Looking for an effective and efficient way to raise capital?
Marcin Drozdz joins us today to talk about the system that secured him 9 figures of private investment capital for several business ventures. An active investor with a several hundred unit real estate portfolio, Marcin developed the E.A.S.Y. system, and he breaks it down for us in this episode. He also shares the inspiring story of his family as immigrants in the United States and the mindset and values that led him to his current success.
[00:01 - 04:54] Getting in the Game Early
- Jumping into real estate in his mid-20s
- Transitioning from employee to entrepreneur
- A lesson he learned early on
- Find out if you're a finder, a minder, or a grinder
[04:55 - 11:12] E.A.S.Y. System to Raise Capital
- Building and maintaining rapport with your contacts
- Make them understand what's exciting and unique about the opportunity
- Talk to a lot of people
- Generate scarcity through demand
- Know the amount they're considering
[11:13 - 19:36] There is No Plan B
- Bring people along for the journey
- Have a "This is going to work" mindset
- Remove self-doubt and believe in your own worth and capabilities
- Look for the right inspiration and the right next step for you
[19:37 - 21:07] Closing Segment
- Reach out to Marcin!
- Check out the free E.A.S.Y. System Mini Course!
Tweetable Quotes
"Find your inspiration, the guy that's out there killing it at a level that you're just like, that's godly. That's God-like. Sure. But then bring that back to Earth and find that next peg on the ladder. That's somebody that can help you, you know, actually more directly." - Marcin Drozdz
"Never lie. Always use real numbers. Don't say things that aren't consistent, because it's a small sandbox… If you start making up stories, it's not going to work." - Marcin Drozdz
"If you don't put yourself in a position where you can speak with some authority on what you're doing, if you don't buy into and you don't believe what you're doing, you know, it's a really difficult thing to sell." - Marcin Drozdz
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Learn more about him and the E.A.S.Y. System by going to his website and downloading the free E.A.S.Y. System Mini Course!
To email Marcin, you can reach him at [email protected]
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Want to read the full show notes of the episode? Check it out below:
Marcin Drozdz 00:00
Find your inspiration, the guy that's out there killing it at a level that you're just like, that's godly. That's God-like. Sure. But then bring that back to Earth and find that next peg on the ladder. That's somebody that can help you, you know actually more directly.
Intro 00:14
Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we'll teach you how to scale your real estate investing business into something big.
Sam Wilson 00:26
Marcin Drozdz is the managing partner of M1 Real Capital where he and his team focused on acquiring value add multifamily properties throughout the southeast. Marcin, welcome to the show.
Marcin Drozdz 00:36
Thank you, sir. That's quite an introduction. I appreciate I'm all excited now. Love it.
Sam Wilson 00:41
Great, man. I'm looking forward to it. There's three questions I ask every guest who comes on the show: in 90 seconds or less, can you tell me where did you start? Where are you now? And how did you get there?
Marcin Drozdz 00:49
Sure. I started out reading Rich Dad, Poor Dad, probably like millions of other people, thought it was a good idea that I could figure it out, started buying houses while I was in college, got recruited into private equity on the real estate side. Probably brought me in a little young, but I'm glad they did got to immediately go from you know, looking at single-family homes, to multifamily land assemblies, commercial, recreation, just all kinds of stuff. So seeing that for a couple of years was tremendous. A couple of years after that broke out on my own, sort of putting together my own LPs trusts structures. And fast forward today, we focus on value ad today, primarily in the south and southeast.
Sam Wilson 01:32
But what a great way to get your early education in real estate
Marcin Drozdz 01:37
Drinking from a firehose, literally.
Sam Wilson 01:39
I'm sure it was but it didn't take you long. I mean, a couple of years is not a long time really to spend under somebody else's tutelage and then just go out and do it on your own. What were some of the things that finally pushed you over the edge and said, hey, I can repeat this.
Marcin Drozdz 01:52
Well, you know, what it was, the firm that I worked for was family-owned, good people, well-intentioned, but I knew that I would never be anything more than just a well-paid piece of the puzzle here, a cog in the machine. And you know, being young enough, maybe naive enough in my mid-20s at that point, I was like, You know what, I can do this. So, you know, went out on my own very quickly realized the things that I didn't know, as I left that space, because everything was kind of, in and around what you do, there's a ton of things that happened for you that I didn't really understand at that point. And then, you know, a couple of million dollars later, with my own money, a bunch of mistakes later, I finally realized, maybe I'm not, as you know, well-versed, you know, as I initially thought, but again, you know, you take your bumps along the way, you know, 37 now, so, you know, a lot of experience, a few gray hairs and all things considered, I'm glad I did it when I did,
Sam Wilson 02:43
What were some of the things just, you know, top of your mind that you say, Man, those were some of the early mistakes I made that somebody else could be spared from?
Marcin Drozdz 02:51
You know, the biggest thing is you got to recognize, if you're better, there's three types of people, there's finders, there's minders, and there's grinders. So that's probably the best way I'm able to articulate it. And you know, finders typically the front of the business, whether it's the deal side, the money side, it's the person that goes out and makes things happen. The minders are the operations, the ongoing maintenance, the making sure the buses run on time, so to speak, and everything happens the way it's supposed to. And then the grinders are the people that are typically just happy with the nine to five, or nine, and nine, or whatever it is, and they have a very specific role within an organization. And they're happy just to grind it out. They don't want to have to go outside of their parameters. So for me, I thought everybody thought like me when I left the PE space. And I very quickly realized that was not the case.
Sam Wilson 03:44
Which of those three do you put yourself in?
Marcin Drozdz 03:48
Well, when you start a business, you're all three, my friend, as you very well know. I'm definitely a finder, I love to find opportunity, find talent, find the right people around me and execute on a vision. But you definitely need to be aware of the fact that you need the minders, and you need the grinders to actually execute things. And that was probably for me, that was my biggest lesson in my 20s.
Sam Wilson 04:11
Yeah, that's a tough one. You're absolutely right. And I'm just a slow learner altogether. And so this is something that I've been actually researching quite a bit, because you're right, I've made the same assumption many over the years, like everybody thinks like me, like no, and goes back to the whole like visionary, integrator. And then there's just like you're saying, so like I would put the visionary is the finder or the integrator is the minder, and then kind of the employee person that just wants to be an employee as the grinder. And yeah, the idea of being just an employee, not just, being an employee and just kind of being happy with, you know, the way that things go, like, I don't understand that. And so because I can't relate to that myself. Like, I assume everyone's me that just wants to go, you know, go nuts and go find stuff and take deals. Yeah, that's just not the case. One of the things you're known for is the system you call the E.A.S.Y. System to Raise Capital for real estate deals. Can you break that down for us?
Marcin Drozdz 05:03
Sure, easy stands for Exclusive, Abundant, Scarce and Your allocation. So essentially, the system is part of a much larger process of how to find, nurture, maintain contacts and eventually get the commitment in a way where you don't, you know, you don't come across pushy, don't come across sales-y. It's very consultative, very process-driven. And ultimately, as you very well know, just because somebody isn't a fit for a deal today, doesn't mean that they won't be a fit in three months, or three years for that matter. So how you approach that situation, how you maintain that rapport with that person is, I mean, it's everything it really is, you know, everything I'm at 16 years now, and you end up getting a compounding benefit for all the work you do early on. And if you do it in, you know, if you always approach things from I'm here for a long time, not just a good time perspective, then you'll have that flow. So the E, the exclusive is your deal. So in other words, so many people, when they tie up the deal, they totally undersell it when they're explaining it to somebody else, or they focus on the wrong things that most people don't understand. So I can't tell you how many of our students or some of my partners are like, yeah, like going in cap rate is X, and we're going to come out at Y, and the replacement costs is Zed, and here's why that matters. And I'm just like, dude, honestly, I understand. But the business owner that's trying to give you 250 grand, is just gonna stare at you and go, Oh, okay. And a confused mind doesn't buy, right. So exclusive is, you know, break it down to a level of what would have got you excited about the opportunity. If you didn't understand real estate, for example, is it on Main & Main? Is it one of the last remaining buildings before the codes change? Is it of a certain size, a certain stature? Is there certain finish within the units? Are there certain opportunities for you to do things to add value that is unique in your market, in your city, in your state, whatever it is. Like, focus on the things that the everyday person can understand. Like, if you tell me, hey, the rents in this area are $800. And if we just put new counters down the guy down the streets renting for 1200, I can understand that, you can tell me that the cap rate is going to go from X to Y, but I'm just going to stare at you and go okay. So that's exclusive. Abundant is make sure you have a ton of people to talk to. So in other words, just because you don't have a deal, doesn't mean you shouldn't be talking to investors about past deals, things you're looking at. Because when you do have that deal, and you can call somebody and say, Listen, you know, I have this deal. It's exclusive, because of these reasons, I have X amount of people that I need to talk to. But I know you told me you want to hear about this. So here we are. And then S for scarcity is, so we're only looking for $2 million. Our average investment is you know, let's just say 150,000. So we're probably looking for another eight or so investors in the opportunity. And then the Y. So scarcity got to create, you know, if you're doing a great deal, and it's exclusive, and you've got tons of people to talk to there's natural scarcity, both within the amount of allocation somebody can take, and the amount of room you have for people because of the size of the deal. So then, you know, you'll obviously have a conversation back and forth to that person. And when you think it's appropriate, you can say, Look, I know you still got to do your due diligence, I got to send you the package, you gotta review everything. But if everything does check out, what amount would you potentially consider investing, like, ask for some kind of a soft... So again, I'm oversimplifying all this, Sam. But all of this breaks down to a process that has helped me secure well into nine figures in capital. And whether you're raising 50,000, 500,000, or commitment for $5 million, it really is the same process.
Sam Wilson 08:44
I love that. It's not playing mind games. I don't want to use that word, but it is a process. And it's getting used to even some of your phrasing there, I think is really unique. Just you know, where it's like, hey, you know what, we're only asking for two and a half million dollars. That's all the raise is average investment, would you say? 150 grand is your example.
Marcin Drozdz 09:02
Yeah, I mean, whatever it is for you, right? It's 25. It's 25. It's 50. It's 50. It's 250 or whatever, it makes it real for you. By the way, never lie. Never BS. Always use real numbers. Don't say things that aren't consistent, because it's a small sandbox, as you and I both know, Sam, and, you know, if you start making up stories, it's not going to work.
Sam Wilson 09:22
What was the Y in the E.A.S.Y.?
Marcin Drozdz 09:25
The Y? I'll tell you why I created two, but the Y is your allocation. So in other words, it's asking for some kind of a call to action. So in other words, when you're talking to somebody can say, Look, I know you got to look through the package or lawyer or accountant, whatever it is, but if everything does check out what amount would you potentially be considering? And that's, you know, soft commit, I mean, in PE it's a soft commit. So in other words, you know, because you got to give them the opportunity to do their due diligence, obviously, to make sure they're qualified and make sure they can, you know, comply with the rules with your lawyers and everything else and make sure everything's done clean. But if at all didn't checkout, what amount would they be considering? Because if someone isn't considering it, they would tell you there, you know, but if they're already telling me I love it, if it all checks out, I'd probably do 100-200, then that's a good indicator of at least somebody who's semi-serious.
Sam Wilson 10:14
Right. I really liked that. I mean, that breaks it down into a very easy-to-understand step-by-step process for people who are out there raising capital. It sounds like maybe this was developed for you just because you needed something that was repeatable.
Marcin Drozdz 10:29
So when I left PE, again, I started thinking that I could do things my own way. And there were various forms that encouraged us to incorporate what I've now coined as the E.A.S.Y. system. But I had a property, I personally had three properties that I was closing in a month. And these were smaller properties. I remember my investor in the last week or so decided to pull out. And it was like, you ever see the movie, Jerry Maguire or buddy gets fired in the restaurant, and he just doesn't know what to do next. That was my Jerry Maguire moment. So, you know, I sweated it out, I figured it out. But after that, I swore and we closed on the properties. But after that, I swore to myself, I would never put myself in a position like that again, and at a sheer necessity created this thing.
Sam Wilson 11:11
Yeah, absolutely. I love that. Tell me some other lessons, you know that you would say that you've incorporated? I mean, raising nine figures is no small amount of money. Is there anything else that comes to top of mind? You said, Hey, here's some other things I've learned along the way.
Marcin Drozdz 11:24
Yeah, I think the best way to sum it up is dig your well before you get thirsty. And I forget where I heard that I didn't coin that, I read that in a book somewhere in the author's... The origin of that escaped me. So for that, I apologize. But that saying to me, it was always resonated true on the fundraising side. So many people wait till they have a deal in hand before they start talking to people. My whole thing is bring people along for your journey, because you don't know if it's going to take someone three days, three months, or even three years to finally decide to engage with you. So if you can share your journey, and I mean, you do it well, other people, you know, some people attempt to do it well. You add value, do video walkthroughs. I mean, just the last property we were buying. As we were doing some of the rentals, I literally just FaceTimed with some of the investors, some of the buddies of mine, as guys were working on-site, I was just walking through the site with a hard hat on and just like, hey, so here are the new units. Here's this, here's this, buddy's not available, that's fine, crank out a two, three-minute video. And understand it's not very professional, because they get the professional newsletters and the quarterly updates and things like this as well. But on top of that, they feel like they're part of the journey when you share that type of authentic, you know, here's what's going on with your money in this project. So bring people along for the journey. And again, if you did that, well before you're thirsty, when you do have an opportunity, those people that have responded favorably to past things, it's a much easier transition, because they're already engaged in your world to some extent.
Sam Wilson 12:52
Absolutely. And that's something, taking your advice to heart even, I started a year and a half ago, like I never had a regular newsletter, right? But it's been for a year now we've sent out every single, almost a year, every single Friday 10 am my newsletter goes out. And you know, Marcin, I haven't closed the deal since September of 2021. But we're constantly talking. But now we've got three deals under contract, right? And it's just like, hang on, like it's coming. Here's the things we're working on. And at times, it feels like Gosh, what do I talk about? I mean, really aren't doing a deal, right? Other than the deals we have, you know, in operation, like we're not doing something actively. But yeah, keeping that lead warm, because it's like, Hey, here's all the stuff we're actually still doing out here, even though we're not presenting deals, because there's nothing that made sense for us. But then all of a sudden, you know, out of the blue, and now we got three deals all at once. And so you know, having that prep ahead of time, I think is just really absolutely key. Talk to us a little bit about maybe your mindset. You seem to indicate or at least I hear that there's a mindset. Is that a true statement?
Marcin Drozdz 13:52
It is. You know, it's interesting, because to me, when I started in this business, I knew that it was going to work. I wasn't sure how I, just in my mind, I was already wired that this is happening, this is going to work. And that's probably due to the fact that I mean quick story about me. I was born in communist Poland and my parents, my dad got arrested for selling corn on the black market corn with a C, those of you...
Sam Wilson 14:17
P as in Papa I'm like, okay. Charlie, corn.
Marcin Drozdz 14:21
C as in Charlie. In Polish, it's called kukurydza. So, the point is my dad was selling this stuff. And during communist times, you couldn't run a business. So he got arrested, they were going to send him to jail. He didn't like that too much. So he and my mom and I was a couple of months old at the time, they ran off to East Germany, and eventually migrated to North America. Well, when I finally got out of Poland, it was because my grandpa snuck me out four years later, so I didn't see my parents for four years. They stuck me out, literally drove me across the border, you know, quote, unquote, legally in the trunk. And we came to North America settled down, but my point is when we got here, there was no plan B. There was no safety net. There was no relatives. There was no family, there was no friends. So the language was foreign. I mean, I spoke Polish and German and now learn English, right? So I always grew up with no plan B. And that forced me to whatever I'm doing, this is going to work. And so mindset is so important for people. Because if you don't put yourself in a position where you can speak with some authority on what you're doing, if you don't buy into and you don't believe what you're doing, you know, it's a really difficult thing to sell, especially for fundraising. If you think about it, you're not giving so, like, when somebody invests with you, they're not getting a house, they're not getting a car, they're not getting anything tangible there that says that they own a piece of this apartment building, or warehouse or trailer park, or whatever it is. And that's it. So it's so important to make sure that you have the mindset that you feel like you're worthy, you're capable, you're competent. And that element of self-doubt has to, over a period of time, leave the mind, because I can tell you right now, when I raised that first $5,000, I was more terrified when I was downtown New York, getting a term sheet for 25 or $50. million, like, but the process is the same. So what change? Obviously, my knowledge, my competence created confidence, which is something I say all the time, but it's the mindset to know that you're worthy of that. And consistency is what's going to give you that. If you think that, you know, if you have feelings, like why are people going to invest with me? I can't find any deals. Do I really know what I'm doing? What if I screw up? Like, if you go into conversations with those thoughts, then you're already shooting yourself in the foot. And that mindset piece is a starting point, it is everything. It really is.
Sam Wilson 16:44
That's an incredible story. First of all, and I love the comment there. You said there's no Plan B, it's the burning of the ships. And it's like, Well, guys, no option. This is what you have to do. What do you say to someone that, you know, is struggling with those things, or, you know, maybe, you know, hasn't done enough deals to really be able to say, hey, you know what, this is how I can confidently, you know, lead on this? What do you do for those people? Or how do they develop that?
Marcin Drozdz 17:13
So, Sam, look, we're all struggling with things. We're all in different scenarios where sometimes we feel like we're not equipped or prepared. I mean, I'll give you an example. I was on the phone with a fund manager at in New York right before, actually right when COVID hit. And he's talking to me, I'm walking through where we're at where we're going, and I'm you know, I'm looking for equity, right, large checks. He says to me, he goes, Well, what's your asset size? And I tell him and he goes, Okay, so look, you're a little small. For me, I go really? Like how much? He goes, well, our smallest client is 1 billion. And I just laughed, I go, okay. So I actually said to him, I go, so what you're telling me is I'm trying to get from the kids' table to the grown-up table, and you won't let me yet. He just starts laughing, right. But the point is, look, whether you're at 100,000, a million, 10 million, 100 million, there's always someone that's going to make you feel like you're at the kids' table. And my advice is to get that person or those people just a little bit ahead of you, or maybe a little bit more ahead of you, when you get to know these people, you'll see that they're just like you and me, we're the same. And when you can see that it's attainable. You get past those self-doubting components. Because yeah, if you see guys on Instagram, or YouTube and buddy's buying Lamborghinis, private jets, whatever it is, and he's billion dollars, whatever it is. And you're like, dude, I'm just trying to buy, you know, a 10 Plex, so that I can put my daughter through college, there's a disconnect there. It's such a huge disconnect, that that's not your man. I mean, those are great people for like inspiration. But that's not the next step for you. The next step for you is the guy or girl that's already at 40-50 units, and trying to get to 100, or something along those lines. So find people that are just ahead of you, or maybe slightly ahead of you to actually have some real connection to be able to engage in growth, because otherwise, you know, there's nothing more, you know, okay, I want to play in the NFL. Great. I'm gonna go play with Brady. Yeah, right. Come on, right, like the guys doing, you know, so I have people call me sometimes and they want to play and I go, Look, you know, it sounds like you want to do algebra, but I need you to learn how to count first, like, you got to work your way up. Right? So the best action item is to find people like yeah, find your inspiration, the guy that's out there killing it at a level that you're just like, that's godly. That's God-like, sure. But then bring that back to Earth and find that next peg on the ladder that somebody that can help you, you know, actually more directly, I think.
Sam Wilson 19:37
I love it, Marcin, thanks for taking the time to come on today. I certainly learned a lot. I've loved hearing your story. All the things that you've been involved in, you know, ideas on how to develop a system for raising capital, just, you know, coming from the institutional side than just going out and doing it the idea that we don't need a plan B. We just need a really good plan A and to go execute. So I've certainly enjoyed having you come on today. If our listeners want to get in touch with you or learn more about you, what is the best way to do that?
Marcin Drozdz 20:04
Best way to do that is my website marcindrozdz.com. And then for those of your listeners who want to pick up the E.A.S.Y. System, or at least get introduced to it, because there's a lot more to it than we talked about, I've got a free download there. There's a mini-course there on the website. It's free to anybody so they can go on my website marcindrozdz.com. Hopefully you can spell that in the show notes for them. And they can download the E.A.S.Y. System. It's a 15-20 minutes set of video tutorials that will walk them through the specifics of that.
Sam Wilson 20:31
Yep, absolutely. Yeah, look for marcindrozdz.com. We will put the spelling exactly of that in the show notes. Marcin, thank you again for your time. Certainly enjoyed it.
Marcin Drozdz 20:39
Really appreciate it. Thanks, Sam.
Sam Wilson 20:41
Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners as well as rank higher on those directories so appreciate you listening. Thanks so much and hope to catch you on the next episode.
