Why We're Raising the Flipping Bar

I'm Derek Marlin, CEO, and Founder of Elevation Raising A Flipping Bar is a podcast dedicated to all things fix and flip. And so what I wanna do is set the stage today in three main areas. I wanna talk about how we're gonna create value to all investors of all levels. I'm gonna talk to you about helping you make more money, save you as much time as possible, and ideally, avoid as many mistakes as possible.

And then the third big takeaway from this first season is it's gonna be strategies to scale your business in more of a growth mindset. Um, this overall first season is gonna be 11 total episodes, and it's gonna be in very digestible bite size pieces. So you'll be able to go back and use this almost as a masterclass for you to help in the property redevelopment, as we call it, or the fix and flip space.

And the other thing we wanted to talk about is, well, why are we launching this podcast right now? I think there's a huge gap in content and resources and what we call property redevelopment. That's what other people call fix and flip. Um, but the space I think, is yearning for some education and some collaboration and some commun community.

So that's where we're gonna try to, to build this thing up. Um, the other thing is there's been a huge shift in the. The second half of 2022, um, nationwide and especially here in metro Denver, there's been a huge shift coming out of what was a, a crazy hot market for covid, and we're into 2023 and, and there's been some softening in the market.

Um, so it's definitely, I think the timing is ripe for us to launch this podcast, which is raising the flipping bar. Um, the other thing is, is the days of property selling for over a hundred thousand dollars over asking. 25 offers in the first weekend. I think those days are long gone. So you've really gotta to tighten your bootstraps and um, and, and really focus on what is the core pieces of your business.

And, and lastly, it's to build a community of fellow growth minded investors. Again, whether you're even just thinking about this, whether you've done a couple or whether you've done a hundred, we want to definitely bring you into our community and hopefully we all benefit and gain from that, from one. So let's jump into this first episode, which, um, we're calling episode number one and it's really just an introduction to get to know me as an investor in my background because I think it's a little bit different from some of the other folks out there.

And I think it'll hopefully help you frame where you can compartmentalize this information and this content as it relates to the property redevelopment. So, um, a little bit of, of background again about me. Uh, I'm originally from New Jersey. Um, I actually moved 15 times between New Jersey, Colorado, Texas, Montana for college, Florida for graduate school, and then back to Colorado in 2002.

So I've moved all over the place, which I think gives me some interesting geographic diversity, um, and an understanding from real estate perspective. And then I'm really, really lucky between my two family backgrounds. So I'll talk about. My side of the family first I come, um, again from New Jersey. My whole family worked on Wall Street at any given point.

Um, my dad was a muni bond trader and known a couple different brokerage companies for over 35 years. Even before that, my grandfather ran large institutions and, and really, um, kind of helped get the municipal bonds industry going in the 1960s and 1970s. Um, supposedly at one point. 35 Marlins in the bond community.

So I'm kind of born and and raised in that Wall Street type of community. On the fixed income side, not so much the equity side. And then, um, you know, marrying that with my wife's side of the family. My father-in-law has been a great mentor to me as well, and he has brought the real estate investing component to the table from an experience standpoint.

So he's got great experience developing land. He's done multi-family. He's done bars and restaurants and the building associated with that. And then he's been in the self-storage business for a long time. So he's really helped impart a ton of real estate investment experience, uh, to me from smaller towns, uh, up in Montana and has had great success there.

So almost think of this as Wall Street and Finance kind of combined with real estate investing to help me, you know, create who I am as an investor today, which I wanna impart throughout these seasons and future seasons, you know, to our audience. Um, let's jump into a little bit about kind of where I came up, which is from a professional background.

Went to school in Montana, studied marketing and political science. So started to get, you know, my toes wet in the sales and marketing side of things. And then decided, oh, crap. Um, I actually wanted to work in professional sports, so being in College of Montana was definitely not the right place to be, um, enrolled in, uh, a program at the University of Florida.

And so I got my MBA in sports management from the University of Florida. So you've got the Fighting Bobcats of Montana State and you've got the Gators, uh, kind of married together to bring both the marketing and the sales and the sports background into. And then what brought me back to Denver was I was halfway through my graduate program at Florida and um, went out for a job interview with the Broncos and was very, very blessed to get my dream job actually with the Denver Broncos in 2002.

So I ended up actually finishing up my graduate degree, long distance, went back, begged my professors and. Hey, look, you can put me on any type of flyer, any type of promotion materials, but you said you wanted to get students in the nfl. I did that, but I also don't wanna bail on my degree. Um, so they were great.

Worked hand in hand with the University of Denver, took my tests there and was able to get my master's degree while working in my first year for the Broncos. Um, got an amazing sales and marketing experience in professional sports. Unfortunately, I give, um, some of my buddies a hard time who are still at the team.

I missed the first round of Super Bowls and then I missed the last round of Super Bowls when I was in media. So my friends have rings. I don't, but I got, uh, a ton of experience in sales and marketing in what we call kind of the, uh, the rougher quarterback years for the Denver Broncos. So I spent six seasons with the Broncos doing premium seating.

So when the stadium first opened, I was selling the luxury suites and I was selling the club seat. And then I, um, jumped into the corporate marketing or the corporate sponsorship. So work with big brands, your Verizons, your at and ts, your Motorolas local companies like Brakes Plus. So really worked to put together customized marketing plans through the corporate sponsorship world.

Um, Love that was fantastic. But the only bummer at that point was is that my wife owned a wedding planning business and we were kind of ships crossing in the night working an insane amount. And so I jumped into media, knew our, our friends and partners at CBS Television, which broadcast the Broncos games and got into sports media, uh, in 2007.

And so for six seasons, um, again, we, in the sports world, we kind of call them seasons rather than. Sold television advertising and digital marketing for primarily also larger brands and some, some smaller local companies for anything that you would see in the sports world. So commercials during Broncos games, NFL Games, March Madness, college football, PJ Golf, um, you know, survivor primetime programming.

Um, and work with a lot of non-traditional companies too. So foundations, um, worked with, um, you know, different ways to, to drive business through media. So I kind of got, again, the finance, the real estate, and also the sales and marketing background together. And fast forward really, essentially through 2008 was when I started to get into, um, word interest, I should say, in real estate investing.

For those of you that were in the market, obviously 2008 was the. Truly of the crash, unfortunately. Um, and so again, I was still based in metro Denver at that point, and one of my coworkers, she, I joke, she was working far less than us. She seemed a lot less stressed out than us drive a far nicer car. And so I pulled her aside one day and I said, what, what are you doing?

It's not just TV sales. And she was investing in turnkey rental properties. So if you think back to 2008, nine, and. It is paramount to kind of set the stage from where we are today in 2023 for this first season. And at that point there were tons of foreclosures. Sadly, people had very little equity in their homes and so when they were behind on payments, they were just giving those homes away, um, or giving them back to the bank, I should say.

And so there was tons of inventory. So one of the investors that I met with and that, you know, my coworker introduced me. Was a person doing turnkey rentals. And so what that is, is they are buying tons of properties. They were actually buying at the courthouse steps and at auction, which is kind of a foreign concept for today cuz there's no inventory out there.

And they were taking beat up disastrous homes. They were fixing them up and then they were selling them to me as a turnkey rental property. So from 2009 through 2012, I acquired 11 different rental properties in and around Metro Denver. So I did four plexes, I did duplexes, I did single family properties and, and started to accumulate that portfolio.

Um, it was great experience. Um, obviously I was a little nervous because it was 2009 and 10 when, when the market was still really correcting, but. You walked in day one and you were able to cash flow those properties, which was fantastic to me. Appreciation was great. The tax benefits were great. The debt reduction was great, but it was all about cash flow and, and I knew in metro Denver, in some of these areas, these properties weren't gonna be any less.

I mean, to kind of put this in, in context, again, we're talking 2023 right now. Uh, first half of 2020. I bought a single family home in Metro Denver, actually nicely fixed up from a rental perspective for $102,000. We bought a fourplex for $380,000 in actually what turned out to be a really good part of town.

So, um, you know, one of the sayings that they have is in real estate. If you think you've made a mistake, just wait cuz that. Time will essentially correct itself. So I got into turnkey rentals at that point. Um, did that for a couple more years. Working at CBS b s was great experience, especially in the sales and marketing side of things.

Working for a large Fortune 100 company was fantastic. But I kind of had the itch to, to do something on my own and start my own, uh, business. And so it was perfect timing. My dad had sold one of his companies and wanted to stay in the fixed income business, and so we partnered up and started a small boutique municipal bond trading company, and that was in 2014.

So it was great because then I really kicked in. I, like I said, I had grown up in, in the world of finance. But this got me heavily, heavily involved. So I went back, kind of took off my sales and marketing hat to some. Um, went and got my securities licenses. So I got a series seven, a series 65, and then I was studying for the registered investment advisor exam.

So got really, really in-depth training, and this is something that I think that you'll really hear, resonate, and come through with our content is even though it's real estate investing, it, it to me comes from a market in a finance background because you've gotta know your numbers. Our business can get really, really sexy and it can be very, very fun and it can be very profitable.

But if you don't know your numbers and you aren't keyed into that, um, you're teaming yourself up to, to have some major mistakes or maybe just leave a ton of profit on the table. So again, kind of going back to 2014, in 2014 and 15, uh, my dad and I worked together in the bond trading business and it was great because being in Denver in the time zones, we would work kind of normal market hours during the day.

And starting in 2015, I realized I've actually got some time cuz the market closed at two 30. And so I started actually saying, you know what? We should start to flip houses. Um, I know my wife was probably really freaked out right outta the gate because, um, when you get to know me a little better, I'm a, I'm a huge systems person.

I really rely on other professionals to, to help us, um, move forward in the best possible direction. I'm horrible at doing the work myself. I think it actually saved me in the long run. And we'll talk about that in future episodes. But I dove into hiring contractors and doing our first flip in 2015. Um, I'm pretty proud because even though we made every mistake in the book, uh, it took us six months just to flip a, a pretty standard thousand square foot, three bedroom, two bathroom home.

Um, today that would probably take us about six, maybe eight weeks, but it took us six months. Had to fire the contractor because he stopped showing up. Had to bring in other contractors again. Um, you know, getting ready to list the property. I'm there at midnight the night before, making sure that everything is perfect.

And, um, we did make 28 grand on our first flip, so I know a lot of people. Just wanna learn, which is great, but we were fortunate to, to make a profit on that first flip. So once we did that first flip, I was a hundred percent hooked. Um, kind of things definitely happen for a reason. And so towards the tail end of 2015, Again, still in the bond business, uh, we got hammered as it relates to selling a position of bonds.

So one of the things, um, that when you're doing fixed income investing or municipal bond investing is there's different ratings. And so an a class rating is a bond that's gonna pay you a little bit lower return, but be a much safer investment. Kind of down the food chain to what they call high yield bonds.

So with that, you've got a far higher rate of return, but also with that far greater risk. And so we took a position in some bonds that were actually, um, Puerto Rico bonds and if memory serves, they were the pension and retirement fund for employees of Puerto Rico. And we, we bought them. We thought they were gonna be a good in.

And as a trader, you're essentially looking to buy low, find your customer, and sell a little bit higher and do tons of margin. Um, unfortunately the bond market just took an absolute turn and, and whip salt on us, and we lost $287,000 in one day. So, weirdly, that was horrifying and, and super scary. Cause I'm looking at it, thinking, holy crap, I'm gonna work for six months for free best case scenario to pay those losses back.

Um, or, or worse case, it's gonna take me a lot longer than that and, and we're gonna continue to lose more money. Well, at that point, the company that we were doing our clearing and trading through came in. They got bought out and they essentially shut down all of these regional offices, which is the way that we operated.

And, um, they told us they were essentially taking the losses. So I use that as, you know, a sign from above that, that I was to get outta the bond. And go into real estate investing full-time. So in the second half of 2015, went into real estate investing a hundred percent full-time and started to build what we call now, which is the property redevelopment business.

And I say that because fix and flip to me doesn't have the best connotation. It's the term that everybody knows. It's the term that's great for seo. But, um, we kind of like to do things differently and we'll hopefully we'll teach you in this first season, um, again, through this kind of masterclass type of model, how to do the property redevelopment business.

So, got going in 2015, um, in 2016, that's when we stopped buying our, uh, rental properties through my sister company and also again, shows you that I'm not the smartest guy in the room all the time. Um, was looking at things in 2016 and 2017 and was. Man, these rents have gone up so much. Prices have appreciated so much.

How much more can they go up? Maybe we should sell. And so I started selling off, um, those properties and we sold all but one fourplex and we used that money to kind of recapitalize the business to help us from a property redevelopment standpoint or a fix and flip standpoint. But then we held onto our last fourplex, and I knew I still wanted to build long-term generational wealth.

And so I said, how can I scale up and how can I add more doors, um, as they're called in the multi-family space. So a greater number of units. So again, trying to, you know, sell high and essentially buy low. Um, also have some experience, which we'll talk about in future seasons and episodes in the, the apartment complex or the multi-family space.

We sold that fourplex. Um, again, it was in a neighborhood called the Highlands. As we all know, that's a great neighborhood in metro Denver. I didn't know how good it was, especially early on working at the stadium for the Broncos in 2002. You know, you'd go to eat up there and, and it wasn't the best place, but you knew it was so close to downtown that it was gonna be a great investment.

So we sold those four, or that four plex, those four doors and turned it into 50 uh, units in Cincinnati, Ohio. So I did a ton of research on the Midwest, kind of narrowed it down to Kansas City and ci. Um, the big kind of marker for me was what's gonna have the best appreciation and the best rent growth?

And at that point there were grumblings that Amazon, from a distribution center was gonna have their headquarters in Cincinnati. And so I said, okay, great. All two things being equal. Let's do Cincinnati. So started buying in 2016 and 2017 in Cincinnati. Bought a 26 unit community and a 24 unit community with a profit, uh, as a down payment.

So we turned four doors into 50 doors. Um, that went really, really well. And so we actually jumped into doing a syndication. So again, you'll kinda learn through this season that we're taking all the different elements of real estate investing and, and trying to build them out into the property redevelopment.

Community and space, which is why I work again, raising the flipping bar. Um, but from a multi-family standpoint, I bought another community just on the other side of the River River in northern Kentucky, which is still Metro Cincinnati, and we bought 65 units. And we bought that in a syndication fashion, which is whole nother episode, whole deeper dive.

But kind of the, the Cliff Notes version of that, or the Reader's Digest version of that is you're investing your money as the general partner. I went out and raised money from eight other investors, um, with a partner at the time. And we bought this apartment complex. It was C class apartments and meaning a is the fanciest, nicest, highest rents, leased crime.

Typically best parts of town. C is definitely working class communities, um, still can be be very, you know, nice places to live, but typically you have to turn them around and you're getting them for the price. Um, you know, for a reason essentially. So I own those for five years. Um, I've also got experience for good and for bad with property management.

So we hired a property management company to run those buildings for us. And, um, not the best job. And so I ended up firing that company and essentially bringing property management in house. So we had a manager who lived on site and, um, he ran those buildings for about 18 months. Um, I've also got, sadly, experience with learning about being embezzled and, um, having somebody rip you off.

And so I knew there was something going on and I had to fly out and fire, uh, the property manager, or again, the person was running it on, on my company's behalf because they were, how do I say this? Um, Giving great customer service to residents, I'll put it that way. Um, but being super, super inappropriate, uh, with some of the residents.

There were units that I was being told were vacant. He was renting them out to his friends and I showed up on the spot to unfortunately let him go. And he was ready to take a vacation in a beautiful, uh, brand new white tracksuit. And I'm thinking in the back of my mind, damnit, I bought that tracksuit. I know it.

Um, so unfortunately, You know, terminated that employee and then pivoted to having a third management company. And things worked out really well. They helped us, um, um, not necessarily turn them around, but finish art, overall turnaround. And, and I sold those properties in 2020 and 2021. We're currently in the process of trying to actually get in the self storage business.

My father-in-law definitely has, uh, things figured out and we're trying to acquire self-storage facilities now. So again, I really want to kind of put together kind of my resume. From how I grew up. How I think some of my professional background and then getting into the multi-family space so you can kind of understand where I'm coming from.

And again, hopefully lay the groundwork for these next 10 episodes for you to really learn and dive into the property redevelopment or the fix and flip space. So kind of let's fast forward that today to who are we and where are we and, and what do we do. Um, again, I own a company called Elevation. Um, we've got a handful of employees that's focused primarily as investment brokers or real estate agents that are focused primarily on investment real estate.

So finding flips for us, selling flips for us, finding them for clients, selling them for clients, and then working with clients, um, when they want to buy rental proper. We've also got kind of a, a unique model, which is called the partnership flip. And so the, the, again, the short version of that, we've got another episode dedicated, um, to this concept with some of our successful clients and students.

But that's where someone is bringing a property to us. The client continues to own the property. I then invest my time, um, our contractors' time, our resources, and our money to fix the property. And then we achieve maximum value on the backend and we split the extra profits 50 50. So if a person's a real estate agent, they can bring us a property and they've got experience, good news for them, they get to sell a super fixed up house on the backend, which is typically more expensive.

So that's the partnership flip model. Um, we also have a lot of experience in the institutional world, so it was kind of a perfect. Starting back in 2021 where hedge funds and institutions were buying a lot of single family rentals all over the country. And Denver Metro was one of those markets. And so it was fantastic cuz I could kind of, again put my Wall Street hat back on and my finance background back on.

And we, we brought on a large hedge fund or institutional client. And we help them acquire just under 300 single family rental properties all around metro Denver in the course of about 18 months. Um, they, they definitely have scaled back recently because of these crazy interest rates, but we've got a ton of experience there.

So again, just another layer of experience to, to bring to the table as far as how to help people become better real estate investors. And, and we also have an education division, so it's called the Elevation Academy. So we teach a one day super in depth seminar on every single step. We actually have 105 steps on how to, you know, fix and flip from step one through step 105.

Um, and then again, as you can see, I'm a kind of a big proponent of having. Sister companies that are similar in different aspects of real estate investing. So we're in the home stretch of actually building out our own co-work space, and it's called the Broadway Collective. And so we'll be in there, uh, from a tenant perspective ourselves and our, and our employees and our sister companies.

And then we're trying to have other growth mindset individuals come and rent with us and grow with us. So again, why am I telling you all this? I want to give you. Personal background, that professional background, so you can kind of see how I think as an investor in how you can hopefully take some of these things that hopefully are, are positive and good and put them into your tool belt.

We're also really gonna talk about some of the really negative things about investing. Um, we've got, luckily, a great track record, but we've lost money on, on two deals over the last six years, and so we're gonna talk about those too. Again, I, I think when you kind of fast forward through. The way people look at it from an HGTV perspective, looks great, looks sexy on tv.

Um, I kind of know the behind the scenes, you know, from my prior experience. Um, but they never tell you about the losses usually and they don't tell you how long stuff takes or all the crazy things that happen in between. So we're a hundred percent gonna dive into that. Um, and I think what I'll probably, you know, as we wind up this first episode, which is why am I doing this in.

So I'm a huge proponent of, um, a guy. His name is Simon Sinek, and he wrote a book called Start With Why. And so what I want you to know about this is my why is that I really do love to teach and I love to collaborate. I wanna work with other investors, with other real estate agents and with other marketing partners so we can all hopefully grow together.

So that's a huge piece of my why. Another big one is again, share the good and the bad. Um, you know, lucky to start investing in 2009. So I've seen the biggest crash. I didn't see the.com crash. I lived through the SNL crash from my family living in Denver in the eighties, so I kind of saw things on the fringe.

But we'll talk about the good and we'll talk about the bad about, um, you know, this real estate investment, um, community here in metro Denver. And then again, I really want to build a community of fellow growth mindset individuals. I think with the, where the market is in 2023, we can be freaked out. We can have a scarcity mentality, but that's gonna give you that analysis paralysis, and you're never gonna do.

Sometimes even taking action in the right direction, as long as it's not completely reckless, is gonna get you better down the line and, and further off down the line than not doing anything at all. So if we can check those three boxes, to me, that's gonna be a win for this first season. So kind of as, as we wind down and as we recap this first episode, um, it would be again, about me of blending finance, blending real estate, blending sales and marketing, and kind of mixing all that up together to create what is known as property redevelopment.

And we'll give you this crazy masterclass in these first 10. Episodes, um, set out this framework so that we can show you that hey, having a crazy diverse background, um, and also your goals changing is okay too. I mean, when I was in graduate school, obviously my number one goal was to work in the nfl. I grew up a Broncos fan.

In the eighties we had season tickets, and so I had the dream of, of working for the. The team that I cheered for as a kid. But sometimes your dreams change. Um, you know, sometimes kids come along and you obviously wanna spend some time with your family. So it's showing you a super diverse background. It doesn't have to be that you're a contractor or a real estate agent or a mortgage broker to be successful in real estate investing.

Um, and the other big thing is I want you guys to engage with, with me and with my company and our community. So whether it's on YouTube, whether it's on Instagram, whether it's on Facebook or LinkedIn. You can reach us@elevationinvest.com. You can connect with us at Elevation Invest, or YouTube and Facebook.

It's actually Elevation Investment Properties. So again, I know people say like, subscribe, follow, that's great. We want that. But we would rather have a community of people that are engaging and we're working with one another and talking to one another than just have, you know, a bunch of likes and a bunch of subscribers.

So that's kind of where we wanna come from on this first episode. Um, Thank you so much for for tuning in to Raising the Flipping bar. I'm your host, Derek Marlin, and we'll catch you on the flip side.