RG 347 – Asset-Based Lending: What is It and How Does it Work? with Marco Kozlowski

RG 347 - Asset-Based Lending

How do you make money without using your own cash or credit? Is such a thing even possible? Our guest for this week’s episode found a method that does exactly that.

Marco Kozlowski is a world-renowned expert in real estate investing, systems process engineering, and platform speaking. Despite starting adulthood struggling to provide for his young family, Marco pulled through by making a massive career and mindset change.

Today, Marco has bought over 6,000 units across various asset classes, is a respected speaker, and leads other investors to financial stability.

Interested in becoming an Investor with Reed? Click here to join his Investor email list.

Marco has built a system where he buys properties that owners need to sell quickly. But the process is not as easy as it seems. In this week’s interview, Marco walks us through how he finds property owners in trouble, fixes their problems, and makes significant profits off the deals.


  • An exchange for a quick sale is always going to be a discount.
  • If you know where to look, you can find the right deals much easier.
  • When sellers can get what they need out of a deal, they will sell.
  • Inflation crushes debt. When you hold on to fixed-rate debt for enough time, inflation will overshadow it.
  • You can’t serve other people unless you listen and understand their problems.



Be Bold, Be Brave and Go Give Life a Crack!

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Podcast Transcript

Reed Goossens (00:00):

Good day Good day, guys. Now, before we dive into today’s show, I want you to let you know that some of you may be aware that over the past eight years, I have built a substantial multi-family real estate portfolio here in the US worth over half a billion dollars. And in that time, my passive investors have received fantastic double-digit returns. And now you too can invest directly into my deals for as little as $50,000. So if you’re an interested investor, head over to reedgoossens.com to find out more. That’s reedgoossens.com. Now, back into the show you, how are you finding those discounted prices or, or, or opportunities where you could have a discounted price?

Marco Kozlowski (00:48):

In the US there’s a freedom of Information Act. So if someone’s going through a divorce or there’s a lawsuit, or, uh, someone has a, uh, a disease of some kind where they need to sell quickly and they own multifamily, or they own a mobile home park, or they own a hotel, or they have, uh, they’re going through a foreclosure or their, their, uh, their equity position is now upside down because of the, you know, the change in, in prime in the economic cycle where there’s more, more mortgage than there is equity, uh, which is, is going to happen more and more as the economy changes. Those are all, that’s all public information. Mm-hmm. . So if you know where to look, they’re everywhere.

Speaker 3 (01:34):

Welcome to investing in the us, a podcast for real estate investors, business owners, and aspiring entrepreneurs looking to break into the US market. Join Reed as he interviews go-getters, risk takers, and the best in the business about their journey towards financial freedom and the sheer joy of creating something from nothing.

Reed Goossens (01:54):

Good day Good day, a ladies and gentlemen, and welcome to another cracking edition of investing in the US Podcast from Los Angeles. I’m your host, reed goossens. Good as always, Debbie with us on the show now. I’m glad that you’ve all tuned into it. Learn from my incredible guests and each and every one of them are the cream of the crop here in the United States when it comes to real estate investing, business investing, and entrepreneurship. Each show I try and tease out their incredible stories of how they have successfully created their businesses here in the us, how they’ve created financial freedom, massive amounts of cash flow, and ultimately created extraordinary lives for themselves and their families. Life by design, as I like to say. Hopefully these guests will inspire all of my cracking listeners, which are you guys to get off the couch and go and take massive amounts of action.

Reed Goossens (02:41):

If these guys can do it, so can you. Now, as you know, I’m all about sharing the knowledge with my loyal listeners, which is you guys, and there’s absolutely no BS on this show, just straight into the nuts and bolts. Now, if you do like this show, the easiest way to give back is to give us a review on iTunes, and you can follow me on Facebook and, and Twitter by searching at Reed Goossens. You can find the show wherever you podcast on iTunes, SoundCloud, Stitcher, and Google Play. But you can also find these episodes up on my YouTube channel. So head over to reedgoossens.com, click on the video link, and it’ll take you to the video recordings of these podcasts where you can see my ugly mug, but the beautiful faces of my guests each and every week. All right, enough outta me. Let’s get cracking in into today’s show.

Reed Goossens (03:31):

Turn the show. I’ve the pleasure of speaking with Marco Kozlowski. Marco is a boutique real estate investing mentor, author and trainer. And for more than 22 years, he’s been buying real estate, working his way up from single family homes to today owning more than 6,000 units across various asset classes, including multi-family, hospitality, mobile home parks. And he even recently purchased a bar in Orlando, Florida where he now lives. Marco is a big believer in supporting others and contributing to his community, and he’s enjoys donating 10% of all his proceeds to his projects and mentoring ambitious young students to create financial success and live life on their terms. I’m really excited and pun to have him on the show today to share his incredible knowledge and his experience with me. And he’s also an ex, an expat like me from north of the border in Candia, as I like to say in Australia. But Nair, let’s get him out here. Good day. Marco, welcome to the show.

Marco Kozlowski (04:20):

Good day. Good day.

Reed Goossens (04:21):

How you going, mate?

Marco Kozlowski (04:22):

Excellent, how

Reed Goossens (04:22):

Are you? I’m very, very good. I can’t, I’m looking forward to getting into our chat here today. Um, but before we do, tell me, uh, rewind the clock and tell me how you met your first of a dollar as a kid.

Marco Kozlowski (04:33):

First ever dollar as a kid. Uh, picking up bottles, recycling, uh, cans and bottles. Saved up a lot of money doing that to buy, uh, paraphernalia from magic tricks. I liked magic. And then I started, uh, doing magic shows cuz I was kind of a nerd. Still am. And, um, did magic shows and put routines together. Did street magic, uh, on, on in Montreal and also did magic shows for kids. Hmm. Uh, and uh, yeah, I was charging like $500 back in 1980.

Reed Goossens (05:08):

Wow, that’s

Marco Kozlowski (05:09):

A long time known that 1980. I was, I was 12, so that would be 84. I was born in 72, so 80, yeah. 500 bucks back then, I think was a lot. I look back and I’m like, I have business cards and everything. That’s,

Reed Goossens (05:20):

That is a lot.

Marco Kozlowski (05:21):

Yeah. And that was a lot of fun. So I learned how to entertain, um, back then, which is a skillset set that, um, is important. I think communication. No,

Reed Goossens (05:30):

Very important. No, I completely, completely agree. But you mentioned Montreals, you clearly, as I said, you’re from, you’re, you’re Anat like myself. We,

Marco Kozlowski (05:37):


Reed Goossens (05:37):

We, we, we, we, uh, tell me a little bit about your, your evolution is around the money. Obviously there, there might have been magic from magic to where you are today. There’s gotta be a story.

Marco Kozlowski (05:48):

Oh yeah. What is it? Well, uh, so my, my, my parents Eastern European, uh, had a terrible relationship with money. It’s a very interesting, uh, start to, to a podcast I’ve started this way, which I think, I think is very important and I appreciate it very much. Uh, your listeners are, are blessed to have you in their lives. Um, because I, I think relationship with money, uh, and understanding how money works and that money is not necessarily a bad thing and it’s a good thing and how we treat, um, how we, our behavior around money will really reflect how much money we have or don’t have. And my parents are, uh, as I said, Eastern European, anyone with money was an evil person. And I was raised in an environment where money was a bad thing and they didn’t have any, they struggled for it and they were savers where they didn’t spend any money at all.

Marco Kozlowski (06:32):

And it was a limited resource versus an abundance. And, um, and they really instilled that, those value systems in me. But I think the day where I, um, I I w I have a very interesting path and I don’t wanna bore your listeners, uh, at all, but I got married when I was 19. Uh, I was a concert pianist. My, my path was, uh, music. That’s, that’s what I was trained for and I didn’t make any money. And I, I I, you, you practice hours and hours a day and you know, you, you, I was lucky to make maybe $7,000 a year. Us, I’m a Canadian, which is like nothing, 5,000 US maybe same as Australian dollar, so can’t really raise a family. Uh, got, uh, married when I was young. Had four kids at 24, stayed home. Dad, dad. And at that time if my spouse, uh, wanted me, if I wanted five bucks and, and she said no, it was okay cuz we just didn’t have the money and we’re always struggling financially and the day where we couldn’t pay the rent.

Marco Kozlowski (07:32):

And I had a landlord that knocked at the door and my spouse, um, I was playing with, with two kids on the floor, Oliver and Elliot. She was, um, feeding my daughter my third child, and she was pregnant with my fourth after a long day. Um, the doorbell rang and her ritual, this, you know, we were always struggling to pay the rent, but we didn’t have the money for the first time. And she basically said, uh, Hey, we’re having some cash flow issues. And she dealt with the money. I never did, didn’t like dealing with money. She, and she asked me to just tell the landlord that we didn’t have the money, thought that was, and that was the most stressful thing I’d ever been asked to do. Like, I can’t believe it. Like what am I gonna say? I’m embarrassed. We don’t have the money.

Marco Kozlowski (08:13):

What’s going on? Uh, I felt less then and, and I really didn’t know how to handle the situation at all, which I find now hilarious. Uh, I go to the door and all I had to do is, one thing is just tell the guy we didn’t have any money to come back in a few days. That’s it. That was my task. One thing to do, I open the door, he looks at me and goes, where’s my money? Right. Short little guy, maybe five feet tall. Most at the most. And I’m six foot three, so I’m a big guy. He’s a small little guy. Where’s my money? I clammed up. I’m still clamming up now. It’s funny. I said, uh, my wife wants to tell you something. He literally goes through me, goes into the house, uninvited, goes through the, and this is in the winter, so he is tracking snow throughout the house.

Marco Kozlowski (08:55):

He finds my spouse, my two kids on the floor, and he starts yelling at her, yelling at her, berating her, calling her names in front of me. And I just stood there with my mouth open as she looks at me, basically making me feel like a pile sight. Right. And I, and I realized at that point that if I did not change, if I did not do something, if I did not find a way to provide for my family, this would be my life for the rest of my life. Which was unacceptable. And that really is the, um, the first real wake up call that I had about myself that, um, that started my journey into, uh, really wanting and desiring abundance in my life so I could take care of my kids. So

Reed Goossens (09:34):

Mm-hmm. That’s a, that’s a very thank you for sharing that with me. You know, for us I should say, like, a lot of people don’t talk enough about that. And that’s clearly the pivotal point cause you remember it so well and it’s so, you know, you say you’re claiming up, we all have that, right? We all, uh, I, I didn’t come from money either. You know, the old saying, money didn’t, doesn’t grow on trees or always around my household, you know, all the time. And it, it’s, it’s not necessary money was viewed as a bad thing. It was just, we didn’t have a lot of it. And not that I was poor by any stretch of the means. It was just more working class, you know? And it just, things you had to go without and that’s okay and you got to deal with it.

Reed Goossens (10:07):

But at some point you have to make that decision, which in good in your life was, was that this, this, this interaction with this landlord that was like, enough’s enough. Right? And we all get to that, we all get to that pain point. And, and, and, and that is the pain that we move away from to try and be better. And as you said, move, move towards abundance. So what you, let’s fast forward a little bit because, but I do want to go back and touch on how you got there. But let’s just quickly describe to the listeners where you are today. I mentioned 6,000 units in the portfolio. Yeah. What, what does today look like?

Marco Kozlowski (10:38):

Well, we actually, uh, I, so in the last year, uh, just before June, uh, very blessed to have timed that, right? We got rid of about a thousand, uh, units. It was the right time to sell, to cash up for what’s happening now in this, uh, market cycle. So we’re down about 5,000 right, right now, units. And, uh, so what I do now is I, I, I help humans, well, first of all, my belief system is that ev I believe everyone should be wealthy through the service of others, number one. Mm-hmm. , I believe it’s your God-given right to be wealthy through the service of others. Specifically, it has to come through service, not through wanting money by itself. It has to be a result of, of really serving others at the highest possible level. And what I mean by that is most, when they’re in the real estate business, as I was in the very beginning, it’s all about the numbers, the money, how much am I gonna pay for something, which obviously matters, but I’ve, uh, moved away from, from that, which will be the result.

Marco Kozlowski (11:36):

But through how do I, what does my counterpart really need? And do I really wanna buy anything or do I wanna buy the right thing? And, uh, n there are those that really, uh, want to sell for as much as possible. And they don’t care when they sell it how they sell it. They want the price for the price. And there are those that are wanting to sell quickly in exchange for some equity. And those are the, those are the humans that we’re really trying to serve. So there are the retail buyers that are, you know, are okay with paying retail or over retail. And they’re, uh, there’s my tribe, which is really looking for someone that is going through what I call one of the five Ds. Either through a business divorce or, or divorce by themselves. There’s a lot of partnerships dissolving, run their course, uh, where there’s something, there’s, there’s a situation where they just will just don’t want to be in that situation anymore.

Marco Kozlowski (12:24):

And if someone needs to sell, there’s, uh, a, uh, the exchange for a quick sale is always going to be a discount, like, like a pawn shop. Um, there’s, uh, you know, those that are in high debt or have debt that are, uh, that, that needs to, uh, be gone, uh, or pay off debt lawsuits. 94% of lawsuits in the, in the world are in the United States. Uh, and if someone is served with a lawsuit, and let’s say the property makes a hundred thousand dollars a year, I, I I’m talking multi-family, hotel, whatever mm-hmm. , uh, the, um, the asset class is, uh, it makes a hundred thousand dollars a year and they got served the lawsuit and they can settle this lawsuit for six 50 and they need the money quickly. Uh, the six 50 that to settle the lawsuit, which potentially could be years of paying in the and millions in, in, I guess in debt in the future, the six 50 is, is, is a much better, um, I guess avenue to go into.

Marco Kozlowski (13:19):

So we can, we can serve the humans that need to sell quickly, uh, by giving them money quickly. And our resource for cash is asset-based lending. So it’s something that really didn’t exist too much back when I started and through a lot of transactions and building a community of people that are tapping into money. Cuz as you know, the more you use money, the more is available. Mm-hmm. . It’s just how it works. And the concept is pretty simple in, in that if you have an asset that is worth, let’s say a million dollars, you can get $700,000 from the asset based lender at a fairly reasonable interest rate, 6 to 8%. It’s not based on prime, it’s just, it’s private institutions or, uh, private equity funds or private individuals have a whole network of these people or these institutions or these, um, uh, entities where they lend out 700, uh, on a million dollar asset that spins off a hundred thousand dollars a year if you’re, if, if the debt service it, let’s say 7%, uh, is, uh, 7,000, 7% at 700,000 is $49,000, uh, in interest only debt service.

Marco Kozlowski (14:23):

It’s just interest only. There’s no amortization on this and it’s perpetual. So your debt service is 49,000, you’re making a hundred thousand. So your net after debt service is 51. Now you miss two payments for whatever reason the lender takes back the, the asset and it doesn’t affect your credit cuz your credit doesn’t matter. So the lender goes from making 49,000 to now owning the asset at a hundred thousand. So they recognize that they’re going to double their money on default. So they’re, they’re, um, they’re not necessarily banking on default, but they’re in a very secure position, uh, to know that if you don’t keep your promises, they’re gonna make more money. And if you s and if you position yourself in a world where if you don’t keep your promises, everyone does better, you’re gonna have a lot of people that are not necessarily hoping that you fail. But you’re, no matter what happens, you’re, they’re gonna be okay. So by protecting other people around you that they actually do better. If you don’t keep your promises, you start making a lot of money.

Reed Goossens (15:21):

Mm-hmm. Interesting. So how do you find these types of deals out there? Like what do you, where, where are you hunting for those five Ds in order to get that deal flow? Because we all know today, you know, multifamily has gone up and value a lot, a lot of asset classes have, you know, parks and self storage. You know, h how are you finding those discounted prices or, or, or opportunities where you could have a discounted price?

Marco Kozlowski (15:45):

So we, we do, uh, 99% off market assets. Number one, we’re not looking for assets that are, uh, listed. Mm-hmm. , uh, that’s the retail market. Um, now in, I don’t know what it’s like in Australia, uh, but in Canada there’s something called the, uh, privacy Act where we can’t get any information at all on anything. Mm-hmm. in the US there’s a freedom of information act. So if someone’s going through divorce or there’s a lawsuit, or, uh, someone has a, uh, a disease of some kind where they need to sell quickly and they own multifamily or they own a mobile home park, or they own a hotel, or they have, uh, they’re going through a foreclosure or their, their, uh, their equity position is now upside down because of the, you know, the change in, in prime in the economic cycle where there’s more, more mortgage than there is equity.

Marco Kozlowski (16:30):

Uh, which is, is going to happen more and more as the economy changes. Those are all, that’s all public information. Mm-hmm. . So if you know where to look, they’re everywhere. It’s, uh, I do an exercise, uh, live in class. If you look around the room, look around the room real quick and try to find everything that’s read. All right. In, in 10 seconds, I’m gonna give it prize to the person who finds the most red things. Look around the room, look around the room, find all the things that are red. Okay? Now close your eyes. Close your eyes. I want you to shout out all the things that you found that were green.

Marco Kozlowski (17:02):

You don’t know because you’re looking for the red things, you’re not looking for the green things. Mm-hmm. . And the way our our mind works is we’re looking for something specific. We’re looking in the fridge and you’re looking for the thing. It’s right in front of you, but you can’t find it. It’s the same thing. So if, you know, once you see it, you can’t unsee it. Like the FedEx arrow, uh, in the logo of FedEx. I dunno if you’ve ever seen this before, but there’s an arrow there. And now if once you look at the FedEx logo again, you’ll say, holy, there’s an, there’s an arrow there. I never saw it before, but now you can never unsee it. It’s first thing you’re gonna see. Mm-hmm. Cuz you just never noticed it until you notice it, then it’s obvious. Right. Same thing. So once you know where to look and, uh, the process around it or process, uh, for those that are in the commonwealth, uh, the, the, the, the, the process around this is we make offers that are, number one, always rejected.

Marco Kozlowski (17:48):

We never make offers that are accepted. Number one is we’re not, we’re not trying to get the best nu possible price upfront. First, we want a, here’s what we’re gonna do. We’re gonna buy it at this number and we’re gonna buy it very quickly. And we want to know. And once we get that, no, we say, okay, well what do you need? What, what, what’s the, what, what’s going on where you need this number? And if they need as much as they want, that’s not our customer. Well we owe this, we need this, we need this, this is what we need to do next. And we find out exactly what the story is behind it. Now we can structure a deal that actually helps them and serves at us as at the same time. Now, if you’re so focused on numbers, for example, um, we bought 147 unit, um, apartment complex, two buildings in, uh, um, in a, uh, in St. Louis, two buildings. Uh, number on that num, uh, on the, they were asking around 6 million off market. Uh, it was on and off market, 6 million bucks, 147 units. Not a bad deal at the number. It was, they hadn’t raised the rent since 1986.

Reed Goossens (18:44):

Wow. All

Marco Kozlowski (18:45):

Right. And this is in a B area if all right with and creeping up on an A, it was a, it was a C turned into a b you know, market rents around 2000, they’re around 600 bucks. So huge upside. Okay. 147 of these sellers asking 6 million. We offered less than two guy told us to f off in the most beautiful way. You’ve never heard the f word as a, an noun, an adjective, an adverb. Like it was a beautiful, well scripted, you know, basically go pounce sand. And it was very cantankerous. This is interesting cuz that’s a very adverse reaction more than what we’re used to. So we get to the bottom of the reason of sale and he, uh, was diagnosed with, uh, with a disease. He had less than six months to live and he wanted, um, uh, to have a certain amount of money in his bank account.

Marco Kozlowski (19:34):

And, but just because his kids had disowned him, he had never really, uh, he was alone. He, he, he was not gonna be remembered. And he said all these things and being remembered is something that, uh, I found interesting. So we had a conversation around that. And the solution that we came up with was, tell you what, what do we if we do this? Cuz you can’t take the money with you when you die anyway. So what if we erected a statue in your Honor, all the things that you’ve done. Cause he was, had a con, he was a guy in his eighties. Uh, we put a plaque on the buildings and uh, we deed it where we can’t be removed for 99 years, which is the max that we could do in that state. So he started crying, weeping. And we got the property for less than 2 million. Wow. Because it wasn’t the number that was important to him. It was the, the act of being remembered that was so, and this is, you know, 20 million asset when it’s optimized. So it’s, you know, that’s a monster deal. Uh,

Reed Goossens (20:29):

How often those deals, how often are those deals coming around?

Marco Kozlowski (20:32):

Uh, how often? Uh, at least once a month.

Reed Goossens (20:35):


Marco Kozlowski (20:36):

Yeah. Yeah.

Reed Goossens (20:38):

And so what’s a team look like? Who’s hunting those types of things? Cause I could imagine you’d have a pretty big bandwidth of

Marco Kozlowski (20:44):

No, no, no team, no man, no team. Uh, it’s, we, we keep it small and keep it all, man. It’s, uh, there are very specific individuals that have, so let me, let me say it this way. If you have a conversation with a real estate agent that is well connected in, in, in, in the environment and say, listen, if someone needs to sell quickly, we have access to up to 33 million bucks. We can close within 10 days of all the checks and balances being done. So that’s pretty quick, right? We don’t have to do, we don’t have to do a money raise. The money’s available right now. So find a deal where someone needs to sell quickly. Let’s take a look at it, we’ll run the quick numbers, we’ll go through the process. It closes, you get paid. So we call those golden retrievers and, and, and to be kind, right?

Marco Kozlowski (21:28):

It’s, and we, and someone that has access to deals then will be hunting on your behalf. You don’t have to pay someone to do it. You just have to incentivize the right people on the ground to do that. Mm-hmm. And again, once they bring that deal, no matter what the numbers look like, we’re still gonna negotiate based on not necessarily the numbers, but what the seller’s actual needs are. And if there’s a mortgage and they need $200,000 to walk away and they can hold the balance on paper, whatever the, the structure is at that point, it’s very easy to do because if you get what you need, you’ll sell it. Hmm. Now someone wants something and they want as much money as possible. And there’s a lot of syndicators that have overpaid for things because they just want to, they’re, I’m competing. I have to buy it for more.

Marco Kozlowski (22:13):

I have to do this. Now you have a money raise. Now you have a different problem, which is if there is a bump or there’s not the appreciation or the, there is your, your refi was, your exit strategy was a refi, but now prime is at nine. How the hell are you gonna get out of it? Hmm. If you’re buying a, you know, a five cap optimizing it, okay. And suddenly it becomes a seven cap, but money costs nine, you can’t, and then if your investors are expecting an exit during a certain period of time, you have a whole other problem. Mm-hmm. . And we’re actually picking up quite a few of these assets that were syndications that were, we investors were promised a certain return, and now the investors are upset with the, uh, you know, with, um, the sponsors. Not because the sponsors ne didn’t necessarily do anything wrong, but they just can’t exit and they expected an exit.

Marco Kozlowski (22:57):

So it’s, it’s fun to have that conversation, um, to really save the whole process, step into a great loan. Cuz loans that were originated back in 1819 under 4%, no way are getting that loan now. Mm-hmm. So leave a loan in place, create a structure for the investors to be happy, give some money to the sponsors. So they go, and then you, you fix the problem. And, um, again, there’s a skillset around that and I, I don’t, I don’t know how advanced your, uh, your listenership is or you as a listener if you’re even understanding what I’m saying, but from a, from a very simple level, we find people that are in trouble. We give ’em what they need and we get wealthy doing it. Mm-hmm. ,

Reed Goossens (23:37):

That’s it. For those of you who are interested in staying up to date with all the latest happenings in my business, or to learn more about passively investing directly into my multi-family value add deals, then head over to reedgoossens.com And sign up for my monthly newsletter. By signing up, you’ll automatically be notified about my new up and coming investment opportunities. You’ll be able to stay up to date with all the latest real estate news here in the United States and much, much more. So head over to reedgoossens.com and sign up today. Now back into the show.

Reed Goossens (24:13):

Well, it’s, it’s, it’s interesting you mentioned the, the taking over the loan. Cause in that scenario, if you can take over the loan, pay off the investors and give some money, the gp, then why wouldn’t they just sell it on the market?

Marco Kozlowski (24:26):

Most people don’t know how to take, take over the loan. They, because they think the loan has to be wiped out. Gotcha.

Reed Goossens (24:31):

That’s the difference. So let’s, let’s, let’s talk about that then.

Marco Kozlowski (24:33):

Yep. So if you’re selling a property, generally you want the loan to be paid off, correct? Mm-hmm.

Reed Goossens (24:37):

. Yep.

Marco Kozlowski (24:39):

Right. And if that has a 30 year amort, you’ve had it for seven years, it’s a 25 year mortgage. The first seven years of alone is all mostly interest. Right. If you look at how amortization schedule works, the banks created it that way. It’s their own economy. If you think about it, you pay all the interest upfront and that way when you sell the property, cuz most properties sell within seven years, right? Five to seven years. Most people move within five to seven years or sell within that seven year cycle, you’ve paid down very little principle. So now they’re going to reissue a loan to the next buyer for a larger amount of principle. So it makes sense because you’re actually lending out more money cuz you’re in the business of lending out money. So however, if you don’t pay off the loan now the loan is being chewed down very, very quickly.

Marco Kozlowski (25:21):

There’s, if you look at the three trimesters of a loan, the first is all interest, then it’s about 50 50 for the next trimester, the next third. And the last third is all principle. Very little interest just gets paid off very quickly. So we’re seeing loans that are halfway through maturity that are in the 50 50 stage, but you have a very low payment, right. Because of the low interest rate. All that pay, all that interest has already been paid out most of it. And now we’re just continuing to pay off the loan over time, taking over the debt through, there’s a lot of different ways of doing it. I could be here for three days going over the 39 different mechanisms or instruments that we can use to do that. Like I said, I was Canadian, I’m the West Canadian, still am Canadian, I haven’t died yet.

Marco Kozlowski (26:01):

So I am Canadian and I didn’t have any money, I didn’t have access to banks, I didn’t have any US credit. And I had to find ways of, uh, leaving existing debt in place, good cheap debt, and finding mechanisms to take care of people so I could step into the, the property, take care of people and still build the wealth at the same time. Hmm. And what I love about debt and uh, I dunno if you’ve ever had this conversation with um, uh, or if you as a listener have had this conversation yet, but if we take a look at a property back in 1970, let’s talk about debt for a second. And the average single family in 1970 was, uh, uh, $22,000. Okay? 22 grand average across the United States. Single family. $22,000. Okay. You rented, you bought that property for the right price. All right? Right. Price, let’s call it you, you bought it for $15,000 and you got an asset based lender to lend you the money for $15,000. And you had a tenant that was paying the mortgage and you know, you’re making a little bit at the same time, $15,000. All right, let’s fast forward to today. That same property now is worth well over six 50. But the debt, you haven’t paid it off. Its interest only is still $15,000.

Marco Kozlowski (27:13):

Is that debt significant? It was significant then. It’s 70% of whatever the value was back then. But now because of inflation, right? What’s happened to the value of that debt? $15,000 on six 50. Is that significant?

Reed Goossens (27:29):


Marco Kozlowski (27:29):

It’s nothing. Right. The payments are the same no matter what. And have the rents gone up over time? The rents have gone up, but the debt services stayed the same. So inflation crushes debt. Mm-hmm. let that sink in. Inflation crushes debt. So if you have an older debt at lower interest rate, inflation is slowly crushing that debt and slowly paying that that thing off. And your equity position is building and building and building that payment never changes. If you have a, you know, a, a loan that’s originates and is not a, you know, adjustable rate, mortgage and arm, if it’s just a fixed rate gets paid off, which doesn’t exist in Canada, by the way. I dunno if it does in Australia or not. We have to go back every five years to renew mortgages. But in the US you know, it’s beautiful. It’s, you, you originate it, it gets paid off over whatever time and cycle that you, um, you agree with, with the bank. So now you can take over this asset where the interest has already been paid on a, a building that you can depreciate that gets paid off over time where your wealth is building. And you know, tenants do they expect rents to go up? Of course. Well, you don’t wanna disappoint ’em. So rents go up, debt goes down, equity builds, Bob’s your uncle

Reed Goossens (28:41):

Love it. Well absolutely love it. So what are you, what are you thinking today with the, and excuse my, my little girl in the background. Uh, what are you thinking today in terms of where we’re headed in interest rates and the, the environment from a macro point of view, given how much froth has been in the commercial multi-family world, you mentioned 6, 7, 8% interest rates. Do you think we’re going back down. Do you think the fed’s gonna reverse? What, what, what are what are your thoughts? What’s crystal ball? I,

Marco Kozlowski (29:07):

I, I, I honestly, uh, the only way the US is gonna get out of the debt that they’re in is by creating mass inflation. Number one. Uh, if you, if you a, if the every single entity I’m talking person or business paid a hundred percent of their earnings to tax, to, to the irs, we still wouldn’t even, uh, have scratched the service in 30 years of paying that. So if you look at the amount of the debt and how much revenue is necessary to chew that down, it’s terrifying. Terrifying. And if you use the example of the, the small amount of the debt in 1970 to the, what it is now, the only other than time it’s inflation that’s created that gap between the value, how many dollars you need in order to buy the same piece of property. Right? It’s, uh, you know, we went off the gold standard and we can go into a whole economic conversation around that.

Marco Kozlowski (29:54):

And again, my background is not in economy at all. It’s just this is experience and having to get this done and, you know, I’m a musician. That’s it. All right. Just so you don’t have to, it’s my opinion. All right. So from a how do you get, how does the US get out of debt? The only explanation is mass inflation because that crushes debt and you have two choices. You can worry about what the interest rates are gonna be, right? Whatever that’s gonna be. And if you’re the one originating that loan, it’s a problem because the more interest rates cost, the more it costs for the money. Or you can not worry about that. Find humans that need to exit quickly with existing debt that they’ve put their name on the line to get, they need an exit. They don’t need to have their loan paid off.

Marco Kozlowski (30:43):

They need $200,000 to get out of it. They need 300,000. They need whatever the number is, and that debt is there. So if they have a immediate cash need, there are lenders that will lend on that based on the income of that property. And you don’t need money, you don’t need credit. You just need to learn how to, the skillset of putting those things together, which is what I teach and what I empower people to do. And I only teach a handful of people to do this cuz I don’t want, I don’t wanna get rich quicker. I don’t want people that say, Hey, I’m gonna help people. And they’re very selfish about it. I’m really looking for people that really want to serve, to serve, give to give. Hmm. I love it. This can be, you know, you can really hurt people, um, by doing things incorrectly.

Marco Kozlowski (31:21):

And I really, I’ve seen that and I don’t want that. Mm-hmm. and I, I’m, I’m really looking for a human being that is obviously wanting to take care of their family, but also has a desire to really help other human beings by having access to as much money as necessary to take care of that human being at the same time, build their wealth and optimize the property to what it should be. So if you’re in trouble and there’s a little bit of juice for the person that’s helping you, let’s go. Now, if you’re, we’re not gonna help, we can’t, won’t help someone where they, you know, they’re so upside down that any, you know, they got themselves into such a problem that anyone that helps them will die. It’s, you know, sorry man, good luck. Learn your lesson. Like all of us had to at one point, right?

Marco Kozlowski (32:06):

But in most cases, there’s something that can be done. So to answer your question as truthfully as I can, I don’t know. My, my crystal ball broke back in the 1980s. I have no idea what the future’s gonna be, right? But I do know that no matter what the interest rates are, like even in, uh, ba from in most of 21, we still bought around 1500 units no matter. And we bought ’em at 30% off. Um, and now we’re buying way more. 20 20 20 was almost 3000. We doubled our numbers. Um, when Covid hit, that was the best year we’ve done. And we’re just doing the same thing. We’re just getting more of them based on the processes that we put together and that I teach. If you wanna learn how to do this, I’d be delighted to help you learn. It’s, it’s not rocket science.

Marco Kozlowski (32:47):

You, you just do this and then you do that and you do this, and then a whole bunch of leads come. You make offers on every single one of the leads that come expecting a no. And based on the responses, those are the ones that you play with. Um, and if, again, we don’t pay a retail, we only buy it for those that need to sell for a certain reason, and those are the ones that we work with. Someone wants retail to retail, not interested. Other buyers will take care of you. We’re not that buyer.

Reed Goossens (33:13):

Yeah. Love it. Love it mate. Well, at the end of every show, before we get into top five investing tips, I wanna ask, what is 2023 got installed for you and beyond?

Marco Kozlowski (33:22):

I just do what I love. So as long as you do what you love and you give to give and you are aligned with what your mission, vision, and purpose is, it’s just joy. Everything’s great.

Reed Goossens (33:32):

That’s awesome. Well mate, at the end of every show, we like to dive in the top five investing tips. You ready to get into it?

Marco Kozlowski (33:38):

All right, let’s

Reed Goossens (33:39):

Do it. My question number one is, what is the daily habit you practice to keep on track towards your goals

Marco Kozlowski (33:45):


Reed Goossens (33:46):

Love it. Do you do anything specifically like in journaling to, to who you’re gonna serve and all that sort of stuff?

Marco Kozlowski (33:53):

Ask a lot of questions to see who needs help. And listen, listen cuz you can’t serve unless you really listen to what’s happening. And this is, it’s not about us. It’s not about me. If I’m talking to a human being, I’m really, well I call it whiteboarding. I am blank. I don’t, I I don’t put my idea into what they, I think they need. I really want to understand what the problem is and I’m not gonna inject any of my ego into it. I’m just gonna listen. And then once they’re done, then I’ll see if a from the source or my experience or whatever, how I can possibly help them.

Reed Goossens (34:26):

Love it. Question number two is in who’s been the most influential person in your career to date?

Marco Kozlowski (34:33):

I don’t think it’s one person. I think, uh, I had a homeless man tell me to wear a Red Shocks once and it changed my life. I’m gonna go back to the answer of I think every single person can teach you something. And if you’re just open and listen, you’re going to be amazed at what you hear and learn about yourself.

Reed Goossens (34:50):

Love it. Love it. Very, very deep. Very deep. I’m sure we could continue talking in that sort of deep vein for two or three hours. And it sounds like you, you’re a deep thinker, my friend. Uh, question number three is, who, what is the most influential tool in your business? Now when I say tool, it could be a physical tool like a phone or a journal that you just can’t run the business without or what, or it could be a piece of software. What is it?

Marco Kozlowski (35:10):

My ears, again, it comes back to listening. I, I, everything’s on the internet. We, I, we’re all virtual investing, at least from my experience. I don’t have to leave my house to get property. Um, obviously the internet is an important tool, but it comes back down to just listening to your counterpart. Whether it’s the phone or your voiceover IP system that you use, or text messaging or you know, mail or you know, how, you know, morse code, how what, however facts, whatever tools you’re using, just really listen to what’s happening. Cuz the solution is generally there. Um, very clearly the solu the, the pain points will be obvious once you start listening. Let’s just say it that way. Gotcha. Because that’s where the money is made, is helping people. It’s not, you know, most people, if I, if I’m so focused on how much money I’m going to make, it’s like McDonald’s saying I wanna make more money so no more beef patties in any of our hamburgers for 30 days.

Marco Kozlowski (36:03):

So we can save money because we wanna make more money. Our desire to make money has nothing to do with our counterpart. Our emergency is not their emergency. So if you are of that mindset and you’re mind, I want money, I want money, I want money, you’re alienating everyone around you and McDonald’s will go outta business in 30 days because they’re gonna off a customer so much. The institution, whether you like McDonald’s or not, they’re out of business very quickly because of a decis decision that was so selfish it actually hurt their customers. And that’s, I see that happen constantly of people that first get into real estate business or even in been added for a while, you start getting hungry and making decisions that are not necessarily best for the team or the tribe. They’re, they’re, they’re doing something because of their hunger and that’s a recipe of death.

Reed Goossens (36:51):

Mm-hmm. Very, very, very deep. I love it. Question number four is, in one sentence, what’s been the biggest failure you’ve experienced in your life and what’d you learn from that? Failure?

Marco Kozlowski (37:01):

Myself and I learn every day from it. And, uh, I have, I, I have a, uh, license to make mistakes. So if you are okay with screwing things up, just learn from every and don’t every day just do one thing better. Don’t try to do everything better cuz it’s impossible. We’re human beings. We’re generally not able to do more than one thing at once, other than women who are very good at multitasking. But I’m a guy and I can’t even do one thing that well, all right, one thing, pick one thing that you’re gonna do better today and just that’s it. And then if you didn’t do it better, then do it better the next day. And then once that’s better, pick the next thing. And if you just do one little thing every day and you get better at just every two days, one thing that’s 180 things that you got better at in this year. That’s a lot of things.

Reed Goossens (37:46):

That’s awesome. That’s awesome. Last question is people, where can people reach you to continue the conversation little bit in your sphere? They wanna learn some more of your tricks about how you’re finding these off market deals, about how are you negotiating, where do they go?

Marco Kozlowski (37:58):

Uh, you can send an email directly to marcokozlowski.com or a podcast that we’re actually gonna have you on as well, which is a big fat realestatechecks.com. That’s big fat real estate checks, not chicks. It’s a completely different podcast. , big fat real estate checks on any podcast that you, uh, that you listened to.

Reed Goossens (38:16):

Love it. Love it my friend. Well, look, I just wanna reflect if some of the awesome things that I took away from today’s show. I think the, the, the one number one thing was inflation crushes debt. I think that’s the number one thing that I’ve took, taken away from this today’s show in and around that the longer high inflation is around on fixed rate principle, it will crush the debt over time and it will become your friend, right?

Marco Kozlowski (38:37):

Yes. And you can take over that debt if you learn how on and ride ifl ride inflation like a wave and surf it versus having to be crushed by it. Cuz if you’re surfing inflation, it’s a lot more fun than what most are going to be, which is crushed by it. It’s like you surf, you understand that analogy very well.

Reed Goossens (38:55):

Mm-hmm. mm-hmm . And then the other thing I took away is our emergency is not their emergency in terms of we’re talking on a human to human level. Absolutely. I think that’s, that’s so very, very much important as, uh, leaders or companies as investors as raising p you know, money from people in terms of interacting with, uh, property managements or GCs or whatever the the hell it is. It’s all, we’re all in the people business and we have all got people to answer to and, and, you know, hearing someone’s emergency and your emergency is not necessarily someone else’s. So taking that self-awareness into a conversation is really, really important. Um, I really enjoyed our conversation today. Did I leave anything out in that little summary?

Marco Kozlowski (39:29):

Uh, no. I’m

Reed Goossens (39:30):

Awesome, awesome stuff. I

Marco Kozlowski (39:32):

Appreciate you

Reed Goossens (39:32):

Very much. I, I appreciate you too. And I look, thank you so much for jumping on today’s show. Enjoy the rest of your week and we’ll catch up very, very soon.

Marco Kozlowski (39:39):

Appreciate your mate. Take care.

Reed Goossens (39:41):

Well then have another , another cracking episode jampacked with some incredible information from Marco. Please remember to head over to Marco Klowski. That’s right. Please head over to the big fat real estate checks.com or that podcast wherever you podcast to check him out and what he does. And he teaches everything, all you need to know about the things that he was talking about on today’s show. I wanna thank you all again for taking some time outta the day to tune in, to continue to grow your financialq. Cause that’s what we’re all about here on this show. If you do like the show, the easiest way to give back is to give a five star review on iTunes. And we’re gonna do do it all again next week’s. Remember, be bold, be brave, and go give life a crack.