Marc Menowitz
When the economy goes south, everybody else has problems. I sleep very well at night knowing that I have good cash flow.
March 23, 2026 · 1 hr 1 min
His Apartment Buying Strategy Is Genius | Marc Menowitz (ApartmentCorp)
With Marc Menowitz — CEO, ApartmentCorp
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In this full episode of the No Vacancy Podcast , host Taylor Avakian interviews Marc Menowitz (also referred to as Mark in the episode), CEO of Apartment Corp — a Los Angeles-based multifamily real…
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In this full episode of the No Vacancy Podcast , host Taylor Avakian interviews Marc Menowitz (also referred to as Mark in the episode), CEO of Apartment Corp — a Los Angeles-based multifamily real estate powerhouse managing over 17,000 apartment units nationwide. Marc, a fourth-generation real estate investor, shares his journey from coder and inventor to building a national portfolio focused on affordable housing (Section 8, LIHTC conversions), Class B apartments , high cash-flow strategies, and heavy in-house AI/automation . Topics include:- Buying and turning around distressed, high-crime properties (including a legendary Compton building linked to N.W.A.)- Cash flow first philosophy vs. appreciation/flip models - Avoiding high-regulation markets like Los Angeles and New York - Proprietary AI systems: call monitoring, sentiment analysis, automated work orders, employee tracking, predictive underwriting - Self-management vs. third-party pitfalls - Raising capital via funds and unique investor platforms (including Miami’s largest yacht accessible in the city)- Affordable housing arbitrage, interest-only loans, low-leverage buying, and operational excellenceA rare, in-depth look at tech-forward multifamily investing , commercial real estate , property management technology, and long-term wealth building in apartments. Timestamps 00:00 – Intro & sponsor 00:18 – Marc Menowitz introduction – 17,000+ units nationwide 02:20 – Portfolio overview: 16,000+ units, 14–15 states 03:30 – Family legacy (fourth generation), starting in 1980 as a coder/inventor 05:13 – Why affordable housing? Early South Central LA deals 06:07 – Cash flow philosophy vs. appreciation models 07:31 – Critique of Wall Street / institutional approaches 08:04 – Leverage strategy: 65–70% LTV, interest-only loans 09:13 – Core arbitrage: LIHTC → Section 8 rent increases 10:49 – Why he stopped buying in Los Angeles & New York (regulations, evictions) 12:35 – Heavy in-house technology & AI stack overview 14:03 – RentalMax: AI phone call monitoring, sentiment analysis, auto-routing 15:39 – AI automation impact: +50 extra leases/month, zero data entry work orders 19:03 – Future of AI in real estate, why the industry lags 21:51 – High margins ($250–700/unit/month), raising $100M+ annually 24:04 – Underwriting volume: 40–50 deals/week, buy 1/month 27:34 – Proprietary rent increase models via government negotiations 28:05 – Why self-manage everything (third-party pitfalls) 30:45 – The Miami yacht as a business/investor platform 32:27 – Innovation mindset, early AI (accounts payable 15 years ago) 34:27 – Works only 27 hours/week, automates everything 35:09 – Growth target: ~25,000 units before stepping back 36:09 – Bad deals (rare), 1031 exchange philosophy 39:18 – Advice if starting from zero today 41:29 – Why affordable housing is easier to reposition 43:45 – Key mindset question: rent increase → value creation 45:26 – Negotiation lessons, buying from churches/families 49:17 – N.W.A. Compton building story: bought for $7M → ~$50M value 53:47 – Closing thoughts & advice for real estate professionalsWhether you're into multifamily investing , commercial real estate , property management technology, or value-add apartment strategies, this episode is packed with actionable, no-BS insights.
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Episode transcript
This 11,491-word transcript is matched to English (Original) automatic captions. Timestamps seek the episode player to the matching passage.
0:00–10:00
Taylor Avakian
Mark Menowitz is the CEO of Apartment Corp, a Los Angeles-based multifamily powerhouse managing over 17,000 units nationwide using in-house AI to turn distressed properties into high cash flow winners.
Marc Menowitz
I guess I'm considered a control freak. We monitor everything from every single word that's spoken to a resident on a phone to every time a toilet's flushed, so we know where everybody is. I want to automate everything. It's not going to replace any employees. What it's going to do is it's going to make sure that every single employee is doing their job. I don't worry about my time so much cuz I only work 27 hours a week. You know, I'm getting older now, so I don't want to work as hard. If I think of a way of automating the company, I speak to a couple of people in my company and they always say no, and then I do it anyway. It was a 164-unit building I paid $7 million for. It sat on the market for 9 years cuz of the crime.
Marc Menowitz
They were averaging about six to seven murders a year. It's difficult to soar with the eagles when you're hanging out with a bunch of turkeys.
Taylor Avakian
This episode is sponsored by Loan Titan, a leading residential financing loan company specializing in both conforming and non-conforming mortgage solutions. Loan Titan offers Fannie Mae, Freddie Mac, non-QM, and private money, hard money loan programs helping borrowers who need flexibility beyond traditional lending guidelines or speed-driven financing solutions. Whether you're purchasing, refinancing, or investing, Loan Titan is known for smart structuring, clear communication, and reliable execution. Visit loantitan.com and mention Taylor Vacheon to get started. Thanks for Loan Titan for supporting the channel. We just filmed an incredible episode with Mark Menowitz. Mark is a wealth of knowledge. He started as a coder and eventually bought buildings, was a broker. We talk about everything from his four-generation family dynasty to how he implements AI and technology into his actual systems. We talked about the biggest yacht in Miami, which Mark
Taylor Avakian
owns and uses it as a business vehicle to raise money, which is kind of incredible. And we discuss finding hidden studios and gems inside of your Compton apartment building, which may or may not have been the first recording studio for NWA. So, I hope you guys enjoy it. Throw this [Music] video a like if you enjoy it. Share it with someone. That means the world to me. And uh yeah, enjoy the episode. Mark, thanks for coming on the show. Appreciate you coming on.
Marc Menowitz
Thanks for having me. Of course.
Taylor Avakian
Mark, I've known about you for maybe 8 years now when I first started in the business cuz you have some some properties in Los Angeles. When we talked, you had mentioned that you have properties across the entire country. Can you give me a scope of uh your corporation, your company, what that looks like right now?
Marc Menowitz
Yes, we have roughly around 60 a little over 16,000 units. We're in I don't know 14 or 15 states and over 25
Taylor Avakian
cities. Jeez. And this was started by your grandpa?
Marc Menowitz
No, great grandfather. Great grandfather. Well, my great grandfather started a business real estate business and it's kind of morphed into sidetracked into many other things. Yeah, I'm fourth generation and my nephew and my daughter are fifth generation in
Taylor Avakian
this.
Marc Menowitz
Wow.
Taylor Avakian
So, stays in the family. Is that hard to do?
Marc Menowitz
Because family business is You have to be able to get along with your family members. I let the other person always win unless it's important.
Taylor Avakian
Okay. How do you know what's like what's the what's an important decision that you would feel you put your foot in the ground?
Marc Menowitz
involves taking money out of my pocket. Okay. If it doesn't, then it's not important.
Taylor Avakian
That's fair. Yeah, that's very fair. And you've been doing this, I assume, since you were a little kid.
Marc Menowitz
No, actually, I've been doing it since 1980 I I started I was an inventor of various tech products before then. I invented like the time clock.
Taylor Avakian
Yeah, you were tell tell me about that. What's the story with that?
Marc Menowitz
So, I used to uh be really heavy into factory automation and barcodes and things like that when I got out of college. So, I invented all kinds of systems that used that kind of technology for tracking employees and tracking materials. And I applied that technology into the apartment business in 1988.
Taylor Avakian
Oh, wow.
Marc Menowitz
I was a computer programmer and applied a lot of automation stuff into the real estate business.
Taylor Avakian
Did you know that you were going to eventually do the apartment stuff or was it you wanted to try something else, the inventions, and then it just kind of worked out
Marc Menowitz
where I was told my dad by my dad to try something else. Uh-huh. And then when I made a few dollars, I didn't have a lot of success in the invention business. And finally, on one deal, I made about $3 million. Wow. And then I said, "What do I do with it now?" to my father. He said, "Get back in the apartment business.
Taylor Avakian
The other stuff isn't working out, so." Did you like the apartment business? Was it was it interesting to you?
Marc Menowitz
business is a great business. It's a very long-term business. You have to own for a very long time to make a lot of money. It's not you're going to get rich tomorrow.
Taylor Avakian
Mhm. Mhm.
Marc Menowitz
Very few people do that.
Taylor Avakian
What does the portfolio look like? So, you said you're across the country, but So,
Marc Menowitz
that's 40% of it's affordable housing and 60% of it is conventional housing. Capital A affordable. Like LIHTC LIHTC, Section 8.
Taylor Avakian
Got it.
Marc Menowitz
You know, uh USDA. There's about four different affordable programs that we own. And the other stuff is class B apartments.
Taylor Avakian
And why go into affordable?
Marc Menowitz
Well, the deal was when I when I first got into the business, my father was going to fund me. And he said, "I get all the equity, you get all the cash flow." Well, the only way to make money in Los Angeles on properties is buying a bad
Taylor Avakian
neigh What was the first one?
Marc Menowitz
I bought a 32-unit apartment building from I was became an apartment broker to learn the business. And I bought a 32-unit apartment building in South Central Los Angeles. Wow. I still own that building.
Taylor Avakian
Really? I'm sure you pulled money out many a times, huh?
Marc Menowitz
Yeah, I paid $800,000 for the building.
Taylor Avakian
Wow. 32 units, so And what do you think it's worth now?
Marc Menowitz
I have no idea, actually. Um 4 or 5 million, probably.
Taylor Avakian
And you mentioned to me that you primarily buy properties for cash flow and not I'm a cash flow buyer.
Marc Menowitz
Yeah, I don't Yeah, what everybody else when the economy goes south, everybody else has problems. I I sleep very well at night knowing that I have good cash flow.
Taylor Avakian
Is that the mistake you think most people most investors should don't make it make? Is they don't buy for cash flow?
Marc Menowitz
Every time I talk to somebody that's starting a fund or these I call them uh Wall Street guys cuz they always have a model that you know, a platform. Mhm. Um and they're always looking to you know, buy on some type of appreciation and then cash out uh through refinances. I I see that ultimately, if you're in the business long enough, you will fail at that model.
Taylor Avakian
Mhm. What makes you what makes you say that?
Marc Menowitz
Well, ultimately, there's a downturn in the economy every 10 years and then you can't refinance out and then you end up with a property that's not cash flowing or cash flowing very little.
Taylor Avakian
Mhm.
Marc Menowitz
And you're stuck owning it, managing it, and then, you know, the whole tax system tax code is biased on having you own properties for long term. So, the guys that play it for the very short term where they buy it, fix it up, and then flip it are not really taking advantage of what real estate's all about. So, you know, because you can do 1031 exchanges, uh you can refinance without paying any income tax and buy property. So, most Wall Street investors that are playing in this realm don't really get it. Mhm. You know, the most the big guys like Apollo and Sure. Blackstone and Blackstone and all that. You know, they buy by the pound and they sell it by the ounce, which sort of works, but I've seen that model. I've I've tried to buy properties from them and they've ultimately had a lot of
Marc Menowitz
problems doing that, I'll tell you.
Taylor Avakian
Yeah, I mean, at a certain game their their game is volume, right? They're trying to get as much volume and that fee business.
Marc Menowitz
They got to Everyone is is right.
Taylor Avakian
Yeah, which makes sense. So, what's the typical leverage on a property? That if you're going for cash flow, you probably lower leverage, I
Marc Menowitz
assume. Well, no, I'm I always buy at 65 to 70% leverage because I want interest-only loans. I only do interest-only loans. So, that way I'm not providing the bank with anywhere between 1 and 2% of the uh mortgage balance every month going into the uh like a savings account that I don't have access
Taylor Avakian
to. Got it.
Marc Menowitz
So, it's time value of money equation. Time value of money equation, right?
Taylor Avakian
Everything we do is time value of money. Are you Have you always been pretty numbers-oriented? As you say, you're all numbers-oriented.
Marc Menowitz
oriented. That's all we do. Everything we do is numbers-based. Give me an example. Well, we won't buy anything that's not breaking even or at least We We have to get to a healthy 10 or 11% return within 18 months. Cash on cash? Cash on cash. And if we can't, we won't buy it. And what And we have to have a 100% certain model to get there. And 99.9% of the time, we buy about seven, eight deals a year.
Taylor Avakian
Uh-huh.
Marc Menowitz
And maybe one deal out of 20 it doesn't hit that criteria.
Taylor Avakian
What is uh what gives you 100% confidence you can execute on that?
Marc Menowitz
It's based on a uh arbitrage that we do between the affordable housing rents going from Section 42 to Section 8.
Taylor Avakian
Can you explain that for people?
Marc Menowitz
So, basically, there's two ways to subsidize a tenant. One is is that you basically invest in what's called a low-income tax credits. And that's where a developer goes in, ties up a piece of property, and then he develops the property usually with a bank as a uh as a partner. Um the developer owns 1/10 of 1% and the bank owns 99.9% of it. And then all the way till the uh at the end of 15 years they sell the property.
10:00–20:00
Marc Menowitz
And they're they're restricted by what's called AMI rents, whatever it is, 40, 50, 60% AMI rents. I convert those rents to Section 8, which is basically market. So, I'm getting 2, 3, 400 in some instances three or four thousand dollars a month more.
Taylor Avakian
So, you're buying expiring light tech contracts for less. And then are you allowed to do that? Or what's the Do you have to buy the tenants out?
Marc Menowitz
How do you take a tenant Uh we just wait for them to move. So, there's usually enough. You know, most apartment buildings have anywhere from 10% to
Taylor Avakian
30% turnover a year. Really? Even in Los Angeles?
Marc Menowitz
Well, we don't we're not a buyer in Los Angeles.
Taylor Avakian
Oh, really? And not anymore? No, with all the rules here and regulations, I'm not going to buy anything here. Well, okay. Well, you got to tell I haven't bought anything in in LA in 10, 12 years. How much do you guys own here right now?
Marc Menowitz
We own about 3,000 units here.
Taylor Avakian
Okay. And you 10 years ago you were like, it doesn't make sense. I don't want to deal with it.
Marc Menowitz
And then we stopped buying in New York, also, which is where our corporate headquarters are. We stopped buying there 20 years
Taylor Avakian
ago. What about the regulations in particular makes you uneasy or not willing to
Marc Menowitz
want to Well, now you can't evict anybody in New York or in Los Angeles, so you know, it used to be where, you know, you could put up with the evictions where it would take 90 to 120 days. Now it's 6 months to a
Taylor Avakian
year.
Marc Menowitz
And that just doesn't make sense for No, and it's all tenant favored, so you know, no matter what you do, the tenant's always right. So, it it's it I wouldn't invest a dime here. The only advantage investing in the state of California is is you don't pay property tax on affordable housing.
Taylor Avakian
So, we invest in Northern California. Okay. Have you been scarred by any any of those?
Marc Menowitz
I always have like four or five tenants that I can't, you know, they're I can't get rid of them. Cuz they won't pay rent. They won't pay rent, you know, they come up with ridiculous things. You know, one of them now is claiming they're part of the Palisades fire and he you know, he's basically uh for he he was living in the my building when the Palisades fire hit and he self-certified that he did,
Taylor Avakian
so. Oh, jeez.
Marc Menowitz
Yeah, and so there's nothing you can do.
Taylor Avakian
Nothing I can do. You uh so, we had a conversation before this and we talked a lot about technology and you mentioned earlier that you were a coder. Uh you showed me some of your systems and they're very impressive. You built out your own AI calling system and you do a lot. Can you tell me a little bit about how tech-forward you are and I guess why?
Marc Menowitz
So, you need to automate your entire business. So, my philosophy is is you don't most people buy within driving distance of where they live. I'm not that guy. I basically believe in buying anywhere where there's a good deal. I avoid certain states like one state I won't buy in is Los Angeles. I won't buy in um Illinois. I won't buy in New York. Um there's a few other places, too. Um now with the advent of all the insurance problems that are going on, there's about 20 states I can't buy in because of the insurance premiums are too high. So, we we we my my whole philosophy is is to buy the best deal you can and buy a big enough so you can afford to have, you know, the proper staff to manage
Marc Menowitz
it. Um we basically self-manage everything. So, I would never let a third-party management company manage it.
Taylor Avakian
Um So, what does the technology stack look like?
Marc Menowitz
stack basically has is we monitor everything from every single word that's spoken to a resident on a phone to uh I'm got I guess I'm considered a control freak. And then we manage every time a toilet's flushed and where every single employee is located within 15 minutes of where they are, so we know where everybody is. Wow. We have that kind of control over the you know, the operation. And we have a system called Rental Max, which is basically listens to every phone call when somebody calls in to rent an apartment and every conversation that a manager has and it uses AI technology. Nobody else has anything like what we have. We developed it in-house. And what it does is it determines the nature of the phone call, whether it be a negative sentiment call, positive sentiment call.
Marc Menowitz
And then it routes those calls if there's a problem to my staff, which sits right next to me in my office. So, if there's a problem, I'll know about it right away. So, I know everything that's going on in the company. Um things like when we implemented the system, we basically are renting about 50 more apartments that we would have never rented in the past because managers make mistakes when they're um renting apartments. To give you an example of what it can do. So, if somebody calls in, the manager will basically require it to ask five questions. And the questions basically, you know, are trying to set up an appointment with the potential person to rent an apartment. If they don't ask those five questions, that call is automatically routed to a guy that sits next to me in my office.
Marc Menowitz
And that person will be called back within 10 minutes just to clarify and make sure that everything is done. Um 50 you know, 50 extra additional apartments a month is, you know, 100,000, 200,000 dollars a
Taylor Avakian
month depending upon how those apartments are. It's massive. Or 16,000 units. I mean, that's a lot.
Marc Menowitz
So, what what happens is is that it it ensures quality of every phone call that uh when everybody takes it. When the person basically does do the answers the five questions correct or asks the five questions correctly, um the system is smart enough where it puts the appointment in the calendar with no data entry and um confirms the appointment via text message with the potential or the prospect to make sure that they try and show up. And then it confirms whether the person showed up or not based to the manager. So, it's all in a CRM system that we wrote. So, everything is accounted for and at least we have the highest possible chance of renting and closing a potential tenant that calls us up on the phone.
Taylor Avakian
Was this a program your idea?
Marc Menowitz
Yeah, this was something that I designed myself.
Taylor Avakian
Uh you coded it?
Marc Menowitz
Well, I coded the initial framework and then it was finished by guys that are much better coders than I am. We have staff we have programming staff in India and also in Los Angeles that are my coding goes back 35, 40 years, so the the guys that are coding this stuff now are you know, in India and they all they do is do AI stuff. So, I bought a company in India that basically codes AI stuff.
Taylor Avakian
You bought them?
Marc Menowitz
Yeah.
Taylor Avakian
Beca- well, why?
Marc Menowitz
Because we do that much AI coding.
Taylor Avakian
No way.
Marc Menowitz
Yeah. For the So,
Taylor Avakian
for interesting.
Marc Menowitz
What you have a whole CRM platform now that's specifically designed for it actually works for most type of businesses, but it it tracks every single phone call in and out of the company to see what people are saying and making sure that the best presentation is put forward by my company.
Taylor Avakian
Are you licensing that technology or planning on licensing it?
Marc Menowitz
Well, we're looking for somebody right now to sell it. Um I'm not actively looking. If we find the right person, we would do it. Everybody who's seen it is amazed by what it can do. Cuz it it basically keeps your calendar. So, during a phone call, if you're having an ordinary phone call or if you're having a phone call with a Like, for instance, if you're having a call with a resident and the resident's saying my toilet's broken, it will automatically create the work order and dispatch it to the maintenance man within 5 minutes after the phone call is made. The the manager doesn't have to do any data entry or anything.
Taylor Avakian
So, you value speed a ton.
Marc Menowitz
Well, it's not just speed. I evaluate to make sure that there's complete 100% follow-up. That's why the the AI doesn't make mistakes. So, you know, it it recognizes the maintenance call. Yeah, the guy's got a leak somewhere, it will put in the work order and make sure if the person calls back and says and the work order never got done, then it gets escalated to the guy that sits next to me, who's you basically in charge of our operations department, and then he has to deal with it and he'll call the manager and dispatch the maintenance guy himself. So, I'm trying to provide the best possible service to my tenants that I can, so I don't lose any of the tenants. Sure.
Taylor Avakian
The is the technology aspect of your business what keeps you excited about?
Marc Menowitz
That's what I really like about it because now I get to use my brain and, you know, renting apartments is not that exciting and I like the money that it generates.
Taylor Avakian
Sure.
Marc Menowitz
So, uh now I'm writing all this code, so we're we're we're coming out with all kinds of crazy things. Like, for instance, every when somebody calls in to rent an apartment, it creates the um rental card registration of that particular person uh in our CRM system and then automatically follows up with the person. We tried going out there and having the AI system speak Uh-huh. to the people directly. That didn't work out and I hate I personally hate it when I get on the phone with an AI agent.
Taylor Avakian
Yeah.
Marc Menowitz
So, everything is done with a human voice and it's all followed up with um the AI is reminding the human people to go out there and do their job.
Taylor Avakian
Uh-huh. So, yeah, cuz it seems to me, I mean, you seem like a very creative. You were an inventor. That's what you get in. Being able to build these kind of systems to systematize, improve your KPIs, right? Just optimize the business that
20:00–30:00
Taylor Avakian
you've been built.
Marc Menowitz
I want to automate everything. It's not going to replace any employees. But what it's going to do is it's going to make sure that every single employee is doing their job. And if it doesn't, the people in my office that sit next to me, we call them operations department, will know that somebody didn't do their job and then it'll be followed up. So the tenant gets the best experience that they can get from
Taylor Avakian
us. Where where do you think we're headed with AI? Cuz I assume you've been studying and so much has changed. It feels like every week there's some new tech that comes out. What do you think the future of that holds?
Marc Menowitz
Well, unfortunately or fortunately, depending upon what side of the side of the equation that you sit on, AI is very easy to implement. Uh-huh. Um you know, you can get a AI going in 4 to 6 months, which is a lot quicker than most software platforms. Yeah. Um a lot of the AI code that's being written is done by the AI system itself. So it makes it super easy for me to implement these systems. You just have to be real creative and have the wherewithal and knowing how to do it. Um so I think everybody will ultimately have them in 3, 4, 5 years.
Taylor Avakian
Mhm.
Marc Menowitz
The real estate business or actual people renting apartments tends to be a they're very they're a technology laggard. They don't typically um think of these things and they just run with the bare bones minimum in a low margin business. Um I on the other hand run a high margin property uh you know, rental business and you know, we're making somewhere between $250 to $700 a month per apartment in margin. Um so the way I stay ahead of everybody else is through technology.
Taylor Avakian
Wow. Interesting. How come um I mean it's it sounds like you're relatively uh I would say conservative when it comes to going and deploying capital. Cuz if you have this technology where you can effectively squeeze more margin out of a typical deal than someone else because of that, you could probably raise a bunch of money, right?
Marc Menowitz
So, you know, we're we raise about 50 million a year. We're this year we're going to go up and up it to about 100 to 125 million a year.
Taylor Avakian
Uh-huh.
Marc Menowitz
Um I personally put in 25% of the money. So um I have skin in the game, so that makes it easier to raise money. Um we used to do it deal by deal and now we're doing it on a fund structure.
Taylor Avakian
You're a fund model. Okay. Um Is there a reason you went fund versus the syndication?
Marc Menowitz
Yes, well, syndication you're limited to, you know, one deal at a time and then you got to sell everybody on the one deal. Now, you know, I own 106 apartment buildings. So I think I have a big enough track record where people believe in the vision rather than the in the actual deal. So um uh the fund last year, for instance, did um if you looked at appraised values, which we do every year, uh two and a half X on everybody's investment. In one year? Uh and they we distributed cash flow. You don't usually distribute cash flow the first year Yeah. Because we're, you know, fixing all the zits of the old owner we got on the property. We we distributed a lot of money last year, over 9% return cash on cash to the investors. Wow. Um you know, we had some buildings
Marc Menowitz
that um did 14, 15% cash on cash return. And some of them, you know, weren't ready to distribute. That's why it was 9% as opposed to Yeah. 15%. Um so uh my cash flows tend to be a lot higher than than most other other deals.
Taylor Avakian
Yeah, that's really that's really incredible. So you you got to be very picky on terms of what what deals make
Marc Menowitz
sense. about the deals. We need to see the upside through our under our underwriting is very different. Um this year we're we underwrite 50 deals a week. Wow. 40 deals a week and we buy one deal a month. A little less than one deal a month. Yeah, nine deals a year.
Taylor Avakian
Jeez, you're going to 200 a month at least.
Marc Menowitz
Yeah.
Taylor Avakian
We have a sponsor for today's episode and that is AI for Siri Collective. 25 listings at the moment. We're closing four or five deals a month. It's been incredible. So if you want to learn, if you're in commercial real estate, how to use the AI in your business, whether you're a property manager, a broker, an investor, really anyone, we have a huge group, over 400 people in this community and the website, if you want to go check it out, is AIforSiriCollective.com. So appreciate you guys and now back to the episode.
Marc Menowitz
And we're automating all that, so the AI will be able to think like me and Oh, you're in the process of all Yeah, we're going to have it so that the AI can capture all the information and at least do a preliminary run-through of the deals and then we can sit there and go into the spray Excel
Taylor Avakian
spreadsheets. Yeah. So it'll be able to do an OCR kind of
Marc Menowitz
pull It'll you know, it'll be an OCR It'll be OCR of the rent roll, for instance, and the profit and loss statement that they had and then um it it'll scrape a couple of websites to get, you know, the comparable rents in the area and then um we're about 60 days away from having that fully operational.
Taylor Avakian
Wow. Okay, you're going to keep me up to date on that cuz it there's there's so many people I'm part of this um AI commercial real estate group that we kind of formed because we found I was super early adopter to this AI stuff. I just I'm fascinated with doing things better, you know, more optimized being in more places than once because I'm a salesperson, right? There's I'm not getting a salary, so it's only up to me. And um and so I started digging into this and I found a couple other people who were also exploring it, figuring it out, doing new things. We'd chat, "Hey, have you tried this? Wow, this new technology is crazy. I wonder if we is it able to do X part of, you know, that sales process? Can we get it to make this quicker?"
Taylor Avakian
And so we ended up forming this group and we have about 400 and something people in there right now. And it is you mentioned it earlier, but the real estate industry, man, it is this old It's a
Marc Menowitz
dinosaur.
Taylor Avakian
Well, yeah, they they just they're very they're last people to pick up on technology, which is so funny because it's such a massive industry.
Marc Menowitz
Yeah. But there's not that many people pushing the envelope of what's possible. start to finish of the whole AI underwriting, which we underwrite very differently from everybody else anyway, but um it was took me 60 days to do.
Taylor Avakian
Wow.
Marc Menowitz
To do the whole thing.
Taylor Avakian
Wait, what do you mean you underwrite differently than everyone else?
Marc Menowitz
Well, I mean, we're looking for different types of ways to get rents higher than most people through our proprietary models. Okay. You know, most people they load the the the data in and they sit there and they play with the cash flow and then hope and pray that they have a certain inflation rate. We don't do anything based on inflation rate. We're negotiating with government entities to go out there and get the rents up at a predefined time, so our model is very different from everybody
Taylor Avakian
else's. Do you Do you have to have a longer escrow to be able to chance to do that or you take the risk?
Marc Menowitz
we actually can do that whole process in 30 days. At least get the negotiated part of it done. We know most of the people.
Taylor Avakian
Is that relationships? Is that you building relationships with people over time? Yeah, it's relationships. Would you say that that relationships are a keystone to being successful in real estate?
Marc Menowitz
The biggest problem that people have is is they don't manage the properties themselves.
Taylor Avakian
Mhm.
Marc Menowitz
So when you're managing a when you're buying a 100 unit property and you're not managing it yourself or a 20 unit property and you're not managing it yourself, you're never going to make a lot
Taylor Avakian
of money. What makes you say that? Why?
Marc Menowitz
There's you're basically paying a guy 4 or 5% or 3% or whatever you get the best deal at and he's sitting there and allocating two, three thousand dollars a month to your property and you're hoping and praying that he's and that the manager is doing a good job, if you even have a manager on
Taylor Avakian
the property.
Marc Menowitz
Mhm. I control every aspect of what we do.
Taylor Avakian
Everything.
Marc Menowitz
So and I have the AI basically looking at what I would do. And with all these sensors on the toilets, with tracking where the personnel are. So if a guy, like for instance, goes out and I we we caught one guy going as to a suntanning salon every day. We have
Taylor Avakian
Hair salons.
Marc Menowitz
We have managers that go to duty clubs during the day. Or the biggest thing that we have is is that manager that that maintenance guys would go over there and pick up their kids after school and not report that they were they were um picking up their kids and then they still on the clock cuz, you know, these apartment buildings are large. So uh you know, we know exactly where they are. So we're getting as close to maximum hours of productivity out of them as you can. With a management company, you have no idea nor does the management company care. You're getting two or three thousand dollars a month on your apartment building and you know, uh they're not negotiating in your best interest. I mean, we spent a lot of money this year on negotiating contracts with supplies, with our vendors, Lowe's, Home Depot.
Marc Menowitz
So, we're making sure we're getting the best price.
Taylor Avakian
If you were to build Do you think you could build a management company that was actually good?
Marc Menowitz
If I was running the management company, it would be fabulous because
30:00–40:00
Marc Menowitz
I don't do anything half-assed. So, if you if you basically you know, we're we're talking about doing third-party management now for a large properties now. Yeah. And lots of them. So, if I was doing it, I would you know, you're it's the individual who wants the management company. So, if it was me, you know, I care about everything cuz I care about my reputation. Totally. So, if you know, if a management company's in it just for you know, making dollars and minimizing costs, they're never going to be able to do a good job. I look at it when I'm managing my own stuff is is that for every dollar that they screw up or they don't collect or they spend foolishly, it's coming right out of my pocket and I you know, I can't feed my
Taylor Avakian
kid. Yeah. Interesting. Okay. And so So, you I want to talk a little bit about Miami for a little bit because I know you have I was looking looking up our conversation. You have at the time you had the biggest yacht in Miami or still do have the biggest yacht?
Marc Menowitz
Well, I now have the biggest yacht in Miami that's that can actually go through Miami. There are bigger boats in Miami, but they can't they're too big to go through
Taylor Avakian
Miami. Got it. So, it's the biggest possible that goes
Marc Menowitz
Yeah, it goes through Miami. And the reason I assume was because you wanted to raise some money and it was a good opportunity to do that. I love boating, so I've been boating since I was 7 years old. I made the mistake of going sailing one day when I was 7 and then fell in love with boating and I've owned 11 boats now. Wow. So, uh now I've used the boat as a platform. Everybody knows what the boat is. It's called Tycoon. And um I use it as a platform to have business meetings down there and uh we have um four times a month we have meetings on the boat to for my investors. I let my investors use the boat when they're investing with me and they we they introduce me to other investors and we raise money as a platform. So, we're currently raising $100 million right
Marc Menowitz
now. $100 to $120 million.
Taylor Avakian
Do you try to find unique and different ways to do something that has traditionally been done? Like it are you for example, like myself I mentioned earlier, I get excited. I get it drives me to get up early in the morning when I can figure out a new way to do something that's been done an X you know, this way for 50
Marc Menowitz
years. Well, I I I do when I'm when we're tweaking the software on what the AI can do, it's kind of fun because I can program the AI to do pretty pretty much anything. So, you know, as I think of new stuff, I jot it down in my phone and then I send it over to the programmers. And then we implement it and it's very exciting when they actually works. Sometimes you do stuff that doesn't work, so um Do you And sometimes the programmers come up with very creative ideas and they implement it and they don't tell me about it till they implement it and then I see it on the finished product and it's really cool. The whole AI thing is we we've been doing AI for about 11 years now. We started off with accounts payable because you know, in the old days let's say 15 years ago.
Marc Menowitz
Well, 11 years ago was about 15 years ago. You know, we pay several thousand invoices a month. And the question is is how do you do that without having 20 bookkeepers? Yeah. So, we developed a system back then which would scan the invoice recognize the invoice and then actually implement it and input it into either Yardi or RealPage. And then it would put in the proper GL code. So, those things were never done 15 years ago. Yeah. So, that's our first AI thing. So, it was very crude AI at the time. Um it's since we're on our fourth or fifth generation of that program. But um you know, you can you scan the invoice, it goes into the system and then it um passes it around for the approvals
Marc Menowitz
of the regional manager or managers so they can approve it and then um now we basically cuts an ACH right out of the system so we don't have to print very very many checks anymore, but um stuff like that.
Taylor Avakian
How do you personally think about efficiency and your time?
Marc Menowitz
Well, I I don't worry about my time so much cuz um I only work 27 hours a
Taylor Avakian
week. Um Well, you know, it's 27.
Marc Menowitz
That's that's pretty that's pretty unconfident. I'm trying to keep a record of it cuz you know, I'm getting older now so I don't want to work as hard. Yeah. I I basically if if I think of a way of automating the company I speak to a couple people in my company and then we say no and then I do it anyway and um we implement it and most of the time it works
Taylor Avakian
out. Do uh do you think that you want to build this company to 100,000 units? Do you have a vision for what you want your kids and the next generations to build it to?
Marc Menowitz
Well, I I I look at it as I I I think, you know, I'll step out and bow out when we hit about 25,000 units.
Taylor Avakian
Okay.
Marc Menowitz
of ownership. Which probably you know, we're at we'll probably grow by three or 4,000 units in the next 2 years.
Taylor Avakian
Okay. Um So, it'll be
Marc Menowitz
close. Yeah, so in you know, 2 3 years we'll be there. You know, because I like buying stuff that's profitable. Mhm. The worst thing you can do is buy an apartment building that makes no money cuz you then you you sit there and you you you know, we have all kinds of dashboards that I wrote that show which I showed you which show you know, profitability in real time. You know, we have a dashboard that sits on top of Yardi and RealPage that shows you know, every 15 minutes it shows me how much rent was collected and then it shows what the recurring expenses are and then it compares it to last month. And the worst thing you can see is a on a building that will never
Taylor Avakian
get profitable. How many bad deals have you done?
Marc Menowitz
Well, in the last 10 years I did two deals that I just in the process I'm selling them. They're they'll be closing escrow. I still made money on them.
Taylor Avakian
Wow.
Marc Menowitz
Didn't seem that Well, I made it made about a million dollars on. I I bought it for $3 million and it I still sold it for $4 million. I never really made any cash flow. That deal died because of COVID. Okay. Um and it never came back. Another one I cash flowed dramatically. It made a lot of money cash flow wise, but it was a pain in the ass to operate. So, we sold that one. It's closing in about Um it's it's actually a great deal for somebody.
Taylor Avakian
Um Why is it a pain in the ass? What makes a building hard to manage?
Marc Menowitz
It was in an area that we couldn't build enough units up to be able to get profitability on. I mean, we it's profitable. It makes 15,000 18,000 a month on a I think we put $700,000 down. Jesus. But I you know, the managers keep on I keep on flipping through new managers all the time and I have to spend a fair amount of time on the deal. The time is not worth the money is what you're saying. And I can't get I don't see a vision where I'll be able to continue to
Taylor Avakian
get rent increases there. What Can I ask what part of the country it's in?
Marc Menowitz
It's in Georgia. Oh, okay. Um I like Georgia as a place to invest. It was um The rent growth in Atlanta has
Taylor Avakian
been pretty good.
Marc Menowitz
Yeah, this is not there. It's in Augusta. So, um Just in our own metrics of being able to The other the person who bought it from me will do pretty well on it because they're buying it at cheaper than price where they'll do
Taylor Avakian
okay. Um Does that make you mad?
Marc Menowitz
Not so much. If it was a 150 unit property, it would make me mad. It Yeah, it's only an 80 unit property. Okay. And you know, I'm I'm I I bought it for $3 million and I'm selling it for seven,
Taylor Avakian
so It doesn't seem too bad of a deal.
Marc Menowitz
Doesn't seem too bad. I'm making plenty of money on it and the deal that it's going into I'm going to 1031 into this awesome deal, so
Taylor Avakian
Yeah. Did you find your Do you find your 1031s before you sell or when No, because
Marc Menowitz
I think the 1031 generally works out as a bad way for most investors.
Taylor Avakian
Okay.
Marc Menowitz
Basically, you're selling at the height of the market and then you're also buying at the height of the market.
Taylor Avakian
Yeah.
Marc Menowitz
That generally most of the 1031s that I see most people do um don't work
Taylor Avakian
out. So, how do you build a portfolio?
Marc Menowitz
Like how if if I refinance and then build the way that way. I don't I don't 1031 because you you know, when you when you typically you know, you can refinance with about a 75% leverage which is usually enough to get into your next deal.
Taylor Avakian
Got it.
Marc Menowitz
Okay. If you do And and it's always better to own the deal you know rather than buy something you don't know. If you if you're trying to grow properties. Some people want to own only three properties. So, they 1031 and that's how they grow and who am I to say that that's a bad strategy?
Taylor Avakian
Sure. If if you were my age, let's say you're 29 30, right? And you had to start over from zero. Zero, no properties, nothing, but you have your brain, you have your
Marc Menowitz
knowledge. Well, they how I did it. So, I was a property broker and I was selling 50 deals a year when I was your age. Wow. Um these little tiny deals in LA cuz that's why you that LA doesn't have
Taylor Avakian
very You're just out there way or the the hood is what they call?
Marc Menowitz
Yeah. So I was I was focusing on a couple of areas. And then what I would do is is I work myself into the deal. I would make instead of selling the property, I would make set up a partnership and people would invest with me. I wouldn't go out there and sell it if
40:00–50:00
Marc Menowitz
it was a good enough deal.
Taylor Avakian
Uh-huh.
Marc Menowitz
And that's how I leveraged into a lot of properties.
Taylor Avakian
Got it.
Marc Menowitz
So you had the first property that the one that I owned is a property that I um sold to one of my investors. And then he wanted to go into a bigger property and I said, "Do you mind if I buy it from you?" Uh So I said, "What what do you want for it?" We agreed on a price and that's how I got into my first deal.
Taylor Avakian
Wow. Interesting. And so what at the time when you uh took over, how many units did you guys have? How I guess how much have you grown it since you took it over?
Marc Menowitz
Well, we actually shrunk. We used to own 23,000 units. Oh. Um but I don't have nor do I want to get involved in the class B properties. The class C the the affordable properties make three times the amount of what the class B properties
Taylor Avakian
still. So you sold some of the conventionals?
Marc Menowitz
Well, they I didn't have a choice. It was family stuff.
Taylor Avakian
Got it. Okay.
Marc Menowitz
So they decided that they wanted to they came up with all kinds of reasons like it was going to be too expensive to compete in the marketplace so they thought that they would be better off selling it in 1031 into an into a better property. Uh-huh. I didn't know the property well enough so I can't c- I can't uh uh say whether they were right or wrong. All I know is is that every property that I've ever sold was worth more a lot more 4 years 5 years down the road than
Taylor Avakian
it was when we sold it so Would you get into affordable? Like if you had to start over again, would you do the same? I would only do affordable. Really?
Marc Menowitz
Yeah, it's a much easier to go out there and talk to people about crappy apartments than it is really nice ones.
Taylor Avakian
How do you learn about affordable? If someone wants to learn about part.
Marc Menowitz
You have to really what I recommend every single person whether you're if you want to get into apartments, what I did was I mentored for a guy for free for 2 years.
Taylor Avakian
What did he do?
Marc Menowitz
He was really good at brokering apartments.
Taylor Avakian
Oh, he was a broker.
Marc Menowitz
He was a broker. Got it. And he was he sold a lot of apartments.
Taylor Avakian
Do you remember his name?
Marc Menowitz
Uh Dan Kolodziejski.
Taylor Avakian
Dan Kolo- Oh, I know Dan.
Marc Menowitz
Yeah.
Taylor Avakian
I know his son. Yeah. Yeah, so Dan Dan was a legend, man. I I've heard uh he he owns a a ton of of real estate and he so that's right, he was a broker and then he started buying a lot of land from in Culver City, right? They were no, he was actually specializing in crappy neighborhoods. Oh. Oh, okay. Got it.
Marc Menowitz
And so he taught you I went and worked for him and learned what I could and then I learned and then Did your own thing? Then I did my own very quickly. I said one day I went to I I I was tired of paying tax on a million dollars a year as a broker.
Taylor Avakian
Yeah.
Marc Menowitz
And my clients were making 4 or 5 million a year and not paying any tax. So I said I can do that and I decided to do it on my own.
Taylor Avakian
Would would you uh would you get into ownership sooner than later? Like would you have been a broker first if you if you had to
Marc Menowitz
Well, I would go out there and work for whether you're being a working for a guy that owns apartments, you're better off working for a guy that owns apartments and managing it. So you can and somebody who's successful obviously, you don't want to work for somebody who's not successful. Sure. Um work for him for a year It's better to work for Consider like going to college.
Taylor Avakian
Mhm.
Marc Menowitz
You're basically working for him for a year or two. I I have people that paid to follow me around. Wow. They asked me, "Can I follow you around for a month?" I said, "Sure." And they pay me a couple thousand dollars, you know, 5 10,000 dollars a month to do that and I let them invite them to all the meetings. And then they ask me questions at the end of the day what's going
Taylor Avakian
on. What's the best question you've ever been asked?
Marc Menowitz
Well, I can tell you the one question that you need to know if you're going to be in apartment business if you raise the rents a dollar on a one unit apartment building, how much money did you make?
Taylor Avakian
16. A dollar?
Marc Menowitz
You raise the rents a dollar Uh-huh. and it's a one unit apartment building, you made 200. 1 * 12 /.06 which is the cap
Taylor Avakian
rate. But every dollar increase of NOI is about $16 worth of value, right? Cuz on a 6% cap rate.
Marc Menowitz
Well, that may be true.
Taylor Avakian
I I did it by You Okay, got it. Per month. Okay.
Marc Menowitz
Understood. So in terms of but that's that's the special thing about real estate. If you don't know that, then you shouldn't be in the
Taylor Avakian
real Is the leverage. Yeah. Yeah. How do you balance leverage and risk versus returns?
Marc Menowitz
There are some people that will leverage up every single dollar they they the worst guy to ever learn real estate from is a guy who was a debt broker.
Taylor Avakian
Why do you say that?
Marc Menowitz
Because they always go broke. Every one of them. They'll I I I'm working with a couple of them
Taylor Avakian
now.
Marc Menowitz
The debt brokers or the properties they No, no, the debt brokers and they they figure out they size the real estate deal based on how much debt you can get against it. Uh That's the worst way to buy real estate. Because it's just Well, they're all going to stay so they leverage it up to the maximum dollars and then when it doesn't work out you know, so you're buying a property in theory of how much it'll generate.
Taylor Avakian
Yeah.
Marc Menowitz
And then they never hit 100% perfection and then they've leveraged every penny out of it so they can never make any money because they put too much of a loan against
Taylor Avakian
the property. If uh so you were very successful as a broker at one point. You mentioned 50 sales. What do you think that you did differently that that allows you to get
Marc Menowitz
such I told everybody I cash flow. I said, "Forget about buying this property in Santa Monica that's going to give you a 14 times gross or whatever they sold people." I don't know what stuff sells for in in Santa Monica anymore.
Taylor Avakian
Yeah, 12 13.
Marc Menowitz
Yeah. Um I they're going to sell it for 25 times gross or whatever they preach to you. I'd say, "Why don't you buy something that's going to give you a 12
Taylor Avakian
13% return?" And that was but how did you get the listings? Or were you all buy side?
Marc Menowitz
I know I was basically I I never needed to get listings because I would go in there and cold call I I cold called the hell out of people. And then when they told me they were interested in selling, I already had a buyer lined up.
Taylor Avakian
Uh Okay. And what Do you remember your what your what you your cold call script was? Do you remember what you called them about?
Marc Menowitz
Yeah, I have a buyer for your property and he's going to buy it right now.
Taylor Avakian
Would you sell?
Marc Menowitz
Yeah. And they always go, "How much?" And I'm saying I need to get, you know, the information which was basically a rent roll and some expenses. I was a lot less sophisticated at Sure.
Taylor Avakian
Do you think you'd be a really good broker now with what you know?
Marc Menowitz
Well, in essence I am because I go out there and convince you know, people to put 50 to 100 million dollars with me so I'm basically brokering
Taylor Avakian
deals. That's true. That's true. Do if you were starting, would you wait to get money and try to build it on your own? Would you go and and syndicate? Would you try to do a fund? What money model would you use?
Marc Menowitz
That's a good question. If I was if I if I was a real estate agent already I and you have you you're coming across deals all the time, you would certainly come across ones that you would rather buy. Mhm. Well, I'd be I would be syndicating every one of those.
Taylor Avakian
Mhm. Okay.
Marc Menowitz
That's how you develop your investor base. Totally. Um but you know, you can do a lot of shortcuts now because or I mean I would I know a lot of shortcuts now because if you work for somebody that's a syndicator you know, you can see what he does and if he's going out there and doing eight deals a year and acquiring eight deals, that's the guy you want to work for.
Taylor Avakian
What do you think the biggest mistake people make when it comes to investing?
Marc Menowitz
I think that number one that they third party manage it out. Okay. The second biggest mistake is that they um are buying based on times gross and they are um buying local. I don't think you can make money by when you buy
Taylor Avakian
local. You mean in Los Angeles?
Marc Menowitz
No, I don't think you can buy it wherever you are. Because it I mean my big thing was buying in Miami. For a long time I was just going to buy in the state of Florida.
Taylor Avakian
Uh-huh.
Marc Menowitz
And then all of a sudden a hurricane hit last year and then that wiped out because of the insurance rates. So you have to be adaptable. Okay. And right now the best places to buy in the country are Wisconsin um Ohio Mhm. and Virginia. Just based on pure return? Pure Well, based on mar- you know, real estate's a margin business.
Taylor Avakian
Yeah.
Marc Menowitz
Those are all about If you're not buying in those areas, that's where the biggest margins are. And you don't care about population or growth or Well, those are all important things but you know, I've already researched that and I know what's going on there so yeah, I mean they I I Are all the apartment buildings full in the neighborhood? I mean that's about all they say. And if they're not, then don't buy there.
Taylor Avakian
Got it.
Marc Menowitz
Yeah, cuz it's not I won't buy an apartment building that's not 96% occupied. Got it. Okay? Cuz I don't want to sit there and fight the marketplace. I'm not that good of a marketer of apartments so I I I basically buy when every other building's full, I know I'll do well.
Taylor Avakian
You'll be fine. Can you tell me about the Compton story? You're building in Compton?
Marc Menowitz
Compton story, yes. I bought a building that nobody wanted to touch including some of your people that you had on this podcast and they looked at the building and they said I would never buy such a radical building. I used to buy buildings and I would go out there and clean them up and de-crime them. Mhm. I try not to do that anymore because um my insurance company won't let me do that, but um you know, it gets to be more complicated as the more units you own because you have to start answering to insurance companies and banks.
Taylor Avakian
Yeah.
Marc Menowitz
Um so I bought a building called NWA. And NWA
50:00–1:00:00
Marc Menowitz
stands for a band also and they were called NWA in my opinion. This is strictly my opinion because of the name of the apartment building that they grew up in. So I bought the building not thinking about NWA or anything. I would just and I I it was a 164-unit building I paid $7 million for. I bought it at two ti- a little less than two times
Taylor Avakian
gross. What? And no one wanted to buy it?
Marc Menowitz
Yeah, nobody wanted to buy it. It sat on the market for 9 years cuz of the crime it had. They were ha- averaging about six to seven murders a
Taylor Avakian
year. Oh my gosh. But it's two times gross. I feel like you you you hold it for 2 years, you're good.
Marc Menowitz
Yeah, I know. That's what I thought.
Taylor Avakian
Yeah, you're like, wait a second.
Marc Menowitz
So But a lot of people didn't want the Yeah, the azure and I get it. So I I I had a very difficult time because HUD wanted to shut the building down. It was a HUD project. Mhm. And uh HUD wanted to shut the building down. Um the city was after the owner, everybody. Um it was hard to get insurance for. So I finally convinced HUD that I was the right guy to do it and my strategy was I wanted to pull all the fences off the property so that basically nobody could say it was their territory. Mhm. No gang could say it was their territory. If they wanted to run in the building, they would that that's my strategy on doing dealing with a lot of
Taylor Avakian
affordable housing. Interesting.
Marc Menowitz
Cuz you try to make it open and Open basically if you wanted to go in there and occupy the building you occupied it at your own risk.
Taylor Avakian
Got it.
Marc Menowitz
Okay, which worked by the way. Um so um there there's certain strategies that I have that I won't lay out, but you put fences in certain parts of the building and not others and that kind of thing. And uh I put in a camera system where it was monitored by live people and then I set up a um PC in a police in the local police station so they could see what was going on at all times.
Taylor Avakian
Wow. And what ended up happening?
Marc Menowitz
So how long So anyway, so as soon as I did that, the crime went away. Cuz
Taylor Avakian
um Do you still own it?
Marc Menowitz
Yeah. So I bought the building for $7 million. It's It's going to be worth about $50 million in about a year. Wow. I put a million six down. So I took a million six and made about 43 million on it. Wow. So when I the first thing you do when you buy a building and that was a fairly large one, uh you go through all the closets to see what equipment is left behind by the old owner so you know what equipment you need to run the building with. Well, suddenly they opened the door and there was a recording studio in in the building. So I couldn't I was scratching my head and then it looked like it was 1980s vintage. So I couldn't figure out why there would be a recording studio in an apartment building. Well, after talking to a few tenants or residents in the building, they
Marc Menowitz
said NWA used to record there.
Taylor Avakian
Wow.
Marc Menowitz
I just said basically who was NWA, then they told me who they were and then I've uh verified actually that they used to live there. So all the all the all all of the people used to live there or they had Do they only that live there?
Taylor Avakian
Yeah.
Marc Menowitz
And Man. That was a shocker to me. For sure.
Taylor Avakian
It's historical. It's um there's some Yeah, historical nature to that.
Marc Menowitz
Yeah.
Taylor Avakian
It's pretty incredible. And so now that it's going to be worth $50 million, um I've had a lot of people are kicking themselves. One of our our other guests, it sounds like did you and Fred compete on that deal?
Marc Menowitz
Well, he wasn't interested in it because you know how it goes. Yeah, you're asking seven, you have to buy it for five. [Laughter] I paid, you know, over asking for it cuz I wanted the deal.
Taylor Avakian
Are you friendly with a lot of the players in the space?
Marc Menowitz
Do you feel like you guys Not really. I mean because I'm a national player, I don't know anybody in LA. Okay. I mean I know Fred from hanging out with him for not real estate terms, but just Yeah. Our paths came across many times. Yeah, um I don't know anybody in LA. I the people that I know are all national
Taylor Avakian
players. What uh what advice would you give me if I wanted to be better at whatever I'm doing in real estate?
Marc Menowitz
Well, do you want to be a salesperson or do you want to be a person that's a syndicator?
Taylor Avakian
Can you be both?
Marc Menowitz
Well, if you're going to be a a salesperson and a syndicator, I would work for the number one salesperson in the country. Kind I could find. That's in multi-family and then I learned that how he does it.
Taylor Avakian
It's hard to work for myself, Mark. It's really hard to do that. No, I'm kidding. I'm kidding.
Marc Menowitz
No, so you you're a big believer in mentorship. Absolutely. But not this crap that they're pushing around now, the you know, the it's the stuff on Instagram. I Yeah, I I I talked to a couple of those guys. The courses and whatever. The courses and stuff, that's all bunch of
Taylor Avakian
bullshits. Fugazi, yeah.
Marc Menowitz
Yeah.
Taylor Avakian
Right. So finding someone who's actually producing results.
Marc Menowitz
I would just find the the number one producer you can find and then go work for them.
Taylor Avakian
How do you become a better negotiator? You seem like you're pretty good at
Marc Menowitz
negotiating. Learn the word no. Extrapolate on that. Well, I mean, you know, just because somebody says that you're going to have to pay up for this deal doesn't mean you're going to have to pay up for the deal. Um you know, it's uh you've heard other people on your podcast basically that with how their mentality is.
Taylor Avakian
Mhm.
Marc Menowitz
Um the the best negotiators are is you need to find out what the other person is really looking for. I can't tell you how many properties I bought from churches. Churches are a great sources of way of buying property for what I do.
Taylor Avakian
Mhm.
Marc Menowitz
And they're not interested in the best deal. They're interested in making sure that the tenants are taken care of. So you always have to listen to what the seller is really looking for.
Taylor Avakian
Mhm. And then base your strategy around what the seller's looking for. Is there a way how do you identify?
Marc Menowitz
How do you Usually you find that who the the sellers are pretty identifiable. There's a lot of motivations like you know, I generally buy from families, multi-generational families that have owned the property for a long time. And churches are is another good one. Um if it's an institutional buyer he seller, you need to find out what they're really looking for.
Taylor Avakian
It's not just about price. What are your favorite questions to ask? It could be through anything. It could be through yourself, it could be through other people.
Marc Menowitz
Yeah, why are they selling the property is the number one number one reason cuz if I'm going to own it and I'm going to make a lot more money than they are.
Taylor Avakian
Um What about personally for yourself? Are there any questions you ask yourself to know if you're in the right direction, doing the right thing?
Marc Menowitz
Yeah, I basically said, am I looking at I I always make sure that I'm asking all the things that I learned from the 40 years I've been in the business. I'm I'm I'm making sure that I'm going through my checklist
Taylor Avakian
mentally. Do you journal? Do you do you track this stuff?
Marc Menowitz
I I I record everything and then now it goes to AI and then the AI transcribes everything. And do you have a do you have a uh a I use one of these which is a Plaud.
Taylor Avakian
Yeah. Do you have a practice of um looking back?
Marc Menowitz
Like do you have a I'm kind of blanking on the Well, every single time I buy a property or even when I'm I'm making an offer, we write a business plan for the property. Okay. And it's a very detailed business plan. And then I periodically every 6 months go back to and I still go back even if I've owned the property for 10 years, I go back and say did I execute on everything that I was supposed to do.
Taylor Avakian
What is a typical business plan?
Marc Menowitz
Oh, they're all in the same format.
Taylor Avakian
Okay. So it's basically a Like a Word document or something?
Marc Menowitz
No, it's a uh it's a presentation that I would give to investors even though if there was no investors in the properties. Got it. That basically outlines where the uh rents are going to be, where's the expenses going to be, and then what the strategy is that I'm going to be able to get the rents up because that's what I'm basing my whole business plan on is how do I get the rents from A to B.
Taylor Avakian
And did I actually execute on that?
Marc Menowitz
And we're really good at that. We we 100% follow the business plan.
Taylor Avakian
If you could be better at any skill, what would you want to improve on? What do you think your holes are in your game?
Marc Menowitz
Well, I'm pretty good at not making the same mistake three times.
Taylor Avakian
[Laughter] Uh-huh. I've done that. I've done that.
Marc Menowitz
Uh I like to be not making the same mistake twice.
Taylor Avakian
Um Like who do you surround yourself with for your maybe your limit limiting factors?
Marc Menowitz
It's very hard now because there's a lot of fraudulent people that are come across me and that are trying to feed off of me. Oh. Um so I try and it's difficult. I always tell people, especially when they're having problems hanging out with bad people. I always said it's difficult to soar like the eagle soar with the eagles when you're hanging out with a bunch of turkeys. Ah. So I try and live by that motto. Um I try not to get involved with people that are bad influence on me. And as the more successful you get, the more people like that you're hanging
Taylor Avakian
around. Yeah. Well, I'm sure.
Marc Menowitz
Um I the biggest thing that I I'm working on now is making sure that all of the employees that I have, and I have hundreds of them, Mhm. are all on the same page as me. That's what the AI does. By having the AI listening to everything that they're doing, all their emails and their their um calls,
1:00:00–1:10:00
Marc Menowitz
I can find out if they're saying things that they shouldn't be saying. And they're all on this, you know, we we sit there and we have team meetings with, you know, hundreds and hundreds of employees that I have, um making sure they're all on the same page and it's very difficult to get them all on the same page. You know, they're they're and they they all have There's different ways of getting things done. So, I let them kind of if they have a different path to get the same result, that's okay. But, I have to make sure that their their path, whatever it is, is going to be able to achieve the result that I
Taylor Avakian
want. Man, you uh you've really done it very to yourself, Mark. I think you the way that you do things is very unique and I love learning from people like yourself because you just
Marc Menowitz
think differently. call me unique? This You don't feel that way? I I guess I am. I've heard it from everybody, so.
Taylor Avakian
Because you uh you do things your own way. I don't I think you think differently, right? You take a different approach than than most people and and that's a good thing. All the all the best creators and people I I study it all the time. They, like Apple said, think differently.
Marc Menowitz
Yes. Like that's what makes them unique and special. I I I really believe that you need to you're as good as your worst employee and you you that's why you need to be able to figure out what your employees are doing all the time. And I'm reliant The most important person in my people in my company is basically I'm giving a 15 or 20 million-dollar asset to a manager.
Taylor Avakian
Yeah.
Marc Menowitz
And if they're not properly trained and they're not doing the things that I need to do to get them to the building will not be successful.
Taylor Avakian
Mark, thank you very much for being here. This is awesome.
Marc Menowitz
Okay, great. Thank you.