Chicago Real Estate Investing Lessons From Fraud, Bad Contractors, and Distressed Properties

Jeffrey Ma (00:00)
So what I’ve really come to learn if you’re really in this business, it’s not a if but when you’ll get screwed and it’s it’s part of the business roll with the punches like

Cody Crabb (00:06)
Yeah.

Jeffrey Ma (00:11)
you like there’s some people who are afraid to make a mistake or afraid that something like that will happen to them. ⁓

Cody Crabb (00:17)
Mm-hmm.

Jeffrey Ma (00:20)
but what’s the cost of staying where you are for another five, 10 years?

Cody Crabb (01:56)
Welcome back to the Real Estate Pros podcast by Investor Fuel. I’m your host, Cody Crabb. And today I’ve got Jeff Ma, owner of Jeff Ma Realty out of Chicago. Jeff is highly active in single family investing, working across wholesaling, fix and flips, creative finance. And over the past couple of years, he’s building some real momentum in the Chicago market. Jeff, I’m so excited to talk to you. Thanks for hopping on.

Jeffrey Ma (02:18)
Cody, absolute

for being here. I really appreciate it, man. I’m just excited to share.

Cody Crabb (02:24)
Yeah, I’m excited too. You bring a lot of energy and I love that. It’s my first meeting of the day so I kind of need it. ⁓ So, yeah, let’s do it. So as far as your story, you’ve got a pretty cool story ⁓ and unlike some of our guests, it bumps up like to right now. The story’s kind of still happening but the good part, the ramp up, the final, not the final part, hopefully not the final part. ⁓

It’s getting to the good part right now. So I’d love to hear kind of, ⁓ you know, how did you get to where you are right now? ⁓ because you did, I mentioned this before, you did a brief version of this ⁓ as we were talking. And I was like, that is the most succinct, awesome summary I’ve ever heard of like someone’s ⁓ complex backstory. So yeah, no pressure. Yeah, go ahead and yeah, let’s shoot it over here.

Jeffrey Ma (03:14)
All right. Awesome.

⁓ How I got into real estate, just like anybody else, think most people, rich dad, poor dad, I think most people are just in a financial distressful situation where they’re looking to get to that next level. So in 2008,

Cody Crabb (03:22)
Yeah.

Yeah, or they go,

all the rich people I’ve ever heard of or who what are they investing? Yeah, exactly. Yeah Yeah

Jeffrey Ma (03:33)
in real estate. was one of those people.

2008, we, you know, family lost our home. Absolute devastating. And just like anybody, right, you’re just trying to figure out how to make money figure. And finally, I go to a real estate seminar. This was a three day seminar, Than Merrill, if you know who he is, fortune builders, right? They’re like, I learned it blew my mind. They talked about flipping, holding the

briefly talked about wholesaling, didn’t really talk that much about it, and I’m just like, okay, cool, I wanna get into this. I can make 100 grand potentially on a fix and flip, and here I am barely making 30 grand a year. I’m like, okay, I’m in. And then they’re telling me the tuition’s 55 grand. I’m like, hmm, that’s not gonna happen, sir. Well, why don’t you ask your parents? They have money, they have credit. No, they’re fucking broke as well. We just lost our home.

Cody Crabb (04:17)
Yeah. Yeah.

Yeah.

Jeffrey Ma (04:25)
And

it wasn’t until 2016, my friend asked me, hey, do you want to get your license? And I’m like, yes. I wanted to get into real estate. I didn’t know how else. So I got my real estate license. In fact, I bought a Groupon crash course for $367. Yes. I’m like, yes, I my foot in the door, did the 90 hours of class, passed with flying colors. And I’m like, let’s go. The first two years in real estate,

Cody Crabb (04:42)
That’s so specific. I love that.

Jeffrey Ma (04:55)
made absolutely nothing. In fact, I lost money because I had to pay association dues. had to pay gas money. The amount of time that I wasted going on showings that I had no business going on. Man, it’s just because when you get your license, I feel like most people eventually learn. You don’t learn anything about the business. Hell, you don’t really know that much about real estate. You just know how not to get arrested or in trouble. That’s what the issue is.

Cody Crabb (05:20)
Sure, yeah. Yeah, it’s the legal stuff,

yeah.

Jeffrey Ma (05:24)
legal stuff. so first two years didn’t make any business. And finally, the foreclosure back in 08 finally fell off and our family was finally able to buy a home, which is literally this home that I’m standing in right now. And 2018, 10 years later, we’ll finally be able to buy a home. Think about that. Some families that get in foreclosure lose their home. It’s probably going to take them at least 10 years to get back on their feet. And 2018, closed this first deal.

Cody Crabb (05:37)
wow.

Yeah.

Jeffrey Ma (05:54)
Most amount of money I’ve ever seen in a check. was like $3,600, I think, like just under $4,000. And I’ve never seen a check for more than $1,000. Just imagine that. And I know there’s a lot of people out there that can imagine that. two years go by, I’m thinking I understand the business and y’all know what happened, 2020. And if you didn’t have your…

Cody Crabb (06:20)
Did something happen in 2020?

Jeffrey Ma (06:23)
don’t know, right? Pandemic.

Cody Crabb (06:23)
mean… Yeah, I must have missed that one.

Jeffrey Ma (06:29)
And I think anyone that didn’t have their feet planted got decimated. There’s people that took advantage of 2020 that knew what to do. But for the rest of us, we were scrambling again. I was back. Our family was back on this loop of losing everything all over again.

Cody Crabb (06:35)
Yeah, for sure.

Yeah. That must’ve been, that must’ve been devastating. Cause it’s like, you’re like, I just got on her feet a little bit. Yeah. Yeah.

Jeffrey Ma (06:53)
And my family’s also in the restaurant. yeah.

I’m like,

I’m making, I’m going in the direction that I want to go. And complete stop. So our family has always been in the restaurant business. We had a restaurant in Chicago. We have a restaurant in the North shore of Chicago. You know, we did our best to survive, but eventually we’re like, fuck it. We’re opening the doors. We’re opening the business. Let’s just say we got slapped hard in the hand. Chicago hit me with $50,000 in…

Cody Crabb (07:04)
Yeah.

Wow.

Jeffrey Ma (07:29)
fines and eventually they made me voluntarily revoke my own business license and we had to close down that business because

Cody Crabb (07:38)
I didn’t even

know that could happen. That’s crazy.

Jeffrey Ma (07:44)
I only had to pay $1,000. It can’t. I only had to pay $1,000 in fines, but essentially you get squeezed out to a point where you’re not making any money. You’re holding on to your life. You’re still paying rent. You’re still paying taxes even on stuff that you’re not really selling. It’s crazy. We have a beverage tax. We have to pay tax on soda can. Don’t give me.

Cody Crabb (07:45)
You’re like, you’re like, it can’t. Yeah. Yeah. Yeah.

Yeah.

Yeah.

You’re like

don’t get me started

Jeffrey Ma (08:13)
And

then mom actually actually had $40,000 in back rent and back taxes as well and she didn’t tell me that she was like in a really tough spot and I’m like, wow, what are we gonna do? Like I’m at a point where I’m not making that much money in real estate. I’m your typical real estate broker, maybe making 30 to 40 grand a year. And that’s before taxes, right? That’s before taxes and

Cody Crabb (08:18)
⁓ wow.

Yeah, no kidding.

Yeah.

Jeffrey Ma (08:42)
I’m just like, what am I gonna do? I’m driving DoorDash to make ends meet. I’m working 16 hours a day. I am busting my ass off just to survive, just to pay off the minimum credit card payment. You’re not even making a dent in your credit cards. All the credit cards are nearly maxed out and you’re just, you feel like you’re suffocating. You’re like, what am I gonna do?

Cody Crabb (08:55)
Yeah.

Yeah.

Yeah, and you watch

that you watch that the the what’s the interest just start to pile up and you’re like I can barely even touch the minimum. Yeah, I know I know that feeling

Jeffrey Ma (09:12)
Yeah, you get to a point where like, well… So, you get to a point where like, uh, rent or this bill. Well, I gotta pay rent. Fuck this.

Cody Crabb (09:19)
Yeah, well this one

will get this shut off here so if I wait three more days I can yeah like that’s that’s not good math to be doing.

Jeffrey Ma (09:25)
Yeah, you’re trying to juggle

like all that ⁓ But I remember sitting in my car one night. It was like I counted the days 96 days straight of 12 to 16 hour days non-stop like considering this is the restaurant business. I’m still going out on open houses like ⁓ showings I mean I’m still driving door dash in between just to make ends meet and I’m like man. This can’t this can’t be the rest of my life, please. my gosh

Like no one should be working this hard just to survive. And I remember in that moment, it’s just like, what if you could just put all your energy into something that actually matters to you? What if you could put all your energy into something that’s going to move you forward in the direction that you wanted to go? And that night it was just like the universe was just saying, hey, Jeff, you’re not going through all this for fucking nothing.

Cody Crabb (10:07)
Yeah.

Jeffrey Ma (11:06)
And a week later I saw an ad on Facebook.

A wonderful mentor of mine and friend, name is JamilDamji. ⁓ He had a mentorship course called Astroflipping on wholesaling real estate. Mind you, I heard about wholesaling real estate almost like eight years ago before this happened, and I didn’t really know what wholesaling was. And that was my real foot in the door. He said people were making 10, 20, 30 K.

checks on a single deal and I’m like, man, I’m making like two, three, four, five grand maybe on these commissions. And you’re telling me I can find distressed properties that people need to sell and then sell to someone that’s willing to pay me five, 10, 20, maybe upwards of 30, depending on how well I negotiate, I’m in. I want to learn this. I maxed out the rest of my credit cards. It was like $7,800 to buy this course. Six months later, I finally get my first wholesale.

Cody Crabb (11:56)
Yeah. Yeah. Yeah.

Wow.

Jeffrey Ma (12:07)
And I’m like, all right, this is it. This is why I got in the real estate. I wanted to learn the investment side of it. I wanted to invest for myself. I didn’t get my real estate license so I can do open houses. I didn’t do my real estate license so I can be a glorified door opener. I got my real estate license because at the time I didn’t know how else to get into real estate with the no money that I had. And wholesaling real estate was finally, wow, now I was beginning to understand a little bit about the

Cody Crabb (12:24)
Yeah.

Jeffrey Ma (12:38)
flipping side of the business. was beginning to understand a little bit about the construction side of the business. was beginning to understand like what does it really take to take these homes that need to be rehab? These homes that are in some areas of Chicago specifically, like if they don’t get rehab, the neighborhood continues to deteriorate. And it really becomes

Cody Crabb (12:56)
Yeah, people don’t really talk about that. In

some ways, you’re kind of doing a service because you’re helping the community too.

Jeffrey Ma (13:02)
yeah! I’m

helping communities that most real estate agents don’t want to touch.

Cody Crabb (13:09)
Yeah, yeah, true.

Jeffrey Ma (13:10)
My very first listing happened to be in a rough part of Chicago called Inglewood. was a two-flat, needed a full… So here, fun thing here in Chicago, we don’t call them duplexes, triplexes, quadplexes. We call them two flats, three flats, four flats. We have a lot of flat roofs. But yeah, here we don’t call them duplexes. We call it a two-flat. It’s a two unit. So two-flat, need full-gut rehab. We listed it for 35,000 because…

Cody Crabb (13:26)
I did not know that. Interesting.

Jeffrey Ma (13:40)
It’s in a rough part of the neighborhood. ⁓ Get it on a contract for 33, come to find out the water line is connected to the neighbors. So someone back in the day dug underground and the water department knew this. That’s the funny thing. But it’s just like, you guys never did anything about it. And we couldn’t get a water certificate, right? A paid water bill in order to transfer title, a clean title. So we’re like.

Cody Crabb (13:54)
Jeez.

that’s even crazier.

Yeah.

Man, you know,

I’ve done this podcast for a while now. could the stories I’ve heard like about things like that, where stuff is you just have situations you happen upon like walls made of like who knows what just with wallpaper on them. I mean, it is crazy what you can happen upon. So the fact that I mean, this is not even this pretty tame compared to some of the stories I’ve heard. like, holy cow. Yeah, geez. How did you even unravel that?

Jeffrey Ma (14:17)
Mm-hmm.

⁓

Finally got a little creative. The next door neighbor, actually the next door home was recently bought. That was also a full good rehab. Approached that agent because at the time I didn’t know that I could have just gone to the buyer. Like a wholesaling taught me like I can find buyers. Finding buyers is actually the easy part, right? Finding the deal is the legwork. But we finally get on a contract, sold it for $18,000.

and I look at my commission, it was like $260. After, because I was still a newer agent too. I was like a 65, 35 split, right? And I didn’t realize I could have charged a flat fee. I charged a percentage on 18,000.

Cody Crabb (15:08)
Yeah.

⁓

gotcha. We’ll see that. I mean, that’s that’s one of those things where you just go like diving into it without really having a whole lot of, you know, handholding or whatever. Those are the kind of mistakes you make right away. So, I mean, yeah, that’s.

Jeffrey Ma (15:25)
Yeah.

That’s what I signed. That’s what I agreed to. So I guess that’s what I make. And you wonder why agents don’t want to go after these properties that are selling for 30, 40, 50, even like a hundred. Some agents don’t even bother when it’s a hundred. So anyways, wholesaling helped me understand like, wow, there is a huge inventory, especially in major cities. Every major city, there’s distressed properties. Pretty much in every city there are distressed properties.

Cody Crabb (15:31)
Yeah. All right. Yep.

Jeffrey Ma (15:54)
And if you’re able to identify them, talk to the seller, have an honest conversation, provide value, right? There’s a lot of stigma on wholesaling because there’s a lot of bad apples. So just like in any business, there’s a lot of bad apples out there that where they are doing almost like predatory tactics, right? But if you coming with a place of service, like, Hey, if you don’t sell this, this is only going to get worse. It’s not going to appreciate like you think it’s supposed to.

Cody Crabb (16:07)
Yeah.

Yeah, yeah.

Jeffrey Ma (16:24)
Because we’re always told real estate will appreciate, real estate appreciate. No, there’s property here in Chicago that sold back in 2006 that’s worth more than it is today.

Cody Crabb (16:35)
Holy cow. mean, and I’m sure that’s, there’s probably a lot of surrounding that too. I mean, there’s who knows what, you know, but, still, I mean, that’s the, that’s important context to know. I mean, it’s not as simple as just, yeah.

Jeffrey Ma (16:41)
Yeah, there’s a lot surrounding that, but.

Yeah, of course there’s some parts of

Chicago, 100%. The appreciated two, three, four times, but some neighborhoods in Chicago, if you bought at the top of the market back in 2006, you’re most likely selling at the same or even below the price today.

Cody Crabb (17:06)
That’s wild. That might be the only time I’ve heard that in recent history. But that just goes to show knowing your market is so key. I talk to people all the time who say, there’s some of these super, super high earning dudes that they’ve been doing this for 45 years and the first thing they say is,

Jeffrey Ma (17:16)
Mm-hmm.

.

Cody Crabb (17:31)
I would never buy in a market that I’m not super confident in. if I, at their level, they’re like, I’m not gonna go the middle of nowhere and buy stuff. Like I just don’t understand. Especially in a place like Chicago. mean, you go like one street over sometimes and you’re like, don’t go there at night, but the other street’s fine. Like it’s crazy how segmented could you be, especially in a big city like Chicago. Yeah.

Jeffrey Ma (17:36)
.

⁓ 100%, 100%.

Cody Crabb (17:56)
Have you kind of benefited from being kind of a local ⁓ in those respects?

Jeffrey Ma (17:56)
100%. It’s funny, I get a lot of wholesalers outside of state and somehow they’re finding me, like, hey, Jeff, I need someone to help dispel my deal. Or some of them are learning novations, so they need an agent to list their deals.

Cody Crabb (18:08)
interesting.

Hmm. Yeah, see I feel like that’s maybe the way to do it. If you’re gonna invest somewhere, you gotta find a Jeff in wherever you are and be like, you’re from here, you’re born down the street. Like, help me out, yeah.

Jeffrey Ma (18:20)
And…

Those are

Cody Crabb (18:39)
Well, because they trust you.

mean, it sounds like they just like, hey, look, I don’t know, but.

Jeffrey Ma (18:43)
Either

as an agent or an investor, like I talked to some sellers like they’re from California or New York and they’re coming to Chicago thinking like, wow, I can buy 10 of these.

Cody Crabb (18:52)
Yeah, seriously. It’s

like tiny New York where everything’s cheap compared to where I live. Yeah, exactly.

Jeffrey Ma (18:57)
everything’s cheap

until you start losing money and they don’t understand it’s just like yeah you if you don’t have local expertise if you don’t have boots on the ground if you don’t know someone that you can trust it’s really hard to build a business in a different state a different city a different area and ⁓ yeah

Cody Crabb (19:16)
Yeah, absolutely. ⁓ Yeah.

Well, so I’d love to hear a little bit about, ⁓ you you talked about before we started, I said one of my favorite things to talk about is kind of failures, not like, ⁓ you I’m, you know what, let’s, yeah, let’s just stick with the word lesson because it’s true. ⁓ And the way I see it, the way I see it, like I could learn from my lessons, my mistakes and errors.

Jeffrey Ma (19:32)
Lessons, lessons. .

Cody Crabb (19:46)
Or I can hear about others and immediately just there might be a tiny thing that I could do differently that would change everything. Perfect example, taking the percentage of the for your commission instead of doing a flat fee. Like ⁓ I’d love to hear you mentioned. I got a good one. So I’m like, all right, I’m buckled in. Let’s do this. Let’s. Even better, yeah, pick, pick the best one. We’ll stick with that. And then I totally want to hear this because I love so I want to hear the story and then kind of.

Jeffrey Ma (20:02)
Yeah, for that time I got two, so…

Cody Crabb (20:15)
what you learned and have changed since this story.

Jeffrey Ma (20:53)
I think I can do both of them. Both of these happened last year in 2025. This is just now. This is in the moment. And finally, I just got an update last week. ⁓ First deal, Wholesaler approached me, told me they had a six unit in an area of Chicago that’s super popular. It’s it’s Westtown, Ukrainian village.

Cody Crabb (20:56)
Okay.

So this is like just now, okay.

Ha!

Jeffrey Ma (21:16)
You don’t find six unit brick properties like this ever for sale and this thing needed a full gut needed everything the guy approached me and There were there weren’t any red flags the guy kind of knew how to talk the talk walk the walk He knew how he knew about ARVs. He knew the struggles of kind of dealing with like buyers quote-unquote wholesalers ⁓

Cody Crabb (21:39)
Yeah, he’s speaking the language,

yeah.

Jeffrey Ma (21:41)
Speaking

the language and everything so he approached me. He’s like hey my boss actually bought this property I’m helping him sell it. I need someone that can help me disbow it. I’m like sure I’m interested We’ll go to the property. They had a lockbox to get the code. I’m inside. I’m looking at the property I’m like, okay, cool. Let’s let’s get this thing. I Sell this property to one of my buyers for about 25k assignment fee

We closed without a without a problem no hitch like but even even in that process it felt like a normal process like Both sides are kind of haggling each other a little bit on the price trying to fight for a better deal that So nothing seemed like what was going wrong? The only thing that should have been a red flag was that he didn’t he chooses like you could just pay me outside of closing I’m like, okay cool. Yeah, no problem That actually is a red flag if someone’s saying they want to get

Cody Crabb (22:16)
Yeah.

Yeah, seems pretty standard.

Well, yeah,

tell us why.

Jeffrey Ma (22:35)
Yeah, because if they want to get paid outside of closing, let’s say if something happens, title insurance ain’t going to cover it. That’s out of your pocket and gone.

Cody Crabb (22:44)
Kind like the dude that rear ends you and goes, hey, how about I just write you a check and we’ll just cover this and we don’t have to make it a big deal. Yeah. Yeah.

Jeffrey Ma (22:51)
Yeah.

what happened was a week later after we closed, the title officer calls me. I have a good relationship with her. She’s just like, hey, ⁓ there’s something fishy about this deal. I’m like, what do mean? closed title, cleared it. Everything’s good to go. It’s just like, well, ⁓ the bank just froze the accounts and you need to get in contact with the seller and tell them to show up. like, what’s going on?

Cody Crabb (23:21)
Yeah. huh.

Jeffrey Ma (23:21)
So they think it’s a fraudulent seller, which it happened

to be. It was a fraudulent seller. So check this out. What happened was, is that these guys somehow created a fake ID almost nine months prior, did a quick claim deed into an LLC. And I’ll say Promenade Partners LLC. Yeah, Promenade Partners LLC. ⁓ was originally a dissolved LLC. So they just found a dissolved LLC.

Cody Crabb (23:42)
You’re like, who am I trying to protect? Yeah.

⁓ OK, so maybe people even heard of it. Yeah.

Jeffrey Ma (23:51)
re- went online, reinstated

it, and then also did a managing member change to someone else’s name whose identity they also stole.

Cody Crabb (24:02)
man, they really went all out for this one. Yeah.

Jeffrey Ma (24:04)
Tell me this is like some, right?

And so they did a quick claim deed into the LLC and sat on it for like nine months. And the LLC was recorded. looked like it was legit. then when the.

Cody Crabb (24:18)
So did

they just sit on it to make it look more like it didn’t just happen? Yeah.

Jeffrey Ma (24:21)
That’s what we assume. That’s

what we, yeah, if it just happened, might have a little bit more like, hmm, something’s fishy, but they sat on it. like, technically on record and recorded, this LLC owned this property for about like nine months. And the funny thing is that what seemed to be the running denominator was that the properties were going to, the taxes were sold and the redemption period is about to end.

Cody Crabb (24:26)
Yeah.

Jeffrey Ma (24:52)
So they wanted to do a quick fire sale. So they sold it and they almost got away with half a million dollars. Half a million dollars. They almost got away with half a million dollars. ⁓ And it was just that the whole process, you’d think Tidal would catch it. You’d think there wouldn’t be any real issues in between. Like they weren’t like, it didn’t seem shady in the very beginning, but they knew what they were doing.

Cody Crabb (24:59)
That is that is wild

Yeah.

Sure.

Jeffrey Ma (25:19)
But as soon as, so what happened was the dummies went to go ⁓ take their half a million dollar check, open up a bank account at the same bank as the title company.

Cody Crabb (25:19)
Wow.

It’s so crazy they went to all that trouble. I mean I could have told you maybe go to a different bank

Jeffrey Ma (25:38)
Maybe go to think, I don’t know,

right? But good thing for my buyer is that we caught it early because he would have started construction on a property he never really knew.

Cody Crabb (25:43)
Yeah, seriously.

Yeah, yeah, geez, I can’t imagine what that would have gotten into too.

Jeffrey Ma (25:53)
And

luckily, like a whole year went by, we were fighting back and forth. I actually found the tax buyer. The taxes were sold to a legitimate person. That person had no clue what was going on. He’s like, well, I didn’t know what was going on. So finally, you know, get, whatever. I’m trying to get the deal fit across the finish line still. I find the tax buyer, get the tax deed on the contract. And on the very last day to redeem the taxes, someone came in.

Cody Crabb (26:12)
Yeah, yeah.

Jeffrey Ma (26:20)
with a check for $220,000 and paid off the taxes.

And apparently it was the original seller before the LLC, Mr. David B. Mr. David B. who no one has been able to find. No one has been able to contact except for supposedly this attorney that represents him.

Cody Crabb (26:43)
This is like Ocean’s Eleven. I’m so invested in this. This is awesome.

Jeffrey Ma (26:46)
And

it wasn’t, so I was just like, and the update last week was that, the title company was subpoenaing everybody. Like, they just like, we need to, like, like we’re trying to figure out, like the guys that, yeah, the guys that had prom, that quote unquote stole Promenade Partners, like we contacted the original owner of Promenade Partners, it’s like, I don’t know what the fuck you guys are talking

Cody Crabb (26:55)
⁓ wow.

We’re sorting out what is even going on, yeah.

Jeffrey Ma (27:11)
And then I called the guy, the guy’s managing member, the name that his change, I called him. He’s just like, someone stole my identity. Someone stole my identity. Someone stole my identity. I’m just like, and then I’m calling the wholesalers and obviously they’re ghosting. They’re gone. And it’s just like, I said, what in the world is going on? So back to the tax the part, ⁓ title is subpoena. Everybody, we were trying to figure out where the money came from. The money came from a Northwestern mutual account.

Cody Crabb (27:11)
Woo.

Yeah.

Yeah, sure.

Jeffrey Ma (27:41)
Northwestern Mutual came and talked about it and they’re just like, there is no David B.

There’s no David B here. So where did the money really come from? But the attorney who represents David B squashed the subpoena and David B never had to show up in court.

Cody Crabb (27:54)
cow. Yeah.

Jeez, what in the world? Yeah, what the heck is going on there?

Jeffrey Ma (28:09)
So we have no clue. Yeah, eventually,

eventually title gave in and title is going to pay out the whole claim. But man, you talk about scam deals like this one is definitely up there. So also. Yeah.

Cody Crabb (28:23)
Well, and I mean that that goes to show

I think I think ⁓ people that get to a certain level are like You know, I can spot those a mile. I mean you mentioned your buyer is like Experience like they I mean if they didn’t catch anything. I don’t know who could like seriously

Jeffrey Ma (28:37)
Here.

Yeah. Yeah.

The title company is a national title companies are not a little title company. They are one of the big boys. I’m not going to mention their name just in case they watch this podcast. Just in case. But, ⁓

Cody Crabb (28:52)
Yeah, fair enough. Yeah, no, but I think, but it, I mean,

like you said, anybody can, you really gotta do your due diligence on some of these things. Cause it’s, sometimes, yeah.

Jeffrey Ma (29:02)
gotta really do your diligence. There’s

been a lot of scams out there of like seller identity theft. I’m hearing it happen with land a lot because it’s like land just sits there and no one’s really checking on it. So there’s a lot of people having a fake identity on land. Yeah, so the title company told me like a couple ways to catch it. One, everyone should be on title. Everyone should get paid out at title.

Cody Crabb (29:09)
Yeah.

Yeah, well, yeah, you kind of just it’s yeah, that makes sense. Yeah.

Jeffrey Ma (29:30)
No one should get paid outside of closing. Because if they’re getting paid, yeah, that way you have a money trail of where everything’s going and you can essentially, one, you’ll be covered by title, but two, you can see where the money’s going, right? You can track it. Two is you wanna do a run notary, not a remote notary, right? A lot of times we’ll find a notary that’ll go on site to a library, a gas station, a coffee shop.

Cody Crabb (29:31)
Yeah, that’s a good way to kind of, yeah.

Yeah.

Jeffrey Ma (30:00)
So, because we’re human, we still have human error. A Ron notary is remote online notary, which means they have to answer specific questions that relate to the seller. Did you buy a car back in 1993, a Toyota Corolla? Did you own this? Did you live on 123 Main Street? Da da da da da. Did you, did you apply for a loan? Da da da da da. Right? So it’s, that information is a lot harder to know rather than like, oh yeah, I’m

Cody Crabb (30:11)
⁓

Yeah.

Jeffrey Ma (30:30)
I’m David B.

Cody Crabb (31:12)
Yeah, right. David B. Yeah. Yeah. Well, and I think I think too, I mean, any steps that you take, this is kind of the way I see it. Like any step that you take that’s an extra step is going to just protect you that much more. it’s kind of even if everything is nothing’s perfect. But if you have four different checks, what are the odds that they’re going to get past all four of these checkpoints? So like you said, I think having a couple of

Jeffrey Ma (31:15)
So, yeah. ⁓

So like you said, if you want to

come up with these little things that don’t just mean the reasons it takes more time, then you do it.

Cody Crabb (31:42)
these little things that don’t even really take more time or anything,

it really can just save you. And I think that’s a huge, that is a wild story, but a really good lesson too at the same time.

Jeffrey Ma (31:55)
Really

good, right? Like really myself and the buyer, the title company, like the scammers knew what they were doing. They were really good at what they were doing. A lot of times that they would either steal someone’s identity. It’s a fake ID. But nowadays it’s, you know, I don’t know how I haven’t had a fake ID since I was 16. So I don’t know.

I don’t know how hard it is to get a fake ID nowadays. feel like you can go on Amazon and get one.

Cody Crabb (32:20)
Well, I mean with even with like AI Geez, yeah, I know it’s with you could you AI plus Amazon? You got if you got yourself whatever you want there. You could be the president of any country you want. Yeah

Jeffrey Ma (32:28)
Exactly.

That that was a big lesson that and then the amount of time and energy and like just to suck the life out. Yeah. And then three months later, just a second story number two, me and my partner do our first three months later, I’m like, we got to get back on the horse. I’m fucking let’s let’s make some money. Me and my partner. But yeah.

Cody Crabb (32:36)
I mean stress yeah yeah jeez

jeez. Three months later, you’re just done with this.

Yeah, we got we got the bad stuff out of the way now, yeah

Jeffrey Ma (32:56)
We get a

really good deal out here on the south suburbs of Chicago. It’s a single-family home in Glenwood. This is a three bed, one and a half bath. And we were going to convert it into a five bed, two bath. Even though it’s a small footprint, we were buying this property subject to the mortgage. It had a 3.75 % interest rate. Our PITI would have been about just under $1,300. Section 8 pays out $35.

Cody Crabb (33:26)
Mmm.

Jeffrey Ma (33:27)
So we’re looking close to a $2,000 cashflow for single family residents. Like that’s a great deal. If you can, if you can do that all day, every day, hell, give me 10 of those. I don’t know. be happy. Right. Um, so we, we, got the partner in contract that was smooth, no fishy stuff. Seller was the seller. We still have great. We have a great relationship with them. Are you this person? Um, and.

Cody Crabb (33:35)
Yeah.

Yeah.

And you’re like at this point you’re like, yeah. Yeah. Yeah

Jeffrey Ma (33:57)
The contractor that we went with, we did what we thought everyone was supposed to do. We got four bids. And we didn’t pick the cheapest one. We picked the middle one. Come to find out, three of them were actually all underbidded. You’re thinking like, statistically, the middle one should be the right one. No, The bottom three were all bullshit. Only the highest priced one was the most

Cody Crabb (34:12)
Mmm.

Yeah. Yeah.

⁓ wow.

Jeffrey Ma (34:26)
⁓ legitimate bid after we after we gone through this whole process, but anyway, he were they were recommended through a couple investment groups because they were building relationships, right? You know, different groups different influencers build relationships with each other and they they’re Blanking out on their damn name. ⁓ They filed for bankruptcy long story short, but here’s the full story, right? ⁓

Cody Crabb (34:30)
Whew.

Yeah, yeah, yeah.

Jeffrey Ma (34:54)
They were in a couple of investment groups. had a podcast. They were on podcasts. They were on YouTube. They were doing content, a great online social media presence. And it seemed like they were legit. Like we went with them, signed the agreement, did onboarding. We even spent time picking out finishes. We spent time understanding the time length of the project. But then for some reason, it took them a very long time to start the project, right? It was just like, eh.

Cody Crabb (35:15)
Hmm, the whole deal.

Jeffrey Ma (35:23)
⁓ One red flag is that they were saying they were a nationwide GC. We already were very skeptical to begin with because it’s super hard to even manage local workers if you’re local. So nationwide GC, I’m like, maybe they just have their systems and checks and balances really locked in because the whole onboarding process felt very clean, professional. ⁓ But it took them two and a half months to start work.

Cody Crabb (35:35)
Yeah, no kidding.

Jeffrey Ma (35:50)
And they were saying, we’re having some trouble getting some guys out there. Obviously they weren’t the actual contractor, right? They’re subbing out the.

Cody Crabb (35:57)
But I could see you kind of going, well, maybe they just have a particularly busy month or yeah. Yeah, you can kind of rationalize that.

Jeffrey Ma (36:01)
Yeah.

So finally they started work and ⁓ also yeah, their names is, what is their names? Man, this is like I’ve buried it so deep that I forgot about it, right? ⁓

Cody Crabb (36:16)
Spill the tea, Jeff. Yeah.

Jeffrey Ma (36:23)
Quick flip construction quick quick flip from construction out of an ATL, Georgia. It was Ramon and The other guy’s name was so weird the other guy’s name was Please run into these

Cody Crabb (36:31)
We got names, holy cow.

Yeah, nothing wrong with putting scammers names

out there. I feel like that’s fine. That is good.

Jeffrey Ma (36:46)
Please don’t do business with these guys.

Cody Crabb (36:50)
Wow, good luck scamming Jeff after this one guys. If you’re trying to scam Jeff, he is on high alert now.

Jeffrey Ma (36:59)
Gosh, what was the other guy’s name? Okay, well I’m gonna give it to you at some point put it in your show notes, right? They they started work they got to like the first part like I look pretty good like they did the demo For some reason they didn’t demo the kitchen, which was a little weird, but they demoed everything else They did all the drywall ⁓ mudding

Cody Crabb (37:08)
Yeah, figure it out. We’ll put it there.

Jeffrey Ma (37:28)
And then for some reason they started painting. I’m just like, are you sure you should be starting painting? Like, don’t worry, we’re going to come back for a second cut. I’m like, okay, cool. They asked for the second and third installments and I’m like, okay, cool. Third installments, like, yeah, well we need money for the materials. And prior to that, I had sat down for like an hour with them discussing every single thing, right? To the flooring, to the trim, to the fixtures, the…

faucets, the handles, the handles, everything, right? It’s like, okay, cool, right? They’re get the materials. And all of a sudden, work comes to a screeching halt. I’m just like, you guys said you were gonna be there next week. What happened? It’s like, oh, I will be there next week. Okay, cool. Next week comes back and they’re still not here. What’s going on? Like, oh, none of our workers wanna go out there because of the ice raids out here in Chicago. I’m like, seems like a legitimate excuse, but the ice raids have been. I’m like, but.

Cody Crabb (38:19)
But now you’re starting to go like, okay.

Yeah.

Jeffrey Ma (38:22)
But the

ice rinks have already been going on for about a month. This home’s still a good 45 to an hour outside of Chicago. I’m just like, it’s not really adding up. And we get to a point where we’re just like, when are you guys going to show up? They’re like, oh, we’re trying to get another crew from Ohio to show up there. We’re trying to get a crew from Detroit to show up there. And I’m just like,

Cody Crabb (38:25)
⁓ huh.

Jeffrey Ma (38:47)
You guys haven’t been transparent every time you say you’re gonna do something that you guys aren’t following through. It took you guys two and a half months to start the fucking project. Like what the hell is going on? We get to a point where like we can’t trust you guys. We’re letting you go. Send us back the money. Send us back at least the third installment. They’re saying they didn’t quite budget out the project properly. So we’re like give us back the third installment.

Cody Crabb (38:59)
Yeah.

Jeffrey Ma (39:17)
You didn’t buy the materials and we’ll call it a wash. And eventually it gets to a point where they’re just ignoring us. They’re not even responding to us. we’re just like,

Cody Crabb (39:25)
Cheese.

So this isn’t

even a scam company. They legitimately do what they say. Well, mean, they’re actually contractors, supposedly, but they’re just not doing it. They’re just straight up not, yeah.

Jeffrey Ma (39:35)
We

can do a point where we send a demand letter, they agree to half of the third installment, and then two months later we get a letter saying they’re filing for bankruptcy. Come to realize I’m in a group chat with like 50 other investors that are also taking

Cody Crabb (39:47)
Geez. The one that you were already being generous with. Yeah, that’s nice of him.

Jeffrey Ma (40:03)
So it sounds like your typical contractor Ponzi scheme. they, I don’t think they had bad intentions to begin with. I think they got too big because they were being promoted by several investment groups. Now all the investment groups are now like blacklisted, but I think they, I think they got too big, couldn’t keep up with the work, were under bidding projects and now they were robbing Peter to pay Paul.

Cody Crabb (40:07)
Yeah, jeez.

Yeah.

Gotcha.

Yeah, they were kind of hoping they could kind of just make it work down the line or yeah, yeah.

Jeffrey Ma (40:31)
That’s

that’s probably what most likely happened but the whole time they I I also think I’m you know, heard stories where the partners are in a dispute One of them wanted to do the right thing. The other one was like fuck fuck all this ⁓ Who knows for sure who knows for sure

Cody Crabb (40:45)
Hmm.

Yeah, you can never know for sure. Well, I mean, that’s, that’s, I think, I mean, that’s, again,

a good lesson. I think you, you kind of said as soon as you started smelling the red flags a little bit, you’re like, hang on, we need to maybe look into this a little bit. ⁓ It sounded like you.

Jeffrey Ma (41:02)
yeah. That was the first contractor

and then the second contractor. ⁓ yeah. The story goes the rabbit hole boat.

Cody Crabb (41:07)
my gosh. The fact that you’re still in the business

after last year is pretty amazing, to be honest with you.

Jeffrey Ma (41:14)
Thank you. ⁓

The second contractor, young guy out here, Chicago local, ⁓ he was following up with us. guy. Joe, I really believe that you try to do your best, but you got to be honest with yourself. If you don’t know what you’re doing, you don’t know what you’re doing. ⁓ So Joe ⁓ made a lot of promises, over promise, under delivered on everything. On everything.

Like it was just bad timing because me and my wife had our first baby boy in October. This is when this guy started work. So the first 30 days, I’m, you know, I’m no sleep, sleep deprived. I hadn’t been on site to see the project yet. I’ve been trusted. And by the time I go there, like mid November to check the site and I’m just like, what the fuck’s going on? Like he, first of all, he bought all the materials at once. That’s

Cody Crabb (41:46)
Of course, yeah.

Yeah, your other priorities, yeah.

Ha

Jeffrey Ma (42:09)
big red flag. Unless you have space to put the materials somewhere, you’re wasting days and hours moving materials around just so you can finish a project in one room to the next room. Two, when I get there, like the drywall isn’t flush. Like you see the drywall like this. And I’m just like, how can you not cut in a straight line? I don’t understand. He’s like, don’t worry, we’ll mud it, we’ll sand it, we’ll spackle it, it would be good.

Cody Crabb (42:10)
Okay, yeah, sure.

Yeah, it’s true.

⁓ jeez.

Jeffrey Ma (42:37)
I’m just like, gosh. And we get to a point where I’m telling my partner, we need to, we need to fire him. He’s going to make things worse. ⁓ Come to find out my partner advanced them a part of his next draw. And he’s just like, we need to squeeze every penny we can out of this guy. Cause we already lost so much money with the first contractor. I’m like, my gosh. And I feel so bad for my partner. Cause this is majority of this is funds.

Cody Crabb (42:56)
You’re having flashbacks of the previous people and yeah, yeah.

Jeffrey Ma (43:04)
Honestly, all of it is really his funds and I have to find a way to pay him back. I have to find a way to make them whole. I actually ended up giving up all of my equity so I can cover some ground for him. But we also wanted to finish the project. We weren’t going to just abandon it. As we were talking, it’s kind of like the show must go on. When you leave halfway through, that’s when you lose more money. At least if you have a finished product, you can find some

Cody Crabb (43:21)
Yeah.

Jeffrey Ma (43:34)
to make your money.

Cody Crabb (43:35)
Yeah, and even you’ll lose less at least, at the very least, yeah.

Jeffrey Ma (43:38)
Yeah, it might take

you a long time to get your money back. So we were going to hold this property anyways, because that was the plan. ⁓ You know, it might take us 10 years to make our money back, but at least we have a way to make our money back. ⁓ Luckily, we didn’t we didn’t use hard money on this. This was a business line of credit on, you know, just regular interest, nothing fancy. So we weren’t like dying from holding costs. But like every time we had a cough up five grand, ten grand, five grand, three grand, one grand, it all adds up.

Cody Crabb (43:45)
huh.

Sure, yeah.

Yeah, sure.

Jeffrey Ma (44:10)
And yeah, so Joe, like he won, he bought way too many materials. Like he like he like come to find out like when you buy a bag of when you buy a bag to sand, right? He bought like he bought 20. I don’t know why. But guys, guys are telling me like I did a whole basement with three bags. Like why is he buying 20? Like

And this house is like, it’s not a big house. is maybe like 1800 square feet total, upstairs and downstairs. Right. And it’s just like, he was, he picked up the phone, you would communicate. He was overcommuting. I like, I think he was really trying, but the problem was that he was trying on our dollar. He wasn’t performing. He was trying. He was, it’s like he was learning how to do this thing.

Cody Crabb (45:00)
Sure, yeah.

Right.

Jeffrey Ma (45:07)
Even though

he quote unquote flipped about 18 houses, I don’t believe that one fucking second. Cause just like the whole project was full of shit. We get there, he, here in Cook County, you cannot use Romex. He was using Romex for the electrical wiring. You have to use BX or hard, hard, hard conduit. ⁓ the back porch we come to learn is technically not up to code. Like he.

It’s not the right dimensions and measurements. Like he’s like six inches off from the railing. Like the railing is supposed to be like six inches, a little bit taller to be actually up the code. Like it’s super sturdy. I’ll give him that. It’s like this thing’s solid as shit. But it’s just like, he didn’t pay attention to detail. was sloppy with his work. He’d start 20 different projects, didn’t finish a single one of them. We had to fire him, get rid of him. Finally, we get the third contractor in there.

Cody Crabb (45:39)
Jeez.

It’s the attention to detail though. That’s, I mean, that’ll kill you. Yeah.

Jeffrey Ma (46:00)
Third contractor finishes the work in about 40 days.

Cody Crabb (46:04)
You’re like, we are gonna find the best. We are gonna really take our time with this one. Yeah.

Jeffrey Ma (46:08)
We’re gonna we’re gonna get this fine finally finished

it Thank you God ⁓ Because that would just the amount of stress and time it took on this one little project like we could have we kind of probably flip two other houses in this time frame you bought the home last year back in May and Literally five days ago June 1st. We finally have our first section eight tenant in there. They moved it

Cody Crabb (46:34)
Yeah,

that’s awesome. Wow, that was what what I was gonna say. What a roller coaster, but that was like four roller coasters in a row ⁓

Jeffrey Ma (46:36)
Oh, time to get.

yeah,

we went to Six Flags, Cedar Point, Disney World, Universal Studios.

Cody Crabb (46:45)
Yeah, no kidding.

Yeah, no kidding. Well, OK, so this has been I think this has been a master class in, first of all, perseverance, because holy crap, you just were like, yeah, we’re still going to do this. Yeah, it’s no problem. We got this. But then but on top of that, also, I really admire that you’re like. You’re like, no, like you still see the good. You’re like, no, I’m sure he was doing his best, but just it’s not going to work. So it’s just.

Like, other than the sketchy dude at the beginning you were talking about, you were like, no, you know, maybe they were trying to, you know, they were probably trying their best. so that’s even still, I mean, that’s a good sign that you still see some good there. Like, they’re probably trying their best, even if they weren’t. it’s not going to hurt you to think that way. Yeah. Well, yeah.

Jeffrey Ma (47:34)
100 % It’s like business

what I’ve really come to learn if you’re really in this business, it’s not a if but when you’ll get screwed and it’s it’s part of the business roll with the punches like

Cody Crabb (47:44)
Yeah.

Jeffrey Ma (47:49)
you like there’s some people who are afraid to make a mistake or afraid that something like that will happen to them. ⁓

Cody Crabb (47:56)
Mm-hmm.

Jeffrey Ma (47:59)
but what’s the cost of staying where you are for another five, 10 years?

Cody Crabb (48:03)
That’s good. Yeah. Well, I think that’s a perfect place to end it. Honestly. Thank you so much for that was an awesome mic drop. Thank you. Thank you. Thank you, Jeff, for all these awesome lessons, not mistakes or failures or lessons. ⁓ And our audience is really going to benefit from hearing some of this. So people want to get in touch with you. They want to work with you. They want to, you know, get some information from you. How can they how can they do that? How can they find you online?

Jeffrey Ma (48:05)
Bye.

Super easy Jeff Ma Real Estate Jeff Ma Real Estate. I am Google Googleable Apparently chat GPT says I am the best agent to work with and wholesaling Yeah, I have a screenshot of that I’m like, yeah. Oh, yeah. Hey, is telling you to But Jeff Ma Real Estate hit me up on Facebook Instagram That’s probably easiest way to find me and

Cody Crabb (48:39)
That’s what you want, yeah.

Yes, frame it on the wall. Yeah. Yeah. Yeah.

Jeffrey Ma (48:57)
Yeah, I’m out here in Chicago. I’m a broker, investor, coach, whatever you guys need. I’m here to help.

Cody Crabb (49:03)
Fantastic. Well, I would definitely be getting in touch. You seem like a great dude. thanks again, Jeff, for joining us and thank you audience as well. If you got something out of today’s episode, and I know you did,

Go ahead and give us a like, subscribe, comment, follow, all those things so that you don’t miss another great episode like this one. Jeff, it’s been a pleasure. Thanks so much for hopping on today.

Jeffrey Ma (49:21)
Thank you,