How to Start Real Estate Investing by Living in Your First Flip

Robert Marucci (00:00)
So if I started today, I would probably look for a good first, first, if I had nothing, no real estate portfolio, I would look for a potential investment that I can live in for two years. Cause if you live in a home, fix it up slowly for two years. And when you go to sell it, you’re not gonna pay any taxes. So if you’re a young investor or or someone that wants to be an investor, ⁓ One play is to use your current home as an investment and just live there for two years before you sell it. So ⁓ and then you could just have a a strategy where every two years you move into a different home, fix it up as you live there and and and sell it, ⁓ and really do well. that’s something I wish I knew a long time ago. because I I I definitely was unaware of that.

Scott Bursey (02:22)
Welcome back to the Real Estate Pros podcast, powered by Investor Fuel. I’m your host, Scott Bursey And pro pros, today we have Robert Marucci from Better Living Realty. Robert is a total pro in the residential investment space. Whether it’s single family homes, condos, or navigating those complex short sales, he’s built a reputation for turning tough market conditions into constant wins. You can expect some serious actionable tactics today in optimizing portfolios and handling distressed assets like a pro. Robert, welcome to the show.

Robert Marucci (02:57)
⁓ thank thank you, Scott. Thanks for having me.

Scott Bursey (02:59)
It’s just great having you here, my friend. And to help our pros get up to speed. Please give us the ninety second highlight reel and how your career ignited and where you’re pouring your fuel now.

Robert Marucci (03:10)
Okay. Yeah. So basically I started in real estate back in 2008. And ⁓ I it might have been the worst time ever to to get into real estate. But I started by just I wanted to buy some rental properties. went and was able to purchase two right away. because back then you didn’t have to show income or anything like that to get a loan. ⁓ and then I kind of transitioned from there and I’m like, I want to.

Become a real estate agent so that I can get my own commissions on the on my investment properties. ⁓ and I I just kind of fell in love with real estate as a whole, enjoyed, you know, finding my own properties, started working with buyers and sellers, and kind of the rest is history. Went went on, opened my own brokerage after two years. ⁓ and we slowly have grown ⁓ over the years since 2010. ⁓ we’re up to 30 real estate agents.

And you know, every day we learn something new. The market constantly changes and we are in one of those those real estate industries that you have to keep an eye on and and watch day to day. ⁓ but excited to share my story and and and dive a little deeper with you.

Scott Bursey (04:21)
Well, thank you for sharing your insight. It’s always great to hear how people find their footing. And Robert, what really caught my attention about you was the way that you’ve been able to master the short sale market while at the same time scaling a diverse portfolio of single family homes and condos. And on that note, curious to know what was the specific turning point that made you realize you could scale your operations so effectively in such

Diverse niches.

Robert Marucci (04:50)
Yeah, so ⁓ when I first started, ⁓ I wanted to buy multifamily homes. That was kind of ⁓ what I read about and what I what I thought would be the most lucrative and you know make the most money in the end. ⁓ but kind of kind of after you start getting into landlording, ⁓ multifamilies can can be difficult. They they take a lot of time, there’s a lot of turnover. So that’s where I kind of transitioned into the single family homes. And ⁓ I love them.

For two main reasons. One, ⁓ there’s usually never ⁓ turnover. So I have properties from I moved out of my first house in 2010. And to this day, I still have the same tenant in there. So we transitioned ⁓ you know, from multis single families. And then the next transition was we started looking at mixed-use properties, where some people don’t know what that is, but

Mixed use is commercial on the first floor typically, and then we’d have residential on the second. And those are properties that for a long time were hard to finance. So people didn’t didn’t know about them. So we actually bought bought a couple of properties that are mixed use and were able to put our business on the first floor, have rental income income on the second. And then more recently I transitioned into I guess I call them Airbnb properties. ⁓ and I always tell people,

You know, they could be super lucrative as long as you do your due diligence and and ⁓ are aware of the pros and cons. So I always tell people the most important thing is to find a property with a draw. So you need to find something that will attract people to rent. ⁓ so where I purchase is pretty close to the ocean and it’s in Rhode Island and ⁓ they’ve been incredible. They’ve been from something that we just dreamt about having just a property to

you know, one of our best investments, ⁓ which which is amazing. So and it’s good to have a a a a diverse portfolio ’cause sometimes, you know, who knows what happens with the economy and, you know, maybe the the vacation rentals doesn’t do so well. So now you we have stuff to fall back on. So

Scott Bursey (06:55)
I love that approach to scaling. And Robert, help us understand what specific skill set do you rely on most when negotiating short sales that keep your success rate high?

Robert Marucci (07:54)
Yeah. So with ⁓ short sales, so you don’t see them as often now because of ⁓ the values have just doubled since COVID. but it but in the past, short sales were you have to have patience and you have to really find I I I guess the the main person in the banks to contact. ⁓ so sometimes it it’s not just look up phone number, get the first person on the line.

⁓ it takes time to find the person in ⁓ loss mitigation ⁓ departments of banks to get there. And then it’s also learning the process. So banks are not in the business of foreclosing on people. So they really do want to work with ⁓ sellers. So if someone’s behind on their payments, ⁓ we’re gonna put the house on the market, we’re gonna advertise it that it potentially a short sale.

could take a little longer and then you have to go through the proper steps, proper paperwork. I mean the bank will provide that ⁓ because they don’t want to foreclose. So we’ve done many short sales in the past and some take two months, some take two years. So you you have to have patience too.

Scott Bursey (09:03)
How do you train your team to maintain the same level of precision?

Robert Marucci (09:07)
So that we we try to have our quarterly meetings and at times we we go through that process. Or if it’s a new agent who’s never dealt with a short sale or foreclosure before, we we tend to do one-on-one, ⁓ kind of help them through the process. me individually or phone calls. Now we do Zoom phone calls, which help out, which help out a lot.

Scott Bursey (09:30)
Thank you for highlighting that. And Robert, we’re eager to hear what is the most common pitfall you see investors make when dealing with condo associations and how do you mitigate it?

Robert Marucci (09:41)
So I I think the number one thing with with condos and and associations is you have to be aware of the the cost, the fees. ⁓ the monthly fees, they they never go down. So if you’re buying an investment, you have to always always put in your your ROI sheet that the costs are going to go up. Then there’s always special assessments. ⁓ so you have to kind of ⁓ really dig in and find out if there’s any coming up, if there’s roofs or sidings or or

deck repairs that that are coming because that’s that’s gonna tap into your your bottom line. so I think the biggest thing with i condos associations is to really ⁓ write down the numbers and be cautious of expenses that can come up in the near future.

Scott Bursey (10:25)
Do you find that self management or third party management works better for your specific condo portfolio?

Robert Marucci (10:32)
So for me, I never I I tried different property management companies and I felt like I was getting the phone calls anyways. So anytime there was an issue, I was getting the phone calls. So I think the most important thing if you’re if you’re a small time investor and you have say one to five properties, ⁓ the most important thing is to build a network of individuals that you can call when issues arise. So plumbers

I I think actually I think number one is a handyman because they could do most of the the the jobs that are required. But then having a plumber, an electrician, an HVAC, you got to build that network that they can respond when when issues do arise. ⁓ and then there are good companies out there that you can hire. ⁓ but just make sure that these property management companies will take all the calls. They will handle everything and they don’t have to call you for a a hundred dollar faucet.

Scott Bursey (11:26)
I appreciate the transparency there. And let’s talk about the current landscape. Where are you seeing the biggest opportunity in the single family home market that most investors are maybe overlooking?

Robert Marucci (12:13)
So I I think especially in like more of the the cities around Connecticut ⁓ and even Rhode Island, there are still opportunities with single family homes ⁓ to buy as either you could flip them or you can keep them as as a rental. ⁓ because the the rental price of an inner city compared to say a suburb ⁓ are pretty comparable. So yes, they’re gonna be more in in a small town.

But the price in a small town may be double. So you’re not going to get that income monthly that will cover the mortgages, the taxes, all the expenses. So there’s, you know, if you’re going to go single family, I think you probably should look more towards the the bigger cities. And then really learn, get a real estate agent that that knows that city and knows where ⁓ you want to rent and where you would not want to rent, where you want to stay away from.

Scott Bursey (13:05)
Is there a particular price point you’re focusing on right now to maximize your returns?

Robert Marucci (13:11)
Yeah, so if you’re looking for an investment in in especially in a single family, you’re looking under that $350,000 price range. ⁓ more bedrooms, the better. So minimum of two. ⁓ ideally you would want a three bedroom ⁓ to to rent, because then you’re gonna get top dollar ⁓ for it.

Scott Bursey (13:29)
That’s a great perspective. Definitely something our pros should be watching. And Robert, we love your take on the current economy. How are you adjusting your acquisition strategy to protect your cash flow against rising interest rates?

Robert Marucci (13:43)
Yeah. So so right now ⁓ you have to be very cautious with purchasing a property just because of the rising costs. So everything has risen. Like you said, ⁓ interest rates are still around seven percent, maybe in the sixes. taxes have gone up, insurance has gone up. ⁓ so you really have to ⁓ utilize the tools available to us to to know exactly what

⁓ it would take to make a property ⁓ worth purchasing. So ⁓ I I harp all the time on AI and ChatGPT and in five minutes I could have this beautiful spreadsheet of you know all the income coming in and then all of the costs associated with it to see if it actually would work. And it you know it gives you a really good breakdown. So you know right now utilize your tools you

You know, there’s not a ton of deals available because the prices are going so high, but they are still out there. Some properties may just need a little bit of work. And if you’re buying a rental property, ⁓ it doesn’t have to be perfect. So you don’t have to do granite countertops and stainless steel appliances, ⁓ new roofs. You know, if the roof is is in good shape, you don’t have to change it. So ⁓ properties that need a little bit of work also can can work great as a as a rental investment.

Scott Bursey (15:03)
Have you found yourself shifting towards more cash heavy deals or are you ⁓ still leveraging financing primarily?

Robert Marucci (15:11)
So I have seen a big increase in cash purchases. ⁓ in Connecticut, we have seen a lot of people come from New York. at one point, we were probably seeing over 50% of all sales come from people coming in from New York. Because houses in Connecticut are, you know, maybe a third of the price in New York. And, you know, you’re getting a bigger house, you’re getting a bigger yard. ⁓ so a lot of people were coming in from there, and a lot of them did have cash.

⁓ you know, I I we had a a client that came in and sold their property for like one point four million dollars. ⁓ it was five hundred square feet in New York. And they purchased ⁓ a 2,500 square foot house for like 900,000 and they were able to pay cash for it. so we are seeing cash come in. And then the other thing that I’ve I’ve heard of recently is is it seems like people are maybe selling some of their paper assets. ⁓

because stock markets the highest it’s ever been. And they’re they’re using that cat ⁓ as a down payment or cash on on a property. So I would say we’re we’re seeing maybe twenty five, thirty percent cash. ⁓ but still people obviously need financing.

Scott Bursey (16:23)
And I love that distinction. Tell us, Robert, how do you ⁓ personally balance the immediate high touch demand of short sales with the long term passive ish play of hold properties?

Robert Marucci (17:17)
⁓ yeah, I I mean, you have to have a balance. So I think when you’re looking for real estate, ⁓ you can’t in this current market, you can’t just pull up the MLS and you know, say, Hey, what properties can I buy for a good investment? You have to utilize every landscape available. so you have to go to the town cards, you have to see pre-foreclosures coming up, you have to maybe go to tax auctions. ⁓ they have them every single week.

typically on a Saturday, in Connecticut anyways. And you you have to do do your research. So you know, getting a professional real estate agent that knows all these avenues ⁓ will will benefit you. And, you know, you have to be willing to make offers too. So you might have to make forty, fifty offers ⁓ before someone’s gonna accept one.

Scott Bursey (18:09)
That balance really is the holy grail. I appreciate your perspective on that. And we love your perspective on this. If you had to start from scratch today with just your current knowledge, what is the one move you’d make, you know, in the first 90 days to generate the most significant ROI?

Robert Marucci (18:28)
So if I started today, I would probably look for a good first, first, if I had nothing, no real estate portfolio, I would look for a potential investment that I can live in for two years. Cause if you live in a home, fix it up slowly for two years. And when you go to sell it, you’re not gonna pay any taxes. So if you’re a young investor or or someone that wants to be an investor, ⁓

One play is to use your current home as an investment and just live there for two years before you sell it. So ⁓ and then you could just have a a strategy where every two years you move into a different home, fix it up as you live there and and and sell it, ⁓ and really do well. that’s something I wish I knew a long time ago. because I I I definitely was unaware of that.

Scott Bursey (19:19)
That’s a killer strategy. Thank you for dropping that value for the pros. And you have dropped a tremendous amount of value here today. But Robert, is there any additional words of wisdom or golden nuggets you can leave with our pros?

Robert Marucci (19:34)
Yeah, so ⁓ we we mentioned this program that that my company has. ⁓ so I call it curb to close. It’s a program where we help all of our sellers get their property ready for sale. ⁓ we basically walk through it, we tell them, you know, A, B, C, D, these are things that are gonna increase your value. Typically they’re painting, they’re power washing, it’s landscaping, and then a lot of times it’s minor repairs. it’s a program that

I developed because every listing I ever had, I would tell everybody you need to paint, you need to clean, you declutter and do these minor repairs. And then a lot of people, you know, maybe didn’t have the time, maybe didn’t have the resources. ⁓ so we’ve developed this program where our company will will handle all that for for you. ⁓ give you a free thousand dollars worth of updates and any additional cost we we charge at the end. So when the c when it actually closes is when you would pay your

your updating bill. So it’s a great program. I have 30 agents that all are aware of it. They’re all taking advantage of it. ⁓ And we love to to kind of help you out if you need it.

Scott Bursey (20:40)
Powerful, unique. And that is just truly awesome. For those of our listeners, Robert, that want to keep this conversation moving, stay in your lane or collaborate with you, what’s the best way for them to reach you?

Robert Marucci (20:53)
So ⁓ we have our website, betterlivingrealtyllc.com you could always go there. There’s links to send out emails. ⁓ you could always call our office number ⁓ (203) 756-2520. ⁓ and all of our agents are on the website. Everybody has their contact info with their email and phone numbers. and we we’d love to talk to you guys.

Scott Bursey (21:17)
Robert, you really brought the fuel today. Thank you so much for joining us. Thank you, Scott. And to our listeners, we appreciate you. If you receive value from today’s episode, please subscribe. We’ll be fueling your tanks with the lineup of elite guests, just like Robert, 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.