Writing the Book on Investing in Cash Flow Rental Properties for Millennials with Antonie Martel

Rob Kosberg:

Hey everybody! Rob Kosberg here, and I’m excited to be interviewing a real estate investor, an expert, and an authority in real estate investing today, Antoine Martel. 

Antoine was born in Toronto and raised in San Francisco. Antoine started investing in real estate while he was in college. Since then, he has been investing in residential and commercial real estate in key markets across the United States. Antoine has built an extensive multi-million dollar real estate portfolio. He’s completed hundreds of rehab projects across multiple states. And of course, he is the best-selling author of A Millennial’s Guide To Investing In Cash Flowing Rental Properties. 

So, Antoine, I’m looking forward to talking with you today!

Antoine Martel:

Thank you so much. Excited to be talking with you today!

Rob Kosberg:

I think it will be fun. I have a good history in real estate. I shared some of that with you a little bit before we started the interview. I love what you’re doing, Antoine! I do think that there is a great opportunity, certainly in cash flowing real estate, not speculative real estate. Why don’t you tell me about what actually motivated you to get started while you were in college? 

And where has that led you to today as far as what you’ve learned?

Antoine Martel:

My story is, I grew up in San Francisco, I was a junior in college – I went to L.A to finish up college. I went to a community college in San Francisco. Then I came to L.A to finish up university at Loyola Marymount University. While I was there, there was this ad going around for this real estate seminar. I decided to sign up for it. It was a one-day event, all about how to flip houses in L.A. And I’m like, “Yeah, right!” I went to the event and was saying to myself, “Yeah, this is total BS.” But they had a three-day seminar where they talked about other ways to invest in real estate. So I signed up for that. I think it was 100 or 200 bucks.  

It was a three-day weekend event, Friday through Sunday. I went to that and learned about all the different ways to invest in real estate. And then that just kind of sparked my interest. 

It seemed kind of scam-y to me, the way they were running the event and stuff. But I was like, “All right, but this real-estate investing is something that’s possible. There are people out here doing it.” And from that way of thinking, I proceeded to network a lot with the people at the event, people that had had some success or were just starting out.

I remember thinking to myself that maybe this is a possibility. It kind of opened up my mind to it. And then I started listening to podcasts, reading books, networking all the time. I moved my classes from 5 PM to 10:00 PM. And then, during the day I would network with people. I would cold-call people across the country, property managers and realtors, from my dorm room. 

This was during my junior year. And then I was getting closer and closer to graduating. I was probably nine to twelve months away from graduating. And then I was like, all right! This is when you need to start applying for jobs, which for me was going to be something at a startup or something similar to that. I am very entrepreneurial by nature. It needs to be fast-paced for me to stay on board!

So I had started on this real estate path. I said to myself that  I need to figure this thing out. And I asked myself how can I invest in real estate and create a business around real estate? I finally found a team or a guy in Memphis who was an agent. Who had a property management company. That had a construction company. After countless meetings, I had probably 200 coffee meetings with different people in and around L.A. And then another 200, 300 phone calls to agents and property management companies across the country. And when I finally found someone, I was like, “Oh my God, this is fantastic.” All I need is a deal. A deal that I can then buy, renovate it, rent it out, and do a cash-out refinance. And the money, my dad had 40,000 bucks saved up, and he was there alongside me throughout my real estate journey.

My dad told me, “All right, I have 40 grand to invest in this first deal.” So obviously, it needed to be something out of state. That’s why we got out of California quickly. And finally, a couple of months later, it was in January 2017, we found a house in Memphis for 35 grand. Renovations were like 5,000 bucks. It was worth 55 grand after renovations. So there was a little bit of a margin on it. We bought that house in cash. Renovated it in cash. I used all my dad’s money that he had saved up. Then did a cash-out refinance with a local credit union. Which back in those days, they were doing it with no seasoning. And it was still really quick. Now COVID, things kind of changed. But cash-out refinance pulled the money out. And then we pulled all the money out, right around the time I was graduating college. And then I went to my dad with a plan.

“All right. We did the first deal successfully. We got kind of a team, a system here. Let me keep building this out. Let me build out the CRM. Let’s see if we can get some more deals coming in. We have our money back.” In May 2017 I graduated. Nine months later, we had ten single-family homes in Memphis that we had bought. We did some tiny renovatiing. Cashed out. And now we had this little family portfolio. At that point in time, the original 40 grand was depleted. My dad was constantly adding more money through his job to that pool of funds, but the money was gone at that point. So I asked myself, “how can we really make a business out of this?” What happened then was, people started actually reaching out to us as a family saying, “Hey, how can we invest in real estate? How can we get started?” And then the light bulb went off in my head! All right! Maybe we can help these people invest because we already built this whole system. Maybe we can help these people invest in real estate, out of state. So we started selling houses to friends and family from our portfolio. And then that’s kind of when MartelTurnkey was born, in January 2018. And since then we’ve done around 300 single-familyhome projects. Right now we’re doing 10 to 15 houses a month that we’re buying, renovating, renting, and then reselling to our clients who are just looking to buy these houses for cash flow.

Rob Kosberg:

Love it! That’s awesome. So tell me, what’s the typical sale price of one of your Turnkey? 

And what kind of cash flow can someone expect with or without a mortgage?

Antoine Martel:

The average sales price right now, it’s right around $100,000 for these properties, for the clients to come in and buy them. The market’s gone up a little bit in the last 12 months.  So you come in, you put 20% down. So 20 grand, a couple of 1000 bucks in closing costs. So anybody with 20, 25 grand can buy one of these houses. Cash flow per month, you have your rent minus tax, insurance, property management, debt service. You’re going to be making like two to three hundred bucks a month, net positive cash flow. 

Rob Kosberg:

After all those expenses? That’s great!

Antoine Martel:

Yeah. After all those expenses. So they’re all cashflow positive. And so, right around a 12% ROI on your money, if you’re buying it not with cash, of course, the return is going to be much less. Like a seven to eight percent return, but you’re making a higher cash flow per month. You’re probably making $600, $500 a month net cash flow.

Rob Kosberg:

Right. Right. That’s beautiful. And Turnkey, I mean, that’s a powerful phrase. So, are you turning over with a tenant in the property and just kind of good to go?

Antoine Martel:

Yeah. We will go by a dilapidated house, not livable. Renovate it. Make it clean, safe, livable. Make sure all the major systems are new or in good working order. Put a tenant in place and then sell it. So everything is done. We help the client get financing, insurance, property management, and then the house is sold fully renovated with the tenant in place already. It’s for the busy working person who only has 30 minutes or an hour a day to talk to the lender for those 30 days. And then, once they close, they already have property management in place. Everything’s set up for them.

Rob Kosberg:

Yeah, yeah. And they got their piece of the American dream and the property is increasing in value. And there are obviously depreciation and opportunities there with good tax write-offs and whatnot. Beautiful situation. Love that.

Antoine Martel:

Yeah. 100 percent. And there’s the debt and the interest rates too! I mean, the lowest interest rates we’ve ever seen, ever!

Rob Kosberg:

Yeah. How do you not take advantage of it? Now is the time and the reason that the wealthy continue to get wealthy. It is not because there’s some kind of evil scheme going on. It’s that they continue to invest in an inflationary environment where the fed is printing money like it’s going out of style. So assets are going to rise in value and cash becomes cheapened. So, you have got to invest in something. I mean, geez if you hide your money in your mattress or under your pillow, it’s going to be worth nothing!

Antoine Martel:

Yeah. I know.

Rob Kosberg:

So this is beautiful.

Antoine Martel:

Yeah. It’s crazy because we’ve been talking a lot about that the last couple of weeks because we just sold a couple of our apartment buildings we bought in 2018 and 2019. We flipped them, and we bought them for a million bucks, then sold them for 2.2 million bucks.

Rob Kosberg:

Fantastic!

Antoine Martel:

And now we got the cashback and the tax bill, and we’re like, okay! What do we think is going to happen in the next three to five years? Okay. You got high inflation, and then you’ve got the cheapest debt you’ve ever seen in 4,000 years! Okay. If you think inflation will be three, four, five percent, and the current debt right now is four to five percent, okay. That means you’re getting debt, but you are not paying any money for the debt. It’s free money! This kind of light bulb went off the last couple of weeks because we got the money back and now we’re making these budgets and stuff.

And we’re like, “why aren’t we buying every single house we possibly can with this low debt?” We’re trying to figure out what’s wrong with our thinking, and I’ve pitched it to a couple of people, and everybody just shakes their head at me. Which is good and bad. I mean, that’s what we’re starting to get into now. Having the turnkey business. Helping people get started too, but also ourselves. We are buying this inventory and kind of growing this portfolio because it’s the best time to buy real estate ever.

Rob Kosberg:

Yeah. Yeah, it’s funny. I mean, for probably the average person hearing you say that, they might think no; that’s kind of ridiculous because we are really in a sellers market in a lot of places because there are so few homes on the market. Single-family homes in a lot of places. But again, the money is so cheap, and cash is the absolute worst place you can keep your money. 

So if you are sitting on cash just to understand, I mean, we have three, four, five percent inflation.

I think hidden inflation may be as high as seven, eight, nine, ten percent, to be quite honest, because there are so many major things like energy costs, food costs that they don’t even have in the consumer price index as far as inflation goes. I think inflation’s a lot higher. And I think looking back, like you said, for people that keep their money in cash, they will miss all of this appreciation and this massive run-up in values.

Antoine Martel:

Yeah. 100 percent. That’s why I was even going to talk to a lot of the past clients too! And be like, “Man, you guys got the deal of a lifetime!” 

Rob Kosberg:

They did!

Antoine Martel:

Six whole months ago, they were getting debt at 3.25, and now in the next 12-24 months, we can all agree, we’re going to be seeing over two percent inflation. And it’s just like, man! They’re going to make money from getting that debt locked in for 30 years. I can’t wait for that phone call in three years! I’m making money from my desk.

Rob Kosberg:

Yeah. I mean, you may want to ask them. I bet a lot of your past clients have seen major appreciation in the market in the last six or twelve months. So, they may be sitting on an additional 20, 30% appreciation just in the last year.

Antoine Martel:

Oh yeah! I just got an email right before this interview. Somebody bought three houses in late 2019. Bought them for 70,000-80,000 bucks. Those houses today are worth 100,000-110,000 bucks!

Rob Kosberg:

How about that!

Antoine Martel:

So as you put 15 grand into each house, and now you have 30 grand in additional equity on top of all that kind of stuff. So, I’m like, man! You got the deal of a lifetime!

Rob Kosberg:

How many more do you want?

Antoine Martel:

Exactly! “You should go refinance and pull the money out and let’s buy some more!”

Rob Kosberg:

Exactly. Listen, I’m with you heart and soul. I see what’s happening in the market. I mean, we’ve purchased quite a few properties just in the past year. We did really, really well, fortunately also in some of the purchases that we made because of this explosion. I mean, it’s crazy. But, it’s not temporary and it’s not a bubble because of the amount of money that the fed is printing and they will continue to. It’s not ending.

Antoine Martel:

Exactly. Yeah, and they just extended the eviction moratorium, the foreclosure thing. 

Who knows? They’re just going to keep printing until that’s done. And then even after it’s done, they may still keep printing because they might find some other problems. So, if all of these foreclosures hit the market and then there’s other bubbles and stuff that they need more funds to buy people out or who knows what’s going to happen. So, yeah. I think we’ve only seen the beginning of the money printing process.

Rob Kosberg:

Yeah, I agree. So tell me a little bit about the book. Everybody has their six steps or six secrets. Give me an overview of what the steps are that you’re teaching in the book so that people can really understand this cash flow business.

Antoine Martel:

Yeah. The book was about my process, about how do you invest in cash flow and rental properties out of state? One of those options that we talked about in the book is buying turnkey. But that would be a very short chapter. It says go to MartelTurnkey.com. 

Rob Kosberg:

Simple.

Antoine Martel:

The other 100 pages are about, if you were going to go and do it yourself, how would you go about that? How do you choose the market? How do you build the team? How do you manage the construction process? Who do you need on your team? How are you going to finance the deals? What should the numbers look like for these deals? So it talks about all of those steps, while I was in that college dorm room going through and building out all these steps. And throughout that process, I was actually writing articles about those kinds of steps that I was doing. 

Because I would get asked all the time, how do you choose the market? How do you build a team? How do you finance?

And then I started writing these things on bigger pockets or just on my personal website. 

And then I finally just had so much information. I was like, man, this could really be like a guide about how to invest in cash flowing rentals out of state, if you wanted to go and do it yourself! And here’s all the different steps you need to take in order to do so.

Rob Kosberg:

Yeah. Love that, man! Love it! After two hundred meetings and two hundred cups of coffee and your many years of digging deep, obviously you’ve put a lot of wisdom togethe. Three hundred plus properties that you’ve turned over. And how many a month did you say you are doing and selling?

Antoine Martel:

Ten.

Rob Kosberg:

That’s fantastic! And I think that obviously is going to grow with cheap debt and with all the other things that you’re seeing. Very, very cool. 

Antoine Martel:

Thank you.

Rob Kosberg:

Tell me, just to switch gears for a minute, we talked about what you’re doing, what led you to it and the book. The book is something for people that are interested in this topic or are going to want to buy it because it sounds like it lays the foundation. And so, you did that for other people, but you also did it for yourself. You wrote a book for your own purposes. So tell me, what has the book done for you? How has it helped you to grow your authority, attract new clients, money, whatever?

Antoine Martel:

The behind the scenes to the making of the book, was that I was doing a lot of pre COVID presentations in and around L.A. People were asking me these questions that I’ve found myself answering a million times before. So I printed a bunch of the books and would take them to these events and give them out for free. “Hey, you’ve got those basic questions? Here’s a book for you.” At the end of the book, there’s a link to schedule a call with me to go to our website. 

I think that the main thing  the book has done has been created more clients for MartelTurnkey, and also for investors in us in our business.

And the reason why is because of the amount of detail that we’ve put in. It’s a pretty short book, at a 120 pages or so. But you read those 120 pages and then if you have a full-time job and kids, and a dog, and all of these things, and you read the book and you’re like, man, that sounds like a lot of work!

Rob Kosberg:

It is!

Antoine Martel:

Exactly! But is there an easier way to do this? And then at the end of the book, if you don’t want to do all these steps, come chat with us, let’s see if we can help you out. And then people go to the website and they go see the properties that we have for sale. They schedule a call with us and then they know  how the business was built and the processes and the steps that we’ve gone through to make sure that we have the right team, the right contractors. How we’re managing the contractors. So, they kind of get a little glimpse of the behind the scenes of how we’re working and the amount of work that it takes to get to the point that we’ve gotten our business to.

I think that, that’s been the main point that’s just helped a lot of clients come to us and say, “Hey, I read your book. It was fantastic, but I just don’t have time to do that!” And that’s probably like 99% out of the people who read that book just don’t have the time. They may think that they want the extra equity or benefit and want to do the burst strategy or fix and flips. And then they read the book and they’re like, man, that sounds like a lot of work! 

I work from nine to five and then I have to come home, and then I have to go to the gym, then I have to take care of the kids. I just don’t have time to do all these different steps.

Rob Kosberg:

Yeah, yeah. I totally get it. I actually hear that answer a lot. The same with my book. My most recent book, Published Promote Profit. You don’t have to hold back any information or knowledge from people. In fact, the more you give, the better quality information you give, the better it is for you. Because there’s going to be people like you Antoine that gathered all this knowledge and information and then you actually did it on your own. But you know the price you had to pay to do that. That’s no small fee.

Antoine Martel:

Two years.

Rob Kosberg:

So there’ll be a tiny percentage of people that do that. There’s a larger percentage of people unfortunately, that do nothing. But there’s always going to be a good percentage of people that come back and say, “You know what, you’re the expert at this. How can I either, A) give you money, right, invest with you? Or B) how can I get on the train and be a partner in some way?” And I love how you’re using it. Obviously it sounded like the speaking stuff that you were doing in and around L.A isn’t happening anymore. So how are you getting the book out to people besides normal Amazon in that kind of thing?

Antoine Martel:

Yeah. So the way that I’ve been getting it out has been mostly through Instagram and Instagram ads. So I had some campaigns running where it was, hey, swipe up to fill out a form and then you get the book. And then using that to get those people on our mailing list, whether it was my personal mailing list or MartelTurnkey’s mailing lists, the business mailing list. So it was a good lead generator. So people would go swipe up. Fill out a form with their information. Then they would get the book for free.

So yeah, I ran a ton of ads, which I think helped with Instagram followers because people would see that and be like, “Oh my God, this kid wrote a book about investing in real estate and he’s giving it away for free! Okay, I’m going to get the book and I’m also going to follow him or check out his content.” So I think it helped to get a lot of attention on me and what I was doing, which then helped with the followers, which then helped with getting the blue check mark as well from Instagram.

Rob Kosberg:

Love it. Great. So yeah. Ads pay traffic. It sounds like Instagram. Really big for you guys. Love that. We do a lot of Facebook, even YouTube. Offering the book for free. Great, great, great suggestions. Obviously it’s working really, really well for you! 

What would you say is the biggest benefit? Has it been raising money from people that want to be investors? Or has it been bringing on people that actually become your turnkey clients?

Antoine Martel:

Yeah. I would say it’s probably high, like 90%, 10 for people that come and become turnkey clients. So 90% of those people come and become turnkey clients. A lot of people just think that they have all this time and all this money. And then they realize that they only have 20 grand! Which limits you severely. So, 20 grand, one of your few options is going to be turnkey rental properties. You can’t flip houses. You can’t do apartment buildings. You can’t even invest in other people’s deals, most of the time, with just 20 grand. Normally they have a minimum of 50 grand. So you’re really limited already. On Instagram, I’ve made a little infographic that said zero to $20,000, the only option for you is turnkey rentals. 20 to 50 turnkey rentals, and you might be able to flip.

50 to a 100. Okay. Turnkey rentals, flip, and now you can invest in other people’s syndications and then a 100,000 or plus kind of everything is open to you except for maybe ground up construction projects. And so, I think that was a good mind shift for people to realize, okay, this is my budget. This is what I have or I’m willing to invest. And then, you really should just focus on these areas. 

Back to your question, the book, I think it was mostly just getting clients, that then were educated about who we are, what we do, how we’ve gotten there. And then they were also very confident in the product because they knew the amount of work that was behind the scenes. I’m not just buying random stuff and putting it on a website and collecting offers.

Rob Kosberg:

Yeah. Awesome. Hey, Antoine, thanks for your time. Congratulations on all your success. Love what you’re doing. Love your passion and your work ethic with it. 

Where’s the best place for people to get some more information, get a copy of the book or maybe become a turnkey client?

Antoine Martel:

Yeah. Thank you so much. The best place to reach out to me would be on Instagram at Martel Antoine. If you guys want a free copy of the book, you can go to free.martelantoine.com. There’ll be a little link there to get the book. And yeah, the best place to reach out to me would be on Instagram. You can shoot me a DM. I try to reply to everybody’s messages there. And then there’s also a link in my bio. If you want to check out MartelTurnkey.com and schedule a call with one of us about that.

Rob Kosberg:

Love it. Love it. All right. MartelTurnkey.com. That’s what you need. That’s what you want. If you’re going to invest in real estate, especially if you got that 20 to 50K level. And so, thanks again my friend, and again, really, really good to talk to you.

Antoine Martel:

Of course. Thank you so much for having me.