GI166: Shifting From Passive Investor to Active Investor with Matt Picheny

Matt Picheny is a Tony award winner and real estate investor with over 15 years of experience revitalizing and elevating communities and has invested in over 8,000 apartments nationwide.

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Announcer:
Welcome to the Global Investors Podcast, a show that focuses on helping foreign investors enter the lucrative US real estate market. Host, Charles Carillo, combined decades of real estate investing experience with a professional background in international banking to interview experts in all areas of US real estate investing. Now here’s your host, Charles Carillo.

Charles:
Do you have money sitting in the stock market? And you’re worried about it or worse. You have money sitting at the bank, not keeping up with inflation. My name is Charles Carillo, founder and managing partner of Harborside Partners. And since 2006, I’ve been investing my money and my family’s money into income producing properties. These are real assets, real properties with real addresses that produce real cash flow. At Harborside Partners, we provide passive investors who love real estate with a turnkey investing solution. If you want to put your money to work in real estate, but can’t find deals, don’t have the time to get funding in. The last thing that productive people want to do is manage real estate. We find the deals. We fund the deals and we manage the tenants, the termites and the properties. Partner with us at investwithharborside.com. That’s investwithharborside.com. Go to investwithharborside.com. If you love real estate, you like the idea of passive income and believe that income producing properties will appreciate over time. Go to investwithharborside.com. That’s investwithharborside.com.

New Speaker:
Welcome to another episode of the Global Investors Podcast; I’m your host Charles Carillo. Today we have Matt Picheny. Matt is a Tony award winner and real estate investor with over 15 years of experience revitalizing and elevating communities and has invested in over 8,000 apartments nationwide. Thank you so much for Matt for being on the show.

Matt:
Oh, it’s my pleasure. Thanks for having me.

Charles:
So you have a very interesting background prior to getting involved in real estate. Give us a little bit of background on yourself, both personally and professionally prior to getting in and getting the real estate bug.

Matt:
Yeah, I grew up in Orlando, Florida and I started doing some acting as a kid. You know, I enjoyed doing that in, in sort of community theater and then ended up doing that a little bit professionally actually, when I was a kid, because I got cast as at Disney world, I actually worked at Disney world at the age of, of around 11 years old. I was singing and dancing in front of the castle at the magic kingdom when I was, when I was younger. And so that was a lot of fun. And then I started doing that once I got to working eight, you know, once I was 16 while my friends were flipping burgers at McDonald’s, I was dressed covered from head to toe in fur on main street USA. <Laugh> at the magic kingdom, signing autographs and, and, and taking pictures dressed as, you know, Disney characters.

Matt:
So that was, it was, it was a cool job, certainly outta the ordinary and a lot of fun and continued to pursue community theater. And, you know, I was in the high school musical and all that kind of thing. I moved to New York city in 1992 to pursue a career in theater. I went to the American musical dramatic academy and graduated from there three days after graduation. I was off on tour doing a tour, a theater for young audiences tour. So <laugh>, I was performing for little kids all across the country and ended up, you know, having a career in as a professional actor for five years, I was in 15 different professional productions all across the United States. It was a blast. I started tinkering around with computers as a hobby, and we’re talking about the mid nineties here and had some opportunities to, to do that.

Matt:
So I ended up creating, ultimately, this is a little bit of a longer story, but the cliff nodes version creating my own boutique agency in New York city where I was doing website development and, and other sort of digital marketing projects for clients up until 2001, when the.com bubble burst a lot of clients were going out of business. And my landlord calls me and tells me I’ve got 90 days to move out of the house. I would the, the department I was living in. So here I was with a business that was literally implo and about to have no place to live. So I got a job in house at Showtime, the cable television channel, a client of mine. They offered me a job in house. So I did that. And instead of rent an apartment, I bought one and then I sold it about two years, little over two years later, and I saw my initial investment quadruple.

Charles:
Wow.

Matt:
Yeah. And so that was a big light bulb moment for me. And that’s when I started getting involved in real estate.

Charles:
Awesome. Very cool. So after you had you know, you, you had that awesome return on your first, I guess you weren’t even thinking it was probably an investment at that point. You were just finding a place to live, cuz you’re kind of pushed into it. What did you do as your first I guess you would say first investment that you actually, it was actually, you were, you know, really focusing on it being in an investment, not just something you’re living in.

Matt:
Yeah. My definition of it, of, of what an investment was sort of changed over time because you know, this, I, I was buying a, a, a primary residence, but I also felt that it was an investment. I didn’t really know what that meant. And I used the, the, the proceeds from that to buy another property. When I bought that one, I, I moved into a part of town, not a bad part of town, but just not the place where I wanted to live. So I was able to buy a place in the area that I wanted to live and was looking, how do I get more involved in real estate? And what I ended up doing through some other chain of events and circumstances, I ended up buying a piece of property a raw piece of land in a community. A lakefront community was not lakefront property, but a lakefront community in Northwest Connecticut.

Matt:
And my thought at that time, when I first purchased the land was, Hey, this will, this will, this will make a good investment. The land will go up in value, it’s in a wonderful community, but ultimately, maybe I’m gonna build on this property. And a few years later I did, I built a house on the property. And my thought at that time was okay, I’m gonna build this house as a vacation home for me to live in, but the price to build the house was going to make my mortgage payments a little bit more than I was comfortable with at the moment. And I was, you know, still young and upwardly mobile, you know, and getting promotions and things like that at work and felt like, well, eventually I’ll be able to cover the whole thing, but for right now, I know that I can rent it out a little bit here and there and that’ll help defray the cost.

Matt:
So maybe I’ll rent it for like a month or two during the summer, or just to help, you know, make everything a little more comfortable during the course of planning and then building the house. I end up meeting somebody who spoiler alert, ends up becoming my wife and her family had a piece of property on the other side of the state of Connecticut and were very seldomly there. So this really became a full-time rental for me because I was able to generate income for renting it. And we would hang out over you know, at her parents’ place. So that was a good opportunity for me now, had I known that that was gonna happen? I probably wouldn’t have built the house if I had done the numbers because the bottom line is even with it rented out, you know, it, it was short term rentals, but about almost for, you know, pretty much the whole year.

Matt:
I was just pretty much breaking even. So it wasn’t really worth like the time or the effort involved now sort of looking at it in hindsight. But I also learned so much by going through the process from, I mean, I learned literally from the ground up, what it takes to build a piece of real estate. Right. And I learned all about rentals and dealing with tenants and why property management is so important. Cause I didn’t have it. I was managing the whole thing myself, which was a, was a, was a, a lot of time and effort. Right. And I also learned about the really fun stuff, like the taxes and accounting type of stuff. Right. I didn’t know what depreciation was. I sure I had heard of it, but I didn’t understand what it was and, and how wonderful it could be for a real estate investor to be able to have depreciation. And so those were all things that I learned while having that property. And it was, it was never a, a primary residence. It was never a residence of mine. It was always a rental unit. So that really was my first investment property. And it set me on the path to where I am today. Now, you know, I, I own thousands of units across the country.

Charles:
Hey, so what is your your current investment criteria and strategy for what you’re doing now with investing?

Matt:
So I have a two-pronged strategy when it comes to real estate. When I talk about my real estate portfolio as a whole, I have over 8,000 units that I’m invested in, right. A partial right, partial ownership, fractional ownership, I don’t own all 8,000 all 100% by myself. These are all done through syndications and two thirds of that portfolio. So a little over 6,000 units are deals that I am a passive investor in. So I’m a limited partner in those deals. I vet the person who’s running the deal, the location and the deal itself. And then I put my money in and that is basically all that I do. I keep an eye on how things are doing, but as a limited partner, I don’t really have control over those deals. And then the other third of my portfolio, so a little over 2300 units are deals that I am a general partner on.

Matt:
And so those deals I’m involved in, I’ve been involved in, you know, the acquisition of them. And I’m involved intimately in the asset management of those. I have other investors that I’ve brought along with me. I mean, I put my own money in the deal and get money from other investors. And then we’re able to you know, get these otherwise unobtainable assets. As I know you do, Charles, right? We, we syndicate our deals. So for me you know, to be able to put two to 3 million of equity into a deal was never something that I could do on my own. And I wanted to know, how can I get these, these larger deals where I can take advantage of these economies of scale and found out about syndication where, you know, a lot of investors can come together and pool our money together and maybe I’ll put a hundred thousand dollars in, right? Yeah. And, and then we’re able to buy those bigger properties and be able to have those, those efficiencies.

Charles:
So, Matt, what is your role on your syndication team when you are active in the deals?

Matt:
So my role is really in, in, when I worked in New York city, I think I mentioned earlier that I had taken a job at Showtime mm-hmm <affirmative> and then I moved on from there and worked at many different advertising agencies over an 18 year career in New York city. And my role was I’m a project manager, I’m a certified project management professional, which means that I’m really good at managing people, budgets and timelines. And so I take those skills that I learned and I apply those skills in the digital marketing world. But I’ve applied those same skills to, to doing that just in the real estate sphere. Right. I did real estate as a hobby for 10 years and then transitioned into doing that full time over six years ago. And so I use all those tools and tricks and techniques that I learned from project management and apply those to real estate.

Matt:
So while I am involved a lot of times in identifying properties in the whole acquisition process, from the underwriting to raising capital and, and jumping through all the hoops, we need to, with our, with our lender going through due diligence and, and getting the deal across the finish line in, in terms of the acquisition process, then that’s when the hard work really begins, because at that point I am on a call and on a weekly basis with our property management company and actually the portfolio’s gotten so big that I’ve, I’ve hired another person to help me out. Also, I’ve got a director of operations who helps on the asset management side of things and, and we are on those calls on a weekly basis and using those, those tools and, and, and, and, and techniques from project management. Actually, my director of operations used to work for me back in the advertising agencies days as well.

Matt:
So he’s also a project manager and really good. And, and I, I actually trained him. So, so we have the same sort of philosophy when it comes to managing projects. And so I have, you know, KPIs and a, a dashboard that I’ve created. And when we review that with, with the day to day project management team, so we use third party, project management excuse me, property management, <laugh> at the properties, right. And we are making sure that everything is running smoothly and when things aren’t, we’re helping address those situations. So I speak with my best performing properties once a week. Mm-Hmm, <affirmative> the ones that aren’t performing great if there’s issues or things that are coming up we’re involved more, more frequently. We, we may have other meetings, we have phone calls, we have emails. And that’s really what happens during the, the hold period, which is, you know, usually, you know, estimated to be about five years, we’ve been exiting our deals lately a bit earlier because mm-hmm, <affirmative> the real estate market has had these tremendous tailwinds behind it.

Matt:
And we’ve got good. You know, when, when we’re, when we’re outperforming our proforma, right, our projected returns for our investors, then we feel, Hey maybe it’s time to you know, and we used to, we used to get votes from our investors and the votes were almost unanimous, like, sell it, sell it, sell it, you know, when, when you have these really great returns lock in those returns and eliminate risk. So we’ve been doing that a lot lately, but the, the, the goal is to hold them for about five years or so. And, and, and then the disposition, there’s not, there’s not very much involved in, in, in, in that that’s a, a lot of the broker and, and us just making sure that everything makes sense and, and tying up loose ends. But the, the real works during that, that whole period,

Charles:
How vital are good property management companies when you’re investing in real estate. Oh, they’re working with them all time. Yeah.

Matt:
Yeah. I mean, they’re key. And, you know, one of the things that my partners and I are discussing is, Hey, does it make sense for us to go ahead and vertically integrate and, and create our own property, property management team, because we have enough scale at this point where we’ve got a lot of units, but there’s pros and cons on both sides of it. Yeah. You know, so we’re, we’re, we’re weighing those right now, but that’s, that’s gonna make or break the deal property management’s going to make or break a deal. Yeah. We’ve had to, in the past fire property management companies, that weren’t doing what they needed to, we’re not able to, to, to execute our business plan and bring in a team that could and so it’s unbelievably vital.

Charles:
How have you found the property management companies that are, were good for you?

Matt:
Word of mouth mm-hmm <affirmative> and so that word of mouth can either come from other investors. That’s, that’s always really good. I also, you know, when I’m in a market and I get to know people, I get to meet hopefully everyone in the market and that, that includes brokers that includes property managers and, and also hopefully vendors. Right? Yeah. So, so that, we’ll, we get to a point where we, we have certain vendors that we like, that we work with a lot. We have certain property management companies that we work with and, and sometimes I’ll work with one property management company, but I’ve got my eye on another one, just in case, you know, these guys, you know, you know, things fall, fall to the wayside a little bit. We have somebody waiting in the wings that we can bring in if, if we need to. And like, I, I’m a loyal person. I like to create long standing relationships, as long as everybody is, is, you know, performing well, you know, mm-hmm <affirmative>, but if they’re not, then sometimes we have to look for alternatives.

Charles:
Right, right. So it usually surprises people when I tell them I’m an, you know, I’m an active indicator and also a passive investor. So why are you also a passive investor with with having so many units as an active investor and being very well versed in the whole active syndicated profession

Matt:
Cuz I don’t want to get bored.

Charles:
<Laugh>

Matt:
Seriously. I think that a lot of people who are actively syndicating deals keep a lot of capital for, for themselves to deploy onto their own deals, which I think is good. I always invest in my deals. I’m usually investing significant amounts in my deals. But when I first started off, I it took me two years to get my first deal as a, as a syndicated, as an active investor. And during those years I started investing passively. I had money that was inve that, that, that I wanted to invest in something might as well invest in something that I was, you know, that I’m very good at. And the, the thing for me is I, I didn’t want to, I, I wanted to go down sort of like two separate paths. I don’t think that there, you know, I, I don’t think you have to go down one or the other mm-hmm <affirmative> and being that I had some capital that I could deploy.

Matt:
I thought, why don’t I go ahead and deploy it on these deals? And sure. I’m not active in them, but I’ll still learn from watching the syndicated learning what they’re doing, seeing what their reports look like. You know, and if there’s certain thing, you know, they’ll, they’ll, they’ll run into situations which they have. And then I find out how they’ve dealt with it. That that helps me a lot. And you know, I learned as an investor, things that I like in the communication from the, from the syndicators and things that I don’t like, you know, a lot of like kind of like, oh, well I definitely don’t wanna be like that guy <laugh> or, oh, I kind of wanna emulate this technique or this thing that this person uses. So I’ve, I’ve been able to do that, but also look, I can’t be an expert in every location in, in the us, or even in the world if I were to start investing outside of the us, which I haven’t done yet, but you know, I’m open to possibly doing that, but I can’t be an expert in every market and I can’t meet everybody in every market and sometimes deals my first deal.

Matt:
I got through some through a random broker who doesn’t do a lot of volume and I never knew about her the property management team that I was hoping to work with, managed the property. And they knew that the property was going to be listed for sale and clued me in on it and introduced me to that broker. But so I can’t know, every broker, I can’t know every property manager. And so there’s other people who are experts in other markets. And so I invest with them in those other markets or even in markets where I, where I’m active, if it’s a good deal. I mean, I know, especially if it’s like in Dallas where I have a lot of property, if someone shows me an offering in Dallas, I can tell if it’s a good deal. And like, I can really tell, I really understand the market intimately.

Matt:
And if it’s a good deal, why would I, why would I let that go by? So I’m developing a completely passive income stream which is, you know, done so well that, you know, look the, the, the bottom line is when it comes to the active investments. I don’t have to do any deals, you know, I’ve, I’ve got good passive income. Also, my wife has a nice job. Like we’re not in a, I’m not driving a Maserati, but I’m also, you know, I’m, I’m, I, I could be okay if, if we had to go a year or, or longer without doing an active deal, I don’t need those fees. I don’t need an acquisition fee or asset management fees. I don’t need those things, which I also think gives me a bit of freedom to be a little more discerning in the deals that I do wanna get involved in from an active perspective.

Charles:
Yeah. I, I like that too, where people, they always say, well, you don’t feels should be full-time in real estate. Well, you can be full-time in real estate, but also having income streams outside of your syndication business whether it’s in real estate or in other businesses. And I think that you have a lot of syndicators now that go full time. The only way of really making money initially is all by acquisition fees. So you’re taking down deals every quarter. Let’s say, no, if they’re good, if they’re not so good, you know, whatever, whatever it is that they can, that they do just to, just to churn those acquisition fees. And I, I mean, you just, you have to be aware of that with whoever you’re investing with, what they’re, what their background is. And if you’re comfortable with that, because when you see a deal from someone that you maybe get, you know, one a year from, or two a year from you’re like, well, this is probably, you know, this person really goes through and makes it you know, they really do their due diligence on it and they’re not, you know, they don’t need it to keep the lights on their acquisition fees.

Charles:
So I think that’s something you see a lot right now in in this syndication business.

Matt:
I, I would agree with you, you know, we do, we, we’re always looking for deals, you know, but we, we generally find two or three a year that that actually makes sense. Sometimes it’s one a year, you know, mm-hmm, <affirmative>, it could be four who knows, you know, we’re, we’re just looking, continuing to look and try to find things that make sense, but, you know, people who, who have the who, who aren’t just in it <laugh> to turn those acquisition fees, I think is important. That’s one of the things you wanna look for when you’re looking at the sponsor that you’re investing with. I, you mentioned, I think in the intro that I’ve got this book, right. And in the book, I, I share the things that I’ve learned, you know, through my journey. And, and one of the things I talk about is like, looking at the sponsor, trying to figure out what what’re, what they’re about. <Laugh> what are, what are they looking for and, and how are they approaching deals?

Charles:
Yeah. So what do you think from looking at so many different deals and investing in so many deals, what are common mistakes you see real estate investors make

Matt:
Not not being educated enough in syndications and, and the underwriting of syndications to truly be able to vet them. You know you’ve got people out there who are sponsoring deals who have a good track record, because quite honestly, if you’ve been any good, if you’ve been halfway decent in the past 10 years, you’re probably gonna have a good track record of the market’s just gone up and up and up. It’s kind of, it’s kind of been hard to lose money in real estate the past 10 years. So some people, you know, Hey, you know, I’ve got this great track record. I’m like, yeah, they have, cuz they’ve been very lucky cuz the market hasn’t turned, but I’ve been looking at their deals for the past five years and they’ve been underwriting stuff that I thought was way too risky. They beat they’ve beaten me out maybe on a deal because I just wouldn’t, wasn’t willing to, to, to overpay.

Matt:
And they were, and it’s worked out in their favor now, but as a passive investor, I’m not necessarily the best in their deal. And that’s really the whole premise behind. I hate to bring it up again, but I don’t hate to bring it up, but you know, just bring up that book again. It’s just the book that I wrote was is to help passive investors be able to sort of peel back behind the curtain it’s called backstage guide to real estate. So kind of a nod to my theater background, but really kind of like going backstage and seeing the inner workings of these deals and understanding how the mechanics, you know, exit cap rates and, and rent growth and you know, how much are they, are they increasing the rents off of the, you know, where they are now and does the household income in that particular area really support that and things of that nature that I think you need to, you know, being a passive investor is great, right?

Matt:
And it’s built as, Hey, make money while you sleep right. And that’s true. You, you can make money while you sleep, if you’re in the right deals. But there is a baseline amount of education that you really need to go through. Once you have that baseline education, it starts to get it easier, but then you still need to really vet the sponsor and then each deal that comes through through that sponsor that you vetted, you’re applying the education that you have to make sure you, you feel good about the market and you feel good about the deal. So there is a bit of work upfront at this point, you know, I’ve been doing this for, for, for many years now. I’ve got seldom that will bring in a new sponsor that I’ll invest with. And if it is it’s someone I’ve gotten to know over a couple of years and that other people have recommended to me.

Matt:
Right. And then, you know, once I’ve vetted them and feel good about them, but they have a deal come in, I can look at it really quickly and decide. So it’s not, I don’t spend a lot of time on the passive stuff. I mean, it really is passive. There’s a little bit upfront to take a look at it, spend a half an hour to an hour, maybe looking at a deal, make a decision to go in or not. And then you know, move on to the next one. But there was, there was years before of, of education and learning by investing in bad deals. <Laugh> right. To get to the point where I am now.

Charles:
Hmm. When you were making the transition from going part-time in real estate, the full time were, were you, it was the passive income. You got your passive income to a certain level before doing it. Or did you want to get your active business to a certain level before you did it cause the passive incomes, that’s something I think it’s much easier to calculate when you’re passive on a deal versus because when you’re active on a deal, you might not be getting paid other than the acquisition fee for the first couple years. Really. so it’s something it’s a little more difficult, you know what I mean? Or you’re not getting much money you’re right. No.

Matt:
Yeah. You know, for on the, on the active side, you know, I’ll, I’ll, I’ll, I’ll, I’ll loop back right around into your question and get to a book, but just, just on the active side of things, I didn’t take an acquisition fee for the first couple of deals that I did I do now cuz I have a track record, but, and that’s one of the things I, I kind of warn people about like, well, you know, wow, this guy’s never done a deal before and he is taking a 3% acquisition fee. That seems a little, you know <laugh> so but I, I, I, I take one now but a, you know, for, in, in terms of those active deals, it’s really, once you have several of them where the income starts to, to stack up, right, because you might only be making $20,000 or $30,000 or $10,000, you know, just sort of, depending on the deal, the size of the deal on an annual basis.

Matt:
So, you know, if it’s 20,000, once you have five of them, then all of a sudden, you know, you’re talking about six figures of income, right. You’ve got expenses too, but you know, I mean, it, it takes a little while I’m agreeing with you to, to, to, to build that up. So, and that, that’s another reason why I, I did the passive investments. I, I didn’t have a plan. Some people find out about syndications and figure it out and sort of map it out. Okay, I’ll start making this much passive or start making this much active. And then I’ll get to a point. Then they’re doing that. Like while they’re working a w two job and then, okay, then I get to this point where I make that leap. That didn’t happen for me because my leap was made when we had a, a bit of a life changing moment where we moved from New York to Miami, Florida, because my wife got a job opportunity.

Matt:
And so with that job opportunity, we had we had purchased a, a place in Brooklyn, a a, a two family property. And with the move, we were able to rent out our unit and we were, we were nicely cash flow positive. So I had passive income coming in from there. We also, so my wife works in theater and I have that theater background and we invest in Broadway shows. And so we had invested in Hamilton, which was doing very well. It still continues to was doing very well at that time. So we had passive income coming in from that. And we moved to my Miami and I thought I would get a job in the advertising world. That was, that was my intention when we moved down there, okay. My wife’s got a job for us to make the move. It was like, there has to be enough to, to pay the, you know, pay the bills and at least allow us to eat PB and J right.

Matt:
And her salary came in and was a little bit lower than what we were hoping, you know, not what we were hoping for. She got paid well, but that what we were gonna need, but because we had these other sources of passive income, we, we, we said, okay, we, you know, we can make this work until I get a job and then I’ll get a job and we’ll be great. So we, we moved down to Florida and I started looking for advertising jobs. And so in New York, after climbing the corporate ladder for 18 years, I was a vice president. I was managing teams of a hundred people or more in multiple countries working on projects for Coca-Cola and Verizon and visa. And I go into Miami and I walk into an advertising agency and there’s like five people in the agency. So it was on a completely different scale.

Matt:
And once I had any conversations with people about salaries, it was like, wow, you know, I, I can flip a property and make that kind of money, you know? So it just didn’t, it didn’t, it didn’t seem to make sense. And I kind of was burned out from the agency world, having done it in New York city. Most of that time I was single. So I was really burning the candles at both ends. Yeah. I didn’t care. I’d work till midnight. I didn’t have a family to come home doing anything. So it was like fine. And so I was just kind of burned out from that. And at that time I was listening to Robert Kiyosaki’s rich dad, poor dad. I had an audio book of that. So I’m listening to, Kiosaki talk about building passive streams of income. I’m like, oh yeah, I need to do that.

Matt:
And then when I’m not listening to that, I’m listening to the Hamilton cast album because we were investors and it, but we’re also just huge fans of the show. We used to listen to that all the time, especially back then I had just come out. And so I’m listening to the cast of Hamilton one day and they’re, they’re singing the song, you know, my shot and say, take your shot, take your shot, take your shot. And I just got done listening to Kiyosaki saying, you know, build passive Inco. And I’m like, what am I doing? Like, why am I trying to get this job and advertising? And I’m burned out. I’ve been doing real estate as a hobby for 10 years and making good money as a hobby. You know, why am I take my shot? And so I sat down with my wife and talked with her about it and got her blessing.

Matt:
Thank goodness. And I started a career in real estate investing and it took me, <laugh> quite a while to, to get regular income from it. Right. And, and, and build a business and, and put myself on, on, on a, on a payroll. But now, you know, I’ve been in it for six years. A lot of my past investments have gone full cycle. You know, they might be generating, you know, anywhere from like, you know, seven to 10% cash on cash. So, you know, if you have a hundred thousand dollars invested, you’re talking maybe like seven to $10,000 a year, that’s not a lot. But then all of a sudden that property sells and you get a check for like $150,000. Yeah. And you’re like, oh, wow. Okay. That was nice. Right. And then reinvest that and put that in. And so that’s grown.

Matt:
So now that I, I have it, it took a few years, you know, it’s kind of like planting a farm rather than hunting. You know, if you wanna talk about acquisition fees from an active investing perspective, okay. That’s, that’s like hunting, right. You, you see the, the big deal, you get it, you kill it, you get, you get a nice chunk of money and then you, you eat on it and then, and then you’re done. Right. And then it’s done though, but the passive investing, and also, also it does work this way on the active, you know, you’re planting those seeds that grow over time. And so now, you know, over six years into this, I’ve got a lot of different crops that are at different, you know, phases in the life cycle. And so I have certain ones that are ready to harvest and certain ones that I’m planting new crops or they’re midway through. And but it, it takes time. It’s just not an overnight kind of thing. It takes time to build it. And thank goodness we had those other streams of passive income. And we lived pretty modestly when we were in Miami for those couple years that we were there to allow us to sort of grow our farm. I don’t know. <Laugh>

Charles:
Nice. Very interesting. Yeah. So wrapping up here, what do you think are the main factors that have contributed to your success map?

Matt:
Well, I E education is key and then beyond that, you know, there’s certain traits that I think are, are great you know, in, to, in life as well as just real estate. And, and that’s persistence, you know, that’s one of the Keystone concepts to talk about in the book, right? Being persistent in a nice way, not being obnoxious, but that’s, that’s really helped me in every deal that I’ve gotten has been both persistence and also relationships building those relationships. Building that network is, is of the utmost importance when it comes to commercial real estate, building those alliances with brokers, with property managers, with other investors, with general partners and limited partners. I have a guy that we both general partner on deals, and we’ve never done a deal together, and maybe we will, but we both also invest as a limited partner, which you do.

Matt:
I know Charles as well. It’s kind of rare, right? Like, I don’t know any other GPS for you and him who, who, you know, very, not actively, but frequently invest as a limited partner. And he and I, we, we, we get on the phone and we, we trade stories on different SP Hey, have you invested with this one? What did you think of that? How did that one do? And, and so that’s really important for me as a, as a passive investor is being able to talk with other passives. When, when I like, Hey, Charles has got a new deal, Hey, have you and I invested in a deal with Charles, like, is he good? How did it go? Was he communicative? Like, how is, you know, all of those things are important to know.

Charles:
Yeah, no, it’s very good too. And jar think too is when you’re vetting out your partners to work with on the active side. A lot of those that we work with myself or one of my partners has been a passive investor previously on a deal that’s gone full cycle. So you know exactly what reporting is, you know, exactly how the underwriting is. We’ve had that underwriting checked out on other deals with other underwriters, you know, so you’re like, you, you really have a good feel for, it’s not just meeting at a conference and be like, we get deals and we need some, you know what I mean? We need partners. It’s, it’s really like, Hey, we’ve worked with him. And then it’s like, you have an idea of exactly many years of, you know, returns, many years of of communication. Cause communication, as it’s funny that you bring that up, I feel it’s one of the biggest things that a lot of syndicates lack on.

Charles:
And it’s when I talk to passive investors, it’s usually not, oh, we got money from, you know, not that we lost money on a deal. It’s really that the communication, I had no idea what was happening or it’s like, you know what I mean? It’s like three bullet points or something sent to me monthly or whatever. And, you know, in the last 10 years, that’s great because it’s very hard. Like you said, them lose money, but maybe we go into another, another phase of real estate, another part of the cycle. And not every deal’s gonna be making money.

Matt:
That’s very true. I think you’ve brought up some great points there.

Charles:
So tell us how we can learn more about you, your business and your book map.

Matt:
You can find out about all of those things on my website. So it’s, chei.com. I’ll spell that real quick. It’s P like in Peter, I C H E N y.com and I’m sure you’ll probably put a link to that in your show notes. But you can go there to find out more about the book and order the book. It’s also on Amazon, you can check out our blog. I’m always posting educational information for investors to, to learn. And you can also sign up for our newly blah, our monthly newsletter that I send out that has investment tips and tricks in it. So that’s all on the website. Chei.Com.

Charles:
Yeah. It’s I was looking through his website the other day. It’s very informative. There’s a lot of information there, so make sure you check it out. The link will be in all the show notes and Matt, thank you so much for coming on. It was great having you here and looking forward to connecting face to face sometime in the near future.

Matt:
Yeah. Yeah. It was great meeting you too. And, and thanks for having me as a guest.

Charles:
Talk to you soon.

Charles:
Hi guys! It’s Charles from the Global Investors Podcast. I hope you enjoyed the show. If you’re interested in get involved with real estate, but you don’t know where to begin, set up a free 30 minute strategy call with me at schedulecharles.com. That’s schedulecharles.com. Thank you.

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About Matt Picheny

Matt Picheny is a real estate investor, Tony award winner, and author of the #1 best-selling book: Backstage Guide to Real Estate. He is focused on developing passive income streams that enable investors to write their own story and choose how they want to spend their time.

Matt has over 15 years of experience revitalizing and elevating communities through real estate investment and has invested in over 8,000 apartments nationwide. He is a licensed real estate agent and has earned both Commercial Real Estate & Real Estate Finance certificates from Boston University. Matt is a member of the Forbes Real Estate Council, the Fast Company Executive Board, and is an advisor to a PropTech company.

A PMI certified Project Management Professional, Matt is a digital marketing veteran whose 18-year career in the advertising world included working for some of the world’s largest advertising agencies, producing award-winning projects for Fortune 500 clients including Verizon, IBM, and Coca-Cola.

Matt and his wife have two Tony Awards® as co-Producers of the Broadway shows Moulin Rouge! And American Utopia. They have invested in many other theatrical productions including the iconic musicals Hamilton and Wicked.

A native of Orlando Florida, and a former actor, Matt still believes in happily ever after. He lives with his wife and their two daughters in Brooklyn, New York and in his downtime enjoys long walks on the beach, Broadway, Rock and Roll, and amazing barbecue.

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