How He Turned a $15K House Into a $175K Cash-Flowing Property | Craig Marlow

Craig Marlow (00:00)

So again, I got a lot of different stories of different houses that I purchased. I actually purchased a home for $15,000 in 2018 that was listed for $119,000. The agent wasn’t happy with me, but I realized that there was a PMI insurance paid. So I offered them $15,000 and they gladly took it. It was a two family that is now worth $175,000.

and is bringing me in twenty one hundred dollars a month. so the flip your mindset has a bunch of different stories to show you how to find these pieces of gold in the sand when you’re looking for it. so the book goes through and shows you how to find these different rare finds that can actually boost your whole assets

to a much higher level if you get them at the right time or the right place.

Scott Bursey (01:17)

Welcome back to the Real Estate Pros Podcast powered by Investor Fuel. I’m your host, Scott Bursey. Glad you’re with us. Today we’re delighted to be joined by Craig Marlow, who has 25 years of experience representing buyers and sellers, and is a top ten percent producer on Long Island. Craig has gutted and rebuilt every home he has ever lived in.

And he wrote the book on using your own home to build wealth. It’s called Flip Your Mindset. Listeners get ready to dive deep into turning the home that you live in into the engine that builds your wealth. Craig, welcome to the show.

Craig Marlow (01:56)

Thanks for having me, Scott. I really appreciate it.

Scott Bursey (01:58)

It’s awesome having you here, my friend. And to 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.

Craig Marlow (02:09)

Okay, 90 seconds. I’ll see if I can talk fast. So as I said to you before, Scott, I got my first house when I was 22 thanks to my awesome parents who helped me get into the game, had no idea what the potential actually I had through that house. as they moved on, I got married and then that marriage pushed me to the next level of I gotta be a responsible individual and not just enjoying my house as a bachelor.

Ended up getting into subdividing land to try to build a new construction for my beautiful bride, which was able to do. And then kids came along. And I said, okay, I want to be able to build some kind of investment where it’s going to give me long-term wealth where I can have a monthly income. So I started getting into the multiple families and the Airbnbs. And then finally I was getting ready to retire. I been a teacher for 32 years in Oyster Bay.

I said it was time for me to retire from that and get myself a house in which we could enjoy with an extended family living in it. So all along, what’s been pushing my investment portfolio forward was basically different phases of life and what they would bring and what’s needed to make that phase of life work in the best possible capacity. How does that sound, Scott?

Scott Bursey (03:20)

That is just amazing. Thank you for highlighting that, Craig. That gives us a fantastic foundation. Craig, what really caught my attention about you was the way you’ve been able to do all this with your own two hands. And then turn around and teach it. You have subdivided land. You have built a home with a modular company. You have bought multifamily homes and an RB.

And now you teach beginners at Stony Brook University. Most pros guard their playbook. Craig, you’re teaching yours. Taking that a step further. Interested to hear. Your book’s called Flip Your Mindset. What’s the first mindset flip a brand new investor has to make?

Craig Marlow (04:01)

That’s an excellent question. so I would say that depends on what kind of brand new investor that you’re talking about. If you’re talking about an investor that’s solely what they’re looking for, versus somebody who has a house that wants to use that as an asset to actually buy different multiple family houses or use that cash to subdivide or get an Airbnb. So if you’re asking me,

My push is to help individuals understand the power of their own personal home and what they can actually do to build wealth through that home and through the equity that home builds. So that I would say is my biggest push. And that my book hits a whole bunch of different angles in which you can do that. And once you get beyond your own home as a personal asset, then all of those other

investments that you’ve done, well, that will actually give you another whole level of ability to even get a greater portfolio for investments.

Scott Bursey (04:57)

And your book’s called Flip Your Mindset. What’s the first mindset flip a brand new investor has to make?

Craig Marlow (05:04)

Gotcha. So looking at everything with different eyes. your home isn’t just a home, it’s a place to build wealth and it’s a place to use to invest. that’s the first mindset. Second mindset is this stuff doesn’t happen naturally. you’ve gotta work hard for this stuff, you’ve gotta learn how to dig for something. It’s like

Well, you know those people that walk on the beach with the little metal detector looking for the lost ring? that’s the kind of mindset that somebody has to have. It’s not going to be given to you. You’ve got to go out and get it. And it’s the hard work and the dedication and the not giving up, those opportunities will pop up just like that lucky person on the beach finds the ring.

Scott Bursey (05:44)

Appreciate you sharing that. And that book sounds really fascinating. And wondering, Craig, what project along the way fought you the hardest?

Craig Marlow (05:54)

I don’t want to go into the whole story unless you want me to. It’ll take a bit of time, but we had an investment home where one of the tenants just because she knew how to play the game ended up stop paying us rent. Now my rule of thumb is always have two units so that if one unit is vacant or somebody stops paying for it.

The other unit could still keep that house afloat without coming out of my own pocket. So thank God we did that. But this tenant not only decided not to pay rent, she also decided to put an order of protection against me because I was trying to collect the rent. She said I was harassing her. I won’t even get into, but then one step farther, every weekend she’d go out to the bars and give my personal cell phone number out saying that.

Tenant downstairs that lived underneath her, who was very happily living there, was moving out and she said, This Craig wants to show you the place. So every weekend I was getting 15 texts from random people saying they wanted to see my vacant house downstairs. And it took me a whole year to get her out of that house. that was the biggest hurdle fight that I ever had.

Didn’t like it. I don’t like having to go to court. It’s very expensive and very annoying and very time consuming. Very frustrating to know that somebody is simply taking advantage of your kind nature because they could. How’s that for a crazy story?

Scott Bursey (07:13)

it was quite a fight and let’s expand on that a little bit, Craig. what did that fight teach you that I guess you still use today?

Craig Marlow (07:22)

It taught me a couple of things. it did teach me that there are states that are friendly toward landlords and states that are not friendly to landlords. So now I’m mostly buying investment homes in a different state. Pennsylvania’s a little bit better for it, and I can still drive there. so I’m buying investment homes in states that are friendlier towards landlords. Number one. Number two is on all of my leases now, I actually have

a guarantor, a parent, a brother or sister, because these people that are professionals, they’ll be very happy for you to go after them, knowing not a whole lot you can do. But if their brother, sister, parent is on the lease and they know I can go after them, that has a tendency they don’t take advantage as much. So those are just two of the many different lessons I learned from that situation.

Scott Bursey (08:07)

And those are two huge lessons for our listeners to take notes on. Interested to know, Craig, where is the biggest opening or opportunity for a beginner starting out today?

Craig Marlow (08:18)

So I had one of my students from Stonebrook say he had thirty thousand dollars. What should he do with it? I said that his best bet is to find a multiple family home that is within your price range, a hundred and fifty, two hundred thousand dollar home, and they’re there on the outskirt of whatever city that he’s close to. And then use that as a down payment.

And then start making cash from that $30,000. Make sure it’s a two or three bed family home. you can get loans where you don’t have to be making money. I don’t have to have a salary in order to get it. There are loans that are out there that if the rents pay for the actual house, the down payment is really all that you need. So he really appreciated that and he hasn’t found one yet, but I’m helping him look for one as we speak

When we hit the right one, he’s going to use that thirty thousand dollars and you’ll probably be making five, six hundred dollars a month from it. So I guess beginners that actually have nothing, you want to search for homes that the rents will cover the mortgage and use a mortgage company that will actually give it to you off of the rents and not your own personal income.

Scott Bursey (09:23)

That’s a solid approach. Thanks for sharing. Digging in here, what is the biggest threat facing a new investor right now in your view?

Craig Marlow (10:10)

Biggest threat for a new investor.

So my son is turning 22 and he’s very eager. he’s got one investment home already, and he’s very eager to get into another. I don’t know if it’s a threat, but the biggest danger is to overextend yourself. So if he got some cash from his wedding and he’s like, well, I’m gonna buy another home and then I’m gonna refinance the first house and buy another home. And this is the method of making a lot of money, and

Really upping your portfolio. But the danger comes if you start buying too much, where if things go south, somebody stops paying for something, or you have a major issue with something, now you don’t have the ability to keep that thing afloat. And now you’re dealing with foreclosures or any of those type of things. So I guess the biggest danger for new investors is overreaching.

Scott Bursey (10:57)

Overreaching, yes, makes a lot of sense. How do they protect themselves from what they’ve already built?

Craig Marlow (11:04)

That’s it. Actually, that’s in my book. That’s a whole couple of chapters at the end. Three things. Number one is you gotta have an LLC. you can get sued personally from somebody renting a house. So you want to create some distance. So every single one of my homes has an individual LLC with its different name designated. So create an LLC to put some distance between that and the tenants. the second thing is.

Insurance in my book, I talk about a story about where my house burned down and I didn’t have the right insurance and I lost my shirt on that one. So make sure you have the correct insurance that will ensure that if the house burns down or something happens, that you get paid back the right amount to rebuild the house. I always say never buy just a single family rental house, it’s either two or three, so that if one of them stops paying.

The other tenants will keep that house afloat without it coming out of my own personal pocket. So I guess those are my big three big ones.

Scott Bursey (11:56)

That’s the trifecta right there. Thanks for walking us through that. And real talk, Craig. What does your next big move look like?

Craig Marlow (12:04)

So I would say within the next two or three years, I’m just piling up as much cash as I can. I know there’s gonna be a dip in the rental market and the multiple family market. So when that dip comes, I’m expecting to pick up two or three, maybe four or five different investment homes. I’m hoping to pick up some of them that are short sales that might have been dealing with PMI insurance, maybe a couple of foreclosures for people who

overbought. that’s basically what I’m keeping my eyes out. I always keep my eyes open for potential subdivision, but those are far and few between. So the multiple families is probably where I’ll be focusing on.

Scott Bursey (12:39)

Where does Flip Your Mindset fit into that move?

Craig Marlow (12:42)

So again, I got a lot of different stories of different houses that I purchased. I actually purchased a home for $15,000 in 2018 that was listed for $119,000. The agent wasn’t happy with me, but I realized that there was a PMI insurance paid. So I offered them $15,000 and they gladly took it. It was a two family that is now worth $175,000.

and is bringing me in twenty one hundred dollars a month. so the flip your mindset has a bunch of different stories to show you how to find these pieces of gold in the sand when you’re looking for it. so the book goes through and shows you how to find these different rare finds that can actually boost your whole assets

to a much higher level if you get them at the right time or the right place.

Scott Bursey (13:26)

Appreciate you giving us that inside look. You’re teaching beginners at Stony Brook. What is the one mistake you see every single class make?

Craig Marlow (13:35)

Wow.

Leaving my clash twenty minutes early?

Scott Bursey (13:37)

Yeah.

Craig Marlow (13:38)

the biggest mistake that I see my students making is they’re looking at a home in their twenties that is going to meet their lifestyle now. They don’t look in the future. So you want to get a home that needs a lot of work in the best neighborhood. And they’re afraid to get their hands dirty, they’re afraid of the work that something needs.

they’ll take a smaller house in a better condition in a not so good neighborhood versus a bigger house in bad condition in a better neighborhood because they don’t want to put the work and effort into being uncomfortable for a certain period of time. and again, that’s fine for anybody who wants to do that, but if they want to make money in real estate, they’ve got to flip their mindset. They’ve got to look at a house as a way to build equity throughout the time.

The other thing is people don’t want to be inconvenienced. When I first bought my house at 22, I had four bedrooms. That means I had three roommates. They were each paying me every single month. Did I like having roommates? No, but they were paying for half of my mortgage because I was doing that. people are short-sighted. They think getting a home is the end game instead of the beginning of their journey in real estate.

Scott Bursey (14:46)

Appreciate your insight there. Craig, if you could describe for our listeners, what does your professional network look like right now?

Craig Marlow (15:29)

you gotta build yourself a reputation. And so I’ve got a reputation amongst all the other real estate agents that I have. you gotta work hard for that. I’ve got a group called REI at Stonebrook that’s got some of the biggest and best names of everything you can think of on Long Island. You’ve got lawyers, you’ve got mortgage people, you’ve got commercial real and residential, you’ve got

developers. And so they’ve got this big network that gets together. I’ve just recently started to invest time in that. And again, if I was to give some advice for younger investors, I would find that network and those groups earlier on and go to whatever events they have and just meet people, sit down with people. Even if it doesn’t produce anything solid, you’re still meeting somebody and learning from their expertise.

mine’s REI from Stony Brook. It’s a great group of people.

Scott Bursey (16:16)

Thanks for giving us that look in your circle, Craig. And Craig, let’s dive deep. If you had to start over today with no clients, no book, no classroom, just your twenty five years of know how. What’s your first move?

Craig Marlow (16:30)

Well let me clarify, as a real estate agent or as an investor?

Scott Bursey (16:33)

as an investor and then take us down the road as an agent as well if you would.

Craig Marlow (16:38)

Okay. So I had a friend of mine he was working real hard. He was a painter and he saw what I had done and he wanted to do the same thing. He wanted to buy his first multiple family house before he was 25 years old. So I explained to him, I said, you need to save up twenty-five, thirty thousand dollars cash in order to do this. And he says, Craig, I can’t, I don’t have the ability. So I asked him, I said, okay, how much do you spend on breakfast?

How much do you spend on your car? How much do you spend for lunch every day? Do you go out for dinner? And he said, Yeah. So I’m like, okay, you’ve got too much of an expensive car. you spend way too much money going out to dinner. I said, change your habits for the next year and you’re gonna have enough cash to buy your first without even saving. Just change your spending habits, and you’ll have enough money to buy your first investment home.

And so I would give myself that same advice. if I was starting all over again, I didn’t have anything, I would change my lifestyle in a way that within a year I’d have what I need. I would learn, I would read books, I would save money, I would do whatever I had to do to get to the point where I could be where I can purchase my first investment home all over again in my twenties.

Scott Bursey (17:44)

Tighten the belt. Yes. Absolutely. Well, thank you for that. That is some incredible advice. And Craig, you have given us a lot of golden words. But is there any additional advice or maybe a golden nugget or two that you could leave with our listeners?

Craig Marlow (18:00)

Golden nugget or two.

I guess, being fifty nine years old, I know I hardly look thirty, but yep, fifty-nine years old, I would say fifty nine happens within a blink of an eye. and the earlier you start, the better off that you’re going to be. time goes fast. Time can be an asset or time could be your enemy. so if you start earlier, time will be your asset

Whatever you can get in your twenties and your thirties, 20 or 30 years later, you will be reaping the benefits from that. I guess that’s my first nugget. and then my second nugget is be vigilant, don’t stop, just have fun with it, be aggressive and don’t say no for an answer. find those deals. Learn how to do things along the way. Get the knowledge through other people and just

Figure out how to find your niche, whether it be multiple family houses, subdivisions, developing, Airbnbs, find your niche. Figure out what that is.

Scott Bursey (18:55)

Two solid golden nuggets right there. Craig, where can listeners find your book Flip Your Mindset?

Craig Marlow (19:01)

Well, it’s coming out in about two weeks. Three tops we’re talking about beginning of November. it’ll be on Amazon and I actually used a very surprisingly good self publisher called Book Baby. So it’ll be also available through them. But you’ll be able to find it on Amazon.

Scott Bursey (19:17)

Craig, for those of our listeners that want to keep this conversation moving, stay in your lane, or collaborate with you on future deals, what’s the best way for them to plug into your pipeline and reach you directly?

Craig Marlow (19:28)

So one of my old students at Stony Brook said, I do not have a very good social media platform. So this awesome young man took me under his wing and he created an Instagram account for me. And I said, Well, is this something that people could actually get in contact with me and ask questions? She said, Absolutely. I guess the young people call them DMs. I don’t know, but that we’ll go from that. the Instagram is

Marlow Man Realty.

Scott Bursey (19:51)

Craig, thank you so much for joining us today on the real estate pros podcast.

Craig Marlow (19:56)

Thank you for having me.

Scott Bursey (19:57)

It was a sincere pleasure. And to our listeners, we appreciate you. If you receive value from today’s episode, please subscribe. We’ll be fueling your tanks with a lineup of elite guests, just like Craig Marlow, 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 in the next episode, everyone.