays episode has equipped you with valuable insights and practical advice to elevate your real estate journey. For more inspiring stories and resources, visit us at www. Dot adversity twoabundance.com. if this episode has inspired you, please share it with a friend who could also benefit from our conversation together.

01:23:53
Lets turn adversity into abundance. Until next time, keep building your rental fitness and your real estate empire.