Scaling a Real Estate Business That Thrives Without You w/ Mark Horton II

Mike DeHaan: [0:00] You are a real estate investor, you have probably heard all about subject to real estate. And also, if you're real estate investor, you probably don't really know a lot of the ins and outs of how to do subject to correctly. That is why we created our free subject to course. You can go and grab at collectingkeys.com/subtwo. We will go through all the ins and outs about how to do subject to correctly and legally so that you don't put yourself or the seller in a bad spot by kind of ignoring the small details. So if that's something that you're interested in, go to collectingkeys.com/subtwo, and you'll know exactly where to go from there.

Mark Horton II: [0:33] We have a huge advantage with the VA loan. 0% down other than a couple closing costs. You can buy multiple houses with as long as you had the DTI to it. The barrier to entry for a service member who isn't going to go for this the bougie house, but go for a realistic house, the first couple ones is super easy, and your return on investment can be very high because you put so little down. I think that's the initial barrier. Then I think the second thing is, it actually goes to what we recruit in the military. You know, usually people from affluent houses, households, don't usually need the military, it's people who maybe, there's a reason they have to go to the military to get out of the situation, they need the money, so once those people start seeing the money, you know, lot of them will just go blowing on stuff, but some them are like, hey, I never wanna go back to that. And how can I use what I'm getting now to keep advancing my situation? Okay, now I have someone who's taught me discipline, who's taught me, hey, if I need to work sixteen, twenty four hours, I can do it, and I'm not in a high stress environment, but I'm doing it for my own family's success. Welcome

Speaker 3: [1:41] to the Collecting Keys Podcast. The show where you'll learn how to use real estate to create massive income, not just passive income. Real estate doesn't have to be a get rich slow game. Listen to the country's top real estate operators, and you'll have all the tools you need to replace your w two income and go beyond in under twelve months. Ready to take things to the next level? Let's jump in with our hosts, Mike DeHaan and Dan Austin for today's episode of the collecting keys podcast.

Mike DeHaan: [2:18] What is going on guys? On today's episode of the collecting keys real estate investing podcast, we have Mark Horton the second, who is an investor, real estate property manager, you know, got a whole bunch of different stuff that he's doing down in Fayetteville, North Carolina. He is also a veteran, and him and Dan got on the ride his reign in that way because he's off to do some more deployments here soon. He's gone to a bunch of different places around the world doing all sorts of crazy stuff. And he's really just an overall interesting guy. This is also a great one as well to go and check out the YouTube because you will see that this guy is freaking massive. Like, I made a comment off the bat.

Dan Austin: [2:54] He doesn't he don't mess around like you don't wanna go fight him.

Mike DeHaan: [2:57] No. No way. But his neck, he's like, so you can

Mark Horton II: [2:59] just tell how huge he is just from the video.

Mike DeHaan: [3:02] Yeah. But we dive into all sorts of different things, particularly around how he has scaled and optimized his property management company. It is able to function while he's on these six month deployments overseas. And you know, lot of you guys out there, you're trying to figure out how to systematize your businesses so you can, you know, go to dinner more frequently with your wife. This dude's trying to figure out how to do it so that he can go to The Middle East for six months and be like off the grid and still be able to have it function when he gets back. That's a whole different level of optimization.

Dan Austin: [3:31] This is like just a learning point for me to listen to and for everybody listening to this podcast. He's literally taking, he doesn't say this exclusively, but I know what he's doing. He's taking like training that he's learned in special forces and in the military, and in his other careers, and just applying it to his business. And just like you talked about cross training his employees, and all that sort of stuff, and that's really just right out of the book of like how to basically train the military. He's putting that into his business, not in a militant way, but in a way that is like, damn, that's so easy. I should be doing that in my business.

Mike DeHaan: [3:59] Yep. Exactly. He has all these great little tidbits about how he goes about certain infrastructures, his sort of like philosophy around how he pays people, whole bunch of different things. And there's some really awesome little tips and tricks in this episode. So anyways, guys, after the show, make sure you shoot him a follow on Instagram and, you know, send him a DM. Let him know what you think. Send us a DM as well. Let us know what you think. I'm at Mike underscore invest. Dan is at investor man dandos. We always want some feedback on how these episodes go. And also remember that people come on these shows because they wanna engage with you. So don't be shy. Give them some love if you appreciate what they do. Mhmm. So thanks for listening everybody, and enjoy the show with Mark Horton the second. Enjoy. Alright. Mark Horton the second from Fayetteville, North Carolina. You guys are dude, you guys were just like right as rain talking military for like the ten minutes pre show here. So I know nothing about you. Like you guys are obviously best friends because you did immediately bonded with your And new military I can tell just by the number of like three letter acronyms and things that you were throwing around that you guys speak the same language. So for the rest of us, give us a little breakdown, who you are, what you do, and what exactly your business looks like right?

Mark Horton II: [5:08] Yeah. So who am I? My name is Mark Horton obviously. I am a National Guard soldier. I got my career in real estate when I came down here to Fayetteville, North Carolina to Fort Bragg, when I was doing the Special Forces Qualification Course. While I was in the Q course, I got my real estate license. Also during that time, my dad was getting sick and I wanted to figure out as I was starting to have kids, how I could set up a legacy to pass down wealth to kids and also initially I didn't have a job. So I wanted to find the easiest way to live free while I was building up my real estate portfolio, becoming a real estate agent. So I initially typed in how to live for free and

Mike DeHaan: [5:52] the And VA house hacking came

Mark Horton II: [5:55] I found out what a VA house hack was. I started reading about that and then I was like, oh, well, I kinda like this because I don't really understand stocks. I'm not a tech guy, but I do know how to fix electrical, and I could go on YouTube. So from there, I reached out to a girl named Shelby Osborne. She was up and coming real estate person at the time and she and one of real agents helped me buy my first couple investment properties. I bought a triplex with my VA loan and was able to house hack it, live for free, and it really interested me and then I figured I'd get into becoming a real estate agent at the same time because I could look at houses, knew how do some of the construction, and I had a big signing bonus coming and I used that bonus plus a little bit of extra money I had saved up when I was a police officer and I started buying houses before COVID for like $6,057,000, 64,000. And I was still buying at the beginning of COVID, gained a lot of equity at that time because of that, And during that time, I initially was actually co hosting Airbnb's for people, because there was a need for that in Fayetteville. Airbnb's were coming very hot, there wasn't really a company that can help do the guest communications, and coordinating the maintenance stuff. So that was actually our first company while I was becoming a guard bump. But a guard bump is someone who isn't active duty, but they jump on a bunch of active duty deployments, or schools to make up for money instead of having a real person job.

Mark Horton II: [7:23] For us people who don't wanna grow up even in their 40s or 30s. So I'm still that, I still do that, and at the same time I started growing my real estate business, started working with clients. You know, you do two deals, three deals, and the next year you're doing twenty, thirty deals, and I've kept that going, specializing investor clients mainly. And during that time as we continued to grow, I actually continued to grow my real estate portfolio to where I got up to about 21 doors at one point, and I think there was a need, or maybe I just didn't find the right property management company, so I decided to open and start my own long term property management company called Fine Land Property Management, and that was within the last sixteen, fifteen months that we've opened that business, and in our first, you know, that timeframe, we're at 130 units. Sold a couple of my own personal properties just to pay down some personal debt, and also to be that guy who's actually looking to pay off their primary residence, so I have less money than I need them to pull out, but I'm still gonna keep my loan debts for my real estate portfolio to someone else. Lot in there from agents to starting a couple companies and then garb bowing. It's kinda what I do.

Mike DeHaan: [8:34] Yeah. I love it though because you're you're a hustler. Right? You're a real estate entrepreneur. And it sounds like you touch so many different parts of the real estate industry. I guess, how come you sort of chose to do that as you were finding sort of like your bigger picture goal here, which is the property management company? I guess, was your reason for doing the agent, plus the investing, plus the Airbnb co hosting, plus, know, obviously now you're doing some media stuff, plus you're in the National Guard. They all say you're supposed to just like have your one thing and be really good at it. But you kinda touched all

Mark Horton II: [9:07] of it. Was that were you being an opportunist? Were you like unsure what you wanted to do? So prior to this, I was a police officer. 2020, a lot of things changed, and I didn't even feel like going back to that career.

Mike DeHaan: [9:18] So

Mark Horton II: [9:19] I started looking for opportunities where I thought I could cut through, I thought there was less competition to initially get my ground foot to where people knew me, and I looked at those opportunities and being an agent that knew a lot about investing, about Airbnb, so being in a new space, was my first initial getting my foot on the ground, it brought a lot of people and made my name very familiar to where even experienced agents reached out and talked to me about it, because it wasn't something they really wanted to get into, now my name's in their phone book. And once we grew, kind of became very good at that, we opened up our doors to long term property management, and all those people that knew me, or we had helped out, like, oh, this guy's been very good, we're having some issues, maybe we'll try him, or, Hey, I know this guy, and it opened us to grow a lot faster because we were known in the area already. So initially was opportunity where there was less competition, because I didn't have a marketing budget that I thought I needed to advertise to get some of these bigger clients, or clients coming in, or the experience. And then once I had that experience, once I became, hey, he does everything, he's been an agent for five years, every deal he does, maybe he doesn't go exactly the way, but he's been honest all the way through. Then when we opened up to a more traditional long term property management in a real estate firm, people are oh, we know him, and they moved over. And I do have the advantage of, if anyone's aware of what Fort Liberty is, it's the home of special operations. I have a lot of Green Beret friends here, so once I opened up my door, I got a flood of them as they're PCSing or leaving the military, but they still wanna rent their house. I am the guy that a lot of

Dan Austin: [10:58] them go to. I was gonna ask you that, that's a, brings up a good point. It seems like to me, that what you're doing is unique, like there's not a lot of guys that I met, or ladies when I was in the military, that had the time or capacity to become like entrepreneurs, real estate investors. Is what you're doing unique, and you're now able to provide that service to these folks, or is this kind of like a common thing nowadays, real estate investing within like, especially the special ops community, where you're training and deploying, doing things that take a lot of your mind power. That's one the reasons why I left the military, was like I just couldn't see doing what I wanted to do while I was still in active duty. So, is it common, or are you kind of one of the only guys that you know doing it?

Mark Horton II: [11:39] The question initially, I can say yeah, it's very common, because, but that's because it's the people I surround myself with.

Mike DeHaan: [11:44] Sure.

Mark Horton II: [11:45] I honestly think there's not enough guys who are doing it. Are they? You know, these guys get these huge sign bonus, instead of maybe investing in a real estate property, go buy a truck or they go buy either nice RV. I do know quite a few guys who maybe don't do the whole thing like me, but hey, I'll buy my house in cash, I'll go buy my next house in cash, I'll buy my next house in and they're gonna leave the army five, ten houses in cash, collecting an extra 10 k plus army retirement. Those are what I see more common, where they're, you know, tripping away over twenty years, maybe have five or six houses, and I think that's more common, but having a full business, I think it just takes too much time. Where I really see guys that do it is once they move from off of a team, and they're coming more to Fort Bragg to be, or Fort Liberty, educational where they're teaching the courses now, where they have a very set schedule, they're not on the they're not on the rotation schedule anymore.

Mike DeHaan: [12:38] Mhmm. Mhmm.

Mark Horton II: [12:39] And where they can have the time to do a side hustle or a business, or maybe they're just doing painting and stuff like that. That's where I see it right now. Okay.

Mike DeHaan: [12:46] Yeah. Fascinating. Yeah. One thing think that's relevant to people that are not in military as well. Know, you said it it seems like it's common to you because you surround yourself with people like that. It's just like the old adage that if you surround yourself with, you know, four broke people, you're gonna be the fifth one. Right? You're surrounded with four alcoholics, you're gonna be the fifth one. Right? It's the same thing. And then once you get outside of that bubble, you know, like a lot of people aren't necessarily taking advantage of the different opportunities that are there. And you're about balancing time with being in the military. The same thing can be said for a lot of w two employees as well. Like if people have this like really strict shift work, we get a lot of people from different trades and things that are working hourly and they're like, I have no flexibility with my day job. I have to be fully engaged like, you know, eight to five with that and I'm trying to do a real estate business. It's gonna be hard. Like you're not gonna be able to do that. Like, there's a reason that you see a lot of white collar people that are able to build successful real estate businesses. A, they typically do have a decent income, which helps. It's also because they sit in office and you fuck all every day.

Dan Austin: [13:46] Well, that that and firefighters. Let's not leave the firefighters out of this. Yeah.

Mike DeHaan: [13:50] And firefighters. Yeah, because they work they work a day and a half a week. So, they got nothing but time.

Mark Horton II: [13:58] But those regular w two employees don't get called back in the middle of the night if someone loses a pistol and the whole range gets shut down. That is true.

Mike DeHaan: [14:05] That's upset. Yeah. There's things like that. There is like a lot of crossover though with successful entrepreneurs, especially in the real estate space with the military. I mean, feel like that's like that and corporate engineers, I would say are probably the two most common like previous employments that we see people that have on the show. Mhmm. And you think that's because I mean, I wouldn't say it's because the military has a ton of truly shot financial education. That I think

Mark Horton II: [14:32] is quite the opposite. Right?

Mike DeHaan: [14:33] Yeah.

Dan Austin: [14:33] Yeah.

Mike DeHaan: [14:34] But is it because they instill a mindset of how you have to take care of yourself, they instill discipline, what do you

Mark Horton II: [14:40] think really drives that? I think it's a combination of stuff. It's people who know how to use the system, because we have a huge advantage with the VA loan. 0% down other than a couple closing costs, you can buy multiple houses with as long as you had the DTI to it. The barrier to entry for a service member who isn't gonna go for this bougie house, but go for a realistic house, the first couple ones, is super easy, and your return on investment can be very high because you put so little down. I think that's the initial barrier. And then I think the second thing is, it actually goes to what we recruit in the military. You know, usually people from affluent houses, households, don't usually need the military, it's people who maybe, there's a reason they have to go to the military to get out of the situation, they need the money, so once those people start seeing the money, you know, lot of them will just go blowing on stuff, but some of are like, I never wanna go back to that. How can I use what I'm getting now to keep advancing my situation? Okay, now I have someone who's taught me discipline, who's taught me, hey, if I need to work sixteen, twenty four hours, I can do it, and I'm not in a high stress environment, but I'm doing it for my own family's success, I can turn that switch back on when needed.

Mark Horton II: [15:54] Now, I'm getting a little bit older, I don't want to turn that switch on. I try not to, I've hired other people, but it's a switch that a lot of us know, especially if you've been to some advanced schools. I see this little Ranger tab over there, all right, I got a Zapper tab, not as cool as this dude. But you go to these advanced schools where you stay up for three, four days with lack of sleep, you know how to turn that back on when it's for your own business. You did it for $32,000 a year, when you're doing it for 0.5 a mil, it's a lot easier.

Mike DeHaan: [16:19] Yeah. Yeah. That makes a lot of sense. Now that that's cool. And then I also feel like there's just an intrinsic level of trust that exists amongst other service members as well. And once is that relationship established, it's probably very easy to get clientele and to do business together. I never served, but I lived for a number of years in Puyallup in Washington State, which is right by JBLM, which is where the second battalion is. And like the inside baseball that would go on amongst all like the, you know, local rangers or the army guys there, it was ridiculous. Yeah. Like, it was so just like flagrant in some of the ways that they would like do business, or the things that if you weren't one of them, you weren't even able to be included in it. So, I think anything like that that creates that common community. It's a lot

Dan Austin: [17:03] of tribal a lot of tribal community, which is real estate too. Yeah. Like, right? We have a lot of tribal communities, and like if you're part of a community, a lot of times you get afforded the benefit of the doubt, so to speak. Which, know, Mark, know there's some dirtbags in the military, just like anywhere else. And so like, sometimes guys can provide a little bit too much trust where they shouldn't have, but you know, you get bitter by that, then that never you never do that again, right? So

Mike DeHaan: [17:24] Yeah. Stay everywhere else. Hey. We really appreciate you being a listener of the collecting keys podcast. Did you know that we also are on social media and on YouTube? You should go and shoot us a follow on those as well. You can find both Dan and I on Instagram. I am at Mike underscore invests. Dan is at investor man Dan. You can also find short clips from the show at collecting keys podcast on Instagram. And if you wanna see our faces talking when you're listening to this show or you wanna check out some of our crazy animated adventures we've been putting together into some funny little web cartoons that sort of show the crazy stories that guests tell on the show, then you should go over to YouTube and check out the collecting keys channel. Shoot us a subscribe over there. It really helps in human grow our audience. We really, really appreciate it. Well, anyways, enjoy the rest of the show you guys. We appreciate you all. Let's talk about your your property management business and the systems that go into that because you're still active,

Mark Horton II: [18:17] so you deploy. But you're now you're responsible not just

Mike DeHaan: [18:20] for your own properties, but you said you have about a hundred and hundred and twenty, 150 units?

Mark Horton II: [18:24] Yeah, we're at a 130 doors now active, so that's been a big jump in like sixteen months.

Mike DeHaan: [18:32] So how do you manage that when you're overseas doing whatever it is you do?

Mark Horton II: [18:37] So initially it was putting out fires, it was just like doing as much as we can to stay afloat. I think some of the advantages I had now, I had other people that I understood how to hire people for very specific tasks, because I've already built something else up. So this basic, I call it my second go around of establishing a company, I knew right away, bookkeeping, nope, and I personally was in a little bit of a better financial situation when I initially did it, so I was okay of not taking a profit for six to eight months from the company, but I was able to pay the bookkeeper and the CPA right off the bat, never touch them, my books were reconciled from day one perfectly to follow all the regulations for the North Carolina Real Estate Commission. I redrew them, but it was sight out of mind, they do all the work, I go in there and fix them, that was first, right? Second person, bring them somewhere, they can handle some of the contracts, some of the back end systems, and developing a very, a a system that flows, where I could just click a couple of minutes, twenty minutes I have a property listed, all the contracts are signed, bringing that person out, and I knew once I sat down after a couple months, after like my first two months where I needed to put people, I knew how to evaluate my 80 to 20%, what stuff I didn't wanna do, my 80% and the 20% I needed to do, and as soon as I got those, put the most lowest value, or the ones I knew would frustrate me the most, and hired those.

Mark Horton II: [19:54] So it was just the experience with having built a company in the past, knowing where to go to. So while I'm overseas, I can have these people running, I have to check mark some boxes, and now we're at a place where I'm actually hiring someone to be the broker in charge, while I may be gone for six months, or a year if I have to be in the future, that has already experience, because I didn't need the money at the beginning, I got to grow the company, I bought the systems that my company wasn't ready for at the beginning, but we have grown into, and it was the best option for me knowing, believing that I was gonna grow the company to that, and it was beneficial.

Dan Austin: [20:29] Yeah. So there's a little

Mark Horton II: [20:30] bit of a gamble, but I was okay with it.

Mike DeHaan: [20:32] Yeah, what kinda like checks and balances I guess do you have with that? Because, I mean, this is this is a conversation we have with entrepreneurs in this space all the time. Is they're worried about management. They're worried about like, what happens if my a player leaves? Like, they're in their own market. I mean, you could be in whatever African, Eastern European, Middle Eastern country, like, helping people evacuate from whatever crisis. It's not like you can just jump in and start taking the sales calls or trying to fix these client relationships. You must have is the checks and balances, is it technology driven? Is it like through crossover of staff responsibilities? Like you have like middle management? Like what

Mark Horton II: [21:11] does all that look like? I think it's a couple different fronts, right? Technology, we are heavy tech setup. Like I said, we initially get Airbnb, so we probably went right into the tech side a little bit more than a lot of

Mike DeHaan: [21:24] probably

Mark Horton II: [21:24] older people who don't understand that stuff. I know the other important stuff is when I hired people for specific roles, I hired established people in my market and paid them what they were worth. And so when people call and like, hey, who's doing this? Oh, it's Katie, she works for her sleeve, she also works for this person. You've seen her in the market for ten years. Hey, Kimberly's over here now. Oh, yeah, she used to work for that property management company, she has her own real estate firm, but she's helping me with property management. So it was established people who understood the jobs ahead of time, and me not being so arrogant and sitting back like, you have to do what I say, no, we have a meeting. If I can't defend one of my positions, I always say, if I can't defend one of my positions, then we have to reevaluate it. And then cross teaching everyone a little bit of each one's job, so if I do have a player that goes out, I can have one step in, it might not be as great, but having SOPs written out, so they go to their Google Drive, I'm like, okay, I have a Google Drive, I have it written out, oh, let me click on the video that's associated with that document, and they can watch on how to do it.

Mark Horton II: [22:27] It's gonna take longer, but they have a step by step video in a Google Drive, and SOPs written out, has helped us being able to mitigate if there is someone that goes down for a little bit.

Dan Austin: [22:36] Man, I love that, like that's probably just right out of the Special Forces handbook too, everyone in the Special Forces team has their skill set and their task, but you are somewhat prostrating on everything, right? Everybody probably knows how to save each other's lives if somebody gets shot, right? There's Oh yeah. There's some things that you just have to, so I love that, that's actually a really good practical use of probably your military training coming into business, that's awesome. One thing also I wanna know, because Mike and I were just talking about this the other day, you noted that I was willing to not take pay for my business for six to eight months while you built the proper systems that were going to be set up for where you wanted to go. A lot of people get so caught up in like, oh I need to have profit right away, and that's just not the case when you're standing up new business. And you said this, you had stood up other businesses before, so you knew that. And you knew going into that what needed to be done, and so you're just taking those steps and saying, hey, I'm realistic, I'm an entrepreneur, like, I may not take a paycheck here, but that's because I need to reinvest into the proper systems. So awesome, I like that. One question I have on this property management business, just because I'm super curious.

Dan Austin: [23:35] You said you have a 130 units. Mike and I talked to lot of people that decide to start property management companies, that's not something we've ever really wanted to do ourselves. But I know there's a really strong, repeatable business model there. So when it comes to the profitability of these businesses, what do you look at? You're like, when somebody's like, Oh I have two fifty doors, or I have 100 doors, is there like how you hear about real estate investors, Oh I can just look at a deal, and it's a 1% rule, I know all cash flow. Is there something within property management you're looking for metric wise, you're like, oh a 100 doors equals like this much for me. Right. For a business profitability standpoint.

Mark Horton II: [24:12] So, just because we have very basic fee structure, I know that I need to be cash flowing to where I'm at minimal $100 a door. I have a target range of the houses that I specifically look for that I feel like my team works best in. Not too low, not too bougie, right in the middle. I call them the E5, E6, E4 houses, you know?

Dan Austin: [24:34] Gotcha.

Mark Horton II: [24:34] That nice, hey, I can get a nice sergeant in there with his family for a couple years, maybe two or three. I got a guy coming for one of the courses here, I can get him in for two years. Those are the houses that I look for, because I know that I might have a little bit more turnover than maybe some houses that maybe have a government subsidy, those houses,

Dan Austin: [24:53] but

Mark Horton II: [24:54] everyone has the people that are gonna pay. Also, I look for, those are the ones I'm looking for, they're gonna be low maintenance costs, I won't have to pay a lot to have my maintenance people out there. But the metrics, I'm looking for a minimum of a $100 a door, and I know with our systems, how much that will come out to be profitable for me.

Dan Austin: [25:12] Right, that's awesome. That's good to know, because I've always wondered that, right? Because there is a, there is an underlying business model, and it's not necessarily just get as many doors, right? It's how profitable can I be per door with the systems I have in place?

Mark Horton II: [25:24] Yeah. At the distance from where I live. Have a map out where I

Mike DeHaan: [25:28] Nice. Won't go any That's huge as well. When it comes to property management like that, what do you think is like the level that another investor should be at in terms of like door count, portfolio size, like before they should be looking to take it in house kinda like you did versus just having everything offloaded to a property management company?

Mark Horton II: [25:51] I don't think it's like how many doors. I think it's it's you knowing yourself. If you're someone that can't communicate with these people, you gotta be able to go in and wine and dine someone that's paying $900 or wine and someone that's paying $2,500 a month. I think it's your own personal capabilities. Maybe it's beneficial for you to just be making the money buying houses and not dealing with the contractors. So it's gonna be your personal situation, what you want. Maybe you have about 50 properties, but you don't wanna touch them, just wanna go work your tech job,

Mike DeHaan: [26:23] and

Mark Horton II: [26:24] just come over and be able to hand over the properties and just collect your check, you don't wanna have to deal with it. So I said it's gonna be dependent on your time, it's gonna be dependent on your personality more than your doors, that's what I would say, because it just might not be beneficial. I'm doing this so I could spend time, my office is at my house, so if me and my wife rotate, you know, I can watch the kids, watch the kids, kids are in daycare. It's gonna be what your goals are overall for your life, and making sure you have those contract I think the biggest thing is having contractors that you respect and know. And that's hard if you're not in the grind all the time.

Mike DeHaan: [26:56] Mhmm. Yeah. That makes sense. I think, like you said, being obvious with your opportunity cost with it as well. This is one of the most, like, reoccurring questions that we get with people that are in our scale community. We have a a community for investors looking to take their businesses, like, 7 figures and beyond and really trying to grow. So And people start to accumulate assets very quickly. And we get people that are at like that kind of 10 to 15 to 20 unit range. And all of a sudden, like, man, my property managers isn't doing that good. Or the other way, they're like, man, managing these properties is taking up so much time. And regardless of where they're at, it seems to be in like that 10 to 20 unit point where they decide that they're gonna do the opposite of whatever they were doing before. But the problem is is that now distracts them from being able to do things. Gonna make them more money. But they're just like trying to seek optimization. And it's just it's such a weird way. And I think to write it, probably comes down to people's personality, what they wanna do if they have the connections. And ultimately, I I think that if they want to do any of it themselves, they need to focus on making it like a business like you have done. Right? Where you're bringing in people, you're willing to pay them the appropriate amount of money, you're putting systems in place. Otherwise, it's kinda like a giant waste of time and effort.

Mike DeHaan: [28:08] So Yeah. Well, the cool

Dan Austin: [28:09] thing about what you're doing too is you get to stress test your systems when you do deploy or have to go to training. And Mike deploys too, but he just deploys to vacations to Africa for a month at a time. So it's a little bit different than your deployments, but the point I'm making is, when you're gone physically, you find out where your holes in your system are and you get to plug them. A lot of people don't ever figure that out as the CEO or the owner of their business, because they're always there as like a safety net for their staff. And so, what you're doing, you really have to be able to step away and let things happen, because you might not be able to talk to somebody or text them for a few days at a time, if not longer.

Mark Horton II: [28:46] Yeah, so there is a technique that even for me, I found out even when I was an agent to my first company to this was, I always make sure the first time I'm gone, I go to a gentleman's course school, where I'm gone, when I might have my cell phone on the day, cell phone at lunch, so I can put out some of the fires, and then every week, every week after that course, we're resetting up things on the vest there.

Dan Austin: [29:08] Right, dipping your toes in so to speak.

Mike DeHaan: [29:10] Yeah, exactly. Alright, so that makes sense though. So I guess as, what are your sort of aspirations with your business? Are you looking to make this property management business your primary thing? Are you using it as kinda like a means to the end to buy more investment properties? So you're looking to pay off your primary residence. I'm curious what the mentality is behind that as well.

Mark Horton II: [29:30] So initially it's just a means to bring in more income to help grow. So let's start paying off the primary. My goal is that I don't have any personal other than my primary. I wanna pay off just because I think it's a mental thing, because I've gone broke a couple of times in my 20s from losing different jobs. And then there's always the like, if everything happens, can hunker down in my house, my dogs, my guns, and my truck, and I'll be okay. It's literally just a mental thing, and there is a part of it where I'm still deploying, I'm still going to the active zones, that if something does happen, even though we do have quite a bit of real estate, I don't want my wife to be burdened with our kids, knowing that the house is paid off, she'll have like 15 doors of rental real estate for the rest of her life. She could just chill out and make sure the kids are raised the best they could in that type of situation. So one, that's basically for me, there's, I know the math, I've done the math, I know it doesn't make sense from that point, but from putting my wife in a strong strategic position, or even me being like, maybe one day I just say I'm done, I need a year break, I don't wanna work, I've been military cop since I've been 21, I just wanna take a break, and I don't have to worry about making money, because if I need 4 or $5,000 a month, I make them already for my rental portfolio.

Mike DeHaan: [30:48] Okay.

Mark Horton II: [30:49] So that's for that. And then aspirations of the company, I personally wanna keep growing it. I will believe that I'm gonna cap my company locally at a certain number, and I've talked to a lot of people that own management companies, and I wanted to cap it for two reasons. One, I wanna be able to give the best service to my clients as possible, the second reason is I talk to a lot of management companies, and they say after you grow so far, you lose that ability to talk to all your owners, all your clients, so I wanna cap it at a certain amount, but I do wanna open up doors in other places. I have a couple marked, I'm not gonna mention them right now, I do have a couple cities that I really wanna get into, and have a couple other offices. There you go.

Dan Austin: [31:27] Right on. I like both of your thought process there too, because there's no right or wrong answer to paying off your primary residence, or paying off any of your debt, but you have a really good reason why, like that effort, you know, like you are still going into dangerous, you know, war zones and stuff like that, and so, having some comfort for your families, obviously is as good of a reason as possible. And yeah, I get it, you might come back from some long deployment and say, I don't wanna do shit for a year, you just wanna be able to live off your cash flow. That's like a super good, I think it's a super good plan of like putting that in place. But also the property management thing, that makes a lot of sense. Because Mike and I have dealt with property management before, not owning it, but with other property managers. And there gets to be a point where they really do turn into crap. And sometimes it's not when you start, but all of a sudden they take on a bunch of units. It might even be that they grow too many units too fast, and they're not even at their cap yet, but they haven't realized they need another property manager in their business, and that shit ended as thick as you, getting a very costly lesson, which Mike and I have lost thousands, tens of thousands of dollars over periods of time from poor property managers. What does that, for you, what does that cap like, I guess look at from where you're at now?

Dan Austin: [32:34] And is it because you won't need to hire any more staff when you get to that cap, and that's where you're gonna be at? Like your business system is set up now, and you can just basically hit that cap and be good?

Mark Horton II: [32:44] I would have to hire, I know probably two more affiliate agents to help out with that cap. Okay. The systems, everything else would be in play, no problem. So before this, I had property management on my own properties, and I had some issues, and that was one of reasons I started my own company. And that's why we're doing the cap is because I wanna keep that quality. It also puts me in a position to where if a landlord or owner the property isn't doing the maintenance that I wanna have a high standard to, it's okay, you can go, you can walk away after the end of your contract, I know there's gonna be someone else that's willing to do the same stuff and be under my roof, because we have a good reputation. Uh-huh. That's my reason for it.

Dan Austin: [33:24] No, I love that. And that's kind of what I was gonna get out to, is like, there's property manager companies in Spokane that are closed to new clients. And I love the fact that you can fire your clients. When you're at a point in your business where you're like, I'm going to fire the people I no longer want to work with, That means you're doing something right because you have that confidence that you have done such a great job that there's a demand for your services.

Mike DeHaan: [33:46] I mean, I don't know, you say it's cap it off, but we all know how it goes. You're an opportunist. You'll get to that number. Two weeks later, some dude with like a 40 unit portfolio is gonna be like, hey, I heard from Jimmy that you have a great business. You're gonna be like, well, damn. I guess I'm opening it up again. Right? Yeah. It's just one guy. It's just one more client. He's got a

Mark Horton II: [34:04] whole I'd bunch of rather open that up in Florida somewhere.

Dan Austin: [34:07] Yeah. Go. There

Mike DeHaan: [34:09] There you go. Yeah. Nice. But awesome. Well well, good some good stuff, Mark. Right on. So we're gonna dive into our end of show questions here. We ask the same three questions for everybody that comes on the show. And our first question, which is always a group favorite, and I'm sure that you have a couple of these at least. But what is your craziest real estate investing story? This can be a big win. This can be a big loss. It could be a crazy tenant. It could be a crazy transaction. Only rule is it's not allowed to be a story about finding a dead person in a property. Because we have like a bunch of those in a row a while back and it was It turns out everyone's done that and it's never like a fun story. It's just kinda like depressing weird.

Mark Horton II: [34:46] I think my craziest, I have two, I have a crack house that I bought that turned out to be an amazing deal. That while we bought a crack house that was in this, it was this little street that was surrounded by all these nice homes. And we were the first one to kind of like delve into this street, and we bought this crack house, and we're still pulling glass out the front yard. But that was a house where we found drugs, we found crack, no meth, because if it's meth we have to disclose, it was all crack. HPA cop, someone was able.

Mike DeHaan: [35:18] On record, on Yeah, record, no

Dan Austin: [35:21] he tested it.

Mark Horton II: [35:24] I think we found a gun in the crawl space, just rusted out. So that would probably be the crazy We had to gut that whole house. That would be kind of the craziest thing that we've ever really gotten into. I mean, I get into tenant disputes all the time. I get into issues with Airbnb tenants. We've had everything from porns being shot at our Airbnb's Nice. Paid for parties where 160 people were there. We had to call, like, the police had to be called because they were doing donuts. I don't know. I think I'm because I've seen so much because of the different hosting, oh, this was all just another Saturday for me. You're just jaded, right?

Mike DeHaan: [35:58] Yeah. What's your craziest tenant dispute that you've had? Oh my god. That's the one that immediately comes to your mind, but you're like, fucking Shannon. Like, I will always remember.

Mark Horton II: [36:07] Oh, I already know who it is. They left the property early, trashed it, reported us to like the real estate commission because we didn't give them the security deposit back, we came back clear. Then somehow we believe, we believe someone broke in afterwards and flushed a bunch of toys down our toilets to clog them up while we were re renting it, kicked in the door.

Dan Austin: [36:31] It was my son, he came over and did that.

Mark Horton II: [36:32] Don't know who it was, they completely trashed it, then they're, now they're trying to sue us because we didn't get them back, though after we came back we were clear because we had eventually evicted them, so we weren't gonna pursue them in small claims, but now that they're already paying for us to go to small claims of the lawsuit, we just dropped the counter suit. So I mean, that was kind of the whole situation. Yeah. Nice. I'm a little bit more hands off on that one because that's an LLC that I only I own with partners. So but that's probably the craziest one right now.

Dan Austin: [37:00] An active lawsuit? That sucks.

Mark Horton II: [37:02] Yeah. Yeah. I don't know if it's active just yet,

Mike DeHaan: [37:04] but there's

Mark Horton II: [37:05] paperwork being sent back and forth from attorneys.

Mike DeHaan: [37:08] Yeah. Everyone's everyone's threatening each other. Everyone's got their their fists up ready to go. And then just like every other thing, it turns into nothing.

Mark Horton II: [37:15] It's gonna cost more over the $1,500.

Mike DeHaan: [37:19] That's a game though. Right? That's literally the game and the lawyers are sitting there going, yep. Just keep tapping up that bill.

Dan Austin: [37:26] Yeah. Exactly.

Mike DeHaan: [37:28] Alright. Second question, what is the number one tip you would have for a small time real estate investor looking to take their business to the next level?

Mark Horton II: [37:36] Oh, understand your weaknesses. Be able to walk through it, but don't be great at it. There's no reason to waste your time on perfecting your weaknesses. Understand where your capabilities are, don't be arrogant, and outsource it to someone else, once you understand a little bit of it. Be able to kinda talk it, you at least understand what they're saying, but outsource it. Don't waste your time. Lean into what you're good at. Kinda bring up your weaknesses, but outsource it to someone who is proficient at it. That is the first thing you're

Mike DeHaan: [38:06] Good advice. And I think a great bit that you added on when you're talking about that earlier as well as you pay those people what they're worth. There's like this thing with like, I don't know if it's because we always have cash crunch issues in in real estate or what it is. You have so many people we talk to, and they're just trying to figure out how to not pay people anything.

Dan Austin: [38:23] Yep. That goes back to the idea of like, you have two ways to make more money. One is reduce expenses, or grow your revenue. As a business owner, get your ass out there and grow your revenue. Pay the people what they're worth.

Mark Horton II: [38:32] Yeah. I explained to my team all the time, or downtime, but when we talk, I was like, you'll always eat great at my table, but when my table, I'll eat nothing, so you guys eat great, but when there's a surplus, I'm gonna eat really good. It's gonna be my surplus.

Dan Austin: [38:46] Alright. That's a good way to put it.

Mike DeHaan: [38:49] Call is called capitalism. That's how it works. Right? If you don't wanna do it, hunt your own dinner, and don't expect it be provided to you. So awesome. Alright. And then last question, Mark, where can people find you, follow you, and reach out to you?

Mark Horton II: [39:01] Yeah, follow me on Facebook and Instagram at markhortenii or the second, Pineland Property Management, Instagram as well, and Facebook, both of those. And yeah, reach out to me on pinelandpropertymanagement.com, Those are kind of the best ways to get at me right now. And I am still part of the five pillars team with Shelby Osborne. I'm one of her OG agents she ever brought on, so I've been with that team since she really started with eXp. Pete. And I still do do sales and listings through eXp at this time.

Mike DeHaan: [39:32] Cool. I love it. You said Mark Horton underscore I I? Yep. Well, I thought you would follow. And yeah, is that a Belgian Malinois,

Mark Horton II: [39:38] is that your dog? No, German Shepherd. German Shepherd. Some asshole left him, called us, said, Hey, he's moving out of our house. We showed up, that dog was just in the house.

Dan Austin: [39:49] Oh man.

Mike DeHaan: [39:50] Oh, that's too bad. Dang.

Mark Horton II: [39:51] Yeah, became full. He left all the paperwork, AKC, the stuff. Didn't even tell us. I just walked in there, was a dog called, he's like, yeah, you can have one if you want. Was like, can you put that in writing? He said, sure. Puts it in writing in the email, so I took him and got him shipped and everything, now he's at my house.

Mike DeHaan: [40:07] Nice, beautiful

Dan Austin: [40:08] dog. Yeah, it is a good dog.

Mike DeHaan: [40:09] Yeah, the German Shepherds, Belgian Malinois, that's like the most like SF dog ever. Yeah. They can sniff drugs,

Dan Austin: [40:17] they can kill people, you know, you just gotta I have a little bit of

Mark Horton II: [40:20] love showing up with him to houses, because he goes on a lot of the calls with me, and I could just roll down the window on my F-one 150, and his head just sticks out. And I know he's just looking like kinda stupid, but there's a lot of people that are going like, oh, hey, he just has this bad head just

Dan Austin: [40:34] Like why is he looking at me that way?

Mike DeHaan: [40:36] Yeah, right.

Mark Horton II: [40:36] He just wants to play ball, but they don't know that. Yeah.

Mike DeHaan: [40:38] Yep. Awesome. Well, Mark, thanks so much for coming on the show, man. We really appreciate it. And you guys, if you are interested in growing your property management business, or you wanna hear some pretty awesome military

Mark Horton II: [40:49] stories, you should hit

Mike DeHaan: [40:50] up Mark on Instagram. You should him up follow. Because he had some off the record stuff that he told us before the show.

Dan Austin: [40:55] And you can't ever know.

Mike DeHaan: [40:56] You can't ever know about it, but if you change some digits, he'll probably hop on a phone call and give you Yeah. Give you some breakdown on things.

Mark Horton II: [41:02] Call me on signal. Exactly. Yeah. Signal.

Mike DeHaan: [41:05] There you go.

Dan Austin: [41:05] There you go.

Mike DeHaan: [41:06] Or whatever the Trump one is that like no one's supposed to track. I don't know. Have no idea. I don't media.

Dan Austin: [41:13] Truth social, whatever. Because I don't know.

Mike DeHaan: [41:15] Yeah. But people come on these shows because they want you to engage with them. So don't be shy. Reach out. Shoot them a follow. Shoot them a DM, and he'd probably be happy to help you out with whatever you're working on. So run on. Well, Mark, thanks so much again for coming on the show. And everybody, thanks for listening. We'll talk to you guys next week. Thanks,

Mark Horton II: [41:30] Mark. Thanks

Speaker 3: [41:33] for listening to Collecting Keys. Drop us a five star review on iTunes and send us a screenshot to Mike@collectingkeys.com for your chance to receive a free collecting keys t shirt.