Marc Abou-Ezzi | 6 Boston Developers to Watch in 2024

NAME: Marc Abou-Ezzi

COMPANY: Ezzi Property Group

Where do you trace your work in development back to?

So before college, I was thinking about going into dentistry. My family is predominantly dentists. There are like eigh dentists in my immediate family. But I needed to get back surgery my freshman year of college, so I ended up taking a leave of absence my first semester to recover. And while I was home, I started researching finance, the stock market, different investment classes, that sort of thing. 

When I went back to school, I was enrolled in the science track, but I added an economics class. I grew to love it pretty quickly and basically told my family I didn’t want to go into dentistry, I wanted to go into the business world. And they were like…”We don’t know how to help you.” We immigrated to this country as a family of dentists, that’s what we did, so I kind of had to figure this out on my own.

One of my buddies who was a couple years older than me encouraged me to get my real estate license and said it was a good way to learn business skills like contracts, marketing, and other fundamental stuff. So sophomore year, I got my license that fall semester.

What did you do with your real estate license at 19 years old?

Well it was sort of like hitting the lottery, because I was able to start helping to lease a bunch of apartments to my classmates and make some money. And then that summer, I had just started to get exposure to landlords and was seeing how landlords operate while working directly with them to do the leases. And because I was so young, a lot of them were willing to talk to me and answer questions. And so, that summer, just scrolling online, just trying to see stuff I could buy, I literally had Zillow filtered to a $100,000 max price, I found a condo in the town over where I grew up in, and it was $75,000 or something.

So, I started to do some research and I was like, "Okay, how much could I rent this for?" I had all the tools because I was working as an agent and I realized that this actually makes a lot of sense. So I pulled the trigger and bought that condo. I put 50% down, which is basically everything I made and savings from graduation gifts and whatnot after high school. And then I realized it needed work. The whole kitchen wall was molded from an old leak, and so I had to redo the kitchen and floors and all that. And the way we found out was we were going to paint it and replace the floors, and we pulled the baseboard off and the whole wall basically felt like a sponge.

But I did a lot of the work by hand and got some help from some friends. Then I rented it and I was like, “Oh, this is cool.” And I just kept doing that. I was able to refinance that one not too long after because I had a lot of equity in it and the rent was good. By the time I finished college, I had built a portfolio of seven condos. And the most expensive one was 90 grand.

So you were 22, 23 with seven condos. What did your friends think at the time?

Keep in mind, their cumulative purchase price was like only $500k. But a lot of my friends were just making fun of me, just sort of mocking it. They were like, “Oh we’re going out and doing this, but Marc can’t, he has to put up drywall.” It really wasn’t mean, it was in a nice way. But then there were some that were interested and asked how to get into this work. But a lot of people asked, very few did.  

What did you do after graduation?

So I built a portfolio of those condos and then after college, I went and worked in real estate consulting. I worked a corporate job. I moved to New York City. One year in Boston, two years in New York. I was traveling a lot for work. From there, got a gig in real estate private equity, also in New York.

What did the corporate work entail, and how was the transition from just focusing on your own stuff?

I was an analyst for one of the big consulting firms, and basically what I was doing was I was doing research and putting together recommendations for clients that were buying property, developing property, trying to come up with master plans. I had a project in Saudi Arabia for the three months that I was there for. I had a project in Mexico. We had a large corporate client that was trying to consolidate a big real estate portfolio. They weren't a real estate business, but they had a lot of real estate expenses, so they were trying to figure out how to optimize that. The job had projects like that.

Were you able to keep buying properties while holding these corporate positions?

So with my first job, with my offer letter, I was able to do a low money down mortgage on a condo in Southie. It was a three bed, so I moved there with two friends. They were basically paying my mortgage, so it was like house hacking.

Right before the pandemic, a buddy of mine bought a property in Dorchester, and I was like, “Interesting, what’s going on in Dorchester?” And I found that a couple of my friends had moved to the Savin Hill area. So it was getting my attention. So what I did was, I had a lot of equity in those condos. They were probably worth a million dollars cumulatively by then. And so, I refinanced them and I was able to have the capital from a refinance to buy my first triple-decker in Boston. 

Afterwards, I bought a second one in Boston. I was about 24 at this point. I was back and forth between New York and Boston, because I had to be very hands-on. I didn’t have any scale to afford reliable help. If things went wrong, I had to figure it out. Just learning from doing, both as a broker and by becoming an owner.

Simultaneously I had also bought a duplex in the suburbs with a buddy, and we flipped it. We did our first condo conversion without even knowing what it was, and we made good money on that. So with my share, we were able to buy another fix and flip  together.  That project we bought together, we also flipped it. And then the money I had, plus some more money that I saved up, I was able to buy a third one in Boston. At this point, it's summer 2020, middle of the pandemic, and I now own three triple-deckers in Boston and a portfolio of condos in the suburbs. 

Do you still own the condos at this point too?

So that summer I started making moves to let the condos go. And I was able to sell them as a portfolio. They were pretty liquid, more liquid than I thought. One buyer came in and bought the whole thing. So the cash I was able to pull there basically gave me a little cushion, but I didn't make any moves, because at this point, wasn't the beginning of the pandemic, but it was pandemic time when people didn't really know what was going on and people were scared. That along with some forthcoming life decisions, I decided to just held onto some cash. 

At the same time, I decided to leave my corporate job. We were working from home and it became very unpleasant. They really wanted us to be available all the time. And at the same time, my portfolio was 16 units, and three of them are buildings in Dorchester, which require work. So I got my year-end bonus, left my job, and bought a building that was really distressed and did a complete gut. And I simultaneously partnered with my dad on buying a six-unit building that was in Chelsea. My parents had never tried investing in real estate, and definitely thought it was risky, but by then I had known a lot of the benefits, the tax advantages, and was able to make the argument as to why they should think about this in their portfolio. 

Anyway, it got to the point where, by the end of 2021, I was able to pick up a property once every six months. I had the three-unit project, the six-unit, and three more three-units.

Who was helping you with all the work at this point? Did you formalize your acquisition process at all?

Well I started getting brokers messaging me with deals, and the contractors I was starting to build relationships with, and they were giving me reliability and good service. So in a way, you want to keep feeding the contractors to make sure that they stay on your team and give you good work. You want to keep buying from the brokers because now you're starting to get access to interesting deals, but the missing piece becomes capital, because I was very illiquid at that point. 

So a lot of my buddies, dating back to college, had seen this progression, and so deals started coming up, and I would ask if they wanted to invest with me. That was the first time I raised capital, and that was right in the beginning of 2022. And since then, I've raised almost seven and a half million of capital. And we've grown the portfolio to probably, I want to say... I don't know by value because values are always changing, but we have maybe 35 to 40 million of value and over 120 apartments.

That's the path that I'm running with and I want to continue to run with. I know how to do on-the-ground real estate and get my hands dirty. And I know the private equity model because I studied finance and worked in the corporate real estate world for a few years. So that’s the model I fell into, a blend of both.  

What’s your actual process to share a deal with friends, possible investors?

It's a process I'm still refining. This is the piece of it that no one teaches you. How do you actually get people to write you a check and trust you? No one's going to teach you that. It's partially a sales role, so you have to have sales skills. And it's also relationship building with the people that can afford to write those checks. And so now, if a good deal comes up, I need to like the deal as I'm putting my money in all the deals as well. I need to be very comfortable with it and, once I have that, I'm able to take it to my network and pitch it to them.

And when they see the passion, the interest, the excitement for it, it makes them more comfortable. I started with a core group, the first deal was a group of four or five. The biggest check was maybe $75,000.. Those people have grown with me and more people have come on because they've seen the growth over the last two years. Now, what I'm trying to figure out is how to grow that investor pool because I'm going to eventually get to a point where I start exhausting those immediate friends and family sources and need to bring in more sources of capital. There’s a ways to go on that end. 

But now that the operational piece has been streamlined, I can focus more on relationship building.

When you say “operational piece,” you mean…

So I started a property management company once we crossed 60 units, and we have a property management company dedicated to the portfolio. And then I have my GC license and I have a great crew of subcontractors that I have good relationships with. I also have access to ad hoc labor that I can bring in on project by project basis. So in a way, I kind of have a general contracting company and a property management company, and I'm comfortable with them and the operation. So once we buy a property in the beginning, it requires a lot of my time because we're adjusting the property management to it, getting the contracting off the ground. But within two to three months of acquisition, it's smooth sailing.

Is everything buy and hold right now?

Yeah, we’re always buy and hold. We're not flipping stuff. We're not building to sell. We're mostly buying multifamily property and now RV parks that have value-add potential, executing on a business plan, whether that's increasing rents, renovating, doing whatever it is to it. Once that property becomes stabilized, then investors basically start earning quarterly payouts. And then whenever we sell it or refinance it will be when the big return of capital comes in hopefully.

For each prospective property, do you put together a fairly detailed plan that potential investors can see, to understand the playbook you’d like to run?

We know what we're going to do with the property from the first five minutes of the phone call with the broker. A broker sends it, or we get an email about it. I'll know the general idea. Then there's intricacies for every property. Are the utilities sub-metered? What is the layout of the building? Is it a clean construction, or is it really old and there's a lot of work involved? What's the tenant quality? That's all stuff that we figure out in due diligence. Once we pass all that, we refine our business model and then we'll try to get the property under agreement.

Once we have the property secured, we have a better understanding of what the debt is going to look like. I can finalize the Excel model. And then that's when I can go to investment partners and be like, "Hey, listen, here's the deal. This is what I think. These are the numbers. This is the business plan. This is why I like the deal, and these are the risks involved. These are the things that I think we should be cognizant about if this happens. This is my potential mitigation plan. But nonetheless, these are risks." You make that whole pitch, and then people decide, "Yeah, I'm interested." "No, I'm not."

After a deal is done, what sort of communication do you have with your investors?

Quarterly updates, mandatory, with the detailed financials, both qualitative and quantitative reports. And then they have access to me all the time. I mean, again, these are friends and family, they're people I'm hanging out with on the weekends.

It's formal and very informal. So that's why it's a nice setup for me and for them. They have access through me to good real estate investments that they're completely hands off with. For me, it's like I don't have corporate reporting requirements and all these different internal requirements that these big family offices and stuff require. So that's also why I'm still kind of deciding which route I want to keep growing into.

A lot of our talk has been about the business, the financials. What’s your philosophy as a builder?

I mean, one, I love to put our name on a property, so I really want to make sure that from the exterior, it looks good. Obviously that's not really what makes money when you're doing rentals, so you kind of have to balance that act. But when it comes to design, it's not like we’re doing for-sale sexy condos. We're doing rentals, but what we like to do is we like to make stuff that's kind of above average in that market. We're not competing with the class A new developments. Ultimately the best feeling is when we deliver a product and give a good family a new home that they enjoy and appreciate. That's really the reward, right?

So when it comes to design and construction and renovation, that's the benefit. You delivered a good product and then you accompany it with good service, which is good property management. You don't really hear that too much. So you end up keeping people and reducing turnover, which is a big win, because obviously the biggest cost for rental landlords is vacancy. Turnover and vacancy is our biggest cost. So we try to limit that as much as possible. In order to do so, we're giving a good product and accompanying it with good service.

One of the things that jump out for me is how you’ve been able to scale, and achieve this growth that other developers don’t. What do you think is the secret there?

Get good people, treat them well, hold them accountable for things, make them own certain things, and if you see them doing something that you would do differently, ask them why they’re doing it that way, then take the opportunity to either learn from them and change your approach, or, give them feedback. We like to get our internal property managers, especially, to almost treat these places like their own.

And ultimately, I let them know that all the properties we're managing are our properties. So, we're not a third party manager., We aren't charging on maintenance calls, turnover and leasing, etc., I'm like, we don't want those, right? So, we need to be good with maintenance prevention, and we need to be good on the contracting side so that we have a good product that we're not always having issues with. That’s why having vertical integration from the contracting through management is really helpful when it comes to scale and knowing your properties. We're doing inspections on our properties, we're making sure things are run well. So, that’s why  I'd rather be in control of that stuff, and on top of it, investors love the vertical integration. We're doing a better job, we have more control, and we're cheaper than the market. So, it's almost a no-brainer.

We have a cleaner at our property once a month, they're going into, this is just a technical example, they're going into all the common areas, making sure there's no water leaks, making sure there's no loose wires, anything going on, mostly in basements, that's where you have most of your problems. Treat the properties well, your tenants will treat them well, right? Treat it poorly, your tenants will treat it poorly. 

Let’s talk about the RV parks. How did you get into that business?

So, my acquisitions partners that I've done a lot of multi-family deals with, they built a good grasp on the hospitality side of things. One of them stumbled upon the RV model almost by accident, and we realized that there's a lot of growth, and a lot of good economics in them, and the operations are very, very similar to the hospitality piece. And from the residential standpoint, it's much easier than an actual building because it's basically a property without a building. 

So, they jumped on one or two the first time, they did well, they came across three more, and then they pitched it to me, and I was like, yeah, I'll get involved. So, we partnered together, I helped bring the capital, I'm helping with some capex work to the properties, and we're currently working on stabilizing them. But it's an area that not many people are playing in, especially in New England. You hear about it in different parts of the country, where it's more of a robust market, or a saturated market, I should say, but in New England, it's not. So, they have I think four or five total, and three of them I'm involved with. One's in Mass, one's in New Hampshire, one's in Connecticut.  We just started last fall.

How have things at those RV parks gone so far?

Good. Demand is strong, more than we expected. Operationally, it's fun, right? You're out in more green areas, it's like, you're outdoors, and sometimes in the woods, your work involves landscaping, tree work, stuff like that. It's way better than being in Boston, and getting a parking ticket because you have to run into a job site. So, that's been a nice experience, but it's relatively new, we started exploring it in the fall and closed in February.

Are these RV parks that people stay at all season?

There are really two types of parks. The people are coming, they need a place to park, it's their home, and they're just going from park to park. Then you have people that are there for a a summer season. And with that, you have the same customers that are usually coming back every year for five to six months, think of it as their summer vacation home. Their kids know the kids of other people. It's a community feeling.

With those, you have to have events. There's amenities usually at these parks: swimming pools, kids' playgrounds, etc. They're usually next to attractions, like natural attractions. But the piece that you're in control of is obviously the amenities and events, and making sure people are interested, and then there's a marketing piece to it.

We’re doing a lot of support business too. For example, we just bought a honey wagon. That's the thing that pumps septic tanks, because we have so many septic tanks at the parks, it made more sense for us to buy the honey wagon than outsource septic pumping. Another thing is we're doing a lot of tree work. Rather than pay somebody to come haul off all the trees, we chop down all those trees and we're selling firewood. There's stores inside the parks. They don't make a lot of money, but you're making a little bit of profit off of selling convenience store stuff. So there's a lot of ancillary businesses. 

The economics are there. If you’re buying a park with 220 sites, let’s say, and you’re charging $4,000 to $5,000 per year per site, it’s in the volume, not the margin. And it’s cool to build a place where people are making memories year after year.

Zooming out, what’s your focus moving forward?

For the next five years, my focus is going  to continue buying larger apartments. I just want to be buying apartment complexes right now. Maybe spreading out a little bit geographically. So that will force the contracting and property management companies to also grow. And then simultaneously, I also want to be getting more involved in RV parks. I'm probably going to put the brakes on for six to nine months just to see how these first ones go.

Any last words of advice for anyone looking to get into development?

Yeah. A lot of people reach out to me and say, "Hey, I want to buy an investment property." My two cents would be that unless you want to do it full-time at some point, it might not be the best to get into. Owning property is not passive, as much as people like to say it is. If you really want to make money and truly own a source of significant “passive” income, it’s going to become an active job. So the best way to do it is obviously with partners.

The other thing is really keeping your mind open. In 2021, I was doing three families. And like you mentioned, sometimes you don’t stop and think, but now I’m doing apartment complexes, Airbnbs, RV parks, spread out from just Boston to most of Massachusetts, New Hampshire, down to Connecticut. It’s all about keeping an open mind and trying new things. So those are the things that have benefitted me the most and I hope can help others as well. 

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