Anthony and Teresa Machi met in a classic Milwaukee way: at Henry Maier Festival Park, on a summer night after their freshman year in college.
“We met back in 2001 at Festa,” said Anthony. “It just kind of happened.”
Yet during their first chance encounter at Festa Italiana, they realized they actually had a lot in common. Not only did they both hail from Italian families living not far from each other on the city’s south side, they both were at UW-Milwaukee studying finance.
During the decades since, the Machis, who married in 2006 and are now both 42, have been highly intentional as they’ve acquired accounting and investment skills working in finance, invested their own money and sweat equity in residential properties and co-founded Mach1 Capital and Mach1 Lending, companion private investment and lending companies centered around the real estate industry.
Learning to balance the books and spot a good investment
After college, Anthony began forging a career in corporate finance working mainly in cash management and treasury roles at Rexnord, Baird and U.S. Bank.
Meanwhile, Teresa discovered her passion for managing investments and treasuries in post-grad positions she held at Stark Investment, Baird and GE HealthCare. But although she loved learning from the many talented professionals she met working in investment and finance, she said, after a few years the pressure and “cutthroat” nature of corporate environments began to lose its luster.
“It was very stressful, and I thought to myself, ‘There has to be more to life than doing this every single day,’” she said. “I just couldn’t see myself in the future going on this way.”
At that point, she and Anthony began pondering how they might find a more independent and less stress-filled way to support themselves, and investing in residential real estate, which Teresa’s parents had done and prospered from, seemed worth exploring.
“My parents immigrated from Italy to the states with nothing and had very blue-collar backgrounds,” she said, yet they still were able to save and purchase the four-family apartment building they lived in in Cudahy and, eventually, the rental income from the property helped her parents put Teresa and her two siblings through college without debt.
In 2009, the Machis bought their first investment property, a duplex in Glendale that had been foreclosed upon. They rented out the duplex’s flats and, using the equity and income they accrued owning the property, purchased another property – and another after that, repeating the pattern.
“We continued that strategy,” known in real estate as the BRRRR strategy (short for buy, rehab, rent, refinance and repeat), she explained, and eventually also “fixed and flipped” other properties that they rehabbed and sold at a profit.
Opening the door for others to invest in real estate
While the Machis were still working in their corporate jobs, word of their fruitful property investing spread. Eventually, Teresa said, “a friend of a friend” approached them with a request to borrow money, and because the proposed deal “made sense,” she added, based on her and Anthony’s knowledge of rehab costs and market rates, they decided to loan the investor some of their capital to make the purchase.
“We had our attorney draft the documents,” she said. “We took a first-line position, just like a bank, issuing our first commercial loan in 2016,” launching Mach1 Lending in the process.
But before long, the requests they received exceeded their personal capacity, so the Machis began soliciting friends and family for investments that could help “fuel and fund Mach1 Lending,” Anthony said. And when that “still
wasn’t enough” to meet all the loan requests they were getting, Teresa added, they formed Mach1 Capital and registered it with the SEC in 2019 to raise more money from other investors who – in exchange for their own returns – could help back Mach1 Lending’s outgoing loans to real estate investors.
Today, Mach1 Capital investors must invest a minimum of $50,000 with a one-year holding agreement, and while they don’t acquire any equity positions in the properties that developers purchase with loans from Mach1 Lending, they do receive a 10% to 12% annualized return that’s paid out monthly, Teresa said.
The arrangement has been favorable enough for Mach1 Capital to attract investors from “a wide range of backgrounds,” including “doctors, attorneys, and just everyday people,” including retirees with some cash savings that’s “not really doing anything in the bank” who have chosen to invest with Mach1 Capital for additional monthly income to supplement their pensions, she said.
Embracing the perks and responsibilities of running a family business
While Teresa left her final corporate job in 2016 to focus on running the budding family business, Anthony admitted that he hesitated at first to make the leap. He’d always been “hooked to a paycheck” and was nervous about losing that security, he explained. But as Mach1 Lending and Mach1 Capital gained traction, he grew more confident that he and Teresa could thrive as independent family business owners.
“For me, it was getting used to, ‘You know what? We know our system, we know our product. We’ve been working together for years,’” and, finally, he said, he was ready to “take the leap of faith” in 2020, when he realized that by joining Teresa full time, he could “add more value to our business, to us, to our community, and to helping other investors, too.”
Day-to-day now, as the Machis balance both wings of their business, Anthony focuses mainly on accounting while Teresa spends more time in the field, meeting investors and inspecting properties their loan clients are considering buying.
The husband-and-wife duo, who currently have about 150 loans in their portfolio, tend to prefer backing single-family and duplex property investments because they’re typically easier to sell than multiunit apartment buildings, in case a borrower wants or needs to cash out, Teresa said.
And, in the end, they always “run the numbers together,” she said, to decide if a deal “makes sense” for them and their clients, on the investing and the borrowing sides of the table. “We’re always proud to say that we have zero foreclosures” on properties purchased with Mach1 Lending loans, she added, chalking this distinction up to their “really knowing the values” of Milwaukee real estate.
As they were beginning to buy properties themselves in the late aughts, the Machis reached out to seasoned real estate investors in the area – including several Teresa scoped out perusing LinkedIn during lunch breaks from her day job – to learn about their experiences and seek their advice. And today, they are happy to return the favor by grabbing coffee with people who contact them wanting to learn the ins and outs of real estate investing.
Being outgoing and curious “was actually how we propelled our real estate career,” Teresa noted, and because so many people “graciously sat down with us,” now, when others hope to sit down and learn from them, “we do the exact same thing. Milwaukee is very open and giving when it comes to anything business-related, especially real estate.”
“We want to help people. We want to give back,” Anthony added. “So, we’ll tell you our story and how we can help out.”
The Machis agreed that one of the biggest rewards of accelerating real estate investment through their private investing and banking business is doing more than they ever could on their own to revitalize neighborhoods across the greater Milwaukee area. Recently, they’ve backed real estate investment projects in Brookfield, Bay View and the Washington Park and Harambee neighborhoods in the city of Milwaukee, they said. And while they would not disclose details about specific properties (Teresa cited the need to keep their borrowers’ information confidential), they said that their loan recipients’ efforts post-purchase to spruce up outdated properties or rehabilitate distressed properties and rent them at market rates has brought new benefits to neighborhoods, “making them strong” places “where families feel comfortable.”
Being their own bosses now, the Machis enjoy taking vacations together with their 4-year-old son whenever they choose, and while they do stay dialed in to Mach1 investing and financing while they’re traveling – “that’s just customer service for us,” said Anthony – having significantly more freedom and flexibility as family business owners feels like a gift.
“Truly, time is the ultimate commodity, and we’re very fortunate we get to work together,” Anthony said. “We might have to take a call at seven o’clock, because when our phone rings, we answer it. But we love it.”
