LUR Etienne | Real Estate Industry

 

The real estate industry is a lot more diverse than people tend to give it credit for, which is because the public faces of the industry usually do similar, if not the same, things. But there are so many niches in the industry that are still left needing to be filled somehow, and it might just be time for you to get exploring.  Étienne Martel is a veritable expert in property acquisitions, financial analysis, joint venture creation, and sourcing capital investors for investment projects. Lisa Hylton interviews Etienne about the experience of searching for and finding the niche where you belong, where you feel strongest and most passionate. Need help figuring out where to go?

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Finding Your Niche In The Real Estate Game With Étienne Martel

I have another amazing guest. His name is Étienne Martel. He is well-versed in property acquisitions, financial analysis, joint venture creation and sourcing capital investors for investment projects. With his strong background knowledge in real estate investing, Étienne is able to pinpoint solid neighborhoods and properties in which to acquire properties. He has helped Martel Turnkey acquire over 200 houses in multiple markets across the United States. I am super excited to have you here. Welcome to the show, Étienne.

Thank you. I’m happy to be here.

A quick story about how I met Étienne. I was in LA having brunch on a Sunday afternoon and it so happened that I sat next to him and his mom having brunch. He was wearing a shirt that said, “Cashflow is greater than paychecks.” I was like, “I’ve got to know who this guy is.” I started asking tons of questions and before I knew it, he’s a turnkey guy who runs his own business with his brother. It was awesome. I was like, “I’ve got to have this guy on my show.”

That was surprising.

That’s LA and the universe making things happen. How did you get started investing in real estate?

Back in college, I was studying to be a realtor. I heard on the radio about classes to teach you about investing in real estate, so I called up my dad and my brother and I was like, “We should go to this and check it out.” Since I’m studying real estate already, I was like, “Why don’t I also learn about investing?” We all went and then it snowballed from there. We tried to find pockets and now we’re at turnkey business and we did 85 properties.

What markets do you guys generally play in these days?

We’re focused mainly on Cleveland, Ohio. We started in Memphis, Tennessee and we’re planning to ramp that up as well sometime soon.

You live here in California, correct?

Yes, we all live here.

You invest in Cleveland, Ohio and Memphis, Tennessee. How did you do it? How did that start?

We’re originally from the San Francisco area. We were looking at flipping properties over there in San Francisco, but they were way too expensive. Properties there were $2 million to $3 million and they would need like full rehab and it would sell for $1.8 million or something like that. It was holding too much money. We wanted to go to smaller markets where we can flip more properties. They give much better returns. We did some research and found some great markets that we can go into and then took it from there.

Go to places with diverse markets so if one market were to crash, there'd be more holding it up. Click To Tweet

What attracted you guys to these particular markets?

There’s great job diversity in these markets. If one kind of market was to crash, then there will be another two markets to hold it up. Also, one business that we’re following is Amazon. Amazon, I doubt that they’re going to be shutting down anytime soon. We follow their warehouses. They built a few warehouses in Cleveland. They hire C-class workers and that’s pretty much our niche of who the renters are.

What would you say you’ve learned in the process of going into these markets and building this turnkey business?

You need to have a great team on the ground over there if you’re going to do it out of state. Your team is literally everything. You’re going to want a great realtor property management and contractors as well. You’ll hear stories of contractors all the time of leaving jobs and you never hear from them ever again. That’s one thing that you want to walk down.

How did you guys go through the process of attracting and building your teams?

I and my brother started off cold calling hundreds of agents every day for a couple of months. We sit there all day trying to see if they were a good fit for our team. We would say, “We’re trying to route estate investors. We’re looking for boots on the ground. We’re planning to flip tons of properties. This is a business so we’re trying to consistently give you business.” It’s funny how people will weed themselves out. Like a lot of realtors will just go, “You’re out of state, never mind.” We were mainly cold calling and then if you find a great realtor, they should definitely be able to help you out with finding property management contractors because they’re the boots on the ground.

Through them you connect to that area as well. Talk a little bit about building out the business in terms of going from doing renovations, acquiring properties, then having renovations done on them, and now marketing them for people to purchase them. How does that process work for you guys at the moment? What avenues are you going through to sell your houses?

I should start with the beginning of how we started with it. We were thinking we could find some rentals for our friends and family to buy and then they could have cashflow coming in. From there, we were like, “Why don’t we do this for everybody? Why don’t we spread it out amongst everyone?” From there, we kept going and kept putting in systems into place to help make the work easier and automated and not keep working out and try to fix things every single day.

What are some of the key systems? There must be a lot, but maybe 1 or 2 key systems that you have put into your business that you’ve found to help.

With your employees, you want to have a system for how everything breaks down and you want people to know their jobs and what they handle so it’s very clear. If something happens to a property or if they set a certain stage, then you know who to pass it off to. They can handle their part and then continue to pass it on.

Can you go through the typical process from an investor’s point of view? If one of my readers is like, “These guys are doing turnkey in Ohio. I’d be interested in learning about what that investment looks like.” Could you walk us through the process for that investor?

Like how we flip our properties?

LUR Etienne | Real Estate Industry

Real Estate Industry: The 1% rule is making sure that the rent placed on a certain property covers at least 1% of its actual value, if not more.

 

It would be great to do that, too and the second part is, say I’m on your website, and I have identified a property that I like. I say, “I want to buy this one.” How does that process work?

On our website, if you look at one of the properties, then in the top right, there’s a button that says make an offer. Click that, put in your offer and then if we accept your offer, then we’ll introduce you to a lender that we would recommend. You can use your lender if you want and we’ll introduce you to property management and pretty much everyone you need. We’ll go from there if you get approved from the lender, then we’ll close on the property once we have a tenant in place.

Your properties are delivered with tenant in place?

Yes, from day one.

Building on that, what are the typical price ranges for some of the properties that you guys have?

Our properties when we sell them typically go from $65,000 to $90,000. We stayed under $100,000.

In terms of cashflow, I know the BiggerPockets are always talking about the 1% rule. Do you see that in the marketplace for Cleveland or has it changed?

Yeah, definitely. It’s usually 1% but if not, we’ll be trying to get you around $250 net cashflow per month so we’ll stick with that as well.

Given your experience, what advice would you give to people as they think about investing in turnkey properties?

Buying turnkeys is good for people who have full-time jobs, careers or something like that. A lot of people don’t have time to deal with a flip, find contractors, people and deal with the stress on top of their job and stuff. That’s when turnkeys would come in handy. You just buy it and then you have the property management take care of it. Basically, you sit back. Every once in a while, we get a little repair. It happens with houses so you have to deal with that but you sit back and let the property management control it.

Let’s circle back to the process from your perspective of deciding to buy.

We usually analyze the properties. I do A Deal, A Day, on my Instagram, and I also have them on YouTube. For all you readers, if you want to check it out.

Always use what's in your immediate surroundings to your advantage. Click To Tweet

If people want to go look, what are you doing on the A Deal, A Day?

I’m literally analyzing properties, exactly how I would look at properties every single day. I analyze the properties as if I would buy it for myself. I show you the numbers and everything so I run the whole analysis.

How many properties do you analyze a day for the business?

I probably analyze 7 to 10 every single day. Sometimes we need more properties. Some days I look at 30 to 50. I’ve done 150 in one day before.

When you’re looking at these properties, I’m curious about the deal breakers. What are the things that you’re looking forward to? What makes a property a good investment for you guys and what makes you want to pass?

A pass is a teardown house. We don’t do any tear-downs. We don’t deal with that. An example would be a property where there’s extreme fire damage or there’s mold everywhere. We don’t want to deal with that. Tear-downs and fully rehabbed, a lot of the times we don’t want to deal with those at all because it’s already rehabbed. For a good property, sometimes you see a property with the kitchen or the bathroom is destroyed. Sometimes you’ll see one with no walls or anything like that and the bathtub is falling or something. Those are sometimes usually good because it looks scary but it’s only in a small room. We can fix it up pretty easily or utilities as well.

What do you mean?

A furnace, air conditioning, plumbing issues or something like that because those are usually expensive, but they’re very important for the house.

Do you mind sharing with the readers about the 1% rule?

The 1% rule is having your rent being at least 1% of the value of the house. If your house is worth $80,000, 1% of that would be $800. Your rent would have to be at least $800. That’s one reason we did not stay in the San Francisco Bay Area, because properties will be $1 million, but you’re not going to rent it for $10,000 a month. That’s ridiculous.

Talk a bit about what it’s like building a business with your family. I know that your business encompasses you and your brother, but also your parents as well. The journey to retiring your parents and then having them in the business and the roles.

It was interesting. It was crazy. We went to one house and my dad was nervous and then we did it and he was like, “It actually works.” We kept going from there and I remember we were having the talk. He was like, “I’ll quit in June,” or whatever. We get to June and then we have a project and it’s delayed so he pushed it back again. He kept pushing it back and then eventually, one day he was like, “I’m done.” I called him and he was like, “I’m not coming back.” I don’t even know what to say about that. It’s weird. Both my parents now have quit their jobs. They upgraded both their cars as well. That was good. I wanted to get my mom a Tesla since I was young. She upgraded and has a Mercedes now. That was one goal for me. It was cool to see it play out.

LUR Etienne | Real Estate Industry

Real Estate Industry: There are so many different places and niches where you can go in the real estate industry. Explore your options thoroughly.

 

What advice would you give to people wanting to start a business in real estate? You and your brother deciding to start this business and I guess for other people who might be reading and like to start a business themselves in the real estate area, what advice would you give?

I would say use your surroundings. If you know people in the real estate game, you can learn some things and see where you think you would be a great fit and what kind of niche you’re interested in because everyone thinks differently. Everyone has their own idea. You might want to do something completely different than someone else. There are also many different places in real estate that you can go to. There are retirement homes if you want to do that. I heard that’s very successful. Multiple retirement homes are very profitable. There are many different niches. There’s commercial and multi-unit. Find out what you want to do and go to meetups and learn as much as you can. Once you learn enough knowledge, then you have to know when to pull the trigger. You have to do it eventually. I know tons of investors that have been investing for five years, but they still don’t even have a property. They’ve never actually invested in property.

I know you guys do have some meetups either yourself or your brother and you also have a podcast. Can you share with my readers, some of the offerings that you have out there to help, if people want to learn more about you and what you are up to?

You can check us out on MartelTurnkey.com. That’s our turnkey website. We have bios and photos of our team and everything like that. Other than that, I have a podcast called What They Don’t Teach You In School. I don’t have too many episodes, but there are more coming. I have A Deal, A Day so I’m analyzing one deal trying to do it every single day. Check that out if you’re interested in deal analysis. Other than that, my brother has a book on out of state investing called A Millennial’s Guide to Investing in Cash Flowing Rental Properties by Antoine Martel. He got the best or the top-rated author on Amazon.

Do you guys have a Meetup too?

That was my brother’s friend’s Meetup and he was a guest speaker there. We’re thinking about opening a Meetup. We’re trying to lay out a plan for it. We’re going to be on Meetups all around LA all the time.

This is a place where we have a ton of real estate Meetups. You can always nerd out on lots of meetings with lots of different real estate investors and getting into the whole business. Thank you so much for coming on the show. I love the fact that you do the A Deal, A Day. For people who are out there and it’s your first time and you are thinking about analyzing your first deal, check out Étienne’s Instagram as well as his YouTube A Deal, A Day analysis. See how someone who has been doing tons and tons of properties is analyzing properties to make it worth your while. Thank you so much.

Thank you very much.

It’s another amazing episode. Thank you so much, Étienne, for coming on. I appreciate it. I love living in LA and I love being able to meet all these amazing people who are doing amazing things. A young guy, somewhere in his twenties, runs his own business and has been able to retire his parents. His whole family lives in California and they invest out of state turnkeys in Cleveland, Ohio, as well as Memphis, Tennessee. It’s a super amazing thing. For me, some of the insights that I took from this particular episode was when he talks about how they got started, which was cold calling agents to see if they were a good fit. Some people naturally weeded themselves out of the process because they were not interested in helping investors but they were looking to buy hundreds of houses.

Keeping in mind, as you get started on your journey, things are not always going to work or line up the way you envision or you’re going to meet people who might not see your vision, but it doesn’t mean that you stop. These guys kept calling until they were able to start building their team. Getting the agent and then from there building out the rest of the team. This then leads me to my second point, which is he spoke about how important a team is. If you’ve been reading some of my episodes, you would have read me talking about the fact that real estate is a team sport. In my opinion, it’s the ultimate team sport because you do need other people to build a team as well as to achieve your goals, their goals and create a win-win solution for everyone involved. The third item was when he talked about the key systems and specifically a system for the employee so that they know what jobs they’re handling. That is so key and it’s also reflective of building and scaling your business. Getting clear about all the different roles and all the different things that you want people to play because as you get larger and larger, you then need to have that clarity so that way the system runs smoothly and works.

The A Deal, A day, how awesome is that? If you are a new investor or someone who would benefit from looking at how someone else who has been doing several properties a day is analyzing their properties. By all means, check out his Instagram or his YouTube page to see how he’s analyzing deals and how it’s all working. I really enjoyed the episode and I hope you did too and got lots of good nuggets. Until next time, keep leveling up and I can’t wait to bring you another episode.

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About Étienne Martel

LUR Etienne | Real Estate IndustryÉtienne is well versed in property acquisitions, financial analysis, joint venture creation, and sourcing capital investors for investment projects. With this strong background knowledge of real estate investing, Etienne is able to pinpoint solid neighborhoods and properties in which to acquire.

Etienne has helped MartelTurnkey acquire over 200 houses in multiple markets across the USA.