How I Built My Real Estate Empire at 18: Secrets to Success Revealed

Stephen Schmidt (00:02.874)
Welcome to the show where we interview the nation’s leading real estate entrepreneurs It’s your host Stephen Schmidt, and I’m back at it again like a back hab or bad habit. Hope you guys are gonna Enjoy this show. I’ve got a real special one in the studio for you today. I got Eric Martel in the house He bought his first apartment building at 18 no money down and since he’s completed over 85 million dollars in real estate transactions and has fully integrated

his business into taking people from zero to hero in real estate. He’s the founder of Martell Turnkey flip system and then also Red Brick Equity. And he’s going to have a bunch of nuggets for us here today. He’s been really heavy into the game the last decade and we’re going to get off to a great conversation. Just remember before we do that at Investor Fuel, we help real estate investors, service providers and real estate entrepreneurs.

two to five X their businesses so they can build the businesses they’ve always wanted in order to live the lives they’ve always dreamed of. And on that note, speaking of financial independence, which I know you’re all about, Eric, welcome to the show.

Eric Martel (01:08.354)
Well, thank you for having me, Stephen.

Stephen Schmidt (01:10.636)
So you’re 18 years old, you buy your first apartment. Most 18 year olds, that’s not even on the radar. what, maybe give us a little bit of backstory to how you landed in that deal. What got you started in this business? And then when did you really start taking it serious here in the last 10 years to really scale and go to where you’ve been at today?

Eric Martel (01:33.518)
So when I got started, that was really my rich dad, poor dad moment. So my father was working at the aluminum factory, you know, like the regular nine to five, and not much career progression or anything like that, living paycheck to paycheck, and not much savings really. And really relying on the company to provide the pension eventually when he’s like 65 or older.

I knew I didn’t want to have that when I was talking to my father. was also like, I always wanted to be an entrepreneur. And I was inspired by, you know, things that I saw and I could tell that there was like, for example, there was like a food truck guy, the guy that started the food truck. And, you know, and then that food truck basically where he was basically built a restaurant from that. And then he had the small restaurant chain and then he had a store.

in the mall and then he had like, and then when I talked to my parents about that, they said, well, he must be a crook, like he’s cheating or something like that. Like, no, maybe you don’t know the rules of the games. then, but I was like nine years old and I could already see that there was a gap in knowledge somewhere and that I really couldn’t, I needed to find another source of information. So I would throughout the high school and all of that, I kind of like,

Stephen Schmidt (02:57.261)
Hmm.

Eric Martel (03:01.335)
gravitated towards people that were also very business minded, like professors and teachers that I had. And I was very, you know, great. This was a great experience for me. Like I really met a lot of great people. Eventually at university, I met my, the rich dad of my rich dad, poor dad kind of encounter. He was a real estate investor. He was a community college coach. He had built a 36 unit apartment building and he was looking at buying a

building a mall, a shopping mall. like, you know, I was like, wow, like, like this guy’s a community college teacher and he’s not any, he was not any smarter than my father. He was just has had the right smarts, the right knowledge and the right, you know, discipline to get things done and get things moving. And so that was really inspiring. And I was just like, I knew I said,

Okay, well, just, wanna know, I wanna know everything that you know. I wanna buy an apartment building and all of that. How do I do that? And he said, how much money do I need? And I was thinking that maybe I could convince my father to do something, to give me some money or him or whatever. But anyway, so after a long time, I eventually bought my first apartment building. Took me like probably like six months to nine months to find one.

and then that would take no money down. So basically a mortgage from a credit union plus the rest of it, what would have been the down payment was loaned by the seller. So that’s seller financing on top of that. And it was still cash flowing. So no money down and still cash flowing. And I think it was cash flowing like 200 or $300 a month or something like that. So that’s kind of like, that was the first.

the first one that I did and I was really, it was really a test for me that, this can be done. Like I could do this. I could create something or buy something that is actually cash flowing and is generating income. I tried to replicate that after that, but I really, it was very hard depending on the cities that I was in. Like I was in Montreal, I went to Toronto and all that. And these big cities, it’s very hard to find deals like that are cash flowing.

Eric Martel (05:27.532)
so, and then I eventually I went to San Francisco and all that and same thing, California, you know, you have to, it doesn’t, doesn’t cashflow on you to put a lot of money into it. And then you just, decide how much you want cashflow, then your return is not that great. and then it took me like a while to kind of like, did all kinds of different businesses and then it took me a while, to kind of like get back into it. And I said, well, I need to figure something out.

I was an independent consultant also and I could see that my time is money. If I spend an hour, I bill an hour. If I don’t work an hour, I make zero dollars. Going on vacation was very stressful because I was dishing out money for the flights and the hotel and I was making zero dollars. These vacations were very expensive in my mind.

So I knew I had to find something else. I had to stop trading time for money. I had to build passive income and I tried all kinds of different things, different businesses. But then I came back to real estate at that point. I couldn’t do real estate in California. So I had to go and do something out of state. So we started looking at all kinds of different markets and we went to the Midwest. That’s where the

Stephen Schmidt (06:27.031)
Sure.

Eric Martel (06:54.699)
The data was driving us. So we looked at Memphis, we looked at Cleveland, we looked at Detroit, St. Louis, and this is basically where we focused. The first house we bought was in Memphis, Tennessee. We paid $40,000 for it. We put $5,000 in rehab. It is rented for $850, and it was cash flowing like $300.

Stephen Schmidt (07:19.373)
Mm.

Eric Martel (07:22.443)
three, yeah, $300 a month or something like that. And then, uh, we refinanced it after that, but it was, but it had increased in value because of all of that. And we were able to, got all my money out that I had invested. Plus I had an extra $5,000 in, uh, in my bank. So I had $5,000 more than I started in, and I had a cash flowing asset on top of that. So it was just like.

Okay. What am I missing? Like I just created money. I created wealth like from, uh, and you know, so it was like, uh, okay. Well, I said, I need to do two more. And that’s what, uh, we did two more properties. Obviously we didn’t find, we don’t find unicorns, uh, like that all the time where you can refinance and get all your money out. Um, but, uh, we found a lot that were pretty close to that and they were really, uh,

You know, they really worked out great. And that’s kind of like where we started at the beginning. We were only looking to do multifamily rental, single family rental portfolio for our family. In fact, it used to be the company used to be called Martel family realty. And, but then as we were telling people, my friends and family say, Hey, you know, we, we bought a house in a rental property and

In Memphis, I said, what? Memphis? Why Memphis? Like how much did you pay for that house? $40,000. $40,000. Like, you know, you’re talking to people in California telling them that you bought a house for $40,000. This is like, what is that? Like it’s a shed. It’s in my garage, cost $100,000. Now you bought a house in out of town for 40. You’re being scammed. There’s something wrong. Blah, And anyway.

Eventually, a lot of people, some of the friends, say, well, you know, we’ve done a couple of houses, like two, three, 10. And then they say, well, you know, there must be something to it. Like, is there a way, can I invest in it? Can I, can I do a joint venture? Can I buy the house at the end? And when it’s kind of like turnkey. So that’s kind of like, oh, maybe there’s a business doing that.

Eric Martel (09:46.63)
That’s when we launched Martel Turnkey and that really took off very rapidly.

Stephen Schmidt (09:53.996)
Hmm.

And so.

Eric Martel (09:56.618)
Yeah, so that’s kind of like the beginning of that. And then since then, like we’ve done a lot more than we did multi-family after that. We were pretty well known in the markets where we invested, especially in Memphis. Then we had realtors call us and say, hey, are you guys interested in apartment buildings? So then we started buying apartment buildings in Memphis. We used to have five apartment buildings. We sold like four of them. We still have one right now.

And that’s kind how it drew and we always had like a big good relationship with with our investors and keeping them in the know about what we were doing on social media. We had like email kind of like newsletter that we would send and showing them what was going on, what was new in the in the market. And also talk a lot about financial independence, how to achieve financial independence.

I have tried all kinds of ways to achieve financial independence. really, real estate is the best way to do it for multiple reasons. Leverage being one of them, appreciation, cash flow, and tax advantages. So all these four things at the same time is you don’t have that with any other investment vehicle.

Stephen Schmidt (11:12.173)
Sure.

Eric Martel (11:20.297)
So that’s the ultimate, in my opinion. And it’s simple to understand. You don’t need to have like a math degree or a quads in stock market to kind of analyze data and have like special data access and math model and this and that to invest like some of the pros do in the stock market. It’s very simple. You buy a house, you rent it.

Stephen Schmidt (11:47.222)
Yeah, you bet. Totally with you there. And so, I mean, really what it sounds like is you were just doing this for yourself, trying to gain your own financial independence. And then over time, like so many people that have success in the business, you’re a real operator building a real business. And then people are seeing like, hey, they’re doing something. We should probably get in on it. And then that led you to starting Turnkey and then Red Brick Equity over time. And so like, at what point did you in that process

come to the realization like there’s also an impact that I can have on other people through this, not just for my own family.

Eric Martel (12:24.893)
Yeah, I mean, it was very early on because a lot of people were then asking me, said, like, you how do I, you know, I want to achieve financial freedom because eventually what happens that I sold my house and I just doubled down on the Martel turnkey. So I just basically sold my house, took all the profits and then I rented another house. And then again, so they thought I was crazy when I invested in Memphis and Cleveland and Detroit.

Now when I sold my house to invest there, then they were, they were sure that I was insane. But, uh, you know, I shared the math with them and said, it doesn’t make sense. Like I make so much more money investing in the Midwest. It pays for all my living expenses. And I was just like, I don’t need, I don’t need to work anymore. Um, and, uh, even though I was working still at the time, I w I wanted to finish a gig that I had with a pharmaceutical company.

And I would tell people, said, you know, I don’t need to work like I’m doing this for you guys and stuff like that. And then, so just to finish that project and after that I’m done. And so it really caused a lot of people to think about how can this guy like me doing this? Like he was independent contractors with, with me, he was managing, he was working in the same team and now he’s like, he’s financially free. He doesn’t need to work and all that kind of stuff. So.

So that’s really triggered a lot of people talking to me about how can I do that? Like I want, I want that as well. and when you’re working with a lot of independent contractors, they all thinking the same things. Like one day, if I’m sick for a month, I don’t get paid for a month. if you know, whatever, like so, and you know that you can’t be working forever. Eventually you’re going to have to stop working. So, so yeah, so

A lot of people were asking me that and I kind of that’s kind of like when the light went on and I was just like, well, I need to do more things. I need to help them out. I’d buy the turnkey rental properties and kind of like build a strategy around that. I wrote a book also called Stop Trading Your Time for Money and basically outlining exactly what people need to do. Then some more people were interested and

Eric Martel (14:52.316)
But still people didn’t do it. You know, like I wrote the book, I said, this is exactly what you need to do. Right. And then this is how you need to find the market. This is how you need to find the team on the ground. This is all you need to analyze deals. This is where you can get the money to buy these deals and finish the projects. I was telling them, I told it’s still the book is still on Amazon. Like everything is in there. So you follow that you’re going to be, you’re going to make it.

But the problem is that people, they don’t have the discipline or they don’t have the, I don’t know what to say, but they don’t follow through. They want it, but they don’t want to put the effort. They don’t want it enough, I think, really put the effort to make it happen.

Stephen Schmidt (15:40.737)
They want the result without having to pay the price.

Eric Martel (15:43.876)
Well, exactly. I forget who was it. Like a lot of people are jealous of your success, but they’re not jealous of the work that you had to do to get there. So, yeah, everybody wants the result, like you said, and, but you know, they don’t want to do what it takes to get there.

Stephen Schmidt (16:01.453)
Because ultimately if people were disciplined to do the things that got them great results, I mean at the end of the day we’d be walking around and everybody would have a six pack abs and be shredded, right? Because it’s simple. It’s just eat right, eat less, work out more, right? Eat less, move more, but so many people don’t want to do the basic things that they know are good for them or the things that they just want that result without having to put the work in for sure.

Eric Martel (16:11.556)
Yeah, exactly. Yeah.

Eric Martel (16:26.862)
That’s right. Yeah. And we have a lot of people that say, but I don’t have time to do that. You do have time. It’s just, you’re spending your time on others. need to prioritize the tasks that you want to do and you find the time for them. And then the tasks that are not so important, then don’t find time for that. Don’t find time for TV. Don’t find time for tick tock. You know, prioritize what you need to do. You’re going to find time for everything. You find time for eating. So there you go.

Stephen Schmidt (16:48.621)
Sure.

Right? Yeah. I’m 100 % with you on that. That’s so good. You know, one of the most valuable things that I did, I hired a business coach three years ago now. And one of the first exercises that he made me do for the first two weeks is I had to track every 15 minutes of time that I put in. And I’m telling you, rigidly, every 15 minutes and then put it into blocks of…

Eric Martel (17:11.96)
Mm-hmm.

Stephen Schmidt (17:18.731)
This is something that’s a money making activity. This is something that’s not. This is, know, family time. This is sleep, et cetera. And it was one of the harder things I did because, I’d go three hours of work and to be like, what was I doing for that 15 minute block two hours and 45 minutes ago? But it really puts in perspective and helps you to find blocks where the people that are the busiest and I don’t have time for this. I don’t have time for that. Well, when you look at it, you also spent six hours this week scrolling on Facebook. So

Eric Martel (17:32.101)
Yeah.

Eric Martel (17:45.827)
Yeah. Yeah.

Stephen Schmidt (17:48.898)
to that point, like there’s six hours that could have made some real difference towards either your education or putting in some form of work to actually get where you want to go. So I love that.

Eric Martel (17:58.156)
Exactly, exactly. mean there’s only one currency and the currency is time. If you have to look at your time, you have to look at how you spend your time and making sure that you spend time on the right things, you know, so to achieve the goals that you want to achieve, then the rest is going to come through. mean, your lifestyle, your the money that you need and all this all going to come through. But you have to you have to focus on the time.

Stephen Schmidt (18:04.173)
Yeah.

Stephen Schmidt (18:27.073)
Would you trade all the wealth that you’ve accumulated today to be able to go back to your mid-20s?

Eric Martel (18:35.617)
yeah, with the knowledge that I have, absolutely in a minute. my God, that would be no problem. That’s like, yeah, absolutely.

Stephen Schmidt (18:41.399)
Sure. Yeah, it’s I think it was Hormozi that said, you know, when I was in my 20s, I wanted wealth. And then when I hit my 30s and even more so for people that are older, it’s like when you’re in your 20s, you want money. When you’re in your 30, you want to be in your 20s. Right. So because currency, to your point is time being the only currency we have the the.

Eric Martel (18:57.472)
Mm-hmm, Exactly, exactly.

Stephen Schmidt (19:05.993)
unfortunate side of that coin is it’s the only currency we have that we also don’t know how much of it we have left. 100%.

Eric Martel (19:12.099)
Yeah, exactly. Yeah. Yeah. So you don’t want to, you don’t want to waste it, you know, and you want to take advantage and you don’t want to delay. You don’t want to wait till something happens and you know, so.

Stephen Schmidt (19:17.087)
You bet.

Stephen Schmidt (19:23.981)
So to your point there, I mean, you’ve created some massive success for yourself in this space and now you’re helping other people to do the same thing. What?

What is the next 12 to 18 months look like for you and what is the next five to 10 years look like for you? What’s the legacy play or what stage of your business are you in at this point?

Eric Martel (19:42.573)
Mm-hmm.

Eric Martel (19:49.028)
So think really the, Martel Turnkey is continuing. So we have great success with that. We also launched like a flip system a couple of years ago and flip system is a coaching program, but it’s not just a coaching program. So we have the regular courses, obviously the coaches, but we also have an application that we have built and we have a property marketplace. And basically you have all the tools that you need.

to acquire properties, distress properties, renovate them, rent them out, and then refinance them or sell them. so that’s what Flip System does. The biggest problem that people had when they wanted to invest out of state or in of the markets is to build a team on the ground.

So we deal with a lot of people that live on the coast, know, California and you can’t invest in California. So then you would invest out of state, but then you don’t have the team on the ground. How do you find the team on the ground? So instead of people don’t want to spend the money calling a hundred realtors. And so we basically connect them with our team on the ground, people that we have vetted, some of the people that we’ve worked with for like 10 years in these markets. And then we introduce them.

to the realtor, the property manager, and the contractors, and then they can do the projects, which is kind of like the biggest, the biggest constraint that people have when they want to invest out of state. So now you have no excuse. Now you have the, if you don’t know anything, we teach you how to do it. We give you a tool to analyze it, that same tool for everybody. Then we have a coach that can help you through how to analyze the deal, making sure that you’re getting into the right deal.

looking at reviewing your statement of work, your inspection report, then kind of getting you out of trouble if something happens. I it happened a few times that our coach, our coaches said to a client and says, no, don’t do that deal. You have to walk away. But they felt some kind of guilt for because the realtor has worked really hard for the deal and then they felt

Eric Martel (22:10.847)
but you know, the realtor really spent no just walk away. It’s like it’s going to be another deal. So we helped a lot of people get not get in trouble and making sure that you’re doing the right deal and all the way through, you know, through the construction through the the exit as well. And it’s all within the system. So this is this is I think this is great. We have like 500 investors right now that are on that.

And they’ve done over like less than 12, 12, 18 months, they’ve done over like 200 projects. And so things are doing very, very well. So that’s kind of this. then I’m imagining the people that are doing flip system, they’re building their capital, their wealth, they’re getting some additional things with Martel Turnkey. And eventually they become accredited investors.

And then they can join us with the Red Brick Equity Fund and invest in real estate with us, cash-throwing real estate rentals or apartment buildings, commercial real estate and all that kind of stuff. So that’s kind of like my plan. We try to do like crowdfunding, but people are not that familiar with crowdfunding. So we kind of let DigiDat for now, maybe later on. But really that’s kind of what I’m hoping for people is that.

Stephen Schmidt (23:31.17)
Hmm.

Eric Martel (23:37.804)
They built some passive income to a point where they can come and invest with us on Red Brick Equity.

Stephen Schmidt (23:45.069)
Yeah, 100%. Now, so let’s say somebody’s wanting to get started. Is your book still a pretty relevant source of information where somebody could even just get started to learn more about you?

Eric Martel (23:50.391)
Yeah.

Yeah, absolutely. Absolutely.

Stephen Schmidt (23:55.383)
And what’s book? I want you to plug that while we’re here.

Eric Martel (23:57.6)
Yeah, it’s called stop trading your time for money.

Stephen Schmidt (24:00.501)
Stop trading your time for money by Eric Martel. And you said they can get it on Amazon? Awesome. Well, we appreciate you coming on to the show here, Eric, and dropping some nuggets for us and giving us your story. if you would like, go ahead and tell these folks where they can connect with you for more. Learn more about what you’re working on, et cetera, as they maybe go buy your book. And then where else can they connect with you?

Eric Martel (24:02.274)
Amazon, yeah.

Eric Martel (24:11.745)
Mm-hmm.

Eric Martel (24:24.086)
But on social media, I’m everywhere under Eric Martel official. so Instagram, Tik Tok, I also on YouTube. I have a channel on YouTube. Actually, I have a free four hour course on real estate investing. If you don’t like reading the book, you want to add the course, or as a, know, after you read the book, do the course. but I’m really, I kind of like going again, like over.

what you need to do in order to invest in real estate successfully, build a passive income portfolio, so that eventually you can just be an investor and just get more passive income.

Stephen Schmidt (25:02.327)
you bought. Well thanks so much for being here folks. I hope you got as much value out of this as I did and I know if you got as much as I did you have and we appreciate Eric and his time and we’ll see y’all in the next episode.

Eric Martel (25:14.23)
Thank you, Stephen.