On this episode of The Same Day Podcast, Mat Zalk chats with Max McGuirk, a real estate investor and Commercial Broker at McGraw Commercial Properties, who shares strategies for real estate investment growth. Max talks about the investment strategy he leverages when interest rates rise, how he secured financing for a risky investment deal, and how to structure owner financing agreements.
Calculated Real Estate Investing: Why Taking Risks Can Be Rewarding
Max McGuirk is a Commercial Real Estate Broker at McGraw Commercial Properties, which specializes in the disposition, acquisition, and leasing of office buildings, industrial properties, and land. With over two years of commercial real estate experience, Max delivers custom solutions for customers in large and small transactions. He has been investing in real estate since he was 21 years old.
Here’s a glimpse of what you’ll learn:
- Max McGuirk talks about his athletic upbringing and stint as a WWE wrestler
- Max’s motivation for purchasing his first house
- From substitute teaching to real estate investing: how Max forged his career path
- Securing financing for a risky investment deal
- How to estimate property repair costs to maximize asset value
- Max describes his transition into investing in multifamily properties
- Methods for structuring owner financing arrangements
- What is Max’s real estate investment strategy during economic uncertainty?
- The value of taking calculated risks when investing in real estate
- Real estate as a passive income source
In this episode…
Real estate investing is a lucrative way to earn money without exerting much effort. Yet reaching a level of profitability requires strategic thinking and a willingness to take calculated risks. Discover how an ordinary professional with a versatile background built a diverse real estate portfolio from the ground up.
With an education in accounting and a flair for athletics, Max McGuirk purchased two homes after competing in professional wrestling. Struggling to find momentum in his career, he became a teacher before discovering sales. Max excelled in this field, leading him to engage in tactical real estate investing, yielding high returns on neglected properties. When starting out, you’ll need to obtain funding, so Max recommends partnering with an experienced professional in the industry to split the costs. Since purchasing and renovating properties can also be risky, Max ensures he secures at least a 10% return rate on each transaction by estimating and including repair costs in the price. Through these methods, you can build a robust portfolio and generate consistent profit.
Resources mentioned in this episode:
- Mat Zalk on LinkedIn
- Keyrenter Property Management
- Keyrenter Property Management in Tulsa | Oklahoma City | Arkansas
- Keyrenter Property Management email address: [email protected]
- Chris Lile State Farm
- Chris Lile’s phone number: 918-878-7771
- Max McGuirk on LinkedIn
- McGraw Commercial Properties
- “Successes and Failures in Real Estate” with Deren Huang on The Same Day Podcast
- “The Value of Private Money in Real Estate Investing” with Jay Conner on The Same Day Podcast
- Kathy Portley on LinkedIn
- Tulsa Real Estate Investor Association
Sponsor for this episode…
Chris Lile at State Farm Insurance:
This episode is brought to you by Chris Lile at State Farm Insurance.
Chris Lile at State Farm helps you protect your most precious assets and investments, including home and auto.
To learn more about how you can save double digits on all your insurance needs, visit dialliale.com or call Chris’ office at 918-878-7771.
Keyrenter Property Management:
This episode is also brought to you by Keyrenter Property Management.
Keyrenter Property Management is a full-service property management company that helps clients buy, renovate, and operate real estate assets.
The team helps clients build wealth while taking the headache out of property management.
That’s why, no matter what rental you have — single-family homes, condos, townhomes, or apartments — they can give you the management solutions you need.
To learn more about their services, go to https://keyrenterpmc.com/ or send them an email at [email protected].
Episode Transcript
Intro 0:05
Welcome to The Same Day Podcast where we discuss driving incremental business growth and other topics related to real estate, property management and entrepreneurship. Now to the show at hand.
Mat Zalk 0:16
Mat Zalk here on the host of The Same Day Podcast where I connect with top business leaders and real estate experts. past guests include Jay Conner talking about raising private money in this tough interest rate environment and Deren Huang who has 100 units under management and a host of other industrial properties. Today’s episode is brought to you by Chris Lile State Farm Chris Lile State Farm helps you protect your most precious assets and investments whether it’s your home and auto investment rental properties or other valuables called Chris Lile State Farm for a quick and painless phone call to potentially save you double digits on all of your insurance needs, visit diallile.com or call his office at 918-878-7771 Today’s episode is also brought to you by Keyrenter Property Management and Keyrenter Property Management we are a full service property management company helping our clients buy renovate and operate real estate assets. We help our clients build wealth while taking the headache out of real estate ownership. Visit keyrenterpmc.com or email us at [email protected]. For more info huge shout out to Kathy Portley the president of the Tulsa Real Estate Investors Association for introducing us to today’s guest. Max McGuirk is a former high school teacher who has been investing in real estate since he was 21 years old. With long term rentals. He’s a serial entrepreneur owns and operates a DJ and photobooth company in Tulsa and was under contract and wrestled for the WWE after college in their developmental territory of Tampa, Florida in 2009 2010. Max joined McGraw Commercial Properties this year specializing in the disposition acquisition and leasing of office buildings, industrial properties and land Max McGuirk Welcome to the show. How are you?
Max McGuirk 1:56
I’m good man. It’s a great Tuesday a little bit of rain, but it’s a wonderful day.
Mat Zalk 2:00
We need it. We need the rain. It’s been dry for a while. I’m happy to have it. Tell me what’s start. I want to hear the entirety of your history. You got such a fascinating history. But when I start with it with you Wrestling, WWE after college, I had no idea that that you did this, but I want to ask is WWE do you need wrestling skills to actually be in the WWE? Is it just entertainment and showmanship?
Max McGuirk 2:22
It’s you got to be an athlete. And so So yeah, I’m gonna say yes. On the on the athletic side. So I was let’s just say I wrestled since I was five years old, but I was around the Swenk stuff since before I was born. So I like to say this is kind of like a blip on the radar. So this is not like how I made my money and how I got into real estate and stuff like
Mat Zalk 2:45
that. Well, you you were getting paid, right? I mean, when he did you got paid? Okay.
Max McGuirk 2:49
Absolutely. Weekly paid by Vince McMahon. So, no, it was it was cool. Really? Yeah. It’s awesome. My Stamford, Connecticut. Yeah, so I can share some pictures and stuff later. But man, just to kind of give you like a hit just a brief depiction of my childhood. When I grew up, my mom started working for WWF World Wrestling Federation back in 1985. I was born in 85. And so she was on the road traveling with like Hulk Hogan, macho man, Randy Savage, open warrior, all those guys. So I grew up with those. Those guys were like, basically, like my aunts and uncles. You know, like we’d be hanging out in the back and you know, like, mind your P’s and Q’s are these guys are gonna beat you up, you know? And so I’m like, yeah, oh, yeah. I got held back my, my first grade year because I missed 82 days of school, because my mom would just be everywhere. And it was it was a blast. And so I don’t think a lot of my friends were like, there’s no way you’re out there. I’m like, getting pictures with Hulk Hogan and Ultimate Warrior and stuff like that. So it was a, it was a cool childhood. My mom got off the road, probably 95. But we were all very well connected in that my grandfather before that was a national champion wrestler at Oklahoma a&m that later became OSU. Back in the 30s. He got into professional wrestling, he actually was a promoter. And so he was he promoted his territory, but back in the day, it that northeast territory, northwest, you know, central states. So he had, like Oklahoma, I want to say Louisiana and in Arkansas. And so anyway. So he had that territory from the 50s to the 70s. In
Mat Zalk 4:24
the promotion from like a promotion perspective,
Max McGuirk 4:27
correct? Yes. Yeah. So he was promoting the territory, basically, in Oklahoma, Arkansas, and Louisiana. Back in the day, a gentleman named Bill Watts, had worked for him as a wrestler, and then and then ended up buying my grandfather out and turn that into mid south, which is a big territory, and that later got purchased by Ted Turner, which became so anyway, all that ended up getting purchased by Vince. And so anyway, so my mom started working for Vince at fives when I was born to 95 She’s on video games. She’s on a bunch of like, you know,
Mat Zalk 5:03
her voice is on video games like announcing the wrestling. Oh, absolutely.
Max McGuirk 5:06
Yeah, I was just somebody had sent me something on social media that Dan was my mom announcing a match for a guy named earthquake. So cool. So yeah, so I grew up around that as a kid. And then I would go to shows whenever I was younger, but it was like, it was completely off the radar until I graduated college. So I wrestled amateur wrestling from five years old till I graduated high school, didn’t want to go to college just because I thought I knew better and I went to Northeastern Metallica. And the day I graduated, I graduated three and a half years with an accounting degree. I’ll never forget the day I graduated, my mom was like, Hey, you want to go train? And I was like, Sure, you know, but she wanted to make sure that had a college degree first. And so anyway, so I did that I trained with a guy that was a wrestler from my grandfather many, many years ago. And, and so anyway, I trained with him on the weekends, while I was an accountant during the week. I mean, I went everywhere, Dallas, Texas, Denver, Houston, and I just kind of, you know, kind of learned the independent, you talked about did you get paid back then? And we like five bucks, 25 bucks, whatever. You were just lucky to have a place that you could form in front. Yeah. Jim Ross is a guy, guy with a big black hat. He was a announcer for WB for quite a while. He actually got his Eastern western Oklahoma. And he actually got his start from my grandfather, probably 70s, I guess, as a referee. And a lot of these guys back in the day just wanted to be part of the business. Like, I don’t care if I’m the referee, or I’m putting up the ring. Taking tickets. They just were just, it was like, you know, it’s kind of like, was it not a carnival but like the Tulsa state fair, there just wanted to be a part of it, you know? So So Jim Ross got his got his start from my grandfather by being a referee. And then, you know, he dragged my grandfather around, because my grandfather lost his sight as he got older. And so anyway, you know, Jim Ralston becoming a really, really big deal like a head of talent relations for WV Wow. So when I was training on the weekends and traveling and wrestling at shows for independence, I had reached out to Jim Ross and Jim Ross gave me a tryout back in 2009. In Tampa, Florida, where they had, it was called Florida Championship Wrestling. And that was, that was their developmental territory. But it was, I mean, you’re paid every single week by WB and they’re molding you and you’re wrestling five nights a week to basically be the next Hulk Hogan, John Cena, whatever. And those guys were there all the time. I’d see Triple H and Vince would come down. We would do Thursday night tapings, we’d have three hours, so three weeks of tapings in one day. And anyway, it was awesome. Dusty Rhodes was our American dream was our like promos, coach. And so anyway, it was a lot of fun. It was for narratives 1314 years ago, I was I got I got hired out of 100 people across the world at this tryout and three of us got picked, not picked but basically like we had good athletic skill and a good look. And anyway.
Mat Zalk 8:08
What did you weigh in that back in the day,
Max McGuirk 8:09
man, I’ll have to send you some pictures back then. I was 220 Wow. And I’m talking it was a full time job, man. It was a full time job to eat like seven meals a day because I mean, you’re just you would train for like six eight hours during the day. And then we’re in a different town in Florida. And you know, we would we would restaurant like parking lots of car dealerships we’d restaurant. armories. Sometimes we’d be like, in a big venue and have like, 20 503,000 people it was It was wild.
Mat Zalk 8:36
But you’re also a decent year decent Greco Roman wrestler,
Max McGuirk 8:39
I guess? Yes, absolutely. Yeah. And some of these guys weren’t me. And I’ll tell you like, some of these guys would just be like models, they’d be like 683 100 pounds, like ripped, and they wouldn’t even know. They had no athletic ability, except how to lift weights, you know? So I was I was a good amateur wrestler, which made the transition to professional wrestling a whole lot easier. For me. The concept I was getting a man is this fake? Man, they tell you the truth. The outcome is predetermined. Yeah. You know, if Mat and you and I are wrestling, Vince is like, here’s the story I want told, Max is gonna go over. And you guys got to tell a six minute story and get the crowd invested in what you’re doing. You know? And so and then you got to do that five days a week. Right? NFL players, they play once every seven days. professional wrestler, you get beat at five nights a week? Yeah. So it was a lot of fun. I had concussions, a torn ACL all kinds of stuff. And, and that transitioned to me to a different
Mat Zalk 9:43
path in my lifetime. So yeah, what would you do directly after wrestling, man,
Max McGuirk 9:47
so I actually bought my first house before I went to web. I bought my first house waiting tables for three years. I saved all my money and bought a house. I still have it. It’s in Bowman acres. What inspired
Mat Zalk 9:57
you to what inspired you to Save your money and buy a house something must have catalyzed that. Yeah,
Max McGuirk 10:03
so my mom, which my mom’s a real estate agent, she’s had her license all throughout the time she was moving WTF. My grandmother had her license, and they were always trying to talk me to buy a house. But like thinking about an $80,000 house when you’re 1718 years old is like, that’s impossible. Yeah. So I didn’t like the thought of having to pay for rent. And so we all want to buy a house. And so I stayed on my buddy’s floor for two to three years on the weekends when I’d wait tables lived at home during the week, when I was in college. And so I said, You know what, I got $64,000, I was able to buy a house and a crazy market. 2007 has been a rental has paid for itself a couple times over. But that was kind of why I chose that was I didn’t want to pay rent. I didn’t want to waste money. Oh, so I had my first house. Then I graduate college. Six months later, I was able to get a mortgage for my second house. And then like I said, I get the call from from Jim Ross. And I quit my job. And for the next two years, I was in Tampa, Florida. So
Mat Zalk 11:02
then could you What were you earning on an annual basis doing WWE? Oh, man, I
Max McGuirk 11:07
actually to be honest with you took a little bit of a pay cut from my accounting job. Calling the 50,000 range, you know, okay, fine. Even it was enough to live on. But like, when we had so many like things, if you got hurt in the ring, you recover, right, I get kicked in the face and at stitches, whatever. I’m covered free of cost. I’m the first one like I get to urgent care or get to the hospital, front of the line. I’m playing basketball with you at my apartment and I blew out an ACL, you might as well be fired like you’re done. Yeah. So they didn’t want you haven’t had any other jobs. So it was cool that I had a rental back home and Tulsa while I was living in Florida, so I had a little extra income. But basically what they were doing is they’re molding you to be the next breakout star so that you’re on Monday Night Raw or Smackdown or whatever. And then then you get a different contract. You’re making more money, and then your merchandise sales and that kind of stuff. So I did that for
Mat Zalk 12:02
so you get your second house, you get a mortgage for your second house. Did you follow through that and buy a second house?
Max McGuirk 12:07
I did. Yeah. Actually is the house behind mine right now.
Mat Zalk 12:10
So love that. So you have two houses, you transition out of WWE? What what what takes you deeper into the real estate world? Yeah,
Max McGuirk 12:19
so I get back home. And it’s kind of one of those things your mid 20s. And you’re like, gosh, like I wish I was on top of the world and all that kind of stuff. But do I go back? You know, do I do I change like my my character and continue to put on more weight and be more jacked and this is gonna be my life path? Or do I you know, say, Man, I’m gonna figure something out here at Oklahoma. I you know, you’re gonna have failures, right? So when I get the phone call from web, you know, Hey, man, we’re, you know, we’re releasing you. It was devastating, right? You’re like, this is kind of like my dream. I grew up around this. Yeah. But you gotta have some kind of setback sometimes that’ll, that’ll set you up for your next success. And that’s, that’s kind of where I went from there. So there was this is Gosh, 2010 2011 middle of a recession. nobody’s answering job applications and stuff. So I started substitute teaching. Just and part of it, like the thought was Greenlake was a really big important part of my life. And so I thought, well, if I become a school teacher, I’ll have two months off summertime I can enjoy the lake and enjoy sunshine be on a boat. And so that was kind of the path I went so I had a bachelor’s degree in accounting. I took the teacher certification test, some the spring and then I ended up taking a job in Bartlesville High School and I was a high school teacher teaching business Word Excel PowerPoint programming that kind of stuff. Yeah, Coach wrestling Yeah, Coach guy wrestling. I did. And and that was gonna be my path. And anyway, so that’s, that’s, that’s what I did. So I did three years there and an opportunity to cut that drive down on this 45 minute drive every single day to Bartlesville because I just was like, I’m not going to move there. So I had an opportunity with my sister principal moved to Claremore they said hey, there’s a job half the distance from Tulsa. So I took that job and I wouldn’t tenured so I was only there two years in Claremore and Christmas of I don’t remember what year it was. They were cutting 39 Teachers Wow. And they said if you’re not tenured if you haven’t been here three years or more and you’re early on teacher whatever, we’re going to cut you loose your you got to teach till May to finish out your contract, but you might look for other employment. And that put me on a trajectory that put me in a path of like, okay, I’ve got a couple of houses. I think I had four or five houses at that point that I just the bank would slowly like once a year once every two years allow me to go buy a house and I’m gonna like a I save like I’m broke right like I still continue to spend like my first year teaching you know, I just a year and
Mat Zalk 14:58
that’s so real estate investor mindset. I mean, it’s like, save, save, save, save, save, buy another house save, save, save, save, save, buy another house as soon as I can afford anything, I’m gonna buy a house with it.
Max McGuirk 15:11
I look at it almost anything I do, like I get a commission. I’m like, oh, man, that’s Dupont. That’s a down payment for my. Yeah. So. So this was like December of let’s call it 15 2015 and are like crap like, Man, I gotta go figure out a different like the superintendent saying, if you like education, you need to get in a different field. And I was like, why? So my mom was working at the time, she was doing the title work and reception. And as for a company called marine Max, which is a funny because my name is in it. But I had no ownership of it. It’s a corporate company out of Clearwater, Florida, and it’s a way to location Green Lake. So I met her boss, and he’s in sales. And he calls me one day and says, Man, I think he’d be really good at sales. And I was just like, Dude, I don’t care for sales at all. I thought of car sales guys, like I go to dealerships on Sunday, because I don’t want to be bothered. And so this is December 15. I walk in and I take every brochure of every boat they had, and I went on a 10 day vacation, I took my parents on a vacation in Florida. And I mean, I’ve memorized every everything I could every aspect because I didn’t know how to get into sales. So Boat Show 2016 starts early January, and and my boss, my boss, he’s my best friend. Now at the time, he says, Man, he said, Give it give it 90 days, give it 120 days. And he says if you hate it, go do something else. I made in that first weekend, I made 15 grand, I made half of my teacher’s salary in one weekend on boats. And I was like, I’m hooked. I’m hooked. And so anyway, I ended up making good money. The funny
Mat Zalk 16:48
thing about sales is there’s two approaches the car used car salesman approach, which is really pushy and terrible. And then there’s just providing a service, it’s helping somebody understand what you can do for them, and what the fair exchange of value is. And I think back to when I was doing sales at Keyrenter. I didn’t sales for a bunch of years. And I loved it. It was awesome. It’s just telling people what you do and how you do it. And it’s kind of, you know, lifting lifting the Komodo so to speak, or kimono, whatever it is Komodo, I guess is a dragon. But it’s like lifting up the kimono and saying this is what we do. Do you want it or do you not want it and I loved sales so much. And it was only I mean, I remember the phone would ring at like 11 o’clock at night from somebody calling in and wanting our property management services. And I was like I would go spring to life and I would just sell our services. And it was great. But my wife was like, we have twins on the way you cannot be answering the phone at 11 o’clock or midnight. We’re sitting here on the couch watching a movie like that it’s not the case. And I had I handed it over I hired a salesperson, Lisa Goins is now with steady rocker, something she did throw under the bus and then solid rock. And she’s awesome. I love her so much. I got an email from her yesterday, but like losing losing the sales in our business was it just was devastating. For me, I love it so much. So if you’re a good if you’re naturally just good with people, and you can just be honest, and tell people what they can expect. And then you deliver that service. It’s a wonderful thing. If you’re trying to sell, you know, if you’re a snake oil salesman or used car salesman, it’s terrible. Yeah, no,
Max McGuirk 18:15
I think you gotta You gotta love with yourself, right? And my favorite thing is, I will tell these people, I’m like, Man, I’m not selling tires or chemicals. Like, I’m selling an experience, right. And we had this conversation, or this started. And like I you know, I know your father in law. And those are all wonderful memories, because it’s not about so much the product, it’s the experience that you get from that product. And that’s what I fell in love with. And so when you can sell that, I think it just naturally comes out of you like, Man, this this is, this is what I want, you know, so I’m with you on the tails. So, I guess like to go further on? How do you know we’re talking about real estate. And I’m talking about boats and wrestling? Well, here’s, here’s where all this stuff really gets put together. And so, my boss, you know, like I said, somebody I very well, I respect him. And one of the first things he taught me his dad was a pastor at a church. And, and he told me, he said, always do the right thing. He said, You’re gonna have opportunities in this business, to where you could absolutely knock someone’s head off on a deal. And he said, I’m going to tell you this, he said, You’re gonna want to do business with these people multiple times, whether it’s this year, five years from now, 10 years from now, whatever. And he said, You’re gonna want that repeat business, and you’re gonna want that loyalty. He said, no matter what, always do the right thing. And I’m like, Man, that’s, that’s powerful, you know? And so anyway, I kind of live by that. And I looked up to this guy, and I was like, this is a really, really good dude. So going back to like that, that w two of like from 2011 to 16 1516, whatever. When I was teaching my mind who was low 30s, right, which was way less than what I was making way less than what I was making as an account. But it was comfortable. And that’s what I was going to do to my 60s. And so, a banker when a banker, you know, is going to finance you for properties, and they see that you’re gonna make $30,000 a year and you got a couple of houses, you are a major risk. They’re like, there’s no way you can pay this back. And so my first full year, they’re still like, hey, I want two years and know this guy is good at sales. And so I found out, you know, great deal and a house and what a great deal look like back then would be, let’s say 31st and Yale, three bed, two bath, two car worth 141 50. And I bought it for 80. Right? Yeah. The deal seemed like a great deal. So a great deal, right? Those are the deals like the house behind me that I will never sell. And so anyway, so the moment I buy that house, what happens next? Another one, just like that pops up, right? Because this is 2016. The days? Yeah, you call your bank? You’re like, Man, can I get another one? No, Max, like, nope, nope. Next year. So the next thing you do is like, Well, I gotta go find the money, right? So I asked Chris Berg, which is the general he was the general manager of REMAX. He is my best friend, my mentor, my I mean, I owe him the world. Yeah. So I call, I am in the office, and I talk in real estate every single day, even though I’m selling boats, and he hears me and we talk about it. And I’m talking about my rentals. And I said, Chris, I’m going to ask you a question. Can I borrow $100,000? And what do you think he said, Let’s do it. Not No, but heck, no. Yeah. And I said, Well, man, I’ll pay you back and do 6090 120 days, my bank won’t let me do this, you know. And so he’s like, but he thought about it. He’s like, man, like, you talked about real estate all the time. You’re very passionate about it. How can we figure this out?
Mat Zalk 21:42
But let me understand your thought going into it. You said look, give me 100 100 grand, I will buy a house renovated refinance it, and then I’ll pay you back with the refinance. Buts. Okay. Got it. I’m with you. Yeah, so yeah, bank wouldn’t. But the so the risk perspective of the bank was, I don’t trust you to buy renovate and rent this thing. But if it’s already rented in a covered service, 1.25, or whatever it is, I feel comfortable with that scenario. Yes. Okay.
Max McGuirk 22:08
Got it. They just didn’t want me to have too many rented homes. Yeah, too many too many homes out there. And where people get hurt, especially in an economy like we’re about to face as we’re going right now, as you get to spread out too thin. And then you got too many bills coming in, you run out of cash, everybody’s hold tight of their cash, and then you lose everything instead of just one. Right. So that’s what I’m sure the bank was probably trying to be cautious with me. Hey, is your mid 20s, late 20s. Whatever. Let’s let’s be careful.
Mat Zalk 22:39
This guy, he’s still decent work with the same bank?
Max McGuirk 22:43
Yes, actually, yeah, I got two banks or bounce off of Yeah. And so that was another thing. I’ll get into that. So So Chris ends up saying, Hey, I make a sizable income, I would really like to offset my taxes. How can we do this together? And I said, Well, man, it really good idea that we started to think of, because before then it was always just me, right? It was always just like, Max and Max only. And it was only my ideas. When I said, Chris, me, me and I meet you. And I can both do this together. So he took a piece of property that’s paid off, I took a piece of property that was paid off. Where did that bank? Use those as lines of credit? And then we went nuts. I mean, we came up with a formula of how we buy properties, because he asked me, Well, how do you buy a property maximize, I don’t know, it looks like a good deal. I buy it. So I didn’t have a really reason of what I was doing. So we came up with a formula. And we never paid $1 more than what our formula, what the math made sense to write and is basically a 10% return a 10. Cap is how we base it. And if these houses didn’t produce a 10 cap, we wouldn’t even go look at if there was a you know, like, we would lose houses for 1000 bucks. If our top dollar was 50 grand, and sold for 51,000 We walked away, but we just never ever tow that line, you know. So
Mat Zalk 24:01
the idea is it’s a 10% cap rate. So your noi over your asset value had to be 10%. How would you estimate for example, repair costs? How would you estimate I guess taxes are easy, a bunch of the stuff is easy, but if you get into a house that needs repair, where you pretty spot on it at estimating repair costs are gonna go over and you’re like I’m gonna noncash because my ultimately the asset values are what I’ve got in it. Cash Wise is more my ongoing expenses are higher because I didn’t do the renovation that I needed to do or whatever.
Max McGuirk 24:33
Yeah, so I’ll just break it out for you. This is some some deep secrets and you can’t really get these it’s very hard to get these deals super, super so we would look for is we would basically do this we would try to find 100,000 Our house and pay $60,000 or less. Right and that’s moving ready right now. And if it needed some work a new kitchen, a new bath or something like that, then we’re probably buying a 50 round or less, right? So what that ends up being it’s it’s a whole lot of notes right? This is speed Dating. This is, you know, making a ton of offers, you get a few people that say yes, and the different side of it too is is cash, right? So many people I’ve run into this are like, Oh, I’m gonna cash and then they’re gonna go call a hard money lender that’s gonna give them cash in 30 days. Well, that’s not cash. My offer generally the people to say yes, my cash offer want that cash yesterday. Yeah, right. And so what I’m able to do is I’m able to you, generally, we would make offers on properties that we either we knew the area inside and out, like I said, I never cross Apple never have never, I don’t really, I’ll never say never will, unless it was just handed to me. But we wouldn’t be south of Admiral and let’s just say from Louis down to Mingo, right? Maybe up to 50 or 60% investor, we knew we knew those areas like the back backside of our hand, we knew exactly, we would always if we were going to rent something, if the market was 11 or 1200, or 2000. Like we want, we don’t want this thing sitting on the market. Right, we want it snatched up quick. And then and then if we really really needed to dig into the risk foundation issues or something like that, we would hit that price a little harder, just because we don’t want any anything that’s going to bust our 10% return. So the math side of it would be I’m trying to we went back into basic off the rents, let’s say rent was $1,000 we would we had basically 40% is what we had for taxes, insurance, maintenance, repairs. Vacancy, we did like 5% for vacancy and all kind of stuff. So we figured all that kind of stuff in there. So that’s kind of how the math was, I’ll have to write it all out for you. So I’m not on the spot and kind of give you an idea. But we would have to cashflow 250 to $300 month minus all taxes, insurance, mortgage, all that kind of stuff. And if it didn’t give us that that type of return, we didn’t touch it. Because it’s not worth like I’m not buying a house just to break even. Yeah, you know, yeah, and, and we were all on 20 Year 20 year loans 20 year commercial loans, five year ARM, 20% down that kind of stuff. And the difference to us too, we would be able to buy if we bought a house really, really well. Let’s say we bought 150,000 our house, we paid 80 for it, but you got equity you take 150 It hit that 80% The bank’s cut you a check. And that was happening a lot between 18 It started fading away in 19. And then what happened is the banks started saying, Oh, you bought that house for 80 Yeah, I know, it’s worth 200 But you only paid 82 We’re gonna give you 80% of the ad. So they were just trying to protect themselves. They’re insulating themselves. So I never another another tactic. I never ever. This is all a math game, right? Like I said, my degrees in accounting, Chris bird, his job, he had 30 employees. And his job was to, to pay attention to a p&l of a $50 million store. Right. So like, he is really, really tight on the details. And so we were very analytical, so we never ever, you know, bumped our number if let me know him emotion. This is all math. If the math doesn’t make sense, you don’t buy. And so what ended up happening, Mat was, you know, we took that 300,000 bucks of lines of credit 150 For me, and 150 from Chris. And we ended up buying 35 houses in just under three years. Wow. So from 20 Let’s call it late 2016 2017. And just under three years with 35 house was in our plan was 30 Other forget the first house we bought 227, South Pittsburgh. And we bought that house and we sat down at like, gosh Mexicali border and Cherry Street. And him his wife and I were like, Oh my gosh, we only need 29 more. We’re so pumped up. And then we get to 35. And it’s like now what? What do we do? And I’ll tell you, Mat, like our plan was bought by an old. Yeah. Like himself ever. And billions.
Mat Zalk 28:55
So you buy the 35 you have a couple of them, you’re on your own. So you’re sitting at 40 houses 45 houses in partnership or whatever, what’s your what’s your next move?
Max McGuirk 29:04
I don’t know. I mean, so you you get to the goal and you’re like now what right now we gotta come up. We’re not just gonna sit at home and do nothing, you know, what a good amount of like a really large amount of cash flow coming in. So I ended up paying attention to like multifamily, right, because you gotta like what’s, what’s next? What’s your next scale up? There’s a 42 unit called wood hollow 5962 East 33rd cord. So basically 33rd and between shirt and Ale. That thing set on the market in 2019. It’s out of the market for nine months. And I from the house I live in I kept a property as a rental from I was living full time in Grand Lake but I kept the one in Tulsa 31st and Darlington. And so it was walking distance. I could walk this thing and I walk a lot just because I’m always like paying attention to properties and stuff. And I’d walk it walk it walk in I’m like Chris, man, I really want to buy this it was $1.8 million and And I really, really wanted it and it sounds I’m working forever. And then I took it down to I took it down to there was a real estate investor, are you checking it out online? And now
Mat Zalk 30:09
I’m looking at email that I’ve got to another investor that looked at it for a while in 2019. In August, he must have bought it in September, October of 2019. Yes, because I see, I say Tom wanted to introduce you to Robert, your inner CEO responsible for day to day operations, he knows the multifamily world well, and drove would holla. Last week, I’ve asked him to put his thoughts on paper for you to review. And then Robert runs a whole analysis of the property. Really funny.
Max McGuirk 30:34
homerun man, so here, here’s the deal. I won’t say the one bedrooms were like, I can’t remember for 75 or 500. They were cheap for one bedroom. The all the units had washer dryer inside. And then I want to say the two bedroom. I mean, they were massive units. And anyway, so we came in there. I think we spent 90 grand, mostly wood rods, updated LED lighting and stuff like that. And I’m not going to tell you, I’m going to tell you, honestly, it’s 12 maybe 15 months or something like that. Where to unsolicited offer. We’re going to keep it for a long time. The scary part was the downpayment. 600 grand you know, 30% down. I mean, that’s a whole lot of money. I remember that was like, do we do this? Is it I mean, we’re pushing all our chips and right, we still had the 35 houses, right? And incredible cash flow coming in. You know, I’m selling a ton of boats. We’re making good money. But like if there was any kind of hiccup we were we could have been touched. Right. Yeah. Yeah. So anyway, so so we buy the things cashflow. And from day one, it’s it’s humming along, it’s it was 41 or 42 units, there’s always at least one person moving in moving out, whatever. But it was a fantastic property. So we got it, we got an off market offer. Like I said, 1215 months after we bought him. Around that time, let’s listen, it was 2020. Around that time, I said COVID hits, there was bigger pockets had said something that Brandon Turner had sent out this letter to all his tenants and basically said, Hey, I totally understand we got a crazy pandemic going on. But just understand, like, we’re here to take care of you, but also rent to do we still have to pay our mortgages, right? So we set that out and maybe one one of 34 on our single family houses decided they’re going to put their heels in and not pay. Right. And, and you know, everything was going good. So I say Chris, man, I know. We said we’re never gonna sell what I said, the price of these houses when we’re buying 5060 70,000 bucks. They’re 150 200. Like, would you would you mind if I just throw it out there on Facebook and toss it out there? So I put the whole entire package on Facebook. I wasn’t a broker. Right? I didn’t have my license. I threw it on Facebook, because I didn’t want to pay a six figure commission. You know, to put it on Facebook, it’s it’s out there and get all the naysayers. Oh my gosh, blah, blah, blah, you’ll never get it. And about two and a half months later, I get somebody that says hey, can I can I dig in a little deeper? Instead of looking at every single house, they looked at seven or eight, right? I looked at seven or eight got back with us and said, Man, I like what you got here. I like the number. We came up with a creative deal. And, and when I’m at a contract, and I’ll be honest with you 60 days later, I you know, I’m like, you know, this deal is not going to happen like never cashed your check before it’s it’s hits the bank right. And I get a call from my real estate attorney. He calls this is hey, what do you want to close? And my immediate answer was on what? On what, like, What are you talking about? He’s like, on your package at houses. I was late. Oh, okay. So we had a closing and we ended up doing a really, really nice deal on the backside of we did like a quarter million dollar seller carry back. Wow. So in case we left some money in the deal for that new buyer in case roofs went down or H backs and stuff like that, you know, and so anyway, so just a just another way of being creative. And then we tend 31 All the rest of those funds into a bunch of multifamily. So we went really, really strong and 2021 with a couple 1000 multifamily doors.
Mat Zalk 34:05
So how does a real quick how do you structure the owner, the owner carry back? Is it is it a true note that’s filed? Is it contract for deed?
Max McGuirk 34:13
It was a true note that was filed to my real estate attorney. I think it was five years and maybe 5%.
Mat Zalk 34:19
And who do you use? Who do you use as a real estate attorney?
Max McGuirk 34:22
I use a true title. So shout out to David Dreyer. Yeah. So you know, I’m really loyal. We talked about loyalty when we talked about your father in law. And the same thing, man like if you treat me well, I’ll never go anywhere else. Yeah, the same bank. I’m gonna throw this out there. I’m gonna shout out to Jeff Howell he’s the RCP banking Claremore. He is like, I think now branch manager or whatever. And he’s, he’s, he’s a big dog. So when I was when I was teaching school back in 2013 2014, I remember being told like, you need a solid banker who’s got like, this is part of your team. Same thing with a real estate attorney. So I remember meeting Jeff Howe on at the time I think I had four or five offices. And I come in, I hear about this, this word called leverage. And so I walk in, I was like, Hi, Jeff, nice to meet you. I’m a school teacher. And by the way, guess what, I’ve got four or five houses. He’s like, fantastic love to help you. He said, Bring in your taxes, and we’ll go from there. So I bring in my taxes, and we go look at it, and he looks through, and then you can tell like what the question is in his face, he says, where your house is on. And I was like, Jeff, I keep all these cash, you know, and he’s like, the nicest way possible. These might not be his exact words, but we laugh about this Max, you’re an idiot. Report the the cash that you’re getting on these houses, put them on your taxes and come back to me in a year. Right. So a year later, that’s when he started basically allowing me to buy a house a year. And so anyway, I still use Jeff to this this to this day. We RCEP
Mat Zalk 35:48
is a great long standing bank. I mean, Frank Robson’s he’s been around for a long time and friend of mine is on the board of that bank. And I mean, we’ve we’ve had a great opportunity to go out and chat with those guys that can claim or they’re just an honest group of hard working folks, and I love it. Well,
Max McGuirk 36:05
and I met Frank ROPs. And actually, he, I want to say this is totally random. When I was teaching in Claremore, they put me on top of what’s it called? Academic Team. And I didn’t even know it what I told him, I didn’t want it. And I took a team and I didn’t you know, these guys were way, way smarter than me. They’re just academic, all stars, and I helped them win a state championship, and I got a coach of the year. And, and so that got the attention to the newspaper of Frank Robson and we had coffee and, and such a nice guy. Wonderful guy, you know, and I mean, it’s Walmart backed. I mean, basically, it’s it’s Rogers County Bank, it’s Robson prop anyway, it’s a big deal. And they do things right. And so I’ve used RCB, like I said, for gosh, 10 years or plus now. And anyway, great guys. I also use, Chris had a contact with what’s called Oklahoma State Bank out of Langley, needed area, state bank. And so we would use Oklahoma State Bank on some deals, and we’d use RCB on some deals. And what’s funny is our bank, good friend, his name’s Sean Taylor, he moved from Oklahoma State Bank to our vest in Miami. So I use him for a lot of stuff. And so I don’t keep everything with just one bank. So I kind of like check the rates on both of them. And both of them know each other. And both of them know that I am looking for the best deal. So RCV actually ends up buying out for almost a bank and just swallow them up. And so they’re growing. They’re doing well. But anyway, so bankers, real estate attorneys, I mean, you got to build your team. And then I got an Insurance insurance company, Joe Howard shelter insurance and broken arrow. He did me a favor 10 years ago in a house and I’ve never had a claim, knock on wood since. And he’s had hundreds of properties with me. So anyway, so I’m super loyal. I think loyalty goes a long way, especially when you’re building a real estate empire, I guess you’d say so important
Mat Zalk 37:56
to have your bankers your insurance guys, your your attorneys on on standby, because they are they’re a critical part of your team. And I you know, David Charney, who sits on our CBS board was a mentor of mine. And he said, early on, he was like, you know, have a good group of bankers, have your financials in order, dress appropriately, go in there and make an impression. And then you’re you’re welcome to shop banks. But I think he his perspective is, I don’t, I’m not, then he would never say this. But he’s like, I’m not whoring around for rates. He’s like, I might be negotiating different terms. Can you give me seven year fixed? Can you give me 10 year fixed? Or can you go a little higher LTV or a little lower LTV, whatever is important to him? And you know, the rate is one element of many parts of a loan. We talked about a 20 year and with a five year ARM, can you do? Can you do a 25? Year am? Can you anything, I can help out in various circumstances, because every deal is different. You know, and make making sure that you’ve got good relationships and that you’re not, you know, coming in, right when you need cash for the first time, saying I’m desperate. Can you help? That’s not the way you want to be. So yeah, the same thing with with your title, folks. And same thing with your attorneys like you want to have, you want to have people that know your business and know you well, so that they’re, you know, willing to willing to help you out. Maybe you can call in a favor because you’ve been doing business a long time.
Max McGuirk 39:12
100% No, and bankers, like I said, like you it’s the foundation, you know, you gotta you gotta be able to have them or get the money or access the money. And I remember many days in the past, like, where a deal would pop up. And we wouldn’t, I mean, there’d be days we would buy houses, and we’d never even see them. We just knew what the price was what you know, and we would know that, I mean, even if the thing needed to be bulldoze, we’re buying, like, just too good of a deal. And so, when we’re up there at Grand Lake, and we’re selling boats, and we don’t have time to drive an hour and a half into Tulsa to go find this property. We had such a good relationship with both Marcy we and then Sean Taylor and Oakland state, whatever. We had such a good relationship, multiple deals and they knew how we bought and be like, Sean man, I need 100 grand and it would be a thumbs up emoji, right? Wow, like, go get the deal. Go get the deal, right. Yeah. And, and, you know, figuring out all the details in the back. And so like those guys get so used to, you know, knowing how we do business. And so when we sold a package of 35 houses, like I said, we 1031 exchange and I’ll tell you more about maybe at another time about all the multifamily stuff. So I’m, I’ve become an expert in multifamily. But I still have a huge heart and love for Tulsa real estate. And that’s kind of what topic will stay on in here. But once that package sold, and all those funds and those loans because we kept dead on everything, all those funds went away from those banks, those banks now call and be like, Hey, what are you buying? Hey, I got an incredible deal. And so like there’d be there’d be like rate sheets and term sheets that we would get that most normal people wouldn’t get? Because they knew how we bought, you know? Yeah, I mean, there was one probably last year, like what everything was five and a half 6%. And it was like 4% 10 year fixed. I mean, it was insane. And it was what they would cookie cutter. And this was our CBN really like cookie cutter of a certain like, piece of commercial real estate that they want you to buy. And so anyway, those type of relationships are just invaluable.
Mat Zalk 41:12
What are you thinking now that interest rates are are up at eight and a quarter commercial? What do you what are you doing?
Max McGuirk 41:17
Don’t get me started, man. So I stopped. I stopped buying single family stuff. Gosh, 2021 For sure. And it wasn’t until like the end middle of end of 2022 that I started buying some of my own right. I just started going back to just buying single family houses on my on my individually. But what would happen is I would have I would have four buyer for sellers that still had like a family of properties. And if something you know if they just wanted some cash or whatever, hey, I want to go buy a new vehicle for my wife. They’d say, Hey, Max, do you want this one? Yes. Like Like, for instance, let me give you an example. A friend of mine calls boat customer friend of mine calls me at the lake. He says three bedroom two bath, two car 1400 square foot $56,000 Take it done. Yeah. And then I started to ask like, can you send me a picture? And his response was Max, you know, the days get or leave it? I call I was gonna say yes. And I was like, You know what, I’ll take it right. And, anyway, so so that that was a matter of I got cash, and I can move quick. And anyway, so I’m not a big guy on flips. Recently, I’ve done a handful of flips. So my my portfolio of rentals is starting to grow again. But like I said, in the past, Gosh, 90 days, I probably had eight homerun deals like deals, you would have never seen me 2021 24 Two, like I just bought a I bought a tutored, and let’s say turn 50 at the lowest $270,000 house, Briar wood. Right? So 38th between Memorial Mingo I looked at all the comps in the area. There’s there’s 122 houses down that sold this year for $255,000. I just bought for 105. Why are
Mat Zalk 42:58
people why are people selling them for 105? When they can go to the MLS and just list them? Well,
Max McGuirk 43:03
I mean, this one, obviously it’s not it’s not moving ready, right. So it’s got a new roof and a rage back. It’s got wood paneling on the inside, you know, I mean, it’s a couple of years, but it’s not 150,000 on foot work, you know, so there’s plenty of equity. The other side of it is we don’t know what what the what the push is on the back. Maybe it’s a family member that wants bonds, and maybe, you know, whatever, we got to sell this and split it up or whatever. But the difference too, is like they don’t probably have the money to go out there and put the rehab into it. Right? Nor the time. And the realizing that a percent like the value has to go down, right. And so that’s, I don’t know if it’s gonna go back down to like, it wasn’t no seven or eight or nine. But the prices have to go down. And so I’m seeing a lot of prices drop. And that’s kind of what I chase. If somebody says, Max, what do you do on a daily basis? I look at price drops. And I hope nobody listens to this because that’s all I do. I look at price drops. And I kind of watch a pattern. And then I start seeing motivated sellers and I start chasing after that stuff. And then to be honest with you, too. I’ve been in the market. I’ve been doing this since 2007. I’ve gotten to the point where literally people reach out to me, right, our connection, right, our connection was from Kathy Catholic’s, like, Hey, I know this is kind of what you’re doing. And so then people just start coming out to you. When you’ve when you’ve had time in the seat. People start coming at you. I’ve been out of sales for two years. I sold about two months ago to a guy that I’d sold about six years ago. Right? It’s time and I don’t care. I don’t know who’s there now, but he’s like, I want to use you. Right? I got commissioned on a, from a different company from from one of the companies that didn’t work for but they knew I brought the relationship and I brought the sale, you know, beautiful. So I’m, I’m excited as heck right now. Just because the rates are higher. People know that prices have to come down and they’re starting to. I’m seeing a softening in 200,000 to 50 and less. That’s where I’m seeing it. You’re still going to have that brand new house. So let’s call it a 300 to 450 range is still pretty solid. Yeah. Anything above that softening, I’m starting to see just in the market. But if it needs a lot of work, there’s less people to have cash. And so what I’m
Mat Zalk 45:12
what you’re sorry, what you’re finding,
Max McGuirk 45:13
what I’m finding is true people that have cash doesn’t take 30 days to get it or whatever. If you have cash needs to move right, now, you’re gonna get a deal. Interesting.
Mat Zalk 45:25
So you have excitement about the upcoming, you know, the notion that a lot of loans are maturing, and people are gonna have to drop prices to sell and get out of bad problems. What’s what is keeping you up at night? Is anything? Do you have fears or anxiety about anything in the market or your business or anything else?
Max McGuirk 45:40
No. So there’s always fears, right? And what I think what I like about real estate, and I can go to Vegas, right? And I can go to Vegas and not spend any money gambling, I’m just not a gambler. I take calculated risk. So anything that I do is a calculated risk, right? So if I buy this house, it’s 105. Grand, I know that it’s not going to take me 145 grand sure to read outright. So I’m not stressed on that. What would be keeping me up, I got a phone call shortly after this with a CPA, have I’ve made too much money this year. And that’s not a good problem or bad problem. It’s it’s when I was talking to my CPA the day they’re like, man, you got a lot of short term capital gains, right? And there’s really no way to not not a lot of good smart ways to be able to make their way. And if I look at my tax bracket, the way I’m looking at it, I’m probably paying 35,035%. Right? I don’t like giving up half of what I know, right? So I’ll tell you about another deal that I did last year. That was just somebody knew me, right? It’s people knowing you in the market. The short term capital gains stuff is in my tax brackets 35%. If I kept it a year, in one day, it’s 15%. Right? Much rather than 50. Right. So I’ll throw a little deal at you that this was totally random. My girlfriend and I were in Oregon last year for her fall break. She works at a school as a child psychologist. And we’re at the Portland airport about to fly home and I get a random phone call. And I always answer my phone, no matter what if I don’t answer I want to call you back. Right respond within 24 hours. That’s just something that I learned. Stolen boats. I remember you said something about 11 o’clock at night. I took a 10:45pm on a Friday night text message from a guy responded to him. And if I wouldn’t have responded to him, Wes, or somebody else in the office would have gotten that lead, right. And I responded to him the very next morning, the dude walks in. It’s a 20,000 word commission. Boom. And I’m like, that’s what you get for responding. Like it’s not always that size of $1 amount, but I was like, This is why you respond. So I get it. I get a phone call from an airport. Probably not an opportune time. But I answer and I’m like, hey, the city of Tulsa says you buy almost anything, right? Like you’ve you bought burnout houses you’ll do whatever
Mat Zalk 47:51
the city of Tulsa thrown your name around love. Right? Yeah.
Max McGuirk 47:55
But but you treat people well, and you do good things. And so I get a phone call. And they’re like, Well, I don’t know. They’re really really really bad. But they’re near to you, would you would you consider looking at so I’m like, Yeah, I’ll be home tomorrow. Four o’clock. Let’s go look at it. And so I’m doing my research on it or whatever. And they are bad like really, really bad when when me and you catch up? I’ll show you pictures. These are like some of the most awful houses have ever seen. But they were on fourth facing t u like a while facing. Yeah, I mean, they were across like if I walk 10 feet across the street, there’s a there’s like 10 houses they bulldoze. And it was a T u parking lot for students. And I was like, okay, all right. So I typed up a contract, right, I talked to a contractor what I was willing to pay most I was willing to pay, right? The lady selling them a meeting straight with the owner. And that’s what I liked about face to face. If I can talk face to face with the check writer or who I’m dealing with, I have a better chance of getting a deal done the mess of of the real estate agent, I was always fearful, but again, as agents more worried about their bottom line, and they care about you getting a deal.
Mat Zalk 48:55
Sure. And that’s I mean, I think freakanomics talks about that a little bit where they’re like it, the commission, if you’re taking 3% You’re splitting that with your with your broker, you’re you just want the deal to get done. You don’t care whether it’s top dollar or bottom dollar is really it’s it’s a miniscule difference in what you’re actually getting paid in the commission. So you want to just get the deal done.
Max McGuirk 49:14
Yep. So Brewster and this was this was a fun one, probably the best deals individual like single family deals I’ve ever done in my entire life. Wow. So and that’s one of the homerun deals, right? And then I meet these people over and they’re telling me that we’ve got one other guy that says you’re interested, and I’m like, Okay, and what I was trying to do is I wanted to be the last one to see him so my offer would stand right yeah. So So I go in there and before I pull up, I got my contract typed up exactly what I want. I’m buying both houses. I look at the first house and it’s it’s furthest from to you. But it’s it’s I’ll give you the addresses later, but it’s it’s house house to you. So I’m looking at the first interior house needs a ton of work. I’m like, I bet you’d need 200 grand right I walk in it. Nobody’s been in it for 10 plus years. There’s there’s gold Garbage, cat litter boxes, whatever, waist high rep the whole house, we’ve got on the outside roof, everything. I’m just like, This is the worst thing ever. While I’m leaving that house, I do have my gun on me just just in case, as I’m leaving that house and the other house it’s facing to you homeless man walks out the front door and goes to the backyard, and was like willy nilly, no big deal waved at us. And I’m just talking me through the house, the electricity and water is on in this house. And I’m looking at the owner. And I’m like, Why do you have the electricity on? And I like, well, you know, for the security system, I’m like, for the security system for this homeless guy to live in. So anyway, here’s the security system. Yeah, after that, I’m sitting there, I go back to my truck. And I’m like, Oh, my God, this is like way worse than I expected. So I go back, and I go to my contract, and I delete the number that I had in there. And I drop it by a considerable number, like lower than what I was going to offer. And this is this is this is totally, this is different. This is when you have cash, you can do this, right? Yeah, this is not like, Hey, I think I’ve got cash, I’m gonna go call Matt and see if I can borrow 100 grand from him like I had, like, I write a handwriting check. And I write it to my title company, not to an individual. So I write the full amount that I changed that contract to put the data on it folded in half. And I walked back to these people, and I said, Listen, these houses are in horrible condition, you know it, and I get we agree. And I said, you got somebody that has now that you got another buyer, potentially, that’s going to come in behind me, they’re gonna see it tomorrow. And I said, What’s going to happen is I’m going to make an offer right now. And that person is going to take, they’re going to, they’re going to find out what my offer is through you. And you’re going to tell them and they’re going to ask, they’re gonna offer five or 10 grand more than me. And I said, That’s unfair to me. Right? So so I’m going to make you an offer ants for tonight only. It’s done. 11 o’clock, I’m going to make you a cash offer. And I said, what happens is, I’m going to take this pain away from you, this pain of this house sitting empty with all the crap and all the junk inside of that becomes mine, that homeless guy that’s sitting in the backyard who’s living in your house. That’s my problem, right? And I said, I can make all this go away. And I handed him a check. They opened it. And it was like kind of a little bit of a surprise. And they walked back and I said, Can I have just a few minutes to talk to my partner, they came right back and said, We’ll take your deal. I couldn’t believe it. Like, I was like, the joy inside of like, oh my god, I can’t believe this. So I was like, No, that’s a heck of a deal. Now, now comes the work, right? So I’m like, do I keep these things I can make X number of dollars, all that kind of stuff. But it was so much so much going on. At the time, I had two houses. I was building grandpa like first two houses ever built my life. And so I didn’t want to pull my guys off with houses, Monkey Island. And I was man. So I called my guys. I said, Man, I just need I need you guys for one day, eight hours, whatever, we’re going to charge me and I want to be there with you for eight hours where I clean these houses out. Because I was like, What’s the best way to sell these things? Do I sell them full of crap? Or do I sell them needing a lot of work? But take all the crap out? Yeah. So we spent eight hours and filled 230 or 230 yard dumpsters in one day. I mean, we didn’t. We didn’t stop and that that day I had posted I think it was the night before I posted them up for sale. I found out the market the cheapest house in that market near to you was 485 grand cheapest house needed work. And so I decided to put mine underneath that value. Right and I put them up for sale individually. I took a screenshot of T u of the parking lot right next door, all that kind of stuff. And I put them out there for price like this is this is the price No, no less will I take I got 42 phone calls that day. We were cleaning out the battery ran out of my my headphones, my earphones wherever my air pods are like no more. And I had one of the first guys called me was like, I’ll give you full price today. Both houses. And I was like, No, right. And I’m pissed that I said no. But what happens when you have 42 offers? It means your prices low. Right? And so I knew Yeah, so I was I start backpedaling. I was like, Man, I need to I need to do something to take these off the market or something. But I based this was like a Thursday going into a Monday. And so I was like crap, like, I just I just knew no was the answer. And so I you know, I tried to regroup, I’m like, okay, maybe I take these off the market, and then two weeks later or something like that. But I remember thinking like this homeless guys kind of come back. He’s going to be my problem. I got to figure this out. So I get I get a phone call again that following Monday. And one of the guys who called me says, Hey, what’s it gonna take to buy your house? And I said, man, just to be honest with you. I said, I don’t want to pay the short term capital gains. I said, Well, this is what my short term capital gain is going to cost. Right? And he said, Okay, well, let’s figure this out. You want to do a contract for deed for 13 months and I said, sure. He said okay, what percentage right and I said 8% Great. He his downpayment two years later, was half of what I paid for. Oh my God. Not only did I get everything I wanted, I got 8% plus I get to pay off in February of 24. Wow, biggest, I’m talking biggest six figure deal I’ve ever done in my life and for done in my life. And so those are just those are just little wins. Right? And you don’t you don’t want them all right. I heard I was at church the other day, and I heard a this is really, really good. I heard a comment and basically said, everybody wants to hear your successes, how you connect people, how you connect with people, is through your failures, right? Yeah, yeah. And so like, it’s fun to tell you all about all like the good things I’ve done. I had a house a second in Urbana, that I just wanted to smash my head against the wall hundreds of times. And so you don’t win. All right, that one was one of those. What I liked about real estate, and this is this is what I’ll tell you, even when the losses, they can sometimes become wins, I broke even on that house. And I spent a year renovating it turning it into like stuff. It was a net zero waste of time for an entire year. And what I did is instead of sell it at breakeven or a loss, I rented it. And I’m going to hold on to it for a long time. And it’s going to turn into a way right. So anyway, that’s what I like about real estate is very forgiving. If you don’t sell at a loss, you never lose.
Mat Zalk 56:20
Who are your who are your mentors that have helped guide you in in some of this journey? Man,
Max McGuirk 56:26
there’s a guy named Curtis Twilley and a property I’m trying to think it’s called the Scandia search it up. It’s very first in Harvard. It turned it into like a retirement center. It is fan Oh yeah. No, it’s
Mat Zalk 56:38
right by Burton bottle. It’s just south east of bourbon bottle. Yeah, yeah.
Max McGuirk 56:44
So when I was waiting tables, I saved $65,000 The three years I was in college, so at 1920 I save 65,000 bucks. I spent no money. I only paid for my car payment, my insurance and gas. I mean, I didn’t buy food I was you talked about how much Dunaway when I was wrestling was 220. If you asked me how much I weighed when I was in college, it was 120. Like I was I was the most of my girlfriend’s just I just didn’t eat. But I saved all my money. And so Curtis Tooley would come in four to five nights a week. It took me 20 to 25 bucks. Everyone restaurants, promise promises attain, right? Yeah. 48 And you
Mat Zalk 57:20
karabell Is Carabas. A, A? Yeah, but who owns it?
Max McGuirk 57:28
I always thought it was. It used to be Outback Steakhouse Incorporated,
Mat Zalk 57:31
okay? Corollas. Okay, good. Yeah. I see your writing Johnny written. And I’m thinking of, oh my God, his brother, his brother about UFC is the biggest restaurant tour in America out of Houston. Anyways, no, it was a
Max McGuirk 57:47
yes, it was Johnny Crapo was the he owned. Anyway. Houston, Houston was the very first crops. So anyway. So yeah, so I’m waiting tables. Had a lot of regulars I had actually regulars that were my regulars from like, oh, four, that ended up buying boats for me in 2016 2017 2018. So that goes back to the relationship. You know, you treat somebody well as a server, and they come up and buy, you know, buy a boat from you. And so it’s no longer a $20 tip. It’s a $3,000 commission. And I’m saying so like, it’s it’s also small, and it’s all full circle. But yeah, so. So Curtis, Willie was very important in my life. I would sit down there like he’d come in late at night. And, and I’d be asking him questions old gray, or gray haired guy, and I’m 20 years old just trying to learn. And I think I wanted somebody like as a handout, like, he helped me with a deal there. And he would help me with knowledge. And so I’m glad he nobody gave me. So I was glad. So I can’t just be like, yeah, man, I got into real estate because somebody left me a huge inheritance, like, never got anything like that. So he taught me a concept of Max, if you can make money when you sleep, like, that’s that it’s set my mind off like, Okay, if I don’t come into grados somebody else gets Curtis’s as a regular, right. So if I’m sick, I’m still coming in. Because I want to get that 20 $25 Tip. But if if I can get that $25 tip and I’m sleeping in bed, or I’m sick or whatever, and then he starts telling me about the reoccurring revenue and on month on the first of every month you get paid. I’m like, Oh, man like that. So that’s, that’s really what set me in the direction of real estate interest.
Mat Zalk 59:29
I mean, so so it was the concept that he shared with you that’s making money in your sleep. It could have been I mean, you could have own anything that made made money while while you sleep. Real Estate. You could. Yeah, but But what but he was he was a real estate guy.
Max McGuirk 59:43
He was a real estate guy. Yeah. And he got into the 80s when things were really really cheap. If you went and saw the price he paid for the Scandia it would blow your mind. Like it’s like we talked TEDx it’s way way beyond that. Man other other things that I listened to sometimes like motivationally like, this is gonna sound weird, but I don’t I don’t eat, breathe and sleep everything Grant Cardone talks about, but like, he’s got a couple things that he’ll say I’ve read 10x That’s great. But he’ll say sometimes just show up, you know, like, just show up. And then the other side of it, I’m obsessed. I don’t know the best way to say it. I wake up and it’s like, what’s, what’s the next deal? You know, like, we’ll make a couple $100,000 on a real estate deal. And I’m like, great, cool. What’s next? And that’s, that’s, that’s where my mind is that I don’t think like, I’m one of those guys that I was always going to keep growing, right? You plan to get 30 houses in the end, and you get to 30 houses and you’re like, now what? Now? What’s next? You know? So, anyway, man, what about yourself? What What was your influence and what got you in real estate?
Mat Zalk 1:00:50
Oddly enough, this is a very strange story. But somebody said to me, I had two friends. One is a private equity guy, and he was like, talking about his K ones. And I was like, What’s a k one? And he was like, what? What’s a k one? And I was like, I better figure out what a k one is. Andrew Carey, and he worked for a long time at Riverstone capital and I was ventured off and his raised a few 100 million dollars for his own fund. Let’s do an energy investment. He’s done some some amazing stuff. Bring them on from middle school and high school. And who wants when I introduced him once as a friend of mine from high school. He was like, Dude, we are friends. Now I am was not your friend in high school. I am your friend. Now. They got really weird indeed. Together hiking. And then I had another I had a friend’s uncle who was like, you don’t own real estate? And I was like, no, he’s like, You don’t own real estate. And I was like, No. And he was like, he like blew his mind. But I didn’t own real estate. I was like, I guess I better buy real estate. And so I started sending books home, you know how to buy real estate for Dummies or whatever. My sister opened up a package that I had sent home to my grandparents house and in Florida. And I was like, well, there’s my sister opening up my mail. But you know, she said to me, I also I’ve also been thinking about buying real estate. So I was in Dubai at the time. She was in Boulder, which she still as we started buying real estate in Boulder. And that’s you know, we still have a bunch of them. There’s we’ve sold a couple 1031 of them into into like, there were I think we sold two last year and I 1031 Those into six houses six new build capital homes. That so that was you know, had a couple of good deals out there. And we still have some properties. And those have gone I think our first deal that we ever bought, we bought for 465. But for 435. And they ended up selling us their solar panels. They forced us to buy the solar panels for 30,000 bucks, which made no difference to me because we were renting it. And that that property is probably worth a trip here. $900,000 It’s a block and a half from CU Boulder. So real estate’s very forgiving. And I’ll tell you, we bought that house for 465. And then the back of the house fell off. So we had to rebuild two bedrooms and a bathroom right immediately, like 80 grand or something. It was just ridiculous. But I was like, anyways, we get almost $5,000 a month in rent for that property today in our mortgages, you know, 2200 bucks or something. So yeah, it’s that’s that’s my kind of journey into real estate. And when I moved to Tulsa, I just started looking at real estate and thought this is just I love real estate. I love the concept, as you said getting paid on the first and arbitrage between your mortgage and your rent payment, et cetera, et cetera, and the ability to build long term wealth with somebody else’s paying off your, your, your your principal and your mortgage. So that was that was my journey. It’s fun. It’s been fun. It’s a great I’m also a deal junkie. So if you see a good deal if you see a good deal. You never, you know, always awesome, brought to my wife’s family’s been here since 59. So my father in law my father in law said is a huge proponent of Tulsa, it’s a great place to live. It’s Tulsa is a wonderful place to be. But you know, my wife was living in LA I was living in Dubai. She said you know if I’m if I’m going to go anywhere, I’m gonna go back to Tulsa. I came February of 2017. It was like 40 degrees and sunny and I was like, Oh man, let’s do this. Just seemed like there was opportunity and good, you know, a good quality of life. So I was like, I’m unhappy too. And I grew up in Houston so Tolson, Houston, despite the size and the size of the economy are different, but it’s culturally very similar. Kind of an oil town you know, built on the Intrepid Spirit of of Wildcat Ng, etc. So it’s cool. My
Max McGuirk 1:04:21
aunt lives in Baytown. And I reminds it I gotta call her she sent me a text last yesterday, so I need to call her but yeah, I used to go to Houston all the time, woodlands and KT and all that. Yeah. Yeah. I mean, I know we got to probably finish up here in a point. But I think part of what got us here in this in this. This talk was like creative financing and that kind of talk. And just kind of give you a little bit of an idea. Yeah, briefly we’re doing right now. So I had done a couple of contract for deeds and basically buying a house, selling it to somebody else and the carrying the note right so The owner financing whatever you want to call it. Or curious what my grandma used to call it. But when I first got started, I bought my first house in cash about a second house with a mortgage. And now I want to buy a house number three, anybody say, Hey, you’re in real estate, right? Yes, absolutely, I am. So I tried to get a mortgage for this third house. And it was a Union School District, great home, three bed, two bath, two thirds of an acre. They wanted one. They wanted 100 grand, basically. But they appraisals at 130. And they just want to mess with it. They just said, Hey, you can give me 100 grand, great. And I said, Well, Kathy, I can’t. It was a good friend of mine. Mom, I said what they were retiring us, I can’t get you. I can’t get you 100 A full 100 grand. So I got 33,000 saved. And I said Would you carry the note. And I’ll give you interest that basically hit you at 100,000 bucks, and I’ll pay it off in six years. And she’s like, I don’t know what I said, Well, Kathy, if I failed to pay, you pass this $33,000 You not only get to keep every payment, you get to keep 33 grand plus the house and then resell it to somebody else. And she’s like, well, I don’t think I could really lose. And so she said, Well, let’s try. So on top of that, just so that she had confidence in me. I wrote 72 checks. Wow. Yep. And inside the contract for deed I put if I die, my estate is going to pay. Like it just you’re going to so she’s like, I trust you. 2018 She sends me a Facebook message. She’s like, Hey, I’m cashing your last check. I can’t believe this has happened. And and what a great ride. And I’m thankful that you’re promised. And so so now what I do is I do this for other people. So So I I’ve done a couple over the the years of like one’s house, I didn’t want for let’s say 30 or 40 grand on by the fourth and memorial. I didn’t want to put it out there for sale. And somebody would say yeah, 60 grand and 6000 down. Sure I’ll do it. And there’s really no way if I bought it for 40 grand 6000 I’m at 34,000 is all I’m into the house. If I get it back at 34 grand, I’ll sell it again, you know, so I started doing that. And so that’s kind of what I’m doing heavily right now. I’ve got one guy that’s buying a lot of property from me. And he’s kind of using me as like a quick hard money lender ish. I make my my fee essentially. And then if I finance the property, let’s say rates are eight, let’s say my commercial rate is eight. And I’ll charge him 10. I’ll charge him two points over. If I don’t refinance the house and I just just floating it in my back pocket, then I’m making 10% on what’s it called untethered or whatever, levered?
Mat Zalk 1:07:27
Yeah, well, let me ask you this. If your rate changes, if you’re if your arm adjusts, how do you adjust that on the contract for deed?
Max McGuirk 1:07:36
I’m not I’m giving them a fixed rate. I’m being really nice. Couple things on my contract for these is like my rates fixed, right? So if I say hey, man, your rates 10% and mine goes up to 14 like I’m out. 4%. Right. The other thing that’s insulating me is the fact that like, I’m putting some kind of fee in there, right? Some some hard money lenders will charge 2% origination fee or something like that. Whatever. Mine’s a little bit different than that. I gotta make a little bit more money. So I’m not charging an origination fee. I’m not charging credit check. I don’t care for don’t give me your driver’s license. Paste on. I don’t care. I’m gonna trust on your character, who you are. And the fact that you don’t pay the house
Mat Zalk 1:08:12
back. Yep. Yep. So anyway, that’s what the model is this.
Max McGuirk 1:08:16
I am. Yeah. So I got a $600,000 of whatever. They’ll call it cash or whatever. Bank rotating that quickly. So, anyway, so that’s what I’m doing. We got to do it. We’ve got
Mat Zalk 1:08:28
to do a second episode on that.
Max McGuirk 1:08:30
Yeah, we totally will.
Mat Zalk 1:08:31
Max McGuirk a former high school teacher has been investing in real estate since he was 21. With long term rentals. He’s a serial entrepreneur. He owns and operates a DJ and photobooth company in Tulsa, we aim to talk about that that’s for the next episode. It was under contract and wrestling for the WWE, ie after college in their developmental territory in Tampa, Florida in 2009 and 10. He joined McGraw Commercial Properties this year specializing in the disposition acquisition and leasing of office buildings, industrial properties and min Max, it was an absolute pleasure to pick your brain. You’re a wealth of knowledge. I really appreciate you being on.
Max McGuirk 1:09:05
Thank you so much. I can’t wait to talk to you again.
Outro 1:09:12
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