Commercial Real Estate Investing: Buy Right, Hold Long & Build Wealth

Marlon Matza (00:00)
Don’t sell. Amortize the mortgage. Amortize the mortgage. And at the end of ten or fifteen years you’ll be a wealthy person. Never sell. Never sell good real estate. If you can if you can structure it where you bring in capital from friends and family, and you you rent it out, and the real wealth is from paying down the mortgage over time. That’s how the real wealth is created, in part, anyway.

Scott Bursey (02:03)
Welcome back to the Real Estate Pros podcast, powered by Investor Fuel. I’m your host, Scott Bursey And today we’re delighted to be joined by a true titan in the industry. Marlon Matza brings over 35 years of experience through strategic reality advisors. He has mastered every angle of the game, financing, acquisitions, dispositions, and development, serving as both a high level agent and a principal investor.

Marlon is here to break down how to scale in complex markets and you can expect some high octane strategies that will sharpen your competitive edge. Marlon, welcome to the show.

Marlon Matza (02:44)
Thank you for having me, Scott.

Scott Bursey (02:46)
It is awesome having you here, my friend, and help our listeners get up to speed. Please give us the ninety second highlight reel of how your career ignited and where you’re pouring your fuel now.

Marlon Matza (02:58)
Well, I started out as a commercial mortgage broker long time ago and eventually got involved in investment property sales, which includes shopping centers, office buildings, apartment buildings, have done some hotel work and development sites.

And from there started to buy and sell properties my own account or from my own account. I’ve done a small hotel, office, retail, got involved in land development. We have a project right now in Sarasota involving 120 apartments, new build. And here we are, 35 years later.

Scott Bursey (03:38)
That is remarkable. And what really caught my attention about you was the way you’ve been able to seamlessly pivot between agent and principal roles over three decades, maintaining an elite level of execution in both. Most people get stuck in one lane. Marlon, you’ve managed to leverage the insights of a broker to win as an owner operator. And expanding on that, curious to know.

In a career spanning thirty five years, what do you consider your unfair advantage or core strength that allows strategic reality advisors to outperform the competition?

Marlon Matza (04:17)
I’ve all I’ve always liked the principal side of the business. I’ve often said that I got more enjoyment out of executing a small principal transaction than a large brokerage transaction. so it was always my desire to be a principal and others have done it.

In a in a larger way, Harry McLeod started out as a broker, for those of you that know his name from New York City. and so did Donald Zucker started out as a mortgage broker. So it’s not uncommon for people to start out as brokers and wind up being principals.

Scott Bursey (05:46)
And how does that translate into a tangible win for, your partners or your clients?

Marlon Matza (05:52)
Well, as agent, my experience has been that owners are always in most cases not always happy to pay a fee for originating a lucrative investment opportunity or a tenant.

Similarly, if you originate a deal that you want to take advantage of as a principal and you bring it to friends and family that you trust and and feel comfortable with, they are also appreciative of the opportunity and knowing that I will work day and night

to reap the benefit of of the investment opportunity.

Scott Bursey (06:29)
Wondering if you could share what is a common operational weakness you see in modern real estate firms, Marlin, that you worked so hard to protect your firm against.

Marlon Matza (06:41)
know the thing that immediately comes to my mind is I see a lot of the younger generation utilizing texting and email in lieu of conversation and and physical meetings that I had I’ve always found are critical to fostering and building relationships. And I think there’s a

a falling out or a misgiving to not having more physical contact with with people.

Scott Bursey (07:11)
That’s what Over all your years, Marlin, let me ask you this. What’s been the key to maintaining those relationships?

Marlon Matza (07:20)
doing what you say you’re going to do, being on time, being forthright, full disclosure, and just being sincere in your dealing with people.

Nothing substitutes for honesty.

Scott Bursey (07:39)
Thinking about the current economic shift, where do you see the biggest untapped opportunity for acquisitions right now that many pros may be overlooking?

Marlon Matza (07:48)
it’s a very difficult market today in that sellers have, kind of old expectations on value prior to the increase in interest rates that occurred two, three years ago. and buyers want to

Purchase assets at lower prices because there are numerous alternative investments that are available at higher yields than commercial real estate today. And with the cost of borrowing today and the lack of banks’ willingness to make

non recourse reasonable loans, it’s it’s a it’s a very difficult buying environment today.

Scott Bursey (09:11)
What specific data points are you watching to confirm when it’s time to pull the trigger on those deals?

Marlon Matza (09:18)
Well, I real estate is a localized business, so we’re we’re focused on Long Island today and we’re watching a number of things, including the availability of real estate tax abatement and pilot programs on Long Island that were not readily available in years past. and the development of mixed use projects on Long Island again.

being more readily approved today, whereas in years past getting approvals on Long Island was was much more difficult. as well as a number of other things. But interest rates are are most critical in our industry and there’s a really a linear correlation, direct, linear

correlation between commercial property values and interest rates.

Scott Bursey (10:18)
And staying along the those lines, Marlon, I’m curious, what is your strategic plan for your your company over the next, let’s say, 12 to 24 months?

Marlon Matza (10:30)
Well, we are focused on building our Sarasota project, which is a forty million dollar project cost. and we are hoping to sign a contract on another site on Long Island for a self storage development project. and it’s interesting.

in addition to the interest rate comments I’ve made, the other the other comment or bullet point is, it’s a s it’s a supply and demand equation in real estate. if you go into certain areas, you have a significant vacancy factor even in multifamily housing and even in fabulous places in Florida.

where your net effective rents after concessions are such that the profitability of new development is marginal or uncertain. Whereas in a place like Long Island, where there is no supply and unlimitless demand for rental housing in particular, if you if you can get your approvals, your your economics

in markets where there is more demand than than availability of of space, that that’s another critical path to success in real estate investment.

Scott Bursey (11:55)
I love that. I love that, Marlon. And if somebody’s listening and they’re thinking, hey, this is somebody that I really like and may want to do business with, what would you like them to know about strategic reality advisors?

Marlon Matza (12:49)
I would say we’re, looking for deals that have big return up when we sold one eleven Livingston Street in downtown Brooklyn, which is a four hundred and thirty thousand square foot high rise office building for twenty five dollars a square foot.

because no one wanted it. I’m going back a long time, but it’s all in the buy. It’s all in the buy. That’s all I can say. Yeah, you have to buy it right. So we we look for things that we can buy at a at a price that will hopefully leave a reasonable return for the capital and the time and energy that that goes into these

transactions. But we’re also very well thought of. we have very good relationships and people respect us and we have good partners that bring significant operating capability to the deals that we get involved in.

Scott Bursey (13:47)
Marlon, help us understand what is the biggest external threat to the development landscape today and how are you hedging against it?

Marlon Matza (13:55)
No.

again, I I refer back to interest rates and supply and demand. but it takes a long time to get approvals. so don’t take title before you have approvals. Lesson number one. you have to go subject to, and so you’re in contract.

until you get your approvals. Don’t buy it and then hope you’re gonna get the approvals. And don’t buy it and then not realize it’s gonna take you a year or two to get your approvals and you incur the cost of having to carry the property.

availability of water and sewer connections and restrictions if you have to go with septic system and all of the above, Do your due diligence. Do your due diligence.

Spen spend the money for the best to avoid a much more costly error by not doing your your proper due diligence.

Scott Bursey (14:54)
It’d be great to h hear how has your strategy for financing evolved recently to stay aggressive while others are perhaps pulling back?

Marlon Matza (15:04)
The the finance real estate financing is a cyclical business. that we go through these cycles of boom and bust, lenders become overly aggressive and they wind up opening the faucet all the way and then problems occur as a result thereof, and then they wind up having to, in some cases

quickly close the faucet. more often than not, the faucet gets closed over time, and right now the banks have a lot of problems on their books, a lot of bad loans. once interest rates spiked, equity was evaporated and loans are coming due that can’t be refinanced and

banks are horrendous right now. I s I’ve seen it three times in the past thirty five years.

Seller financing. Seller financing. and the federal government through Fannie and Freddie Mac for multifamily and mobile home park communities. but if you go to get f or try to get financing on an office building today, you’re gonna have a very difficult time.

Scott Bursey (16:13)
Thinking about the bottom line, if you had to start over today with only, let’s say, a hundred K, Marlin, what specific asset class or deal structure would you target to hit a seven figure return the the fastest?

Marlon Matza (16:27)
Well, I’ve done very well when I didn’t have enough money to purchase the asset. I would go to contract to to acquire a piece of property that I thought I was buying for less than let’s say the retail value if it was maybe marketed. And I would find a purchaser that was well healed

That had a track record in the property type and/or the market area geographically, and I would offer the property to one or more of those people at a higher price, and I would assign my contract to them. And the difference between my purchase price and what they paid was my profit, and that’s one way you can.

make money with limited funds. not sure if that answered your question, but if you if you bought one house a year and you rented the house out and you were able to do that for ten years, maybe with the help of family and friends that would chip in, you create a little

syndication you take your twenty-five percent promote for doing the work and you raise through friends and and that’s how big deals are done as well as what I’m suggesting for a beginner. and just d don’t sell.

Don’t sell. Amortize the mortgage. Amortize the mortgage.

And at the end of ten or fifteen years you’ll be a wealthy person.

Never sell. Never sell good real estate. If you can if you can structure it where you bring in capital from friends and family, and you you rent it out, and the real wealth is from paying down the mortgage over time. That’s how the real wealth is created, in part, anyway.

Scott Bursey (18:29)
That is the high conviction answer. It’s all about the velocity of money and choosing the right vehicle. And Marlon, you have given our listeners a tremendous amount of great advice here today and an insight. But is there any additional words of wisdom you can leave with our listeners?

Marlon Matza (18:46)
Knowledge is everything. Is that how it goes? Yeah. Melton, learn, learn a lot about what Learn learn learn learn as much as you can about the business and be honest and and straight with people. And there’s a very, very successful company called Time Equities. And I love the name because capital is

created in investments over time. Time. You you you plant a seed, whether it’s in a security or a building, and over long periods of time the seed germinates and turns into a tree. So time equities is run and was founded by Francis Greenberger.

And i if you ever have a chance to look at his website, time equities. It takes a long time. And and once you’ve flipped enough deals

Buy something and keep it for a long time.

Scott Bursey (19:55)
Thank you for that, Marlon. And for those of our listeners that want to keep this conversation moving, stay in your lane or collaborate with you on perhaps future deals, what’s the best way for them to plug into your pipeline and reach you directly?

Marlon Matza (20:07)
My email, my email is MM at S like Sam, R like Robert, A like Apple, the numeral two dot com, ⁓ at S R A two dot com and I usually respond quite quickly.

Scott Bursey (20:25)
Marlon, you brought the fuel today. Thank you so much for joining us on the Real Estate Pros podcast.

Marlon Matza (20:31)
Thank you. It was a lot of fun, Scott. Thanks a lot.

Scott Bursey (20:33)
And to our listeners, we appreciate you. If you receive value from today’s episode, please subscribe. We’ll be filling your tanks with the lineup of elite guests, just like Marlon Mantsa, who are accelerating and setting the pace for the rest of the industry. Until next time, keep your standards high and your vision clear. We’ll see you on the next episode, everyone.