Managing Real Estate Investment Strategies with Marck de Lautour – Part 1

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Marck, 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 1,800 homes in the United States of America. His property management firm now manages over 650 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.

His expertise is wide and diverse. Marck’s Beliefs In Real Estate include:

1. Real estate is a safe investment vehicle.

2. Rental real estate is a long term play – so start early!

3. Real estate is best done at scale – so buy as much as possible.

4. Good Real estate should never be sold.

5. Real estate provides great tax benefits.

6. Real estate investments can always be cash flow positive.

7. Good Real estate can handle 80% leverage, if needed.

8. SFR Real estate is less impacted in a downturn.

9. Real estate is a basic necessity (e.g. food and shelter!)

10. Professional Management decreases the 2 biggest killers of cash flow – vacancy and maintenance.

As a company, they keep to a small group of core values. Accountability, Commitment, Communication, Professionalism, and Quality.

Episode Notes:

Narrator  This is The Norris Group’s real estate investor radio show the award-winning show dedicated to thought leaders shaping the real estate industry and local experts revealing their insider tips to succeed in an ever -changing real estate market hosted by author, investor, and hard money lender, Bruce Norris.

Bruce Norris  Thanks for joining us. My name is Bruce Norris and today we have a very special guest Marck de Lautour. Marck, is Founder and CEO of SBD Housing Solutions, a Real Estate Investment firm based in the Kansas City, Missouri. He has been investing in real estate since 2002 and has successfully flipped over 1,800 homes in the United States. His property management firm now manages over 650 rental homes. Mark’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 a billion dollars into real estate by 2030. He also loves to invest in multifamily apartment complexes and has successfully raised over $10 million dollars to deploy into assets throughout the Midwest. And we’re going to cover in this interview some of the things that he has implemented to help his clients. So, Mark, welcome.

Marck de Lautour  Thank you, Bruce, appreciate you being here.

Bruce Norris  I’m gonna start just by asking, you know, you, you were born in New Zealand, and what did, what did your dad do for work? I’m just curious.

Marck de Lautour  Yeah, my father was actually an airline pilot, he flew the large 747 Jumbo jets. And so was one of those unusual people that actually held the same job for 42 years. He just slowly grew up in the airline industry in New Zealand, there was a pilot shortage back in the 60s and late 60s, early 70s. And so he jumped on that just had a passion for aviation. And so the thing that inspires me most about my father is that he truly just lived into his passion and just continued to do it and never wanted to do anything else. Once he got on the 747 He said, hey, it’s the cream of the crop. And, you know, don’t there’s no going up from here. So, he continued and stayed on that jet for about 20 years.

Bruce Norris  When you were growing up as a kid, did you notice yourself having an entrepreneurial bent of some kind.

Marck de Lautour  My parents really valued education, I actually went to a private boarding school in New Zealand, where I think that’s where my leadership traits were developed. The prefect system, the house system, I think most people in America would probably, you know, relate it to something you see, like on Harry Potter, but, you know, we, it was an interesting time. So, at the age of 13 years old, I went to a boarding school, came home just every other weekend, and spent a ton of time, you know, kind of being charged with the responsibility of running the school, you know, my junior and senior year, and they really encouraged leadership. And that’s something that I think I, you know, I’m a second born I’m a middle child, I don’t know if you’ve read Dr. Kevin Lehman’s book, The birth order book, but the second one is typically extremely motivated, aggressive, you know, wanting to hide charge prove themselves, and that certainly rings true. I was always just trying to keep up with my older brother.

Bruce Norris  Yeah, I’m a middle, middle child, too, with the same, same mentor, if you will, my brother, you know, I was like, I’m never going to catch up to that guy. So, you ended up in the United States And what was the what was the process that got you here?

Marck de Lautour  Yeah, I was a fairly decent tennis player, that attracted some attention from some of the universities, blessed to be able to get a scholarship to University of Missouri here in Kansas City. And so I played for four years on the, on the tennis circuit here for NCAA. And, yeah, they got, got my undergrad and stayed on as a grad assistant, got my MBA. So, from there, you know, it was an incident, my degree was in business in the international business management. You know, I often kind of quit you know, that I don’t really use my degree at all because I got straight into real estate. But having said that, you know, it was such a great base such a great education to go in and, and, you know, understand how business works at a at a pretty young age, but I was one of those few that we got on that accelerated Executive MBA program. So, I came out at a very young age with an MBA, I think I’d go back now and look at those classes very differently, Bruce, but at the time, you know, I just kind of I knew I wouldn’t go back. I just wanted to get it out of the way. So, I just knocked it all out in five years.

Bruce Norris  Who around you was into real estate? How did you get into that?

Marck de Lautour  My uncle, I think I would credit he just gave me the book Rich Dad, Poor Dad, which I know it’s cliche now because there’s so many people were inspired by the book, but that was back in the year 2000. And I read the book and it just kind of spoke to me. My father had introduced me to the stock market. And it was like watching paint dry, especially on the, you know, the New Zealand stock exchange for crying out loud. I mean, there’s just so little movement, wasn’t really appealing to me, but real estate I could understand. And there was a couple of people, you know, obviously going to private boarding schools, like the number one school in New Zealand and my parents, obviously sacrificed to put me through that school, but a lot of my parents, my, a lot of my best friend’s parents were like, in the top 10 Rich List in New Zealand. You know, we were kind of middle, middle up, you know, family, but, you know, hanging around with parents of my best friends that were just, you know, multi multi millionaires and it you know, for young kids, you’re influenced by that it’s aspirational. And, you know, they were not arrogant people, they’are great people, and they’re just so giving and of their time, and a lot of their dads were in real estate in some form or fashion. So, I think, you know, coupled with the reading that I was doing, at the time, I think that’s probably where I had it had piqued my interest.

Bruce Norris  How old were you when you got married?

Marck de Lautour  I married young. For, I, perspective. I got married in 2001. So, I was 24 years old. just celebrated our 21st, actually, our 21st wedding anniversary is today, so.

Bruce Norris  Congratulations.

Marck de Lautour  That’s, thank you.

Bruce Norris  That’s very cool. So, your, your entrance into real estate and you getting married is very closely tied, yes?

Marck de Lautour  Yeah, I had a very supportive wife. It was a funny story, Bruce. There’s a couple of instances in my life where I’ve asked for forgiveness, not permission. And I went along to a, I answered a newspaper clipping that’s how old I remember some newspaper. But there was a newspaper clipping that said, Come learn How to Buy Foreclosures on the courthouse steps. And so I went along, you know, and obviously it was a an upsell, so it was a free seminar, then they pitched you on the $5,000 course down in Springfield, Missouri a guy that I don’t think he’s no longer in business, but he was educating in that space. And me, gosh, he taught me how to, you know, research trustees deeds, how to literally go to the the recorder of deeds office and pull up the microfiche and understand how to, you know, basically do a title search effectively is what I was doing because title was so inefficient, that couldn’t get it done in time. And so I learned how to kind of research title, understand if something was clear, and, you know, research if something was in a first or second lien position. And so came back home to my wife and said, Hey, you spent $5,000 on a credit card money that we didn’t have at the time. And so but she was, you know, at least supportive enough to say, you know, if that’s what you want to do, then then make sure it counts.

Bruce Norris  Yeah, that’s a that’s an amazing wife. There was a story that I heard you tell about the Florida House that you bought, and without her knowing about it, so I’m just gonna say you tell you we are of the same ilk. It I was teaching Bible class and I, I decided to put the women on one side and the men on the other side and ask them this question, what would your reaction to be if you came home and there was a new car in the driveway that you didn’t know was being bought, and my wife was in the class, she says, You got to be kidding. I come home every day, and he buys a house.

Marck de Lautour  Yeah, there’s a lot of that goes on in our household. But yeah, we’ve been blessed.

Bruce Norris  Well, at that time, five, grand, I mean, what, what was in your mind to say, Yeah, that’s a that’s a good idea. Because that’s a big…

Marck de Lautour  You know, I was, I saw my friends, you know, graduating from university going to KPMG, and sprint and Hallmark Cards. Ford, Cerner Corporation, these big corporations in Kansas City, and it just I didn’t get the I mean, I just didn’t see myself sitting behind the desk answering to someone else. Didn’t really know what that meant, because, you know, I was very young and and didn’t understand what, what being a business owner meant. I just knew that that wasn’t for me. So, the thought of kind of rolling up your sleeves, buying a deal, rolling the dice and seeing if you could flip a house had some kind of appeal to me. And yeah, it was, I mean, I’m not minimizing it, it was a massive amount of money that, you know, we had to work on, on paying back. But I just value education. I think one of the things that I was taught at a young age is to the value of good education. And I certainly knew that I didn’t want to go in and make all the mistakes in real estate without getting some kind of education first. And I think if there are people out there that are listening, how do I get into real estate, the one thing I would tell them is, if you’ve got less than, you know, $20,000 in the account first go and invest in some kind of education. There’s so much online training or YouTube courses or you know, small investments now, from real estate educators go learn first before you go through the big bucks at an investment strategy that certainly pay dividends for me.

Bruce Norris  Well, when you bought your first property wasn’t connected to the trustee sale. So, let’s talk about that one first. And then I’m going to, then I’ll follow up with some questions about doing actually the trustee sale business.

Marck de Lautour  Yeah, I was, I was fortunate with that I was going to church with a guy who was a new home, just got a new home construction, and they took our house and on trade and said, hey, you know, we want to get rid of this, we’re not in the in the business of flipping, but it needs some work, it’s a happened to be a, a Japanese owner that just didn’t want anyone to go through the house. So, you know, one of those many, many instances that people are that do off market deals would understand where there are, some people just don’t want their house on the MLS. And so I had to kind of take it sight unseen, but I obviously had pictures. And so you know, bought the house, you know, drastically under market value. And at that time, rolled my sleeves up, kind of got stuck in and was able to flip the house and kind of make, you know, a 25 grand, which at the time was, you know, equivalent to, you know, basically nine months of a salary of what my friends were making, you know, sitting behind a desk. So, I thought, Man, if I can do that, and maybe I can repeat it.

Bruce Norris  maybe I can take five grand of that and pay for this course,

Marck de Lautour  …out of the doghouse. And I was able to go on.

Bruce Norris  People that maybe you haven’t been in the trustee sale, buying business as that’s a very unique place to start, because what you just said, is front loaded with education, and also work. So, you have to check out all these properties, you’re doing the title search for all these properties, then you have to physically go see these houses, the odds of you getting into those houses are not high, right?

Marck de Lautour  High risk, high reward indeed. Yeah, I mean, for those that are unaware these the houses at the trustee sale, they’re technically until the hammer falls is still owned by the actual occupant. So very respectfully, you have to knock on the door, oftentimes, that would result in a Get the eff off my response, which is always humorous when you end up buying the house because they’re, you know, like an ostrich the heads buried in the sand. And then you say, hey, you know, would you please now get out of my house because but, you know, essentially, it was, you know, a an adventure, it was a chase every day you’d wake up, it’s a great inefficiency in the business model. Because back in the day Bruce, they would announce the opening bid for sale, sometimes the morning of the sale.

Bruce Norris  Oh, absolutely.

Marck de Lautour  And so you know, we would be constant alert, where if you know, the mortgage, it didn’t matter what the mortgage was, the mortgage could have been $100,000 on $140,000 house, well, that was enough spread for me. But suddenly, the opening bid comes in at 20,000. And oh my gosh, I gotta run to the house. Because now it’s a deal. So run to the house, check it out, knock on the door, look in the windows, try and get some information as a foundation look good. How’s the AC give you an indication of the furnace? And then you run to that quickly get back to the courthouse to get there in time when the hammer falls. And no one else is there? You get it for $20,000? I mean, the reps were were unbelievable.

Bruce Norris  Well, they, but the, the dry, dry runs were many.

Marck de Lautour  Oh, of course. Yeah. I mean, for every, you know, 20 houses you drive by maybe get one or two. So then it was a matter of trying to put some systems and process around that what I saw was a massive opening. Because obviously I did this in theoretical sense for a couple of weeks before I said, Man, this is really going to work. So I would run to the house, check it out, and then go to the the courthouse steps and it’d be one or two guys there. I mean, it was just no one was doing this. And so I saw a massive opportunity and a big opening in that space. Now obviously, at the same time, turned around and got my license. So I you know, was at least kind of dabbling in the real estate space looking for MLS deals as well. But I soon learned that there was a massive opening and just committed to it what I have always been the guy that when I see an opportunity, I tend to go a mile deep rather than a mile away. So I said, okay, hey, look, I can make money in this if, and I become the expert and the biggest buyer of the courthouse steps in our county, then then I will be able to, you know, I’ll try and dominate that space. And so I put systems and process in place hired my first VA, to start doing all of the tedious work of, you know, checking out title and, you know, running searches and checking on opening bids and putting together spreadsheets of the upcoming opportunities so that I could do the work that took a little bit more skill, which was knocking on the doors, talking to people seeing if the home was occupied, or vacant and making the decision of a go no, go.

Bruce Norris  Yeah, that’s great. Now, were you adept at repairs?

Marck de Lautour  Not at all. No, I did one house. I think pseudo myself, obviously, you know, outsource the carpet and the roof and those kinds of things, but you know, I’d paint a house myself, I quickly learned I’m like, Look, let me go, you know, when you make your first 25k And you’re like, look, I could have paid someone else to do the work and still make good margin. I think there’s just the highest and best use of talent. And I quickly found that that was it was not mine. So I like to say that I don’t want to rob the guy that has joy it finds joy in mowing lawns by doing it myself. So, I’ll try and outsource as much as possible.

Bruce Norris  Yeah, absolutely agree. Have you set up the system to where you don’t, are you still buying a trustee sales, first of all?

Marck de Lautour  It’s a really good question. Unfortunately, foreclosures dried up. As you know, we just haven’t seen many and Auction.com I’m sure you’re familiar with the company had a massive impact on my business model in 2015. That kind of came around. And by 2017, they were providing up to date financials, and actually fake financials on their website on a, on a frequent and updated basis. So before where I was logging into, you know, Millsap and singer or Shapiro and Wiseman or south and Associates websites to actually get the data myself. Now they were doing that throwing it up on the website, advertising the heck out of it, and doing fake opening bids. So, they would advertise just to try and generate people to come to the sale. So they would have a $200,000. home without set the bid at $26,000. Of course, when you bid $26,000 and a penny, they would then say, oh, have you heard of third party interest, we now raise the bid from Wells Fargo bank up to $175,000. So, but what they were doing was generating a ton of interest in that space on the courthouse steps. And so now, I mean, goodness, the competition is just like what you would see in San Diego or LA or Phoenix where you have, you know, 20 to 30, you know, ready, willing and able buyers with cash on the barrelhead as they say, to pull the trigger on any day. So it really ruined that business model, which was not a forever thing anyway. But luckily, I’ve pivoted and joined a mastermind group, collective genius, which you are familiar with. And I was able to use my collaboration and partnerships and friendships through that group to allow me to pivot in and go find off market deals with that reduce the reliance of the courthouse steps auctions.

Bruce Norris  You’ll appreciate that we interviewed the owner of that company Auction.com.

Marck de Lautour  Okay.

Bruce Norris  And shoot him out on air for the false over bids that they were doing at these auctions.

Marck de Lautour  I appreciate you even more, Bruce yeah, it was quite quite interesting times. For like, you can imagine I’m like running around town trying to you know, do this get to the house, because you see a $26,000 being bid, you get an auction. And then they, right you know, it wasn’t even a true bid, the bank was already willing to pay $100,000 more than that. And so it got to be completely frustrating.

Bruce Norris  I didn’t like that they were bidding, you, all the all of those bids, you know where she’ll bids they were, there weren’t other bidders. And I just said, what you’re teaching me now, they not only took over the trustee sale business, but the auction of Oreos. And so I said, I’m one of the few people that will go see all 400 houses. And I sit in that audience waiting for some of those to drop through the cracks because I did more work than anybody. And you’re not letting that happen. You’re going to dumb down your audience, you’re going to get rid of the means in your audience. And that’s what you’re doing. Just so you know, so anyway.

Marck de Lautour  You and I, we have similarities, there may not literally I would hustle and grind. And look, I would just never even the random attorneys that would not, you know, advertise on the met through the mainstream newspapers. We would find all the attorneys, we were just hyper detailed and would never let an opportunity go. We did look at hundreds and hundreds of opportunities to find the ones and you’re right. I just got to the point of frustration, where I finally walked away and said enough is enough,  I’ll go, so in 2017 I think we was the last year where we bought over 100 homes. And in 2018 I think we bought maybe 30. And then now we don’t we’re down to zero and quite literally. You’re not buying, you’re not buying not a courthouse steps, but you’re doing steps. Yeah. So, the courthouse steps we used to buy over 100 a year and now we’re buying zero on the courthouse steps and still buying a couple of 100 houses just off market.

Bruce Norris  Yeah. Well, that’s what’s unique about the business. Is that see, that’s what I use for I use charts as well. Just so you know. So charts tell me what when I go out the door, what activities should I be doing as a buyer? How do I find deals, I’ll take a look at a chart and say okay, it’s not time to pursue trustee sales. It’s a time to do mailers or time to do land under whatever. So it’s uh, yeah, that’s great that you’re, you’ve morphed your business to to a more sustainable model.

Joey Romero  Okay, that’s gonna do it for this week’s episode of the Norris group, real estate radio show and podcast. Please stay tuned next week for part two of our interview with Mark de Lautour.

Narrator  For more information on hard money, loans and upcoming events with The Norris Group, check out thenorrisgroup.com. For information on passive investing with trust deeds, visit tngtrustdeeds.com.

Aaron Norris  The Norris group originates and services loans in California and Florida under California D R E license 01219911. Florida mortgage lender license 1577 and NMLS license 162. 23669 For more information on hard money lending go to the Norris group.com and click the hard money tab

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