From Duplexes to Apartment Complexes: A Real Estate Journey

In this episode of "The WealthGenius Podcast," Alfonso Cuadra talks with Mark Loeffler about his evolution in real estate investing. They discuss Mark's transition from duplexes to large apartment buildings, the challenges of renovating distressed properties, and the strategic decisions that have led to his success. Mark shares insights on the benefits of holding assets long-term and his recent investments in Alberta, providing valuable advice for aspiring real estate investors.

About Mark Loeffler
As the founder and executive director of Freedom Tree, I’ve combined my passion for construction and Real estate with my commitment to philanthropy. We’ve raised funds to build 3 clinics and 2 schools in Sierra Leone, West Africa, aiming to reduce maternal and infant mortality rates. Our efforts have been recognized by the local government and the city of Calgary, where we received the Calgary Peace Award in 2012. My experience in real estate and construction complements my charitable work, allowing me to make a meaningful impact in communities in need.

I wake up every day wanting to make a difference in the lives of those I meet.  I am grateful for life!

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Transcript

Carl Richards  00:05

Welcome to The WealthGenius Podcast presented by EXPAND Wealth Real Estate Fund, secure investments, solid returns. The WealthGenius Podcast, strategies for multifamily real estate investing, mindset, community, success. The WealthGenius Podcast with your host, The Godfather of Real Estate, Alfonso Cuadra, who has expansive experience in business and massive success as a real estate investor. The WealthGenius Podcast, let's dive into today's episode!

Alfonso Cuadra  00:40

Mark! 

Mark Loeffler  00:41

Alfonso!

Alfonso Cuadra  00:42

You've made it. Finally! 

Mark Loeffler  00:43

I have.

Alfonso Cuadra  00:44

 I think I've been on your show once,

Carl Richards  00:45

Once. 

Alfonso Cuadra  00:46

Once, and it was the best show that I've been on.

Mark Loeffler  00:50

Well, you- it's the greatest host.

Alfonso Cuadra  00:53

But I remember like, you know you're asking me all these questions, and we've know each other for a long time. And so I remember thinking like, "oh, I can't wait to have him on my show, because I have a lot of questions for you, my friend." 

Mark Loeffler  01:05

All right! 

Alfonso Cuadra  01:05

And you've been around for a long time, highly successful. You've transitioned into apartment buildings, just like I have. So we have a lot of that in common. I remember maybe 15 years ago, I can't remember when that was that someone handed me a book with your face on it. 

Mark Loeffler  01:24

Yeah, it was. So that book came out in either '07 or '08.

Alfonso Cuadra  01:28

Yeah. So maybe- 

Mark Loeffler  01:30

Yeah, oh yeah, oh '08, '09 maybe. Yeah.

Alfonso Cuadra  01:32

So I remember, you know, going through the, you know, rent-to-own, because I was in it was doing a lot of rent-to-own as well at that time, and just highlighting some things in the book, and I was trying to look for it, but it's somewhere in the boxes and storage or something. But I wanted to come and have it 

Mark Loeffler  01:47

Have me autograph it for you!

Alfonso Cuadra  01:48

Oh yeah, that would be awesome. So you know, how did it all start? How did you get here?

Mark Loeffler  01:54

Oh, geez, how did I get here?

Alfonso Cuadra  01:55

Let's start from the beginning. 

Mark Loeffler 01:57

Oh crap. I mean, I started buying duplexes in Newmarket, Ontario. I literally tried to buy my first property. I think I was 19 or 20 years old in Toronto. So if you know Toronto at all, it was in the East End, Woodbine, or Woodbine, but Woodfield Avenue, it was a detached property for like, $180,000 back then.

Alfonso Cuadra  02:16

180- let's just stop for a moment, $180,000 for a property in Toronto.

Mark Loeffler 02:23

Detached, two story, had parking, already had a basement apartment. 

Alfonso Cuadra  02:28

Wow. 

Mark Loeffler  02:29

So I was like, "Well, I can buy this, basement apartments paying $700 back then, that's a $2,000 apartment now or more, and I can rent out the rooms for four or $500 a piece, and basically live for free." And I just couldn't pull it together, like, for whatever reason, I just didn't understand. 

And I was like, $2,000 short. I couldn't come up with $2,000 extra. And, you know, you could talk to my parents, and they were like, well, this is a nicer house than ours. And I'm like, "Well, what does that have to do with anything?" I go-

Alfonso Cuadra  02:59

You can't have a nicer house than ours!

Mark Loeffler 03:01

Yeah, when you're 20-19, 20, like you don't even, like, you're working this kind of Joe job while you go to university. And I'm like, "Yeah, well, it's still like, just help me buy it. And I live for free. I get out of your house, right?" And anyways, that deal fell through. And then I finished university. I traveled a bit. I went to Australia, hung out there, played rugby, traveled around Southeast Asia, came back, got a real job at, like- 

Alfonso Cuadra  03:28

Grown up job.

Mark Loeffler  03:28

Grown up job, sales job at Canon. And yeah, I started, like, read Rich Dad, Poor Dad. Got introduced to other real estate investors. Started, you know, talking to them about how to do some deals got introduced to an agent bought three or four properties, duplexes, Newmarket. 

Finally bought a house back in Toronto, which was in the junction at the time, and it cost me 280 for a duplex.

Alfonso Cuadra  04:14

 And so early on, you were intrigued about real estate, yeah? And then you had, you made a move. What was the first move? 

Mark Loeffler 04:24

First move was to find people who were doing it and get connected with them. And I still, I bought my first property, and I still didn't know what the hell I was doing. I bought it and had all these conditions. I just waived them. I didn't have my mortgage set up or anything. My realtor calls me two weeks before closing. "Hey, who's your lawyer?" "I don't know, I don't have a lawyer." He's like, "Oh, you're using this one. Harriet Altman, she was great!" 

Alfonso Cuadra  04:47

Wow. 

Mark Loeffler  04:48

And he's like, who- where's your mortgage? I'm like, I don't have one yet. He's like, "Oh, crap, you're going to this guy." And they- yeah, they sorted me out, and I got all done. And, 

Alfonso Cuadra  04:56

Yeah.

Mark Loeffler  04:57

Yeah. 

Alfonso Cuadra  04:57

Wow. And the first in, like. Because I can remember the first time I closed a property, like, my first closing, like it was like sweat and like, I was like, afraid that they might lose the money, maybe the money doesn't hit the lawyer's account, or whatever. You know what I mean, it was just all these things going through my mind. And you were relaxed.

Mark Loeffler 05:16

I was- I was more relaxed. I didn't have that for sure. It was more like, okay, and then everyone was just like, they basically came together. And while this might not close today, I'm like, "Oh well." And ended up closing on time, everything happened, and I was up that weekend, like, chopping down a tree and working on the property to get it rented out upstairs. 

Alfonso Cuadra  05:37

And how did you get into the rent-to-own space? I mean, people get in-  dabble in rent-to-own. But you, you were, 

Mark Loeffler  05:43

Yeah, I- 

Alfonso Cuadra  05:43

You were for- you were bullish on it. 

Mark Loeffler  05:45

I owned a company that did rent-to-owns. I obviously taught rent-to-owns, I wrote the book on rent-to-owns. A book on rent-to-owns, one of them now, but back then, it was the book. I got into it because, you know, you're buying these duplexes and even back then, but you're paying 7% interest. 

And they just didn't cash flow, right? Like, it's like, how do you retire from real estate? Or, how do you retire, live off the cash flow, by owning real estate. And buying these rentals, I saw my net worth going up, but I didn't see the cash flow increasing. So I got into rent-to-owns because it was better cash flow. 

Alfonso Cuadra  06:20

Yeah.

Mark Loeffler  06:20

And then, you know, I again, I did the same thing I did when I wanted to buy real estate. I found somebody who was doing it, and said, What are you doing? And then, you know, I shifted it a little bit to make it work for myself. And then I found other like minded people who wanted to do it, and we formed a company that, basically, we did called it Tenant First Rent To Own, and we would find the tenant, we would approve them, and then they'd go and buy a house. 

Alfonso Cuadra  06:46

And are you still doing rent-to-owns? 

Mark Loeffler  06:48

No, no. And the reason I don't do rent to owns is because it's active, right? It's more active and you have to sell the property. I mean, you're contracted to sell the property to these people, and I like to buy and hold. I like to buy it, right, build it out, set it and forget it.

Alfonso Cuadra  07:05

Yeah. And what I love is that you've transitioned into apartment buildings, which is kind of my MO This is my space. I This is where I live and breathe. And, you know, everyone has to make that transition. Some people don't. Some people stay, you know, doing the ones and twosies, which is fine. 

Mark Loeffler  07:22

Yeah.

Alfonso Cuadra  07:23

But you've made that transition into bigger assets. And so why did you make the transition? And how did you make the transition?

Mark Loeffler 07:30

So I made the transition. I was buying three, four unit properties in Hamilton, all over, really, and buying undervalued, like they have crappy tenants, or, you know, bed bugs, fire damage to whatever.

Alfonso Cuadra  07:41

I remember going to Hamilton and, like, 20 years ago, driving seen all these boarded out houses, boarded up houses.

Mark Loeffler  07:48

I was buying all those, the worst, the better. Yeah, like, cheap, right? I remember I bought one, and the neighbors were hugging me when I the tenants were moving out, and they're like, "these were the problem, like, this is, like, the neighborhood is much better now that you've bought this, even just by buying it." 

Alfonso Cuadra  08:06

Yeah, yeah. 

Mark Loeffler  08:07

And by getting those tenants out, I probably just increased the value 80 to 100 grand.

Alfonso Cuadra  08:11

Wow. 

Mark Loeffler  08:11

Without doing anything to the property. 

Alfonso Cuadra  08:13

Yeah. 

Mark Loeffler  08:13

I think I put like a $40,000 Reno and then sold it for like, 180 more than I bought it for, like, six months earlier, but I got into apartment buildings because financing. You can only own so many, three, four unit properties. And you know, the pendulum swings in financing, like back in 09, 08-09, you could basically buy properties zero money down 40 year AMS, they cash flowed like you wouldn't believe, right? 

Because they were on CMHC. CMHC approved debt, and then that all stopped. And it's like, 2013, 2014, 2015 and I, like, I was self employed, I can't get a mortgage. And then you're like, "Well, why don't you just do commercial financing?" Because then they look at your net worth and your track record, and I'm like, "Well, I have both of those." 

Alfonso Cuadra  08:57

And the asset. 

Mark Loeffler  08:58

And the asset itself, right? So what did I do? I found a 18 unit vacant building in Hamilton that was sinking because, well, various reasons, but one of the reasons was, I guess-

Alfonso Cuadra  09:10

Actually sinking, like, into the ground? 

Mark Loeffler  09:12

Yeah, yeah. 

Alfonso Cuadra  09:13

Or, like, just not doing well? 

Mark Loeffler 09:15

No sinking into the ground. It was totally vacant. And I guess at one point, because it was vacant, some homeless people decided to go in there-

Alfonso Cuadra  09:23

Wow!

Mark Loeffler  09:23

And take the radiators out, and they rolled them down the stairs, and I guess, caused it to flood. So when I after I bought it, we were going to turn the water on the city's like, "Whoa, you got to make sure all this stuff." And I'm like, "Well, what do you mean?" 

And the guy told me, he's like, "listen, I came here and shut the water off because the building was crying." The water was coming out the windows. It looked like the building was crying. So it had, like, scraped away all the sand. So we found, like, basically an epoxy that they lift up the runways with, and it like expands into. It's like a foam that expands into. The space. And so we created basically our own bedrock to- 

Alfonso Cuadra  10:04

Wow!

Mark Loeffler  10:04

Yeah, and lifted the building back up.

Alfonso Cuadra  10:07

So now you get this empty 18 unit, 

Mark Loeffler  10:10

Yeah. 

Alfonso Cuadra  10:10

What point did you think that this was a good idea? Or were you, were you know, were you doubting yourself the whole time?

Mark Loeffler 10:17

So at first it was a great idea. $600,000 for 18 unit property. It might have been even a little less, Hamilton, I think of maybe five, probably 30 grand a unit. And then at some points it's like, "oh, this and this." But then you find creative ways to fix things. So we bought it for 540, I think we ended up spending, I don't know, over a million dollars renovating that property. 

Alfonso Cuadra  10:39

Wow. 

Mark Loeffler  10:40

You know, once we finished renovating it, right away, we got a CMHC evaluation of like, 2.5 million on the building. CMHC- 

Alfonso Cuadra  10:50

Ch-ch-cha ching! 

Mark Loeffler  10:51

Well, CMHC, the regional director came to the building because the appraisal had such a high per unit evaluation. He's like, I don't understand. 

Alfonso Cuadra  11:01

I gotta see it for myself. 

Mark Loeffler  11:02

Yeah, so he came, and he's like, "Wow!" It's amazing, right? Because we had separate water, like, they paid their own water, heat, hydro, everything, right? We had a cell phone tower on the building, and they just couldn't believe the revenue we were getting from it. And they're like, "Okay!" And sign off on it, right? So-

Alfonso Cuadra  11:18

I love it. So now you've entered this apartment building space, and are you hooked right away, or you wait a while, or you just completely, you went into the apartment building and said, "Forget about rent-to-own. Forget about the ones and twosies and-

Mark Loeffler 11:33

I was done with rent to own by then, basically, well, I think I was still doing, like, some small stuff, but I had sold the company I was involved with. I had ran some courses on rent to owns and stuff like that. At first, when was I done? Like mid 2015-16, I would say, because there's a lot of work, right, like putting it all together and and again, I want to hold the asset, because you make money holding the asset, you don't make money-

Alfonso Cuadra  12:01

Selling it. 

Mark Loeffler  12:02

Selling it, right? You know, I call them big piggy banks, because you just have all these tenants putting money into a bank account for you every month right? 

Alfonso Cuadra  12:09

I love that. I love it so much. 

Mark Loeffler  12:10

But, yeah, then I bought, well, I don't know, I bought like, 12 unit property here, 19 unit here. And then I found a great partner at the time, and he wanted to partner with me on all my properties. So we bought seven buildings together until that covid kind of made him go a little. But then we sold all our buildings and made a lot of profit, nice. And that's when I went out to Edmonton. 

Alfonso Cuadra  12:34

Yeah, so you created a liquidity event? 

Mark Loeffler 12:36

Well, he created the liquidity and, I mean, we decided together, basically, I said, "Yeah, I think it's a good time to sell." It was like we were getting sub three caps-

Alfonso Cuadra  12:47

Wow.

Mark Loeffler  12:48

-on all the properties. So a building we bought the year before at like, a 4.1 cap, and we got a sub three cap on it. So we made a million plus dollars on that building. And I think maybe we put in, like, this is after the renovations but we put, maybe put 100 grand into it, like we had no money into it yet, at all, yet. So-

Alfonso Cuadra  13:09

And now you said Edmonton, so you made this transition to Alberta, and I feel like you're bullish in Alberta. 

Mark Loeffler  13:16

Very bullish. So here, here's what I did. Obviously, we sold those properties. I had this influx of cash, and I said about searching, right? Like, I was like, Okay, I can't buy in Hamilton if they're gonna sell at sub three caps. This was like, in the covid, like, cheap money, boom, all that type of stuff, right? 

I can't. It doesn't make financial sense. Like, those people who bought off me. They took 10 years of future earnings and gave it to me. And I'm like, I don't want to give somebody 10 years for future earnings. Where can I go and buy so I looked out east. I looked out west. I looked at all the provinces, maybe, except BC I looked down south. I looked like in Atlanta. I looked in Florida, Texas, Arizona, some of the other more landlord friendly states actually didn't look in Ohio back then. And I came about that Alberta had the best economic opportunity of anywhere in North America. 

Alfonso Cuadra  14:14

And what brings you to that point? Like, what do you think Alberta is so good right now? So let's time stamp this. We're June, June of 2024, yep. So where's Alberta going? In your in your view?

Mark Loeffler 14:26

So, I mean, just the immigration numbers are massive out there, and the jobs, right? They, they, they're creating jobs like you wouldn't believe. And they're all doing it with a fiscally conservative government that is running like a $4 billion surplus. 

Alfonso Cuadra  14:43

Wow. 

Mark Loeffler  14:44

That's after giving all the money to Ottawa and Quebec, right?

Alfonso Cuadra  14:49

Franchise fee. 

Mark Loeffler  14:49

Yeah, right. But like they are just creating jobs upon jobs upon jobs. So I'm part of a Facebook group, a couple of them, like Ontario people moving. To Alberta. And I see it every day, right? You follow the U haul, u haul stats, right? 

Alfonso Cuadra  15:04

Wow. 

Mark Loeffler  15:05

There are more full U hauls going well, there's exponentially more full U hauls going to Alberta, and empty ones coming back.

Alfonso Cuadra  15:14

Wow, wow. Yeah, so I was in a, I just did an event in Calgary, and you know, I would say maybe 100 people or so. And I remember saying to everyone, how many people were born here in Canada? How many people were born here? Four people put the put up their hand, yeah, four people in that whole room. Yeah, it was wild, right? Wild. I mean, you talk about the potential of 20 million new immigrants coming to Canada in the next 25 years. 20 million, that's in the low end.

Mark Loeffler 15:47

We're gonna be 68 million people in Canada in those next 20-25 years. 

Alfonso Cuadra  15:51

Yeah. 

Mark Loeffler  15:52

And Alberta, like Edmonton, slated to double in size in the next 10 years. 

Alfonso Cuadra  15:56

Yeah. And it's, when you go there, it's like, gorgeous,

Mark Loeffler  16:00

Yeah!

Alfonso Cuadra  16:00

Right. It's, there's a lifestyle component. I mean, Saskatchewan has the same opportunity. 

Mark Loeffler  16:04

They have no mountains.

Alfonso Cuadra  16:05

Exactly the view the lifestyle. They're gorgeous cities. 

Mark Loeffler 16:09

Anybody who's born in Saskatchewan leaves Saskatchewan.

Alfonso Cuadra  16:15

Love it. I love it, but it's still, I would say there's still an opportunity. But for sure, I would, I would agree with you on Alberta because of everything it has to offer.

Mark Loeffler 16:24

Yeah, I think it's for me, Alberta is just more diverse. Yeah, it's like, they're attracting tech jobs. They're like, clean energy there. They're clean energy jobs that they're attracting are massive, like, they have a massive hydrogen plant that's being built out there, $11 billion by Air Liquide, and they're like a hydrogen hub. So all the big trucks, they're going hydrogen, right? So all the big dump trucks you see up in Fort McMurray and all that type of stuff, they're all going to go hydrogen, not electric. You're gonna hydrogen. 

Alfonso Cuadra  16:55

What's the future for you? 

Mark Loeffler  16:57

I'm gonna keep buying more properties. I got a nice 44 unit I'm looking at right now. Got an 83 unit. That's, I love. It's fire damaged, it's condemned. It's right up my alley. The 44 units on the opposite side of the spectrum, it's like, turnkey. I don't need to do anything but raise rents. You know, I'm obviously a realtor in Ontario and Alberta, and I help people buy multifamily buildings. And I love it, right? Like, I just love, I love doing deals. 

Alfonso Cuadra  17:20

Yeah. 

Mark Loeffler  17:20

I love putting deals together, if they're mine or other people's. I love figuring out the intricacies of how to make that deal work. How do I get Alfonso 5% down? Is that the best deal? Or do we bridge it and then pull out all your money in a year? Right? 

Alfonso Cuadra  17:34

Yeah It's like guidance, proper guidance. 

Mark Loeffler  17:37

Yeah.

Alfonso Cuadra  17:37

I love that so much. And so we're gonna have all your information. They're gonna be able to get a hold of you through the show notes that we're gonna have attached to this episode. What inspires you, like what gets you up in the morning? 

Mark Loeffler 17:50

My dog, my kids? No. Well, yeah, yes and you know what, I just I've never been very good at sitting still. And I really do love to help people create wealth. Yeah, I that's, I mean, that's why I started the YouTube channel way back when, and that's why I continue to do what I do. 

Alfonso Cuadra  18:08

Yeah.

Mark Loeffler  18:08

I'd love to help people create wealth. And if I can help, if I can help people buy a couple 100 units. And I mean, what does that do for them and their family? And what does that do for-  

Alfonso Cuadra  18:17

Infinite.

Mark Loeffler  18:17

Like their circle and my circle too, right? I like hanging out with people who have a couple 100 units.

Alfonso Cuadra  18:22

yeah.

Mark Loeffler  18:22

Because we can go do cool shit.

Alfonso Cuadra  18:25

I love it. And you have a podcast. And the podcast I was on, 

Mark Loeffler  18:30

Yes, you were.

Alfonso Cuadra  18:31

And I would have to say that was one of your best episodes.

Mark Loeffler 18:33

I agree, and it's one of the last ones. I haven't done one since November. 

Alfonso Cuadra  18:38

Oh really?

Mark Loeffler  18:39

I've thought about doing it again, as you know, it's a lot of work. 

Alfonso Cuadra  18:43

Yeah.

Mark Loeffler  18:43

And I don't know if I'm gonna start the YouTube channel again. A lot of people, every time I see them, they're like, "when, when is it coming back? When's it coming back?" And I'm like, "maybe, maybe it's a lot of work." It's like a job, and I don't like having a job.

Alfonso Cuadra  18:56

No, no. Looks like you're easy going, very lifestyle driven, very much like myself, and I think that's that helps a lot of people. Lastly, a quote that you live by?

Mark Loeffler  19:07

Don't compare your insides to other people's outsides.

Alfonso Cuadra  19:09

Love it. Love it. So much. Mark, thank you for coming, my friend. I appreciate you so much. Guys, this is a great episode. Alfonso loves you. We'll see you at the time. Whoa. Let's go! 

Carl Richards  19:21

Thanks for listening to The WealthGenius Podcast presented by Expand Wealth Real Estate Fund, secure investments, solid returns. If you have a question or comment about something you heard today, reach out to The Godfather via social media or email him anytime. All that information is in the show notes, and of course, don't forget to subscribe so you never miss an episode of The WealthGenius Podcast. The WealthGenius Podcast, until next time see you at the top!