3 Real Estate Investing Tools That Increased My Cash Flow in 30 Days

3 Real Estate Investing Tools That Increased My Cash Flow in 30 Days

3 min read
Marcus Maloney

Marcus Maloney is a value investor and portfolio holder of residential and commercial units. Marcus has been named the “Equity King” for his impressive ability to find real estate opportunities with massive amounts of equity.

Experience
Marcus, a high school dropout, went from G.E.D. to M.B.A. Although his education has a major impact on his investment philosophy, the real impact came from his upbringing.

Marcus thrives on completing successful transactions. As a young kid, his parents and grandparents faced many challenges; as a result, it made him think of ways he could help. His mother and grandmother were avid investors—not in the market but in people. Marcus was a recipient of those investments. And his early years were hard work growing up on a farm.

Marcus was a strategist at an early age. To relieve the burden of his family buying him clothes when it was time to return to school, he decided to make a small investment that paid big dividends. Marcus decided to purchase a small piglet at the beginning of summer, feed it until it became fat, and then sell it to a local farmers’ auction before the school year started. This was one of his first transactions and the beginning of his adventure of finding equity in every opportunity.

Marcus’ hard work continues today: He has completed over $3.3 million in wholesale transactions. Currently, Marcus is a licensed agent who wholesales virtually in multiple states while building his investment portfolio. Although wholesaling provides great money, he saw the opportunity to buy some of the deals he found and convert them into cash flowing rentals.

Marcus currently holds seven rentals, two of which are commercial units. He’s also done the unimaginable and purchased a school, which was converted to a daycare center. Again, he turns what is a marginal profit into a significant equity position. He leverages the equity by using the BRRRR (Buy, Rehab, Rent, Refinance, Repeat) strategy to increase his portfolio without any money out of pocket.

Marcus has been featured on numerous podcasts, such as the Louisville Gal Podcast, the Best Real Estate Investing Advice Ever podcast, FlippingJunkie, and many others. He’s currently a featured blogger for BiggerPockets, the largest community of real estate investors in the world.

Along with completing transactions and working to build his portfolio, he provides mentorship to aspiring investors. This is done through one-on-one interactions and through his successful YouTube channel and blog.

Marcus does utilize his M.B.A. for more than real estate. As a consultant for a successful non-profit institution south of Chicago, he uses his expertise in the development of human capital. His philanthropic efforts help existing stakeholders develop in their capacity to serve those in need of assistance.

Education
Marcus completed his M.B.A. in 2011 from Olivet Nazarene University.

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It’s known by now that you can invest in real estate without your own cash or credit. There are many times you will need to be resourceful (and a little lucky) if you want longevity in the real estate industry. By reading this article, you will see how I used 3 real estate investing tools that increased my cash flow in 30 days.

Having established credit is not a necessity when starting out. The goal for most investors is long-term wealth through passive income. To get to this level of investing, credit is a great resource. Yes, you can seller finance your way to long-term wealth, but having a financial partner is essential.

Traditionally, wholesaling is my niche because I love the movement of putting together transactions and working within the essence of the deal. What many do not know is that using the profit from the wholesale deals, I purchase rentals in C-class neighborhoods. I am an out-of-state investor who purchases small single families homes. I bring this up because I’m in the midst of refinancing one of the properties to purchase another rental. Thanks to Josh, Brandon and the team at BiggerPockets, I’m exploring the BRRRR strategy (buy, rehab, rent, refi, and repeat) to increase my monthly cash flow. This would not be possible without good credit, wholesaling, and my rental portfolio.

I’m using a small local bank where my current loans are held. They had no issue working on the financing for me on this transaction and here’s why.

wholesaling-sellers

3 Real Estate Investing Tools

Networking

I’m from a city just South of Chicago. Every time I go home to visit, I stop in the local bank to say my hellos. I’ve done some charity work with the bank’s asset manager, so I normally have a brief conversation with him. We began to talk real estate, and fortunately for me, one time recently, he had a distressed asset he was looking to unload. He had been holding the unit for about a year and wanted to clear it off his books.

Related: 5 Investment Property Finance Tips to Help You Get the Financing You Need

The BRRRR Strategy

I went by and looked at it, and the house had new systems and was in relatively decent condition to use as a rental. I made the offer he accepted. Naturally, he needed to do his due diligence, so he asked how I would settle the transaction. I clearly heard Brandon’s voice in my head saying, “The BRRRR strategy,” so I informed him I would refinance an existing unit and use that capital to pay for this property. I negotiated the property down to $19,820, already knowing I could rent the unit easily for $750-$850 and I only needed to put about $10,000 into it (carpet, paint, and appliances). Yes, I am a firm believer that you can invest in $30,000 houses.

Credit

After discussing my approach and informing him the terms, we then needed to do the application. This brings me to the importance of credit. I had the cash to buy the property, but I didn’t want to use it. Without good credit — and I mean traditional FICO scores and reputation — I would not have been able to create additional cash flow. In this transaction, I was able to increase my cash flow by $770 from this one transaction. After refinancing my note, it increased only $80 a month, but I was able to pick up another door in return.

Related: Creative Financing: 5 Outside-the-Box Tools Savvy Investors Use to Build Wealth

Conclusion

Investing without cash and credit can limit your opportunities in the investment arena. Sustainability and liquidity of your assets are highly important. It is essential to be in a position to move quickly when finding deals. Those who are able to move the fastest normally get the best deals. By establishing your credit and relationships, you will be able to ensure those deals come to you. Now because of this one transaction, the banker knows who to call when they need to move an asset quickly.

If you have any questions about how I was able to use these 3 real estate investing tools that increased my cash flow in 30 days, feel free to comment below. Make sure you guys say thank you to Josh and Brandon for the webinar on the BRRRR strategy.

Which strategies have helped you boost your rental portfolio lately?

Leave your comments below!