A rental property can look like a great investment on paper, but the real test comes when you start managing it. I sit down with Marc Rice, an investor-friendly real estate agent based in Columbus, Ohio, to discuss what investors should consider before buying rental properties and why chasing high cash flow can sometimes backfire. Marc works with investors, many of whom live outside Ohio, who want to build wealth through real estate. He explains how tenant turnover, vacancies, evictions, repairs, and property management costs can eat into projected returns, especially in lower-priced neighborhoods. We also discuss how investors can evaluate neighborhoods, set realistic rental expectations, and decide whether strategies like BRRRR, short-term rentals, mid-term rentals, or co-living make sense for their goals. Marc shares his perspective on the Columbus market, why investors need to be more selective with deals, and how he got started in real estate after graduating from Ohio State University. He also talks about his 60-acre campground project in Asheville, North Carolina, and how real estate can become a way to pursue bigger personal goals.
Stephen and Marc talked about:
00:00 Introduction and the hidden risks of rental property investing
02:05 Why high cash flow can be misleading
04:10 The hidden costs of tenant turnover
06:15 How to price rentals and screen better tenants
10:00 Is the BRRRR strategy still working?
12:10 Why patience matters when buying properties
19:20 How many rental units do you need to replace your income?
22:45 Short-term, mid-term, and co-living rental strategies
28:10 The best neighborhoods for investors in Columbus, Ohio
30:15 Why local market knowledge matters
37:10 How Marc bought his first investment property
42:00 Building a campground and connecting real estate with passion
TRANSCRIPT
∎ Teaser / Highlighted Clip
00:00 Marc Rice: Whether you be buying a house hack or it's a turnkey property, like just get started somehow, learn how to work with those property managers, learn how to kind of the leasing process, just the whole process of getting a loan, getting insurance, getting a home inspection, contractor bits, learn it and get comfortable. And then you can go more aggressive on your second one. But yeah, you're not going to be a millionaire on your first one and you're not going to replace your income on your first one, but you're going to get started.
00:25 Stephen Husted: The replacement of income is the funniest. I don't think people realize that you might be replacing that W-2, but you are now a full-time business owner. Like you just took on a whole nother beast in itself. And I think because you don't hear a lot of the daily things that go on if you own five plus investment properties.
∎ Podcast Intro:
00:51 Stephen Husted: I'm Stephen Houston, and you're listening to The Breakthrough Podcast, a space designed for clarity, curiosity, and the stories that move us. Here, we step away from the noise and into the moments that define us. The early influences, the hidden struggles, and the breakthroughs that reshape our lives. From personal reinvention to building a life through real estate and entrepreneurship, these conversations remind us that success isn't a straight line. It's a series of honest decisions, brave actions, and small shifts that change everything. This is where those stories live. Let's begin.
∎ Guest Introduction:
01:28 Stephen Husted: What if real estate could give you more than financial freedom, but also the freedom to decide how you spend your time? Mark Rice got into real estate while still in college, finding a mentor, cold calling off market deals, managing Airbnbs, and eventually turning that experience into a career as an investor friendly realtor. Since then, he's built experience helping investors navigate Columbus, Ohio, and make smarter decisions about where and how. to invest. In this conversation, Mark breaks down why chasing high cash flow can sometimes create bigger problems, what investors should look for in a market, how higher interest rates are changing the numbers, and why being patient and persistent can make a difference when searching for deals. We also talk about house hacking, short-term and mid-term rentals, co-living, exit strategies, and why your first property should be about getting started and learning the business rather than replacing your income overnight. There's a lot here for anyone trying to build wealth through real estate. So let's hear how Mark approaches the game.
∎ Podcast Proper:
02:36 Stephen Husted: Mark, thanks for joining today. Appreciate it.
02:39 Marc Rice: Absolutely, Steven. Yeah. Good to chat with you and looking forward to it.
02:42 Stephen Husted: Yeah. We figured out that I was a real podcast and I was able to get you on.
02:47 Marc Rice: That's it. Instead of being a real podcast.
02:49 Stephen Husted: That was a funny DM. I was like, wait a minute. He gets a lot of spam on people saying that, Hey, come on a podcast. That's crazy. I've never heard that.
02:59 Marc Rice: Yeah. And the spam, the email spam these days are just like, yeah, it's kind of, it's like a mass wave of bots. It feels like, so yeah, always checking, but glad we can finally meet.
03:09 Stephen Husted: Yeah, definitely. Definitely. So we were talking earlier before we jumped on, like what did this, what to discuss and what's going on C minus D plus neighborhoods. They were basically. doing cosmetic little rehabs, but not dealing with any of the big mechanicals on these older homes, and was doing pretty good for a couple years. As he kept scaling, they didn't take care of any of this stuff. All of it just crashed down. They had evictions, bad tenants, and finding contractors. The whole thing that can happen. And when it does, and I brought up something to him because this is what I went through as well, is once you start to scale, you can wake up one day and you could have 10 messages of repairs. And it usually all comes that way. It's never just one thing at a time. It's like this big influx of issues. And those issues could be repairs, big things, tenant issues, you name it. And he was so adamant. about telling his story. He just went deep. All this went right into it. And then you brought up when we were beforehand, before jumping on, that it's one of those things when you're getting a new investor, you're trying to get them to look into more of a B minus, more stable market. But I'd like to hear your take on what I just told you.
04:32 Marc Rice: Yeah. I mean, so I'm a... investor-friendly realtor here in Columbus, Ohio. So a lot of my clients, they're out of state looking to invest here in a growing market, cheaper prices, $100,000 single families, $200,000 duplexes. So I think in general, people, they live out of state, they have a lot of cash. They say, hey, how can I deploy this to quickly replace my active income so I can retire? I think that leads them to high cash flow and that tends to lead them to C and D class areas. And I think the issue is on paper, the spreadsheet works, but in reality, when you go to collect rent or the tenants just randomly move out after six months. Or when the tenants finally move out and there's a $5,000 to $7,000 turnover every time from your property manager, that's what just digs a hole. And you might buy this duplex three bed, one bath per side. Maybe you pay $220,000. It's renting out for $2,200 to $2,400 a month total. So surpassing the 1% rule. But if every six to 12 months you have a $5,000 to $7,000 turnover, maybe 25% of the tenants you place end up leaving or getting evicted, it's just not. actually cash flowing in reality. So I think it can be tempting to chase that cash flow. And obviously an extreme example would be go to the worst street in Detroit and you can buy a house for $10,000. And yeah, you could rent it out for 700 a month, making a 7% rule, but nobody wants to live on that street. And it's very bad and it's very rough. And when the tenant does move in, they're probably not going to pay and you have to evict them. So that's an extreme example. Yeah, I see it all the time. I mean, I broker deals in California. Columbus, Cleveland, and Dayton, Ohio. But yeah, we constantly have people chasing that high cashflow, C-class, sometimes D-class. I try to advise them, you're better off in a more B or B-minus stable market, stable house, stable tenant who can pay their bills and has enough credit to be financially responsible. And also when they move out. They're not going to trash the place. And maybe you only have a $500 turnover versus a $7,000. So that's some high level stuff I see as a real estate agent here.
06:53 Stephen Husted: If the turnovers will crush you.
06:56 Marc Rice: Yeah, it's a silent killer. I mean, especially when you add an eviction on top of that, $500 eviction, vacancy. You got to pay your property manager, replace the tenant. Then you got to turn over the property. Yeah. I mean, it could easily be 7, 10K when it's done of
07:11 Stephen Husted: just dust set. Yeah. And the time too, because another thing that we were talking about yesterday is things don't move as quick either. Things take time. And that time, then if you had a property sitting or you now you're trying to get work done to it once that tenant moves out and it sits longer, whatever the case may be. time creates issues not only just carrying costs but break-ins yeah it's interesting because a few guests that i've had recently are actually true operators the true operators will tell like it is and those episodes are if you were a new investor listen you're like shit i don't know should i even do this does this really make sense and it's not that it doesn't make sense you just learning from others experience on how that journey for them has gone. They're just basically telling you all the bad things to where they end up to the good things because the gentleman yesterday, he just pivoted, figured out, okay, I'm going to get into a B minus neighborhood. Yeah. I am going to buy a house and I'm going to replace all the mechanicals all the way down to the sewer line. that's just part of it because i don't want i want a tenant to be comfortable i don't want them to have high utility bills because the windows are older or all that stuff but so that was the solution and that was which was really cool he went through all this shit but then came up with a solution and that's the part that matters okay when you're listening to this don't do this or if you're gonna if you're gonna do those types of properties at least live there
08:43 Marc Rice: Fair. Yeah. And I say, and I, what I tell clients too, if you're going to buy in these C-class areas, I like everybody goes into rentometer.com. They put in that three bed, one bath and they say, oh, it says 1300. I'm going to charge 1300. The issue is that is the top market rent in that area. Generally what I see rentometer spinning out pretty much top market rent. And the issue is the best tenants in those neighborhoods, they have a lot of options. They have good credit, good jobs. They don't want to move every year either. They don't need to move. So they're going to go find a $900 or $1,000 a month rental instead of paying top dollar for the $1,300. So if you're going to be in these C-class areas to a good strategy, I always recommend whatever Rentometer says, subtract like $100 to $200 off of it. It is be very picky with your tenant. You have to fall fair housing. But what I mean by that is strict. credit requirements and follow them. So 600, 620 plus is a great minimum. Most people do 600 in the C-class areas, but if you want to be very strict, like 620 plus and just don't move off of that because you legally can't, but just be very strict on verifying the income and making sure they have that credit requirement. And once you do get a tenant, they're probably going to stay versus if you price it at 1300 a month. You're not going to get as many applicants. And then when it sits for a while, you're going to feel pressure to take the first applicant. And a lot of these property managers, they're incentivized to place a tenant. They get a commission, but also they're not even running formal credit checks. They're running a credit check, but they're not looking at a credit score. So they don't have credit score minimum, some of them. So yeah, they might not have a bankruptcy or a eviction on their credits or maybe not a lot of collections. Well, their credit score could still be like 490, 510, and they're going to place them. I think just pricing it a little bit cheaper and then raising your requirements income and credit wise can get you a better stable tenant. So you're not getting caught up in that kind of constant move out eviction tornado.
10:44 Stephen Husted: That's when your asset turns into a liability.
10:48 Marc Rice: For sure. Yeah. I mean, we see it, unfortunately. When you talk about solution, that's a good solution. If you're in a buy C-Class, that's a solution to make it better and make sure your property manager is checking credit, like actual credit score. That'd be my advice. So if you're going to do, we can talk about solutions to buy B-Class and how to make that work, but that would be my C-Class advice.
11:08 Stephen Husted: Well, let's jump into the B-Class scenario. Walk me through how you deal with the investors. So you said that most of your investors are coming from the West Coast?
11:17 Marc Rice: Yeah, West Coast, some New York, some Florida, kind of like retirement, like older crowd where they're maybe like 1031 out of Florida due to the condo changes and whatnot. But a lot of West Coast, Oregon, Washington, California, some Arizona, not as much. And a lot of New York and some Florida tends to be most influence.+
11:39 Stephen Husted: And what is there? So you brought up the cashflow scenario. Do they really understand their objective? Are they just trying to diversify and figure out another way to
11:48 Marc Rice: generate cashflow? Yeah, I think a lot of my clients are high W-2 income earners and they want like over time, replace that income, but also have a diversified approach. I think they probably see all around them how the real estate went up. been very fast over the last 20 years in most of those cities and states. So I think it's something they've always wanted to do, but they just literally can't do it in Los Angeles or Orange County or up in the Bay Area. So I think a lot of them also do research the BRRRR method. And I think that is probably the best way to create a lot of fast wealth in real estate. So a lot of them start with turnkey. And once they buy one or two, then they switch to the more cosmetic BRRRR model. is what I see.
12:34 Stephen Husted: So speaking of the BRRRR, which is buy, rehab, rent, refinance. That's a funny acronym, but is that still possible in Columbus? Because there's a lot of talk online right now. Buying single family homes is dead right now. And I've had a lot of different operators that got investment properties throughout the Midwest, St. Louis, place like that. And they're like, we're just not buying as many. But the ones we're getting, we're completely getting the project up, rehabbing it, refinancing all our cash out, moving on, it's cash flowing. We're doing it. We're just not doing it at the scale we were back in like 2020.
13:14 Marc Rice: Yeah. And that's kind of what I think is the case. I mean, rates right now, I mean, it's September 17th, five-year treasury is at 4.8%. The Fed just raised rates 0.25 literally yesterday. So rates are high right now. Probably those DSCR refinances. you're probably around a 7% to 7.25% on a cash out refinance, maybe up to 7.5% on some of these. So I think the issue now is the numbers are tighter, especially when you go to refinance. I think also construction costs just kept going up. I think a lot of sellers... they never really adjusted their prices. They're like, hey, I could have got this four years ago. I'm still asking that. That's been a rhetoric the past three years. So I think what I see with my clients, other investors locally who are doing it at scale, they're just being more picky on deals. Maybe they leave five to 10% into the deal to get some across the finish line, especially if they're in good areas. But yeah, they're just not doing the volume they were because rates are so high. So just being more conservative, especially now. past call four weeks i think everyone's even more conservative than they have been in the last five years so yeah i think people are just more conservative and realizing they need to leave a little bit of money in the deal to cash flow or break even once it's all stabilized and refinanced and
14:36 Stephen Husted: you the one talking point from a few of them that i talked to were patience yeah just being patient and hey this is gonna be these are the numbers I need to be at when, whether that seller can or cannot do that, that's what they're going to do. And it was in an interesting, I had this one gentleman, he's actually a lender and he bought in St. Louis or he buys in St. Louis. So he's picking up this property. It was on the market. And then they did a price reduction within a week. So then it got on his radar. He reached out to his agent and said, hey, I can be at this because I'm going to have to put this amount of money into it. He's like, just write it up. It's going to be a little bit offensive. But this is what I have to do in this market. And the sellers either say yes or no. Well, come to find out, the sellers were based in New York. And it was like a family house that they had. And they wanted nothing to do with it. They just wanted to be out. And they accepted. And he got it, locked it up, rehabbed it, did a cash out refinance, got his down payment back out and moved on. But he's not doing five of those a year. He's doing one, but that's okay. That's kind of part of, I think people get a little caught up on the news of things and you have to, and to understand that if you can look at real estate in a 10, 20, 30 year horizon. There is going to be those times when things are going to be flat. They're going to be low. They're going to be this. And you're just going to have to adjust with it. A lot of people can't see that in the moment. They're just like, well, the rates are high. So the news is telling me don't buy. So I'm not going to buy.
16:14 Marc Rice: Yeah, no. And yeah, I mean, you can always rates move. Your basis in the property doesn't. So I know one of my friends who works for a big developer. She's always basis basis, meaning like your total costs into the property, because that's never going to change. And I think as rates do go up, prices should go down in that. As long as the numbers work, great. And then if rates go down in the future, then your basis is still the same and you can just be cash flowing way more. So yeah, I think it'll be, it'll lead to opportunity. I think to your point in that last story is you got to follow up on deals and let them know like, Hey, this is my offer. We're still here and just keep following up. And as times change or water pipes burst or people break into the property, they may get more desperate or just say, Hey, screw it. Let's just sell. And you being in their ear nonstop is going to help you get that deal. across the line so yeah i think submit your offer where the numbers work and as the market moves and shifts some deals will definitely come to fruition just by being persistent so yeah that's a good strategy yeah
17:15 Stephen Husted: and it seems like to the point of the sellers still haven't got the memo so to speak that's been a long process it's been interesting to see play out yeah+
17:27 Marc Rice: No, absolutely. Yeah. Especially in the five to 20 unit commercial range that we do for somebody's multifamily, it's even more magnified there because they have loans that are coming due potentially. You just got to be persistent on these deals and follow up and submit offers where the numbers make sense for you.
17:42 Stephen Husted: I've been seeing some, watching some videos on what's going on in the commercial and multifamily and particularly Houston on a lot of these apartment complexes are. getting gobbled up. And a lot of these operators, they're losing money because they have loans due, right? And they're taking massive losses. But then what they're doing is they're going out after these properties that are taking this big haircut and picking them up so that they can recoup that, which is a true operator mentality. Because you hear that, oh, well, they're losing this money. They're losing this on this. But they're like, yeah, but in the background, they're making it back up because they know what's going on in the market. So
18:23 Marc Rice: they're shifting. Not true. Yeah. I've heard some bigger cases. I know Brandon Turner, BiggerPockets. I mean, he had a big property down in Texas where they just sell it at a loss and a lot of his investors lost money. And he just kind of owned up to it. He's like, hey, like the market moved. We couldn't refinance, couldn't sell it for what we needed to. So we ended up having this. to decide to sell it, cut the losses, but he's still buying and still raising money. You don't want to over-leverage yourself where if you do lose, you're kind of out of the game. You want to stay in the game. Yeah, like when an 08... event happens, like everyone's losing money. It's just who's losing all their money and they're out of the race. So you don't want to be in that position as the market shifts. And I don't think the market's just going to crumble. I think there's extreme pressure on it, but you want to set yourself up for that kind of worst case scenario where you still can stay in the game and you're not going to have a total loss to have a fire sale or anything or whatnot.
19:15 Stephen Husted: We got a very stubborn market.
19:18 Marc Rice: Yeah. And people have low 30 year fixed interest rates. So it's like, I don't blame them. I mean, I have properties at three, 4%, 5%. And it's like, I don't need to sell and they cashflow. So, and they're in good areas. And that's where, like, why would I sell? So I think that's where the C-class, you see more of these C-class properties come into market because it's becoming a liability for them. They're having these five to $10,000 turnovers. Their property managers aren't doing a good enough job. And they're like, Hey, even if I hold onto this, I'm still going to be losing like five to 10 K a year. So I'd rather just cut my loss and have that mental space back instead of holding onto it versus all these A and B class properties. These owners generally, they don't need to sell. And even if they're losing a hundred dollars a month, it's such a low headache. So there's not going to sell them. So that's kind of what I see right now. I see a flood of kind of C class properties, but not still like nothing really A or B class that's viable to buy. You see some stuff get listed, but. but way overpriced. The numbers can never work at that purchase price. And they just honestly don't end up selling. Pretty much, you had to list it for 30, 180 days and just take it off the market. So, I mean, that could change if they, for whatever reason, absolutely need to sell. But that's what I've seen so far in the past six months.
20:32 Stephen Husted: I cut my losses on a property out of Detroit. It was my first one out there. And it was just... so many headaches and so many different things. And I'll tell you, I went into a Detroit investor group on Facebook and I was just looking at people talking in there and this guy popped up and he was actually based out here in California and he buys properties, problem childs, basically. And he just says, these are the things I'm looking for. I'm looking for squatters, evictions. just things that people are having a hard time doing and because i have a really solid team on the ground and i sold it to him for the same price i paid for it and it was cool because it was like that first one it really didn't matter because that was the learning lessons that it came with so those were more valuable than making a profit to be really honest because it got me in the game no
21:26 Marc Rice: i mean that's what he told clients, friends, first time investors, like just get started. Like whether you be buying a house hack or it's a turnkey property, like just get started somehow, learn how to work with those property managers, learn how to kind of the leasing process, just the whole process of getting a loan, getting insurance, getting a home inspection, contractor bits, learn it and get comfortable. And then you can go more aggressive on your second one. But yeah, you're not going to be a millionaire on your first one and you're not going to replace your income on your first one, but you're going to get started.+
21:55 Stephen Husted: The replacement of income is the funniest.
21:59 Marc Rice: When you do the math on cashflow, it's, I mean, the average property, if you're lucky, probably cashflow is $100, $200 a door right now. I mean, that's like still higher end, I'd imagine. I mean, that's probably the Midwest. So, I mean, yeah, a lot of these high W2 income earners, I mean, they're probably making 300K, 500K a year. I mean, it's a lot of property. Like you're really gonna replace that. call it income through the wealth generation of the property getting paid down and the property appreciating. It's probably not going to be that cashflow, at least not for maybe 10 years. So that's just, I think a little bit of a misconception too. You would probably need to buy about a hundred units to even come close to replacing that income. And that's not easy. Like that, like to buy a hundred good properties is, that's probably a five to 10 year journey.
22:50 Stephen Husted: Absolutely. And I don't think people realize that you might be replacing that W-2, but you are now a full-time business owner. Like you just took on a whole nother beast in itself. And I think because you don't hear a lot of the daily things that go on if you own five plus investment properties, there's a lot of stuff that goes on besides just putting a tenant in. and dealing with the property management. You got taxes, you got insurance, you got all these different calls, and there's so much things moving along. And I think because it's not talked about a lot, that people think, I'm just going to replace my income and travel the world, which you can get it to that point. You can get it to that point after years of systems and teams and processes, and it's a long journey. Then again, this day and age, I do think right now, I think this market in itself is a great market to get into. And I'm just going to say that I know it's high interest rates and I know that there's just a lot of moving parts right now, but if you can be smart on your numbers, be patient with a deal using AI. and building out things. What a great time to get one property, get it under your belt. You don't have to buy 10 in the first year, but you get that first one and now you can build out and systemize your whole, what you're going through in real time with AI. Yeah. I didn't have this back in 2015.
24:20 Marc Rice: Yeah. It's never been easier to manage real estate than now. It's never been easier to run a business than now at this point in history. So yeah, you can. extremely leverage your time with these tools. And also, I mean, yeah, there's a lot of fear in the market, especially with sellers. And I mean, prices will go down or you will get like way more discounts now than you ever would have. So if you can make the numbers work now, as rates move down in the future, like you're gonna be in a good spot where you have properties or your basis, your overall price you paid for the property is low. And when those rates do go down and you refinance, you're gonna be sitting very well. So yeah, you got to react to the market and play your cards right and just be a little bit more conservative and aggressive. So.
25:03 Stephen Husted: What strategies do you work with your clients on besides just single family? Do you have different scenarios that you're running by them? Are they doing co-living, midterm rental, short-term? Like what is everybody calling you and trying to like in their head? Because there's so many shining objects. I'm sure they call you like, Hey, I want to buy an investor, but I'm thinking about doing this or that.+
25:23 Marc Rice: Yeah. I mean, I think short-term rental. three, four years ago was a hot topic. Then it switched to midterm rental over the past one to two years. And now recently the co-living pad split model has come up a lot recently as well. I think the issue with all three of those is you need a good property manager. And I haven't really found a good co-living manager yet, at least in our market. I think maybe in more expensive markets like the Bay Area, LA, San Diego, New York, Chicago, Miami, it's probably more, it would probably work a lot better. The issue out here in the Midwest is rent's already so cheap. You can find a one bedroom for probably $800 to $1,000 pretty easily. So people only want to pay probably close to like $500, $600 a bed for these pads for the models. So it's just hard to find a manager. So I guess in summary, I think short-term and mid-term rentals are still the most like... creative options to make some of these A and B class properties work. And that's really how I explain it to clients is short-term rentals and mid-term rentals are a strategy so that you can at least cashflow or break even in A and B class areas. That's basically what it's for. That's how I utilize it at least. I don't really recommend it in C class areas. You get a lot of canceled bookings. You get a lot of riffraff going on. People book one day stays, trash the place. locals in the area. So I tend to recommend A and B class for those short-term and mid-term rentals. I have good managers in my market who can do both of those. Getting the co-living does work. I just haven't figured out a process at scale because I don't have a good property manager who can take it on for our clients. So I have like one local client who does do a pad split run by the bedroom and he's done well. Actually, my buddy and one of my business partners, one of my best friends from high school, he does pad split in Asheville, North Carolina. He does very well, just very management intensive. I mean, you have instead of a single family home, you have eight leases because you're eight bedrooms. So vacancies high, you just like navigate fair housing in terms of who you're going to put into the property because. They don't match or they're filthy or they're smoking cigarettes or just causing chaos in the house. Like you could ruin that whole co-living house. So it's hard to objectively place some tenants sometimes. So I hear some of his anecdotal experiences there a little bit. I find pad split. It's kind of one of those things that works good on paper. It probably would be good in A and B class areas. I probably. would only really do it near big universities just so you have a fallback of, hey, this doesn't work out. I can still rent it to students for pretty similar rates. But yeah, I guess I don't love as much like buying some of these pad splits in a suburb, paying like top market price, and you're just relying fully on the pad split or the rent by the bedroom model. And then if anything happens to that, you're kind of like you're as negatively cash flowing a ton. So with all these strategies, I try to have my clients make it so that if they buy this property as a short-term, mid-term or pad split, if they ever wanted to switch back to a long-term rental, the numbers could still make sense or they could always sell it pretty quickly and retain that value on the sale. So it has to be a very desirable neighborhood that has a lot of liquidity.
28:49 Stephen Husted: Yeah, you want to have some type of exit strategy. you can't just bank on one scenario that's a big thing about this day and age with social media if you're following investors and you're trying to get into it and you see a post on co-living and the guy's spitting really insane numbers and got a big following and probably means well about talking about his experience and maybe he has a good experience of doing it or maybe got into a point where The market was lower. You know what I'm saying? Depending on when they buy, they have more flexibility. But a lot of these situations come up because social media can push them so quick. And then people go, oh, it's co-living is now the next best thing, which we all know that there comes with a lot of risk too. You have to understand the business model. You just have to understand what the business model you're getting into is actually going to, what kind of time you put into that.
29:41 Marc Rice: Yeah, for sure. And that's the issue. A lot of them, there's really not many management companies who can do co-living. So a lot of these people buying these houses, I mean, it probably really only makes sense to do it in their local market where they can be the manager. But then in a way, you're almost like buying a franchise or you still have a job of filling those tenants, handling those maintenance requests, handling the leasing, the cleaning when they move out, maybe common area cleaning. It definitely becomes a small business. So I'd say if you're going to do it, yeah, I would probably try to find a property manager who's specialized in that. I think that could be a good way to really do well there because I think there is money to be made there and there's a lot of spread. And I think it's probably the most affordable housing option for all Americans. So yeah, you just got to be careful of the time commitments and kind of social media gurus selling it.
30:30 Stephen Husted: Tell me a little bit about your market. Where do you like to be? What are the neighborhoods that you like? Where are the places that if a new investor was coming in, what is those sweet spots that you like?
30:40 Marc Rice: Yes. I mean, Columbus, Ohio, it's a growing city. It's kind of similar. I think Charlotte, North Carolina is the closest kind of big brother comparison. Yeah. I mean, we have about a million people here. It's a pretty big city. Ohio State University is here. I try to recommend clients that... either get into the B or B minus neighborhoods. So the B class neighborhoods, that's where you can buy a duplex about 350 to 400,000. You can get about 3000 to 30, 400 a month in rent should be super stable. A lot of these neighborhoods in Columbus for B class will be like. We have basically downtown, then we have a giant circle highway, which is 270. So you kind of have a suburb B-class, which is basically everything around the city. But then we have a couple of B-class pockets within the city. And I can list some off. Old North Columbus, Ohio State campus area, Wyland Park, Merriam Village. There's some pockets in Franklinton that are good too. Old Town East, Franklin Park. There's some good B-class areas. It's just tough to cash flow. So a lot of clients, they also look at the B-minus areas. In these B-minus ones, that's where there's a lot of fix and flips going on. A lot of rapid growth going on. You have a lot of affordable housing, new developments going in there. But you're going to have a couple of boarded houses still in the street of just people holding out. Some of those areas in Columbus are like Hungarian Village, Rebhosak down there, Southern Orchards, Deschler Driving Park area there. We got Franklinton, North Hilltops, kind of similar area. North Linden is a similar area, B minus. And sometimes it's street by street where some streets may be closer to C plus. So I think really talking to a local investor-friendly agent is how I would weave through the information. And we have a neighborhood grade map that we can provide to clients. It's more based upon the objective rents and sales prices, but it helps them navigate like A, B minus, C plus, and C. There's some areas. Yeah, we try to be like a resource so that they don't necessarily need to fly out and spend a whole week here. We try to just cut that noise out right away. And hey, we've already kind of broken this information out for you so that when we send you a deal, you already know if it's an A class area or a C minus class.
33:03 Stephen Husted: Do you have new investors flying out to check the market? Do you see, is it a mix between some come out, some don't? What do you see? It's a mix. I'd probably say only
33:11 Marc Rice: 20% come out. And the ones who do, I tell them, hey, your biggest takeaway is just drive around the city and understand the difference between A, B minus C plus and C. Just make sure that you're validating and verifying your investment thesis. Because yeah, if you thought you were going to invest in C minus areas and just get a ton of cash flow and then you drive it. and you're scared to get out of your car, maybe you don't want to invest there. Thankfully, Columbus is pretty, like it's not as rough as Cleveland and Cincy. Cleveland definitely has a D and F class neighborhoods. Columbus really doesn't. We have some C minus areas, but it's not, there's nowhere where you're going to park your car and you're going to come back and there's going to be no tires on it. They have that in Cleveland. I think it's more just validating. Hey, this is the city I want to invest in. I'm comfortable. Maybe they meet with a property manager. Maybe they walk a couple of properties to understand some of the age built properties. We have a lot of 1920 to 1945 built product out here within the city. And then suburbs is more 1980 plus built. So I think just understanding like neighborhoods as well as types of houses is what they're getting out of that.
34:23 Stephen Husted: And what is the industries out there? What are the jobs look like?
34:26 Marc Rice: Yeah. I mean, last five to 10 years has been a lot of tech boom, actually. Not as much software boom as you guys kind of in the Bay Area. It's more like manufacturing boom. So we have Intel, they're building a $25 billion chip manufacturing plant out here. We have Anduril, which I believe is out of California, their defense manufacturer for drone technology. They're building a $1 billion plant down south of the south side of Columbus. Tons of data centers out here as well. Like JP Morgan Chase, they have 10,000 employees. employees out here, good hospital system. We have good university, which pumps out like pretty well-talented, affordable labor for a lot of these employers. Like Battelle, they're headquartered out here. Abbott Health, they make Pedialyte. They're out here as well. It's pretty diverse, which I think is good. We're not just one sector where, you know, if there's a IPO crunch, everyone wants to leave. It's pretty diversified. Which
35:22 Stephen Husted: is such a key. I think for investors to understand is when you're looking into these markets, especially in the Midwest, understand the industries that are there. I think Kansas City is very similar to Columbus then. What you just named off was very similar to Kansas City. I remember when I got into Detroit, I was just going, what are they doing out here?
35:46 Marc Rice: It used to be all auto. It was just all auto manufacturing. And then it, yeah, 60s happened, 70s.
35:51 Stephen Husted: When I bought my first couple. What was that?
35:54 Marc Rice: I think Cleveland was a similar manufacturing history as Detroit. Boom and bust.
36:00 Stephen Husted: Really? Yeah. How'd they come around in Cleveland? Yeah,
36:04 Marc Rice: a little bit more than Detroit, but it's still not, you don't hear a lot of these tech companies setting up shop there. That's pretty concentrated to Columbus. So yeah.
36:12 Stephen Husted: And why Columbus?
36:14 Marc Rice: It's the capital. It's a newer city, a lot of flat. Cheap farmland to go out. Cincy and Cleveland, I mean, they each have Cincy as a river, Cleveland as a lake. So it's already had its urban sprawl. So there's not a lot of open, yeah, there's not a lot of open space left. Columbus, this is a newer city. In the 80s, it started really coming alive. So it's just where, I mean, this is the capital. It's where a lot of the growth is concentrated. I think Ohio State's been a big part of it, bringing a lot of these companies here, especially with the labor force that it pumps out. But yeah, I think once it caught momentum, it just kept going. And it's been a story past 10, 20 years.
36:53 Stephen Husted: Yeah, that's cool. That was a good breakdown. I didn't know about the tech that was setting up in Columbus. That's really cool.
37:00 Marc Rice: Yeah, we have a Honda. I mean, Honda, they have a big manufacturing plant here. Scott's Miracle-Gro as well. It's like Scott's Miracle-Gro is headquartered here. A lot of random companies you would never think of. So yeah, it's just pretty diverse.
37:12 Stephen Husted: And when did you get into real estate?
37:15 Marc Rice: Yes, I went to Ohio State from 2015 to 2019. So my senior year at Ohio State, I found a real estate mentor through one of the guys that I knew I played basketball with. And I started working with him my senior year. Just told him like, hey, I just want to learn. Whatever I can do to help you, I'll help you. I don't really care about the money. I just want to learn. So I started helping him cold call on properties, off-market deals. And then I helped him with some of his Airbnbs that he had at the time. So that's how I got into it, which is my senior year at Ohio State. cold calling on off-market deals, learning how to put those together, and then learning about Airbnb management and a little bit of project management. So the day I graduated in May 2019, I decided to do that full-time. So at the time, graduated in May, was still putting deals together with my mentor, was still managing Airbnb. So I had some income coming in. Three months later in that summer, I bought my first house hack, bought a triplex, put 5% down with my buddy, actually, one of my best friends from college. He had a W-2 job. I didn't. So we used his income to qualify.
38:18 Stephen Husted: Yeah. I want to hear about how you got your real estate license.
38:21 Marc Rice: Yeah. So how I got started in real estate was actually, I went to Ohio State University, graduated in 2019. But during my senior year at Ohio State, I found a real estate mentor through one of the guys I played basketball with. And I just approached him and said, hey, I want to learn. I want to do real estate, I think. But let me just shadow you and help you out with making some money so I can really learn this business. So what I did, I started a cold call on off-market real estate deals for him and helped him do a couple of deals. started to manage a couple of his Airbnbs that he had at the time. So that's how I got my feet wet was still while I was in school at Ohio State University. And then as I approached graduation, I had job offers at big four public consulting, public accounting firm in Boston. I basically just told them, no, thank you. I don't want this offer anymore. Even though all the friends around me were going big four, big three for consulting. It was just Ohio State. pumps out a lot of big corporate jobs and that's great. But I decided it wasn't for me. So when I graduated in May 2019, I was still putting some deals together with my mentor, was still doing some Airbnb management. So I had some income coming in. I knew I wanted to buy my first property. So that summer I continued to cold call, eventually found my first off-market triplex property in a good B-class area. So I bought that for $230,000, bought it with my friend. We put 5% down. So he had a W-2 income and I did not. So we could actually qualify for the loan by partnering up. We ended up fixing up two of the units, moved into the other vacant unit. And I was basically living for free. So that was around kind of September, October, 2019. And I was still continuing to put some deals together. And then January, 2020 approached. I had some friends who were brokering real estate. They got their license. They became investor-friendly agents. I stayed in touch with them. And they're like, hey, you're putting all these real estate deals together. You can make way more money if you become an investor-friendly realtor and get your license. So I was like, okay, let's go. I'm going to get my license and I'm going to put more deals together. So basically that January, February, 2020, right before COVID hit. I got my real estate license and officially became an investor-friendly realtor. I already had a ton of leads from cold calling the past two years. So it's pretty easy to transition in because now I have a formal process. I could sell my deal to anybody instead of just my one mentor. So yeah, income shot up. I was actually able to bring in a lot of business for my Airbnb management company just by selling deals and offering that management service to my clients. Really just got into real estate through being curious, started listening to BiggerPockets podcast, just kept saying yes to opportunity, just stayed committed to it. But really, I think I found my momentum once I became an investor from the agents, especially because during 2020, rates hit the floor 2%, 3%. If you could find a deal, you could sell it because everything made sense. So I think it was a... good time to getting into the business heavily. And yeah, did a lot of real estate deals then and throughout COVID and then beyond. So it was a good bet on real estate and on myself here in Columbus.
41:42 Stephen Husted: Yeah, that's cool. And I like the fact that you brought up about, you know, you were curious and that this can go without getting into real estate, just being curious on new ideas and careers and directions in life is super valuable. Because you just don't know where things are going to go. You can go five years down the road and be curious about something else. And now you're doing, maybe it's in the same, it's in the investor investment space, but it can be completely different. But because you were curious, that opened up your eyes to lean into it more, which is really cool.+
42:16 Marc Rice: For sure. Yeah. In college, I had some. Like I had a t-shirt business in college and I was, you know, my buddy at one point, we were having our t-shirts sold in up to 11 stores on the East Coast. I grew up in the Boston area. But the issue was around me, I couldn't find a mentor or anybody living the lifestyle I wanted to live at the age of 40, 50, 60. It was everybody kind of living paycheck to paycheck in the t-shirt business, trying to make ends meet, figure out digital marketing. And I was like, okay, if I stay on this path of doing t-shirts, it's going to be a grind. The biggest success I could think of was like the life is good t-shirt model where it took them 20 years to finally blow up. And yeah, I just felt like there was nobody around me really crushing it and living the lifestyle I wanted to live. But then once I started to dip my toes into real estate, it seemed like everybody around me was living a very financially free life. If I do this five to 10 years and really give it my all. I can at least have that financial foundation to do whatever else, entrepreneurially or family or just time freedom. So that's why I really fell in love with it. It was just like a no-brainer to build that financial freedom and have time freedom to do whatever I want in my life.
43:28 Stephen Husted: Yeah, because I tell you, I'm sure you're... How old are you?
43:33 Marc Rice: 29, just turned 29. Okay.
43:35 Stephen Husted: Yeah, as you get older, you start to really focus on time. that is the commodity you want the most of and you start to just home in on things that go on through your day that you're like i don't want to spend my time doing that yeah and you just you're always chipping away to do it for me and it happened when i got older because i mean to be honest at 35 is when i basically started over the complete rebuild 35 so always felt like i was in a making up period, changing lost time. But it's cool that you're approaching this now at your age. It's pretty amazing.
44:16 Marc Rice: Well, yeah. I mean,
44:17 Stephen Husted: on
44:18 Marc Rice: time, that is the most valuable resource, right? You never know when you're going to get that call or that random doctor checkup where it's like, hey, here's your final date. I mean, everyone dies eventually. So I think even for myself, I've been doing this business since the day I graduated college. I think it's how do I... do more creative stuff in this business and how I've kind of done it so far as me and my friend, best friend from high school, we actually have like a 60 acre campground, glamping ground. We're building out in Asheville, North Carolina. So that's kind of where my passion. kind of passionate pursuit within real estate is being directed right now. But you can, I mean, you can keep buying single families, duplexes, a hundred plus unit apartment buildings forever. Like the game never ends. So I think that's been a cool creative outlet for me. It's like, Hey, I'm passionate about this. I'm passionate about getting people connected to the outdoors in an accessible manner. So that's kind of how I've married like real estate as a wealth generator with like. passion and what I want to do with my time. But yeah, that's an example of how I found in real estate. I think some other people along their journeys in real estate, they figure out maybe they love hotels or like creative things or co-working, co-living, and they kind of find their more like passion within the real estate box. So I think that's another thing I'd encourage the listeners. If you are passionate about something or maybe you're an artist and you want to do like artists, co-working spaces that you would probably crush it in there because you're passionate about it. And like, there's a way to make money in any niche in real estate if you really focus on it.
45:58 Stephen Husted: That's a, you brought up a really good point. The whole passion part thing, I think it's super important. I mean, I've gotten to this point now where I build houses out in Seattle. So I develop and that's where my passion is at. And it's interesting enough. Back when I was in middle school in eighth grade, my favorite class was drafting and I built a house in eighth grade. And fast forward to today, I started developing out in Seattle and I had a random friend that was in my class reach out to me in a DM. He's like, hey, you took building houses serious. And I was like, what do you mean? He's like, I helped you build your foundation in eighth grade on your house. He's like, now you're building houses in Seattle. He's like, hey, I want to connect with you. I want to get into this as well. I live in Seattle. I work in tech. And it was just the craziest. How do you put that together? Something you were doing in eighth grade finds its way, you know, and I'm 56. Yeah, yeah.
46:58 Marc Rice: That's what's wild. I mean, my business partner that I'm doing the campground with, it's like we were pretty much best friends that we met in ninth grade. And it's something some of those childhood relationships and absolutely carry over. It's like you have those just more like wild experiences as a younger kid where you can develop a lot of trust very quickly with people. And I think as you get older, you just don't get as much of those experiences with it. With a fellow new adults, it's just harder to quickly meet friends because you're not necessarily thrown into some random Spanish class together, like random class project. Yeah, you go to a barbecue, but you're not really going to have to work through extreme turmoil very quickly and really build trust. I mean, literally best friend, business partner from high school. I mean, yeah, we own a lot of real estate together and we've been side by side ever since I graduated. So yeah, I mean, that's a... a wild anecdote but i think it's yeah you never know who you'll reconnect with that could have a lot of synergies with so yeah that's
47:58 Stephen Husted: a good point this is good this is good follow your passions yeah
48:02 Marc Rice: i think it's it's definitely you definitely want to follow a passion that you can i think it's a little ikigai japanese saying where it's fire kind of you want to meet your meet your passion with what you're good at. And then hopefully something that you can make a living with too. I think finding that balance is hard. I mean, people sometimes go their whole life without finding that. So that's, I guess I'm grateful for having found that, I guess, so far. And it looks like yourself as well. It's connecting other people, connecting with other people, building stuff. I mean, that's, I think we both share that common interest. And thankfully here in the US, we can make some good money doing that.
48:36 Stephen Husted: Yes, absolutely. Yeah. Hey, Mark, I appreciate you jumping on today. It's been great talking to you.
48:41 Marc Rice: Yeah, absolutely. Absolutely. Steven. Yeah. Good stuff. And yeah. Good luck to your listeners as well. I don't know if, do I need to share like.
48:48 Stephen Husted: Oh, I'll get everything in the show notes. Yeah. We'll put it all in there, but yeah, I appreciate you jumping on. I'm glad you didn't think I was a spammy bot.
48:59 Marc Rice: Yeah. I mean, I'll show you the screenshots. I get, I'm like, these are, it's just not even good. Do you want to come on this podcast? And I'm like. okay, what's the podcast? And they're like, oh, we're, and they make up fake names and like, oh, we're still developing it. And I'm like,
49:12 Stephen Husted: but when
49:13 Marc Rice: you get like 10 of those in a row, you're like, all right, is this a scam or a hack? It's weird. So glad you're real and you're doing cool things. And it sounds like you're talking about cool subjects with a cool audience. So great to be a part of that.
49:26 Stephen Husted: Thanks a lot, Mark. Well, you have a great day. Okay.
49:29 Marc Rice: You too. Take care.
∎ Podcast Outro:
49:30 Stephen Husted: Talk to you later. Bye. Thank you for tuning into our show where we hope you found inspiration and gained valuable insights. If you enjoyed this conversation and want to stay updated on our latest episodes, be sure to subscribe to our podcast and share it with others who might benefit from it. We appreciate your support and look forward to bringing you more candid conversations and breakthrough moments in the future. Until next time, take care and keep exploring new ideas and strategies.
