How a $5,000 Duplex Grew Into a $17M Real Estate Portfolio | Marty Hofmann

Marty Hofmann (00:00)

I filed out—I did not want to hire an attorney, so I thought, “I’ll do the eviction myself.” You know where this is going: I filled out the wrong form. And I get before the judge, and she’s literally like, “Well, this will give your house back, but it won’t give you judgment for what they owe you.” And she said, “So you need to redo it.” This was three days before the moratorium hit. And the moratorium, for those who don’t know, allowed people during COVID not to pay their rent. So I said, “Yeah, well, I’ll redo the paperwork.” I could have that day in court got my house back and started over, but I didn’t. And a big mistake.

Meghan Escobar (01:04)

Hello, everyone. Welcome back to Real Estate Pros Podcast. I’m your host, Meghan Escobar, and today I have the pleasure of bringing on a gentleman who is out here doing many things. So we’re gonna talk a little bit about his real estate journey, we’re gonna talk a little bit about his podcast journey, but at the end of the day, I just wanna say thank you so much, Marty Hofmann, for joining us on the show today. Thank you.

Marty Hofmann (01:27)

Thank you. Thanks, Meghan, for having me. We’ve had a nice chit-chat before the show and I’m excited to get to know…

Meghan Escobar (01:34)

Know you better. Yeah, absolutely. Same here, and I agree—it was a great chit-chat before the show. So obviously, you guys see Marty’s branding in the back, Kill Complacency, which we’ll talk a little bit about that towards the end and bring you guys up to speed with what he’s got going on there. But first and foremost, I want to talk about your journey into real estate, right? So I got to know Marty a little bit, and I asked him where he started, and he was in HVAC, which is interesting, and transitioned over to real estate. He’s got a portfolio of about seventy doors. So for those in the audience that might not be familiar with your name, who you are, what you’re doing, can you give us a thirty-thousand-foot view of what that looks like?

Marty Hofmann (02:15)

Yeah, I grew up in Iowa on a farm, so I learned hard work and grit at an early age. Went to college in Wyoming, where I became a youth pastor. And I would almost say, Meghan, my real estate journey began early on when I bought my first house. I think we often think about the investing aspect of it, but I learned so much, too, from just the first two-bedroom, one-bath. If you ever play *Cashflow Quadrant* or the *CASHFLOW* board game, that’s where it starts, is a 2/1. So I learned a lot there. That was in Malta, Montana.

We moved back here in 2010 to Oklahoma, where my wife is from, and I got a job doing HVAC. I was an attic monkey for a bit. It was really good exposure because I got to learn the ins and outs of contractors and houses. You know, I saw the bones of a house, I saw the finished product of a house, and being a very hands-on person, it was good.

But in 2012, actually my HVAC boss called me and said, “Hey, you should buy this deal. It’s on the MLS.” And he’s like, “I’d buy it, but my wife says I can’t.” So it was a beat-up duplex, decent part of town in Guthrie, where I live, on the MLS for five thousand dollars.

Meghan Escobar (03:29)

No way.

Marty Hofmann (03:32)

I’m serious. Wow, okay. And I had four kids at the time. I was making twelve bucks an hour; I didn’t have a lot of money. But I did have a tax return. So this is actually a story about using a tax return to buy a—because I had four kids, so I had a…

Meghan Escobar (03:43)

Refund.

Marty Hofmann (03:45)

Refund. So I used my refund and I bought that house. I tried to negotiate with the realtor, but the realtor was like, “Listen, it’s costing this person twenty-five hundred bucks just to have me list it. Five grand for—you can’t negotiate.” Yeah, so I bought it.

And really over the next few years—maybe the opposite of what this show’s about—but I did everything myself. And I learned everything. And I pulled permits, but I’d have contractors come in and line me out, and then I would do the work. And then we were off to the races. And in the meantime, I had sort of replaced my job as HVAC shearing alpacas, which is a whole ‘nother side note. But that entrepreneurship allowed me to have nine months a year free to work on the house and fix it. And I got it fixed, I started landlording, learned a ton there. Landlording’s a lot harder than you think.

And I read a book after that called *Rich Dad Poor Dad*. I’m sure your…

Meghan Escobar (04:39)

Most of you.

Marty Hofmann (04:40)

Audience is familiar with that, yes. Turned my world upside down. I was very Dave Ramsey prior, and as a result, I started—I didn’t know it at the time, but I started BRRRR-ing houses. I took that duplex and I got a line of credit on it because I was free and clear, and from that line of credit, we built a seventeen-million-dollar portfolio.

Meghan Escobar (04:59)

Wow, what a journey. Yeah, so it’s safe to say that read for you was a pivotal point in your life.

Marty Hofmann (05:07)

Big time, yeah. It was huge because people talk about it being a real estate book, but I really feel like it’s…

Meghan Escobar (05:14)

It’s a mindset book.

Marty Hofmann (05:15)

A hundred percent, yeah. It totally shifted my mindset. And I don’t want to beat Dave Ramsey up, because I think his message is good for ninety-six percent of the population, yeah. But once you get that aspect figured out, you need to learn how to make your money work for you. And so that’s what Robert Kiyosaki did in that book, is realizing how money works and how to make money work for you. And so then it was no longer Marty’s gonna swing the hammer; it was Marty’s gonna leverage: “What else can I leverage? How fast can we leverage? And how quickly can we build systems?”

Meghan Escobar (05:52)

Is better. I love that you said that, because I agree a hundred percent. And me being in the position I am and having the opportunity to talk to individuals that are in real estate, that book gets brought up all the time. However, we did talk a little bit about my background, too, right? Like, I teach breathwork and it’s all about mindset. And the truth is, that book is about mindset; it’s not relevant to just real estate individuals, I believe that a hundred percent. It’s such an incredible book for I think everyone to read, yeah.

Marty Hofmann (06:24)

So…

Meghan Escobar (06:25)

You’ve been in the game for a while, starting with being in the attic. Every operator I know has a time where things got real, where maybe they felt like they were ready to throw in the towel and give up and walk away. And I think it’s important to talk a little bit about that, because as an entrepreneur moving through the journey, we live in a highlight world where everybody wants to see the success and hear about the success, but they don’t really understand what it takes to get to that success. So Marty, would you mind sharing with myself and the audience a moment in time where you could go back to where you were like, “Man, I thought things were gonna go left, but it all worked out”?

Marty Hofmann (07:11)

What I would say, Meghan, is I think I’m still there, okay? I think it still is hard. And if it isn’t hard, it’s maybe because I’m not challenging myself. Certainly things get easier, but especially with my brand, Kill Complacency, like, I want to be the guy that’s a continuous learner, and that means I’m gonna fail, and that means I’m gonna make mistakes. So I could tell you a hundred mistakes I’ve made; I could tell you of a hundred times I thought, “This sucks.”

Being a new landlord like that, it’s so hard. I let the tenant get two months behind—big mistake. And now we had to evict them. They never paid me, blah, blah, blah, blah, blah, like your audience knows that story, yeah. COVID happened; this was my first eviction right before COVID happened. I filed out—I did not want to hire an attorney, so I thought, “I’ll do the eviction myself.” You know where this is going: I filled out the wrong form. And I get before the judge, and she’s literally like, “Well, this will give your house back, but it won’t give you judgment for what they owe you.” And she said, “So you need to redo it.” This was three days before the moratorium hit. And the moratorium, for those who don’t know, allowed people during COVID not to pay their rent. So I said, “Yeah, well, I’ll redo the paperwork.” I could have that day in court got my house back and started over, but I didn’t. And a big mistake.

And that person ended up staying for months and months and months. They were like $10,000 behind.

Meghan Escobar (09:06)

Wow.

Marty Hofmann (09:06)

We finally got them evicted right before the moratorium extended again. We switched to—I had an attorney at this point, and we changed it to a lease violation. Only to find out a few months later that he was taking me back to court to get the eviction off his record. Dead serious. It was like everything about it was bad. And this is a *Who Not How* story, is really what it is. I should have hired a “who” at the beginning to just get him evicted, but I didn’t. I wanted to DIY it. That’s my biggest handicap, is I DIY way too much. I’m sure if you guys give me advice later, that’s what you’re gonna say: “Get out of the way.”

The end of the story—if Paul Harvey was sharing this—the end of the story is that tenant had filed for the CARES Act. So the government called me like in October of that year and said, “Hey, he wants us to send the money directly to him, but we have to have you agree to that. Do you agree?” And I said, “No, you need to send it to me.” And they said, “Well, he has to release it, so you’ll have to talk to him.”

So I get on the phone with this guy—who, by the way, I found out when he took me back to court in July, there was a warrant out for his arrest. So I kind of tipped the cops off and they arrested him in the courtroom after he got the eviction—like a whole bunch of drama, right?

Meghan Escobar (10:46)

I’m like so mind-blown right now. How do you have the audacity when you have a warrant for your butt?

Marty Hofmann (10:54)

Okay, no, yeah. But so he gets on the phone with me—this is the crazy part, Meghan. He gets on the phone with me and he’s like, “Hey, I want six months moving forward, and you’re not gonna get this money unless I sign it. So instead of getting ten thousand dollars, you can get seven.” And honestly, I took it. Like, a bird in the hand is worth two in the bush, right? And I figured it was better than nothing.

But here’s the audacity this guy had: is he says to me, he says, “Or Marty, you can get the other six months if you have a place you want to rent me.”

Meghan Escobar (11:30)

Wow.

Marty Hofmann (11:31)

There is no way. I mean, this is a guy that sold the stove and the dishwasher and all the appliances in the house to get money because he didn’t want to work, and now he wants to—I mean, he literally asked me…

Meghan Escobar (11:46)

I am mind-blown right now. So hold on, where in your journey was this? Was this at the beginning of your journey where you only had a couple of doors, or…

Marty Hofmann (11:55)

Or where I had like ten doors, wow. So yeah, things were tight. Things were tight, like, cash flow’s not great, we’re learning, I’ve got six kids, yeah, I’m trying to be a full-time investor. Like, wow, it was hard. And like I would be like, “Hey, you could do work for me and we could work this off.” And he’s like, “Nah.”

Meghan Escobar (12:14)

Yeah, and now he knew—he knew the rules more than you did, didn’t he? Wow, well, I bet there were a lot of lessons.

Marty Hofmann (12:22)

Yeah.

Meghan Escobar (12:23)

Yeah, and thank you for sharing that with me. And I didn’t mean to bring you back to that vulnerable place, but you know, I think it’s important to talk about those things, because people need to understand that when you are going into business for yourself and you want to be an investor, whatever it is that you’re looking to explore, there are gonna be things that come up in the world that you are not ready and prepared for. Maybe like Marty here: don’t be a DIY guy, and like, get the help.

Marty Hofmann (12:51)

Go read the book *Who Not How*.

Meghan Escobar (12:54)

That’s a good one, too. That’s a good one, too. Man, thanks for sharing that. So let’s pivot a little bit and talk a little bit about what your focus is these days. So you’ve obviously been able to grow yourself into a successful investor. Are you looking to grow that portfolio, or is there another focus for you?

Marty Hofmann (13:49)

So this morning before this, I closed two more deals. One of those is a house that’s honestly too big for a rental portfolio in my opinion; it’s a two-story, I still don’t want it. So that’ll be a flip. But the other one is a buy-and-hold. So I’m always looking to add, but it sort of has to be the right metrics, if that makes sense. So the flip—like, we can make maybe sixty K on that flip, so we’ll do those all day long ’cause it just feeds the bank account. So as an investor, you need active money, which is where we do flips, and you need passive money. But the passive isn’t always as passive as the gurus say it is.

Meghan Escobar (14:29)

It’s not that.

Marty Hofmann (14:30)

Yeah. Well, and there’s other stories. I mean, he was definitely the worst, but yeah, when you got lots of doors, there’s a different story.

Meghan Escobar (14:41)

Yeah, I’m sure. So that makes sense to why you kinda are mixing your portfolio where you have some flips that’s gonna bring in and fund the bank account, but then you have your passive income, and sometimes you have to make up for that on the back end because maybe someone’s short one month, and just prepare yourself for the unknown.

Marty Hofmann (15:01)

Unknown.

Meghan Escobar (15:02)

Yeah, makes sense. So always looking to grow, always looking to expand, obviously if the numbers align. I think that’s something that I’ve learned, too, is like a mentor of mine always told me: you gotta learn how to make money in your sleep, not on your feet. And to just make sure that you don’t have all your eggs in one basket, right? Like just making sure that you are diversifying yourself, diversifying the portfolio.

And so with that said, I wanna talk a little bit about Kill Complacency. Where your journey pivoted into what you’re doing with this: you told me you have a podcast, but talk to us a little bit about where that came about, where that passion came about, and who you are looking to bring into that.

Marty Hofmann (15:50)

Yeah. So I learned a long time ago that my best days are when I’m serving, and my most discouraged days are when I’m focused on myself. And kind of because learning that lesson about myself, I knew that as the rental portfolio grew—like, you can do the math, you can project it forward. I’m like, “Okay, we’re good to go. I could sell a house a year, we could live off this, and we can live happily ever after. I don’t need to work anymore.” But because I knew that about myself, about serving, I wanted to give back.

And so, yeah, the first thing we did is we started a real estate meetup in Oklahoma City. We have like, I don’t know, maybe 80 members of that, and we started that. But then I was like, “Man, there’s a niche here in real estate, which I’m good at, but it’s bigger than that.” And so that was when we came up with Kill Complacency, because I realized that what got me on the board—because I was a poor farm kid—what got me on the board was real estate, but it was really consistency and intentionality. And so whether you’re a real estate investor or a breath coach, like, you can do it. And this is why I would tell you, Meghan: you can do it if you will show up consistently and be intentional with where you need to grow your business.

And that’s what the message of Kill Complacency is about. Kill Complacency was a better hook than “Live Intentional.”

Meghan Escobar (17:16)

I agree. Good branding.

Marty Hofmann (17:17)

Really good branding. So that’s what the podcast is about. From the podcast, we wrote a book called *Kill Complacency*. And again, I might be wrong in this, but I feel like a book is gonna outlive a podcast. I feel like this book could show up at a Goodwill thrift store in twenty years and impact somebody. So that’s why I wrote the book, is just more legacy, something to live longer than, you know, a forty-five-minute podcast on Spotify.

Meghan Escobar (17:43)

Yeah, I agree. Nothing better than a good read, mm-hmm. But going back to where your mindset transition happened, right: it was from reading that book. And how many people—I don’t know one person that I’ve talked to on this podcast that hasn’t read that book. So, you know, it’s huge.

Marty Hofmann (18:04)

Huge. I read that book 20 years after he wrote it, which is the other thing. And maybe someday, 20 years from now, someone will find this podcast between the two of us and we will inspire them to greatness, but I have a hard time believing that. I think there’s gonna be so many podcasts that are gonna get buried. But yeah, a book…

Meghan Escobar (18:20)

They will, mm-hmm. Yeah, I agree. There’s certain things in life that the digital world just can’t replace, like a pen…

Marty Hofmann (18:27)

Pen to paper, yeah. Preach.

Meghan Escobar (18:30)

Taking notes as well, and reading a book, right? Sometimes I’m so busy in life where I’m like, “I wanna read; I’ll just put an Audible on.” But you’re not grasping all the information as if you were to actually open the pages and read the book, write, highlight things.

So yeah. All right, so one thing that I think is really important to bring up here, too, is like a lot of our audience, they’re either very early on in their journey and looking to see where they fall into place—is real estate something for them? Do they want to become an investor, a wholesaler, yada, yada, yada? Or they are just somebody who’s been in the game for a while and looking to level up. And so with that being said, I think it’s important to talk about building relationships and growing your network. And for you, Marty, what has made the biggest difference for you? With that, you started a meetup, but networking in general, is that something important to you?

Marty Hofmann (19:22)

Yeah, and I would say networking is everything. And I will fight—I will fight for this, Meghan, because I feel like especially as we become more tech-driven, we are less apt to do in-person events, yep. And I don’t have any data on this; this is my gut on this. But I feel like our culture is pushing back on the inconvenience of going somewhere to talk. But nothing is more important than a face-to-face connection and interaction.

So I cannot—I mean, thanks for the leeway—I cannot stress networking enough. And that’s why we host the REIA. It has been—and that’s what I would almost encourage somebody listening to: like, you don’t have to be the expert to go start a meetup. And now you get to become the expert because you’re talking to the experts; you’re getting them in the room. Our last month was Jimmy Ogle; they do 300 deals a year.

Meghan Escobar (20:43)

Wow.

Marty Hofmann (20:43)

Now, Jimmy and I are buds, and we text, and I looked at a house he’s wholesaling yesterday. But that’s what somebody can do: they can literally go start a meetup. It could be so simple. But they now get access to some of the best experts who can become your mentors. And you don’t have to know everything to do it, but just go do it. Get after it and…

Meghan Escobar (20:43)

Quit riding the fence. Yeah, that’s really great advice, and thank you for saying that. Just got my wheels turning, so if my wheels are turning, your wheels better be turning if you’re listening. So it’s something that I think people, like you said, we are shying away from because we have such a digital world that is evolving vastly. And you know, even like I have a 17-year-old son, you have six children, I am sure that they are all into platforms, social media platforms, gaming, things like that, connecting with people through the internet. But you cannot take away from getting in rooms and shaking hands with people. Like, every business, not just real estate, but every business is a people business. No matter what you’re running behind the scenes and your systems and the AI things in place, you still need a human being to run those and to grow…

Marty Hofmann (21:34)

And scale, and to communicate when it’s not going well, yeah. And I really feel like we are losing it. I think the next generation is not as good communicating, yeah. But you sit down with somebody that’s sixty-seven, that’s all they want to do is sit around and talk, and it’s good. So yeah, I will fight, I will preach…

Meghan Escobar (21:54)

You and me both! You and me both. I mean, don’t get me wrong: I think it’s wonderful that we have the ability to connect through Zooms and meet people all over the world where maybe we’re not able to fly to each other in the moment. But like, make a plan to do that, yeah, you know?

Marty Hofmann (22:15)

Sure. Yeah, something I do on a weekly that your audience may enjoy this is I have an accountability group. Actually started from—it’s Brandon Turner’s BetterLife Tribe. We started there, and then we broke, just because it was just a glorified Zoom call. And we said, “Hey, we can do this and save a hundred bucks a month or whatever, or three hundred bucks a month.” So we do it ourselves. But to your point, twice a year we get together. Like, we just went to Dallas. We pick a location and we show up in person, because my pod—there’s five or six of us total; we’re from all over the United States—but twice a year we get together very intentionally just to hang out and be buds and do things together, because we need this. We need this real life. And those face-to-face real encounters is what is going to keep us together as an accountability group, much more than a Zoom call.

Meghan Escobar (23:11)

Call every Monday, exactly. And I think you brought up a very valid point there, because you can have an accountability person or group, but at the end of the day, if you don’t know them personally, what are you really holding them accountable to? What the goal they said they wanted to reach that week? But maybe you need to know what the hell’s going on in their life if that didn’t happen or whatever the case…

Marty Hofmann (23:31)

Case maybe. Well, that’s what happens: we have these hard conversations like, “Why did you set that goal? And why haven’t you hit it? And what’s holding you back?”

Meghan Escobar (23:41)

Yeah. Yeah, it’s definitely something you can’t fake, and relationships, like I said, are everything in this space. So thank you for sharing that. And if you are listening and didn’t get any value from that, maybe rewind and listen again, because there’s real value there. So Marty, before we do wrap things up here, if someone listening in wants to connect with you and learn more about how you built your portfolio or what you’re doing with Kill Complacency, what’s the best way for them to reach?

Marty Hofmann (24:08)

My handle on most social media is Marty Hofmann1 at whatever: Instagram, Facebook, LinkedIn, et cetera. Hofmann is one F, two Ns. We have a website, killcomplacency.com. That’s where you can learn about the podcast, you can learn about me. There’s some assessment tests there kind of pertaining to the book, but also some resources, a bunch of books I’ve read, also goal-setting things. I know it’s coming up at the end of the year, so those are really good tools. But yeah, that’s what I would say is go to killcomplacency.com.

Meghan Escobar (24:40)

Cool. And Marty Hofmann1 on all platforms, social media, and we’ll drop those links below. So if you want to connect, you’d have no excuses; they’re listed below. All right, perfect. Well, thank you so much. I really appreciate your time, your story, and more importantly, your perspective and the way that you position yourself as a professional in this world. I think it’s really important that we have more people doing business the way that you’re doing it and being authentic. So thank you again for taking the time to be…

Marty Hofmann (25:11)

Yeah.

Meghan Escobar (25:12)

I agree. And for those of you tuning in, if you did get any value, please be sure to hit like and subscribe, because we’ve got more conversations coming in with operators just like Marty Hofmann here who are building real businesses in real time with real people. We’ll see you on the next episode.