✦ AI generated
Mark explains his business model: buying severely damaged, old brownstones and restoring them.
Mark O'Brien: I usually buy things that are that have rats in the cellar and holes in the roof and water damage everywhere, mold, and and problems. But this one, when I walked into it, I was like, 'This is cute.' It's 180 years old.
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Mark highlights that regulatory delays, not construction skill, are the hardest part of the business.
Mark O'Brien: It's been two and a half years that I've been waiting for permits. You know it's landmark. It's a lot of work of architects, engineers getting soil bearing tests. It's the cost to carry it. And time will kill every deal. And often it does.
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Mark says desperation, not strategic planning, drove him into real estate — he was overleveraged and had to make it work.
Mark O'Brien: I spoke to a guy about this recently and he was like, 'Well, how did you get into real estate?' And I said, 'Desperation.' I had two and a half kids. I was living in Greenwich, Connecticut in a house that I had no right. I was completely overleveraged. I'm a big believer in leverage and use other people's money, the bank's money, but it's a great way to go broke.
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Mark shares the financial structure of his first brownstone flip: buying and building for about $1.6 million total, selling for over $2.3 million.
Mark O'Brien: The numbers on the first one and the numbers back then were basically you buy for a million, bill for a million, and sell for 3 million. So, you make a million bucks. This house was 800,000. I built it for about 800,000 and I made a lot of mistakes. I sold it for like two two three or something over less than a year.
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Mark lays out the economics of his current Brooklyn project, netting roughly half a million per year.
Sam (host): 2.8 to buy it. And then about 2 million to build it. So that's 4.8 in. And you're going to sell it for 6.2. So you'll make something like $500,000 a year. So if you want to buy a $6 million, 4,500 square foot home in Fort Greene...
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Sam summarizes his scoring framework: the business side is weak (8/30) due to modest returns and risk, but the lifestyle is strong (21/30) for pride and community.
Sam (host): For business, he gets an eight. For lifestyle, a 21. Add all that up. That's 29. So Mark O'Brien buying, restoring, selling brownstones. SAM score 29. This business was a pain in the butt and I don't think it made that much money. I think he probably does something like $500,000 to a million dollar a year in income, but that's on a good year.
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