Why This Investor Never Sells His Rentals | Buy-and-Hold Real Estate Strategy

Ray Marks (00:00)

They said to me, “We need it for forty-five more days and we’ll give you eight thousand dollars for forty-five more days.”

So logically, I’m saying to myself, if they’re willing to give me $8,000 for 45 more days, they have to be making 10, 15, 20 more thousand above that to give me $8,000. That told me that was a great business to get into. And so I own the property, but it’s like I leased it out to them.

For the forty-five days, that makes sense.

Cody Crabb (02:03)

Welcome back to the Real Estate Pros Podcast, powered by Investor Fuel. I’m your host, Cody Crabb, and today I’m talking to Ray Marks. Ray is the owner of Jais Management based in Baltimore, investing throughout Maryland and parts of Pennsylvania with a focus on long-term rentals and unique short-term rental properties. We were just talking before we started about finding your lane in real estate instead of trying to do everything.

So I’m excited to dig into that. Ray, thank you so much for coming on the show today.

Ray Marks (02:29)

You’re very welcome. Appreciate you for having me and yeah, thank you so much, man.

Cody Crabb (02:34)

So you said something to me before we started that really stood out to me, and that is that everybody has their own lane in real estate. Now I would love to hear the story of how you found your lane because it sounds like you’ve got kind of a couple of different lanes, but I’d love to hear how that happened.

Ray Marks (02:51)

So, you know, being a young kid growing up in Covington, Georgia—actually, my nephew’s a star football player down there. And he’s on one of my bottles. He’s on one of my bottles. C.J. Stroud. Live for him because he will definitely be in the NFL next year. So I started in the hair business. My grandfather was a barber, and my mom was a hairstylist. So I started opening up hair salons.

And about 2009, there was like a huge—everyone’s buying like bundles of hair for hair extensions. And so someone convinced me to get into that, which I really wasn’t sure I wanted to. Once I got into it, I mean, there was so much money to be made. It was just coming in left and right, like rivers of flowing water. And so—

I didn’t want my money to just sit. So I didn’t know much about purchasing a house or investing, and I actually met a guy who had five properties and he needed to get rid of all five. Nobody was paying rent. He had mortgages on them. And actually, that was a learning experience for me off of him of not to go that direction.

Because when you have a mortgage on a property, if the tenants aren’t paying and they mess it up, you’re digging in your pocket to pay for your household and you’re digging in your pocket to pay that mortgage off. As much as it seems it’s only like five, seven, eight hundred dollars, if you have eight or ten properties that’s seven, eight hundred dollars and you still have, you know, a family, it’s not gonna work.

Cody Crabb (04:39)

Yeah, that starts to add up.

Ray Marks (04:40)

Absolutely. So I purchased my first property from him. It was a turnkey property. Him and I kind of went back and forth. I knew that, you know, it was distressed—he needed to drop that property off. And I had a little bit of capital that I could purchase it outright. I purchased the property. I did an open house as far as tenant placement.

Again, a major learning experience. When you do an open house, you have everyone coming and you have individuals that are saying that you should rent to them. You know, those other individuals might be a little shaky, or “We work for the school system, we’re right up the street, we are paying tenants.” Everybody is paying tenants until they become paying tenants.

So when it’s time to collect the rent, yeah, you find out then. And what got me off on this first property was there was a group of guys that kept calling me, and they couldn’t find a rental nowhere. But in Baltimore years ago, we had a huge epidemic on lead paint in properties. And so the Baltimore City Department, they started regulating that all properties couldn’t have chipped paint, they had to be licensed, they had to be regulated. So the young men were like, “You could talk to our parents.” And yeah, I talked to the parents. Parents said, “Hey, I have some good kids,” and they had a fifteen-thousand-dollar check for me. So mind you, I only paid thirty-two thousand for the property, cash.

Cody Crabb (07:15)

Yeah.

Ray Marks (07:16)

So on that thirty-two thousand, I instantly received fifteen thousand of it back.

Cody Crabb (07:20)

It kinda sounds like that saying, “Luck is when preparedness meets opportunity.” Like you’re kinda looking for an opportunity like this anyway, and then all these different situations come into play and you’re like, “Boom, I know exactly what I’m gonna do.”

Ray Marks (07:35)

Absolutely. Absolutely. From that transaction, another half a year or so, I pretty much made my money back. So from there, it was just—I think it was like $1,400 rent. So, you know, you calculate that up times 12, you get about $16,000 per year just off of that property. And then I just started doing it over and over and over. So I knew that’s the lane for me.

Cody Crabb (08:05)

Mm-hmm. Yeah. And so, okay, so that’s long-term. And then I want to hear how did you go, “Okay, now there might be something else here for me in the area of kind of mid-term or short-term rentals”? Because it’s interesting, because I just heard you say everybody has to find their lane, but it kind of sounds like you did find your lane, but there’s something else calling to you. So I’m curious about that.

Ray Marks (08:32)

So after being an investor for 10-plus years—12, 15 years—I had a realtor and she was like, “Hey, there’s a property that stays booked on Airbnb.” And funny enough, I was already in Atlanta trying to purchase some condos in Midtown and downtown near Lenox Square. And I knew my nephew had already started football and I knew that he could stay there sometimes if he needed to. And I kept hearing so much about Airbnbs, VRBO, short-term booking, Booking.com, and you know—

Cody Crabb (09:13)

When was this, more or less? Because it’s probably not recent.

Ray Marks (09:16)

No, so this was about maybe four or five years ago or so. And I’m like, “Mm-hmm, okay, I want to know more about it.” So I asked one of my cousins. He has a condo downtown in Atlanta, and he’s like, “Hey, when I go out of town, I let someone stay there, they pretty much pay for my cruise or my trip, and I still have some money left over.”

I’m like, “What?”

Cody Crabb (09:45)

Yeah, that’s amazing.

Ray Marks (09:46)

Yeah, “Let me look more into this.” So from there, my realtor was like, “Hey, I need you to fly back to Baltimore because there’s this property—I mean, it’s amazing and it’s for sale.” And I’m like, “If it’s so amazing, why hasn’t anybody bought it?”

It wasn’t making financial sense to me. So she had to convince me a little bit more.

Cody Crabb (10:39)

Right. Yeah, yeah.

Ray Marks (10:49)

I had my friends coming in from LA. They were shooting a movie, actually the Bad Boys for Life movie. And I was already in Atlanta. And so I’m like, okay, so I think that was April 1st. So March 29th, I flew back to Baltimore and I saw the property from the front, from the outside.

And I’m just like, it just looks like a high-priced property in a prestigious upscale neighborhood, but it just looked kind of small. And I felt like it was a waste of my time flying back. The realtor said, “Just give me a second, let me get there and open the door for you.” She gets here, she opens the door, and I can see clearly from this front door—because I’m actually here right now—so I looked from this front door and this is what I saw. I saw steps, and I saw a long hallway, and I saw steps to go up. And I’m like, “This is a huge mega place.”

Cody Crabb (11:35)

This is a cool visual, yeah.

Yeah, that you don’t really get—yeah, like the stairs, the second set of stairs is really where you’re like, “Wait, woah, wait, it goes all the way back there? Holy cow.”

Ray Marks (12:04)

Yeah, and then you have the stairs that go down to other bedrooms, and then you have to the right back there, and then it just has several rooms going all the way up top, like three more floors before you get to the rooftop. So it didn’t take me but a second to go ahead and say, “Yeah, let’s get this property, let me get this wrapped up, and let’s take it off the market.”

Cody Crabb (12:30)

Yeah. Yeah, wow.

Ray Marks (12:31)

And so it’s kind of crazy because even after I purchased the property, the individuals that sold the property still had guests that were booked.

Cody Crabb (12:40)

So you were even buying that.

Ray Marks (12:42)

Yes, so they said to me, “We need it for forty-five more days and we’ll give you eight thousand dollars for forty-five more days.”

Cody Crabb (12:52)

I guess so, yeah. If you make me, yeah, I guess I can do that.

Ray Marks (12:54)

Logically, I’m saying to myself, if they’re willing to give me $8,000 for 45 more days, they have to be making 10, 15, 20 thousand more above that to give me $8,000. That told me that was a great business to get into. And so I own the property, but it’s like I leased it out to them for the forty-five days, if that makes sense.

Cody Crabb (13:29)

Yeah.

Yeah. Well, I think that’s a great intro in there, because like you said, I think what happened really for you, it wasn’t so much about finding your lane as it was just being open to opportunities and seeing what comes your way. ‘Cause it sounds like a lot of the things that happened were totally not planned. It just kind of fell in your lap, really.

People call it whatever they want to call it, whether it’s luck, whether it’s divine intervention, whatever you want to call it. But I think a lot of that happens when you are kind of looking out for the opportunities, too. So I do think there’s an element of, you know, you gotta prepare yourself, too.

Ray Marks (14:17)

Absolutely. And just for the record, I call Him Jehovah and Jesus.

Cody Crabb (14:22)

Gotcha. Gotcha. All right. So as far as—I would love to know a little more about you. You specifically mentioned before we started that you don’t flip. You said that came out like, “Yeah, that’s something I don’t do.” I would love to hear why—like, what has been the driving reason behind that?

Ray Marks (15:27)

So there’s nothing wrong with flipping. I definitely believe in it. I think myself and my daughter’s mother, when I first started getting into investment, I told her—she opened up a dental practice and she’s a dentist, has her own practice in Bethesda, Maryland. And I told her, “Let’s partner on this. That way we have two incomes that are going into this.” And I like the fact that she’s very book-smart—she graduated from the University of Maryland, very educated, and I’m just a common-sense individual. So I told my daughter, “You’re just gonna be common-sense and highly intelligent.” Shout out to my daughter—she graduated from Penn State, Dean’s List, Angel, I love her. So my daughter’s mother, she wanted to do flipping, and I wanted to do buy and hold.

So since we couldn’t both agree on that, I just went ahead and followed my vision and I’ve stayed with it ever since. I don’t see anything wrong with flipping. If there’s meat on the bone and you get the property for a great price and you have the right contractors that can come in, get it done at a fast, reasonable time, I would say go for it because once you throw it back on the market, that’s a quick sixty, seventy, even thirty thousand, fifty thousand, eighty thousand dollars real quick.

Cody Crabb (16:53)

But why has it not made sense for you and your strategy? Because like you said, I want to hear what the lane was that you wanted to stay in. So what’s the lane that you found that doesn’t include the flipping?

Ray Marks (17:03)

So I still have a three-unit apartment building that I had a contractor start and it’s still sitting. Sometimes you’re dealing with these contractors and it’s from the bottom up—they’re either trying to super overprice you, which I guess you can make up when you sell the property, and I see it on a lot of these TV shows when they’re flipping houses. If there occurs something that they didn’t know and they didn’t have it in the price, they just put it into the sale of the house. And I don’t know, it’s just me with these contractors sometimes.

Cody Crabb (17:41)

Yeah. So from an outside perspective, it sounds like a lot of it is about control. Like you don’t want to deal with the timing, you don’t want to worry about the contractors or depending on someone else. You want to make sure this is something that you have control over because it’s your asset. That’s just the read that I get, but I can definitely see why that’s a strategy that doesn’t fit with some people’s way they operate. So when you look at your portfolio today, are you glad that you kept the properties that you’ve kept instead of selling them? Or do you think that you maybe should have made a choice differently?

Ray Marks (18:23)

No, I’m ecstatic. I’ve seen these property values go up tremendously. And that’s why I kind of like the Baltimore market. I know sometimes outsiders might see and hear things on the news, but I promise you, this market is valuable. It is overwhelming. And for long-term retirement, I don’t even think of 401(k) plans and I don’t think of all these other investments and stock. I mean, if you have the money to put into properties in Baltimore, I would tell every investor, put your money into the property. It’s gonna pay off.

Cody Crabb (19:05)

Yeah. So what is it about Baltimore specifically that gives you that confidence long term?

Ray Marks (19:11)

One, the properties that I already had purchased, they all have gone up in value. I get so many letters, so many phone calls, so many emails from investors that want to buy my properties. And they’re just throwing crazy numbers from what I paid for it. I’ve already made money off of the steady rental flow every month, so the properties have paid for themselves. So selling is just an extra asset, but why sell something that’s valuable?

Cody Crabb (19:41)

Yeah, yeah. And it sounds like you’ve been able to make them cash flow enough that you’re like, “Why would I sell?” Yeah. So you said something about people seeing it on the news, people hearing things about Baltimore. What are some things you feel like people get wrong about Baltimore? Maybe from an outsider saying, “This is what I heard about Baltimore,” but you think they have it wrong.

Ray Marks (20:06)

So having an Airbnb, I have so many guests. Actually, I just had a guest leave this morning. They said they had a fantastic time at the property, they enjoyed being in Baltimore. I get guests from all over—from Europe, from just different places. They want to come to Baltimore for different types of things. Sometimes we have the car racing through the streets. Again, we have Preakness with the horses. Of course we have the Ravens, Lamar, we have the Orioles, and we have the waterfront right around the corner. And there’s just a lot of things to do, from the museums, etc. So they don’t talk enough about the great things in Baltimore. It’s easy with most cities to show the negative things.

Cody Crabb (20:59)

More eye-catching, yeah.

Ray Marks (21:02)

And to say this happened on that block or this happened on that corner, instead of saying about the good things that are happening. People are coming together, people are making homes affordable, people are really helping each other, people are keeping clean streets in neighborhoods. They don’t show neighbors in certain neighborhoods out sweeping the sidewalks and helping their neighbors out. This goes on, and it’s a beautiful place.

Cody Crabb (21:34)

Yeah. So for someone that wrote Baltimore off, what opportunities would you say they should look for if they’re not familiar with the area?

Ray Marks (21:49)

If you come to Baltimore, especially if you’re looking to invest, you can’t be afraid to invest in certain neighborhoods that are coming up. You get gentrification, you get areas where you’re seeing wheelchair-accessible places, you’re seeing places like Johns Hopkins and Mercy Hospital, St. Agnes and all these huge mega hospitals—they’re trying to buy up everything within their vicinity so that way they have their doctors and their nurses close by.

But I would definitely tell most investors, if you own a property, I would tell you don’t sell. If you are an investor, I would tell you buy, buy, buy, buy, buy. Even if you think that you shouldn’t buy. Coming from and growing up in DC, Baltimore looked exactly like the old DC—rundown properties, boarded up. And those properties were going for dirt cheap back in the day. And now those same properties are going for 400, 800, 1.2, 1.7 million. And it’s just the same property.

Cody Crabb (22:57)

Yeah. So you see some potential there just because of how it’s developed elsewhere.

Ray Marks (23:01)

Yes, Baltimore and DC are neighbors. So they’re bringing in train lines. I think they were talking about a train line that’s supposed to go from New York to DC in a matter of seconds. So yes, I’m telling you, buy in Baltimore.

Cody Crabb (23:18)

Definitely some opportunity. So for somebody that’s listening who’s trying to find their thing in real estate, what would you advise them to do or to try first?

Ray Marks (23:29)

Well one, I would tell them to evaluate what direction they want to go. Do they want to be an investor? Do they have good credit? Because if you’re gonna borrow money, they’re not lending you money unless you have excellent credit. You may have an idea of, “Hey, I want that four-unit apartment building, it’s beautiful, I can see it making money,” and you go to a loan officer and the credit’s not right. There are different types of ways that you can also get loans. So, of course, if you’re making a certain type of money and your credit is right, but then there’s other ways as far as your bank statements and different loans that a lot of times you never hear about.

Cody Crabb (24:18)

Yeah. I like that you called out that you have to find out what you actually want to do. It’s like that famous Alice in Wonderland quote where she says, “I’m lost, I don’t know where to go,” and the Cheshire Cat says, “Where do you want to go?” and she’s like, “Well, I don’t know,” and he says, “Then it doesn’t matter, go wherever, because you don’t have a plan.” Having a plan will always be better. I think that’s a great way to bring us to a close here.

If people want to find out more about what you’re doing or want to get in touch with you, who should get in touch with you and how can they do that?

Ray Marks (24:54)

So you definitely can contact Jais Management at jaismanagement@gmail.com. You always can contact Flawless Sports Water. You’re gonna see us everywhere—you’re gonna see us in the Giants, you’re gonna see us in 7-Eleven, Wawa. Again, you know, I put my boxer on there—he’s undefeated. Yeah, my nephew, star football player. So you’re gonna see all of them drinking my water at their events. So it’s very easy to get in contact with me.

The only thing I say is that if you are serious and you really want to know more about this business, I don’t mind helping you as much as I possibly can to figure out what direction you may want to start off in. Because where you start off and where you end are two different directions. So never be afraid to take a chance. And everyone that became successful in this real estate game, they took a chance.

Cody Crabb (25:46)

Yeah, that is a great way to end it. What a nice feeling to be like, yeah, you know what, if you’ve heard of somebody being successful, it’s because they also took a chance. So thank you for sharing all this that you’ve shared with us. We really appreciate it. Get in touch with Ray if this sounds like something interesting to you, especially if you’re looking around the Baltimore area. And thank you for giving us some of your time today, Ray. We appreciate it. And audience, thanks for giving us your time, too.

And we’ll see you on the next episode.