June 11, 2023 • 32 mins
Do you dream of a future filled with financial freedom and a lasting legacy for your family? Today, we're joined by Matt Chase, a successful real estate investor who's built an impressive portfolio and a fantastic life using smart strategies and a dedicated team. In our conversation, we reveal the secrets to real estate investing that have allowed Matt to create lasting wealth, a flexible schedule, and a family legacy.
As Matt guides us through his journey from fresh college graduate to real estate mogul, he shares the methods he uses to find and buy properties, and how he manages them using BILDIUM software. Our insightful chat also covers Matt's approach to long-term holds, tax strategies, and how he leverages the bank's 75% loan-to-value to purchase and refinance without spending a dime. If you've ever wondered about the challenges of finding and managing a real estate team, Matt's firsthand advice could be just the game-changer you've been looking for.
But building wealth isn't just about money; it's about leaving a lasting impact on our families and our communities. We discuss the importance of teaching financial literacy to our kids, the shortcomings of our education system, and how we can create a legacy through giving back. By the end of this episode, you'll be inspired and equipped to start your own journey towards creating a lasting legacy through real estate investing. Join us for an unforgettable conversation with Matt Chase and start building your dream life today.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
This is the Legacy Wealth Code Podcast helping you
build long-term wealth and alasting legacy through real
estate investing, tax strategiesand motivational stories from
some of the most successful andinfluential people out there.
Here are your hosts real estateinvestor and entrepreneur,
michael Knotbaum, and realestate investor and attorney,
andrew Hook Hey guys, welcome toanother episode of the Legacy
(00:24):
Wealth Code Podcast.
Speaker 2 (00:25):
My name is Michael Knotbaum, here with my partner
and crime, andrew Hook.
Speaker 3 (00:28):
What's up, guys?
Speaker 2 (00:30):
So not sure which bar I left it at, but bear with me.
Speaker 3 (00:33):
Today Andrew may be doing a little bit more than me
With that seductive voice.
we're not sure what type ofpodcast we're on here.
Speaker 2 (00:38):
I know It's our Charging by the Minute, so this
is really cool.
Matt Chase here today.
Matt was with us in a number ofdifferent masterminds over the
last couple of years.
He's out of Cleveland Ohio area.
Well, when he's not on his boat, I guess right, That's right,
That's right.
Speaker 4 (00:54):
And we're also best friends.
Did you mention that?
Speaker 2 (00:56):
Oh yeah, i mean, how could we not be Right?
So Matt's built a hugeportfolio of real estate over
the last couple of years, has apretty large retail team and
just is doing a lot of the rightthings in terms of building
wealth.
So we wanted to have him ontoday and just have him kind of
walk through what his journeylooked like.
So welcome to the podcast.
Speaker 4 (01:17):
Thank you, i'm delighted to be here.
That's what podcast people say,right.
Speaker 3 (01:22):
Exactly, you better be delighted.
Speaker 2 (01:25):
We got with the attorney, so he has to say
undoubtedly at least three times.
Speaker 3 (01:29):
That's right Or notwithstanding?
Matt, will you kind of open usup with giving us an overview of
your background and then howyou're set up as far as your
team and then your investmentside of things?
Speaker 4 (01:41):
Yeah, absolutely.
I think Mike was a littlegenerous with a massive
portfolio, but I started in realestate right out of college
about 16 years ago, and Istarted in the sales business.
The reason I started in thesales business is I read Rich
Dad, poor Dad when I was ateenager, when I was in high
school, and I love that.
I mean I read the book probably10 times.
(02:02):
I was like everything in heremakes sense.
I never knew what I wanted todo until I read that book And I
asked my dad how do I buy houses?
He said, well, you got to havemoney for houses.
And I said, okay, how do I havemoney?
And he said, well, sales makesa lot of money typically.
And I said, okay, well, realestate, if I want to be in real
estate, real estate sales.
So that's why I got into realestate sales was to make money
(02:25):
to buy real estate itself, andso that was about 16 years ago.
The journey didn't go as quickas I thought it would, so I
didn't buy my first rentalproperty until probably about
six or seven years afterstarting in real estate, and
then that's kind of went offfrom there, and so today the
real estate sales is still myprimary focus, but my goal is to
(02:49):
have equal income from my realestate sales business and then
equal income from my investmentbusiness.
So that's what I'm workingtowards right now.
But got 16 real estate agentsthat work with us And then we
have two administrative staffand then a full-time director of
sales who recruits real estateagents and helps the agents that
we have with productivity.
(03:10):
And I think investing kind ofgoes hand in hand with the
retail side, and so I tellpeople all the time how do you
find this type of stuff?
And we're finding it all thetime on the retail side, just
taking a double look ateverything that we list, is this
something we could buy first,or do we have an investor who
would want to take this on ifit's not us?
Speaker 2 (03:31):
So walk us through that, because that's something
that we, andrew and I, talk alot about, and I know you and I
have talked many times.
but when you're identifying aproperty, how are you choosing?
what am I going to do with it?
What's my exit?
look like, is this a fix andflip?
I'm just going to get out of it.
I'm going to keep this as along-term hold.
What does that look like foryou?
Speaker 4 (03:51):
Well.
so for me, almost everything Ido is a long-term hold, and it's
because of the tax strategyright You can.
I try to buy as many long-termholds as I can in cash.
I try to buy them When yourefinance out.
you refinance out, the bankwill give you 75% loan to value.
So I try to buy that initialproperty such that when I'm the
(04:14):
purchase price plus the repairsand then getting it ready is
still under that 75% LTV, sothat when I do the refinance I'm
into it for no money.
Speaker 3 (04:25):
I like that.
Yeah, that's really smart.
Speaker 2 (04:27):
Yeah, i mean, these are the needs that come in.
that could be a listingopportunity and you're like, hey
, instead, how about this?
Speaker 4 (04:34):
Yeah, obviously this market is a little more
challenging than it used to be,but the first four units that I
ever bought so I've got about 60doors right now And that's a
mix of single family duplexes,four units, three units all the
way up to the biggest we have isa 12 unit, and then we do have
(04:55):
one that's got some office spaceon the first floor also, but
the biggest is a 12 unit Andthose obviously are easier to
find, especially four unit, andsmaller is easier because of the
loan process.
It's not a commercial loan Andso my first four unit was
actually one of my really goodfriends.
Mom's came to me and said thatthis was her husband's project
(05:18):
and he had recently passed awayand she didn't want anything to
do with it really.
And I looked at it and I said,well, hey, in order to get it
ready for the retail market,it's going to need this, this
and this.
She said I really don't want todo any of that.
You have any other options.
And this was probably six orseven years ago and a light went
off in my head I didn't haveany formal training on this at
the time And the light went offin my head and I said, oh my God
(05:39):
, i should buy this thing.
And so she came to us, firstbecause of our real estate
expertise, and then I ended upclosing the deal on it And it's
been a.
It's a $4,200 a month propertyright now.
Speaker 2 (05:54):
That's awesome.
Speaker 3 (05:55):
Yeah, it is.
Speaker 2 (05:56):
Couple takeaways, i think, from that one 60 doors
The next time that Mattcomplains about buying a seafood
tower.
Speaker 4 (06:03):
That was a $750 seafood tower, Michael.
Speaker 3 (06:07):
What the most oysters you've ever seen.
Speaker 2 (06:11):
We won't share the establishment thing which I
purchased many drinks for you,Just because we can't have the
explicit rating on this quad.
Speaker 3 (06:19):
Even with that voice you might, though.
All right, you said 16 agentson your team.
Do you coach each of them to dothe same thing?
as far as look at a deal as canwe buy it before we list it,
are you telling them to bringthat to you?
What's your mentality there?
Speaker 4 (06:38):
Yeah, both They're trained to.
The more experienced peopleunderstand how to evaluate the
properties on their own.
Then they'll typically come tome and say is this something we
can partner on?
Is this something that I canshow them how to take down on
their own That type of thing?
Then, the less experiencedobviously we ask that they bring
it to us first and we evaluateit together.
(06:59):
Our top four people on our teamall own their own homes and
three of the four all own asecond rental property.
That's one thing that we'retrying to grow is the value of
working with us.
Hey, what if not only do youmake six figures selling real
(07:19):
estate and we could teach youhow to do that with 40 hours a
week or less, with support andleverage, but can we teach you
how to acquire five or 10 rentalproperties over the next couple
of years so that you havepassive income to where you?
don't even have to work.
Speaker 2 (07:34):
Are you partnering with them on these deals, or how
does that look like?
Speaker 4 (07:39):
One I'm partnered with right now, the rest I'm not
, but I offer that all the time.
Obviously, this market's alittle challenging right now, so
I think free cash is not whatit used to be.
Yeah, we will.
That's the goal is to say, evenif it's not a full partnership.
I've offered to some of theagents that, hey, if you find
something off market and theseller's okay with paying a 7%
(08:02):
commission, instead of takingthat commission and cash, why
don't we put it into theproperty?
and whatever we do with theproperty whether we rent it or
we sell it at least you're 7%owner in this.
Speaker 2 (08:13):
Yeah, i like that.
It sounds to me this podcast,andrew and I talk a lot about
legacy and I know that you'vegot a family yet you actually
have a growing family, socongrats on that.
Speaker 4 (08:25):
Thank you.
Speaker 2 (08:27):
What does that look like for you?
I know you've mentioned whenyou first started out, you
wanted to make a lot of money tobuy real estate.
I think that all of us in thereal estate game probably had
that initial thought.
and then, over time, things dochange like okay, it's not all
about me making a lot of money,more about what is my legacy
(08:47):
going to be as I continue togrow and accumulate more wealth.
So how does that tie in withyour family, with your team?
What does the legacy piece looklike for you?
Speaker 4 (08:58):
For me.
Obviously, I started doing thisfor myself, selfishly, I guess.
Then, once you start acquiringmore and more, you start to
think about your family and whatit's like, especially as we get
older right, Not that we're oldyet, but I'm a lot older than I
used to be And so you startthinking about that type of
stuff, And for me, that's themost important thing now is how
(09:20):
do you preserve, how do I buyquality enough properties and
take care of them enough, notoverdoing it so that you don't
lose your cash flow, but doingmaybe one improvement a year to
keep the rents up and thingslike that and to keep the
property in good shape, so that,when my daughters are older,
this is something that they can.
Maybe they don't necessarilymanage it themselves, but they
could pass it off to amanagement company or something
(09:43):
like that, And they have a greatasset that provides for them.
Because what else are you goingto invest money to right?
If you were to die and you wereto give your family several
million dollars, they've got tofind a place to invest it right.
And what's that going to be?
It's going to be six or sevenpercent if they're lucky, maybe
plus fees and stuff on top ofthat, or they can keep the
(10:04):
rental properties and generatetens of thousands of dollars a
month in income.
Yeah, they don't have themillions of dollars because it's
tied up in the property, butthe cash flow is far greater
than what it would be if it wasto be invested, because, I mean,
at this point the rate'sinfinite because you're getting
your cash back.
Speaker 3 (10:21):
Right, sure, matt, can you talk a little bit about?
we kid around with you and giveyou a hard time about how
you're always on your boat, butfrom a serious perspective, i
mean, i think you've almostbought your time back to a
certain extent, right, like you,from an outside appearance, do
a very good job of managing, youknow, free time and things that
(10:43):
you enjoy outside of just theactual real estate industry and
working, and a lot of that ofcourse translates into your
family time as well.
But can you talk a little bitabout that piece and sort of how
you have put yourself in thatposition to be able to kind of
run the schedule that you wantto and have the flex time that
you want to?
Speaker 4 (11:04):
Yeah.
So I don't know if I did it onpurpose, but you know it's
having good people around you.
I mean it always starts withthe people in the systems that
you have around you.
So, like, as far as all myrental properties go, you know
I've personally never replaced atoilet or mowed the grass, or
you're right, like I don't doany of that I have.
(11:24):
I've got a couple guys thatI've met along the way who
pretty much just work for me nowat this point And you know
they're handling all themaintenance and you know I use
BILDIUM.
You guys have to call them andget some royalties from them,
but I use them to manage mysoftware or my property.
I use their software to managemy properties And it's as easy
(11:45):
as if somebody moves into theproperty.
We tell them.
You know here's my phone number, but the only reason and it's a
Google number, it's not mypersonal cell, but the only
reason why you would ever needwe don't talk to you on the
phone.
You know we don't need to hearyour excuses or any of that.
The only reason why you wouldever need to text me is because
you're heat out or you haveactive water coming into your
property Other than that, usethe BILDIUM app and let me know
(12:09):
what issues you're having.
If you have a light bulb out ora breakers out or whatever your
issue is, let us know throughthat system so that I can send
it out to my guys who are in thefield And let them handle it
right and so that that gives mea lot of free time.
That way Do not not, you know,just shuffling some people
around, you know, every day andthat type of thing.
Speaker 3 (12:30):
How about on the on the retail team side of you?
one of the things I feel likewe hear Over and over again from
high producing agents is thatthey want to take themselves out
of the listing game.
Or, you know, everybody wantsyou as the team lead.
you know, like your face, you,they want to deal with you.
(12:51):
How have you, how have youaccomplished that?
because I feel like that's onethat a lot of people struggle
with.
Speaker 4 (12:58):
Yeah, i think a lot of people are control freaks,
right, i mean, i think you hiredthese agents team for a reason,
and the reason, hopefully, isbecause they're pretty good at
what they do.
And yeah, there's a handful ofpeople you know I still sell
maybe 10 or 15 homes a yearBecause it's, you know, a best
friend or a family member, justsomebody that I feel like
(13:18):
hanging out with, or whateverthe case may be.
Well, yeah, the rest of it Isend out to my team And,
honestly, you know my team, youknow I've got guys and girls on
my team that are selling 50 or60 homes a year.
So at this point, you know,they're probably more equipped
to handle that transaction thanI am.
Anyways, right, i mean, i thinkit's just finding good people,
(13:39):
trusting them and being there tosupport them.
You know, i need to make sure,obviously, that they're giving
the same level of support in thetransaction that I would have
been, the same advice and allthat same type of stuff.
But that comes with time.
But you know I work closelywith them in the office.
I'm still coming to the officenearly every single day from 9
to noon and work with the agentsthat are here.
(14:00):
So it's not like it's not likea full time vacation or anything
, and you know, on the days thatwe're not here, What would you
say Yeah, and?
Speaker 3 (14:09):
then noon to 5 noon to 5 on the boat.
Speaker 2 (14:12):
Yeah, but I mean we're out on the water.
When it's 50 degrees out, it'salso a fun day.
You know, we're down here inFlorida where 50 degrees is like
the coldest day of the year.
He's got his speedo on.
He's cruising around like here.
Speaker 3 (14:25):
Trust me if I didn't have to be here for my real life
.
Don't place those images please.
Speaker 4 (14:28):
I'll tell you the next story to you guys.
Speaker 3 (14:31):
That's right.
Speaker 2 (14:32):
Well, we've always told you the door is open for
that opportunity.
Speaker 4 (14:36):
Well, yeah, i just think to go with all that stuff,
though I mean it's just we'rehere in person for those hours.
But I mean you guys know how itis.
I mean you're getting up earlyin the morning and maybe you've
got some stuff you're doingbetween like 6am and 8am, and
then maybe you work out orsomething.
Then you hit up the office andthen you know you're still
probably doing some computerwork in the evening and stuff
(14:56):
like that.
I mean we're always working.
It's just a matter of whereyou're working at.
You could work from a boat.
Speaker 2 (15:01):
Sure.
So how many times do we go tothese masterminds and we, you
know, like the one that we'vemost recently been in, starts
out with everyone sitting at atable discussing you know what
is working really well in theirbusiness and what are their
challenges.
Yeah, and these are the highestperforming teams in the country
.
Right, everyone says I meanwithout question.
Every single time I'm stillstruggling with having really
(15:24):
good people.
Speaker 4 (15:25):
That's the hardest part.
Speaker 2 (15:26):
And it's like you'll never probably have enough good
people, because then you getsome good people, you grow, and
then the people that just don'tgrow with you leave, and now you
need more good people to growagain.
Speaker 4 (15:38):
Yeah, yeah.
I mean the best thing you couldbe doing, no matter what role in
this world, is finding peopleto work with.
right, i mean for us it'sfinding good real estate agents.
It's finding good operationspeople.
It's finding good roofers,finding good guys to deal with
your landscaping.
It's right, like anywhere Any.
(15:58):
you're always looking forsomebody to do something right,
or just add them to your on deckof you know.
the one guy right now is doinga good job, but just in case he
doesn't show up one day, can Icall you?
Speaker 2 (16:10):
When you have to be grooming these people, i think
to have something else that theycan look forward to.
You know, i love the fact thatyou're helping people on your
team by properties, but you knowit's like you know you have
these people that join your teamor your world and then they
reach a certain point where youknow you've determined either
they're great great people ornot.
(16:32):
And if they are great people,what is their next step?
look like, because most greatpeople aren't just going to be
content being whatever they areat that point.
Sure, i would think most peoplewant to know what's the next
step.
So I think having that plan ofaction is very important to
creating that culture for yourorganization where people don't
(16:53):
people don't want to leave.
Speaker 4 (16:55):
Yeah, that's the hardest part, but it's the most
important part.
Speaker 2 (16:59):
Yeah, i would agree with that.
So let me ask you this yourinvesting strategy.
You know you've mentionedseveral times on this call the
market is changing.
I think there's withoutquestion.
You know it's been so crazybecause it's like as soon as we
think everything is fallingapart, it comes back again.
Right, at least it seemed likethat for the last couple years.
(17:19):
But you know the writing is onthe wall that we can't sustain
printing money, having a hugeinflation rates, interest rates
super high and not having somekind of dramatic effect on real
estate market.
What does that look like foryour investing strategy, come as
you move forward?
Speaker 4 (17:38):
So I don't know if I figured that out yet, but you
know what?
what's really worked for us istrying to identify the guys and
gals that have been in thisbusiness for a long time and
just forming a relationship withthem and seeing you know, when
they're finally sick of owningtheir properties, can we buy him
, right, like I mean a lot of alot of the property.
(17:59):
Probably 80% of the propertythat I've bought is not from,
like, an institutional investorand is not from, you know, young
person that bought it and gotin over their head or something
like property for 40 years andis just getting to the point of
wanting to be retired or justsick of dealing with it, or just
They're just done.
They've made all their moneyand they don't have anything.
(18:20):
They don't have a next of kinthat wants to deal with it.
So you know they tell to me,right, i mean that's that's what
I'm looking for.
Speaker 2 (18:28):
Yeah, but I guess my question is more around the
changing markets.
It's not really.
It's just gonna change the wayyour offer is, or what.
Speaker 4 (18:35):
Yeah, i mean it.
So I look at cash flow you know, I don't, you know.
I know everyone likes to talkabout cap rate and all that
stuff and I, under I look at thecap rate, but you know, i look
at how much money is this thinggoing to throw off every month
and if it's, and I just I justwent under contract on a three
unit over the weekend for Youknow, hundred and sixty thousand
(18:57):
, and probably five years ago Itwould have been a hundred
thousand, right, but the rentshave gone up.
Five years ago The rents wereprobably six hundred dollars a
month and now the rents areeleven hundred dollars a month.
Speaker 2 (19:09):
So 1100 each unit, yeah, yeah, so thirty three
hundred.
I mean that's.
you know, i think we weretalking before the call.
I mean, andrew and I starteddoing some wholesale stuff in
Cleveland and I'm blown away by,yeah, the fact that you can get
properties for fifty, sixtythousand bucks that are bringing
in Fifteen or twenty thousanddollars a year.
Speaker 4 (19:27):
Right now I'm guessing that property will
never appreciate.
I mean it might.
It might keep up with inflation.
It well At a normal inflationrate, not current inflation, but
it might keep up with a two tothree percent normal inflation
rate over the next 20 years.
But it's not like it's evergoing to be a home run where
we're selling it for a milliondollars.
But it will.
Speaker 2 (19:47):
Yeah, and you've been in Cleveland through a couple
different.
You know markets.
You know when you first startedI'm sure you went through.
You know the huge collapse.
What did you remember?
what rents did then?
like Something that right nowmight rent for eleven hundred,
if you know the bottom falls out.
What does that look like?
Speaker 4 (20:06):
So I mean that was a while ago, so no, and I wasn't
playing in the rents at thattime.
But from what I remember isrents did not go down Because
you had an influx of rentersentering the market.
You know when these people aregetting more closed on right.
Like they all had to gosomewhere.
Speaker 2 (20:21):
That's kind of my thought too.
Is I never, i can never Corally, when there's a terrible
housing market, how rents couldgo down, because all these
people are, i think.
Speaker 3 (20:30):
I think rents Rents really only go down when you,
when you're flooding the marketwith inventory of similar
product, which you know, yougotta, you gotta say does that
buyer pull that, does thatcreate a new buyer pull, or or
are they?
Or are they just runningsomething that is, you know, the
same product at a differentrate because there's more of it?
Speaker 2 (20:51):
But I think the lag time on that is long too,
because if they're closing onthe property the bank has it
sure.
Speaker 3 (20:57):
I think it's that, and I think it's also demand
right, which I mean we have sucha strong labor market that I
Mean.
I don't see that disappearinganytime soon.
So I mean wages are still gonnabe be up for a while.
Speaker 2 (21:08):
So yeah, so you're really looking.
you know, have the fundamentalsof analyzing the deal, but yeah
, but have cash flow be your,your number one.
Mm-hmm, that's good, i likethem.
Speaker 3 (21:19):
Yeah, that's always me.
We always talk about keeping itsimple and I mean you're doing
that.
Keep it simple and And staytrue, to stay true to those
basics.
And you know, you may not hitGrand Slams, but you're hitting,
you're hitting doublesconsistently.
Speaker 4 (21:33):
Well, it's exactly.
If you had enough singles anddoubles, who cares Right?
Speaker 2 (21:38):
Yeah, well, and you said, well, we need to have a
model around this, which Idefinitely agree with.
but you know The fourproperties we were talking to
you about beforehand.
It's like we can visit four orfive, it's four.
It's four properties, fiveunits, five rental doors to five
rental doors and it's bringingin like 6500 a month and we can
(22:00):
buy the whole thing for 200grand.
Mm-hmm, Yeah, that's a 38 car.
Speaker 3 (22:05):
Yeah, you know it's like mean, well, and Matt's
gonna, matt's gonna manage itfor free for us too.
Speaker 4 (22:10):
So of course I mean, why wouldn't I?
Speaker 3 (22:13):
Yeah, they're closed.
That's his.
That's his new afternoonactivity.
I.
Speaker 2 (22:18):
Tire marketing plan is centered around where's the
closest Marine?
Make sure everything's good.
I know let me go back to this.
You know you said that you'vebeen in real estate for 16 years
.
Really started buying about sixor seven years ago.
So I know in the beginning ofthe call you said why you might
(22:40):
be inflating Massive portfolio.
But I think that most peoplecan't say that they have 60
doors.
So to me that's still a verygood achievement.
You have a family that you wantto leave things to.
You want to help them.
You know You want to leave yourlegacy with them.
How do you, you know, fromgoing from zero to 60?
How do you transition?
(23:01):
You know your kids to have amindset that they still need to
be working, still need to beestablishing Their own goals in
life, where you're not justhanding them, you know, millions
of dollars of real estate andsaying, you know, go do whatever
you want to do, be wild, becrazy, whatever.
Speaker 4 (23:19):
My wife does that.
She, she's with them all daylong and and talks about that
type of stuff.
But I mean, you know, from myperspective, is them about?
you know, if I buy a Boat,we're not living that lavish of
a lifestyle, right Like?
I made a commitment to myselfand in my wife along We're not
(23:41):
gonna buy, we're not gonna goout and buy brand new hundred
thousand dollar cars.
We're not gonna go out and buybrand new five hundred thousand
dollar boats.
We're not gonna live in amillion dollar house.
Now like, we live in a reallynice house, but it wasn't like
beyond our means.
We drive nice cars but they'reall used.
I have a nice boat But I boughtit used, 25 years old, right
Like.
And I explained that to my kidsthat you know we only spend the
(24:05):
money that we've, that we have.
You know we don't use creditcards.
We don't finance things.
We wait until we can pay for itin cash.
And I just involve them in theconversation, you know they, we
were talking the other day aboutmaybe getting a new boat, and
so my one daughter, just she,asked me well, how many rental
(24:25):
properties would we need to buyso that we could pay for the
boat, right, i mean that'sawesome Yeah.
That's, that's what I want.
That's how I want them talking.
And you know They don't do aton with the rental properties
right now, but they like once,once I buy them, they like to
hear the numbers.
You know they're teenagersright now, i, so they like to
hear the numbers.
I think they're kind of halfwayin between understanding it and
(24:45):
not understanding it, but theylike to see the property.
They understand that we'reproviding affordable housing to
people who need it And you knowthey like to go see it.
Sometimes they don't trust methat I had it cleaned the right
way or that it was painted theright way, so they go see it And
I want to make sure like, okay,you know, i saw them once.
They came into a place.
(25:05):
I said it was ready to go andthey went out to like the local
dollar store and they were backin there and they had, you know,
rags and tile cleaner and theywere like scrubbing the bathtub
one more time because they'relike, oh, good enough, you know
that's great.
Just keeping them involved inthe small stuff and just having
them understand what's going onlike as a broad view.
You know, just get them to getsome involved and just get some
(25:25):
to just understand the process alittle bit.
Speaker 2 (25:28):
Unfortunately, our academic system doesn't have a
whole lot of value on financialliteracy.
Speaker 4 (25:35):
All right.
Speaker 2 (25:35):
You know you go through and it's.
I have come to realize it's bydesign.
You know, i think that theywant people to be in debt.
You know, that's why the youknow they can control everything
a little bit better, at leastit surely seems that I'm reading
a lot of books right now, whyit's called the, why a students
(25:57):
work for C students and Bstudents work for the government
.
Speaker 4 (26:00):
So I recommend that book.
But he talks about that Likewhat you just said, mike, that
like the whole system isdesigned to train you to be an
employee who just works to coveryour debt and to, and that you
have to stay indebted to theseemployers forever, right, and
that you don't question when thegovernment spends, you know, a
(26:22):
hundred thousand times moremoney than it earns.
We don't question that.
Speaker 2 (26:26):
Right, and our deficit is so huge that most
people can't even comprehendwhat that number is.
But I was thinking about itactually this morning and I was
like, imagine if you logged intoyour Wells Fargo account and it
said, you know, in our terms,like negative $7 million, we
would freak out, but our deficitis trillions of dollars.
(26:49):
You know, and I think RobertKiyosaki even said money.
You know, once they got rid ofthe gold standard, money is debt
.
Speaker 3 (26:56):
Yeah, that's true.
Speaker 2 (26:58):
So, but you got to obviously structure your debt in
a smart way.
You know, I think that's wherea lot of people kind of get hung
up on.
Speaker 4 (27:05):
It depends on what debt right Like, if you if you
left real estate debt.
It's amazing.
But if you have consumer debtand you're paying, i mean just
people say, oh, it's just 24% orwhatever.
But I mean, if you actually dothe numbers on that, because,
because you couldn't wait youknow what 18 months or whatever
to spend however many thousandsof dollars to buy a vacation or
(27:26):
buy whatever it was, it didn'tcost you the five grand for the
vacation.
It probably cost you $20,000 bythe time you paid it back,
right, right, if you ever pay itback.
Speaker 3 (27:35):
Yeah, well, that's the design, is I mean?
yeah, that's what I mean.
Yeah, it teaches financialliteracy.
Speaker 2 (27:41):
Yeah, then by the time, by the time you learn it,
it's too late, because mostpeople are so far in debt that
they can't get out of it.
You know, with a normal, youknow their salary is X amount of
dollars a year.
It's impossible unless they dosomething else.
Speaker 3 (27:56):
Well, what's in me when he said it's how come?
Speaker 4 (27:58):
how come you can make .
You can make 100 grand W2 or100 grand 1099 gross owning your
own business and the 1099 guycan't finance a popsicle, but
the guy W2 can get a milliondollar home.
Speaker 2 (28:12):
Right, yeah, see the conspiracy theorist.
Yeah, i know Getting deepgetting deep, here I got Andrews
the outlier at least for somereason.
Oh, he normally is.
Speaker 3 (28:23):
Yeah, that's why I have him around, otherwise
that's like being jailed by thepeople.
That's the counseling part ofthe job.
You know All right?
Speaker 2 (28:30):
Well, Matt, you got anything in closing.
Speaker 4 (28:32):
I don't, i got nothing.
Give me, give me.
What do you want to hear fromme?
Speaker 3 (28:36):
Well, i think, what's your, what's your number one
tidbit of wisdom, my number onetidbit of wisdom.
Speaker 4 (28:42):
I would say just do it right.
Like the Nike, yeah, nike, thefirst property I bought.
I remember my wife was likewhat are you doing?
We need a spouse for ourselves,this, that and the other.
And then I said, just go withme for a while.
And now, however many yearslater it is.
She's asking me like well,when's what's the next one going
to be?
When are you going to find thenext one?
(29:03):
Where can I see the next one?
Can I see the current, whatever?
right, you know?
now she's like hey, go buy 10more.
I think, just do it, yeah, andyou can't.
As long as you hang on to it,long term you can't mess it up,
right, like that's where thecharacter of the terms in Yeah,
that's the coolest thing aboutreal estate is.
You know, obviously, take someclasses, read some books, don't
(29:24):
just blindly jump into something.
That's not what I'm saying, butlike once, once you have a
pretty good understanding ofwhat it looks like, just just go
get something and just get theexperience and just do it.
And even if something goeswrong or there's a big repair or
whatever, just so what if you,if you just hold onto it and
definitely you'll get that moneyback.
Speaker 2 (29:44):
Yeah, i love that.
Well, Matt, we appreciate youcoming on taking some time away
from the boat.
This is, you know, as always.
Speaker 4 (29:52):
I've already shared with you.
I'm in my real estate office,So we are working.
Speaker 2 (29:59):
He's on the clock You want to give a quick plug to
Thanksgiving Heroes.
Speaker 4 (30:03):
Yeah.
So Thanksgiving Heroes is anorganization founded by all of
our good friends, the Rob Adams,and we feed families during
Thanksgiving.
We provide enough food to afamily of five that they get a
like a 20 pound frozen turkeygravy pie like everything that
it takes to have a really niceThanksgiving meal And if anybody
(30:25):
is interested in doing thattype of thing in their area they
can give me a call.
My number is 440452-2000.
That's my cell phone, so giveme a call if you want to know
how to do something like that inyour town.
But this past year we fed 2000families in the greater
Cleveland area through Rob'smentorship and his ideas.
Speaker 2 (30:45):
Yeah, we actually had Rob on I think he was like
episode four or five And youknow I've always been inspired
by him.
I'm inspired by the fact thatyou took action and now you know
, 2000 people that wouldnormally not be having
Thanksgiving are able to do it.
It's pretty awesome.
Speaker 4 (31:02):
We've gotten some corporate sponsorships this year
.
So we have several largecorporations now where you know
I'm pretty good friends with,like the CEO or the founders of
the company, who donate money tous And you know, just getting
involved in something like this.
You know, obviously it'samazing to help these families,
but when I got started you neverunderstood.
I didn't understand the gravityof the type of people that
(31:24):
might come into our world right.
Speaker 2 (31:26):
Right, I mean, it goes a long way And it's all
about giving back, it's aboutcreating that legacy.
It's not just about you knowhow much money do I have, How
much wealth have I made, Butwhat am I going to?
you know what's my mark on theworld, And I always hats off to
you, brother.
Speaker 4 (31:41):
I appreciate it.
Speaker 3 (31:42):
We appreciate you.
So thanks for doing it, Matt.
Appreciate you coming on andspending some time and imparting
your wisdom and your goals andyour successes with us.
Speaker 4 (31:52):
Cool.
Thanks, guys Happy to be here.
Speaker 2 (31:54):
All right.
This has been another episodeof the Legacy Wealth Code
podcast.
Until next time onward.
This is the Legacy Wealth Code Podcast helping you
build long-term wealth and alasting legacy through real
estate investing, tax strategiesand motivational stories from
some of the most successful andinfluential people out there.
Here are your hosts real estateinvestor and entrepreneur,
michael Knotbaum, and realestate investor and attorney,
andrew Hook Hey guys, welcome toanother episode of the Legacy
(00:24):
Wealth Code Podcast.
Speaker 2 (00:25):
My name is Michael Knotbaum, here with my partner
and crime, andrew Hook.
Speaker 3 (00:28):
What's up, guys?
Speaker 2 (00:30):
So not sure which bar I left it at, but bear with me.
Speaker 3 (00:33):
Today Andrew may be doing a little bit more than me
With that seductive voice.
we're not sure what type ofpodcast we're on here.
Speaker 2 (00:38):
I know It's our Charging by the Minute, so this
is really cool.
Matt Chase here today.
Matt was with us in a number ofdifferent masterminds over the
last couple of years.
He's out of Cleveland Ohio area.
Well, when he's not on his boat, I guess right, That's right,
That's right.
Speaker 4 (00:54):
And we're also best friends.
Did you mention that?
Speaker 2 (00:56):
Oh yeah, i mean, how could we not be Right?
So Matt's built a hugeportfolio of real estate over
the last couple of years, has apretty large retail team and
just is doing a lot of the rightthings in terms of building
wealth.
So we wanted to have him ontoday and just have him kind of
walk through what his journeylooked like.
So welcome to the podcast.
Speaker 4 (01:17):
Thank you, i'm delighted to be here.
That's what podcast people say,right.
Speaker 3 (01:22):
Exactly, you better be delighted.
Speaker 2 (01:25):
We got with the attorney, so he has to say
undoubtedly at least three times.
Speaker 3 (01:29):
That's right Or notwithstanding?
Matt, will you kind of open usup with giving us an overview of
your background and then howyou're set up as far as your
team and then your investmentside of things?
Speaker 4 (01:41):
Yeah, absolutely.
I think Mike was a littlegenerous with a massive
portfolio, but I started in realestate right out of college
about 16 years ago, and Istarted in the sales business.
The reason I started in thesales business is I read Rich
Dad, poor Dad when I was ateenager, when I was in high
school, and I love that.
I mean I read the book probably10 times.
(02:02):
I was like everything in heremakes sense.
I never knew what I wanted todo until I read that book And I
asked my dad how do I buy houses?
He said, well, you got to havemoney for houses.
And I said, okay, how do I havemoney?
And he said, well, sales makesa lot of money typically.
And I said, okay, well, realestate, if I want to be in real
estate, real estate sales.
So that's why I got into realestate sales was to make money
(02:25):
to buy real estate itself, andso that was about 16 years ago.
The journey didn't go as quickas I thought it would, so I
didn't buy my first rentalproperty until probably about
six or seven years afterstarting in real estate, and
then that's kind of went offfrom there, and so today the
real estate sales is still myprimary focus, but my goal is to
(02:49):
have equal income from my realestate sales business and then
equal income from my investmentbusiness.
So that's what I'm workingtowards right now.
But got 16 real estate agentsthat work with us And then we
have two administrative staffand then a full-time director of
sales who recruits real estateagents and helps the agents that
we have with productivity.
(03:10):
And I think investing kind ofgoes hand in hand with the
retail side, and so I tellpeople all the time how do you
find this type of stuff?
And we're finding it all thetime on the retail side, just
taking a double look ateverything that we list, is this
something we could buy first,or do we have an investor who
would want to take this on ifit's not us?
Speaker 2 (03:31):
So walk us through that, because that's something
that we, andrew and I, talk alot about, and I know you and I
have talked many times.
but when you're identifying aproperty, how are you choosing?
what am I going to do with it?
What's my exit?
look like, is this a fix andflip?
I'm just going to get out of it.
I'm going to keep this as along-term hold.
What does that look like foryou?
Speaker 4 (03:51):
Well.
so for me, almost everything Ido is a long-term hold, and it's
because of the tax strategyright You can.
I try to buy as many long-termholds as I can in cash.
I try to buy them When yourefinance out.
you refinance out, the bankwill give you 75% loan to value.
So I try to buy that initialproperty such that when I'm the
(04:14):
purchase price plus the repairsand then getting it ready is
still under that 75% LTV, sothat when I do the refinance I'm
into it for no money.
Speaker 3 (04:25):
I like that.
Yeah, that's really smart.
Speaker 2 (04:27):
Yeah, i mean, these are the needs that come in.
that could be a listingopportunity and you're like, hey
, instead, how about this?
Speaker 4 (04:34):
Yeah, obviously this market is a little more
challenging than it used to be,but the first four units that I
ever bought so I've got about 60doors right now And that's a
mix of single family duplexes,four units, three units all the
way up to the biggest we have isa 12 unit, and then we do have
(04:55):
one that's got some office spaceon the first floor also, but
the biggest is a 12 unit Andthose obviously are easier to
find, especially four unit, andsmaller is easier because of the
loan process.
It's not a commercial loan Andso my first four unit was
actually one of my really goodfriends.
Mom's came to me and said thatthis was her husband's project
(05:18):
and he had recently passed awayand she didn't want anything to
do with it really.
And I looked at it and I said,well, hey, in order to get it
ready for the retail market,it's going to need this, this
and this.
She said I really don't want todo any of that.
You have any other options.
And this was probably six orseven years ago and a light went
off in my head I didn't haveany formal training on this at
the time And the light went offin my head and I said, oh my God
(05:39):
, i should buy this thing.
And so she came to us, firstbecause of our real estate
expertise, and then I ended upclosing the deal on it And it's
been a.
It's a $4,200 a month propertyright now.
Speaker 2 (05:54):
That's awesome.
Speaker 3 (05:55):
Yeah, it is.
Speaker 2 (05:56):
Couple takeaways, i think, from that one 60 doors
The next time that Mattcomplains about buying a seafood
tower.
Speaker 4 (06:03):
That was a $750 seafood tower, Michael.
Speaker 3 (06:07):
What the most oysters you've ever seen.
Speaker 2 (06:11):
We won't share the establishment thing which I
purchased many drinks for you,Just because we can't have the
explicit rating on this quad.
Speaker 3 (06:19):
Even with that voice you might, though.
All right, you said 16 agentson your team.
Do you coach each of them to dothe same thing?
as far as look at a deal as canwe buy it before we list it,
are you telling them to bringthat to you?
What's your mentality there?
Speaker 4 (06:38):
Yeah, both They're trained to.
The more experienced peopleunderstand how to evaluate the
properties on their own.
Then they'll typically come tome and say is this something we
can partner on?
Is this something that I canshow them how to take down on
their own That type of thing?
Then, the less experiencedobviously we ask that they bring
it to us first and we evaluateit together.
(06:59):
Our top four people on our teamall own their own homes and
three of the four all own asecond rental property.
That's one thing that we'retrying to grow is the value of
working with us.
Hey, what if not only do youmake six figures selling real
(07:19):
estate and we could teach youhow to do that with 40 hours a
week or less, with support andleverage, but can we teach you
how to acquire five or 10 rentalproperties over the next couple
of years so that you havepassive income to where you?
don't even have to work.
Speaker 2 (07:34):
Are you partnering with them on these deals, or how
does that look like?
Speaker 4 (07:39):
One I'm partnered with right now, the rest I'm not
, but I offer that all the time.
Obviously, this market's alittle challenging right now, so
I think free cash is not whatit used to be.
Yeah, we will.
That's the goal is to say, evenif it's not a full partnership.
I've offered to some of theagents that, hey, if you find
something off market and theseller's okay with paying a 7%
(08:02):
commission, instead of takingthat commission and cash, why
don't we put it into theproperty?
and whatever we do with theproperty whether we rent it or
we sell it at least you're 7%owner in this.
Speaker 2 (08:13):
Yeah, i like that.
It sounds to me this podcast,andrew and I talk a lot about
legacy and I know that you'vegot a family yet you actually
have a growing family, socongrats on that.
Speaker 4 (08:25):
Thank you.
Speaker 2 (08:27):
What does that look like for you?
I know you've mentioned whenyou first started out, you
wanted to make a lot of money tobuy real estate.
I think that all of us in thereal estate game probably had
that initial thought.
and then, over time, things dochange like okay, it's not all
about me making a lot of money,more about what is my legacy
(08:47):
going to be as I continue togrow and accumulate more wealth.
So how does that tie in withyour family, with your team?
What does the legacy piece looklike for you?
Speaker 4 (08:58):
For me.
Obviously, I started doing thisfor myself, selfishly, I guess.
Then, once you start acquiringmore and more, you start to
think about your family and whatit's like, especially as we get
older right, Not that we're oldyet, but I'm a lot older than I
used to be And so you startthinking about that type of
stuff, And for me, that's themost important thing now is how
(09:20):
do you preserve, how do I buyquality enough properties and
take care of them enough, notoverdoing it so that you don't
lose your cash flow, but doingmaybe one improvement a year to
keep the rents up and thingslike that and to keep the
property in good shape, so that,when my daughters are older,
this is something that they can.
Maybe they don't necessarilymanage it themselves, but they
could pass it off to amanagement company or something
(09:43):
like that, And they have a greatasset that provides for them.
Because what else are you goingto invest money to right?
If you were to die and you wereto give your family several
million dollars, they've got tofind a place to invest it right.
And what's that going to be?
It's going to be six or sevenpercent if they're lucky, maybe
plus fees and stuff on top ofthat, or they can keep the
(10:04):
rental properties and generatetens of thousands of dollars a
month in income.
Yeah, they don't have themillions of dollars because it's
tied up in the property, butthe cash flow is far greater
than what it would be if it wasto be invested, because, I mean,
at this point the rate'sinfinite because you're getting
your cash back.
Speaker 3 (10:21):
Right, sure, matt, can you talk a little bit about?
we kid around with you and giveyou a hard time about how
you're always on your boat, butfrom a serious perspective, i
mean, i think you've almostbought your time back to a
certain extent, right, like you,from an outside appearance, do
a very good job of managing, youknow, free time and things that
(10:43):
you enjoy outside of just theactual real estate industry and
working, and a lot of that ofcourse translates into your
family time as well.
But can you talk a little bitabout that piece and sort of how
you have put yourself in thatposition to be able to kind of
run the schedule that you wantto and have the flex time that
you want to?
Speaker 4 (11:04):
Yeah.
So I don't know if I did it onpurpose, but you know it's
having good people around you.
I mean it always starts withthe people in the systems that
you have around you.
So, like, as far as all myrental properties go, you know
I've personally never replaced atoilet or mowed the grass, or
you're right, like I don't doany of that I have.
(11:24):
I've got a couple guys thatI've met along the way who
pretty much just work for me nowat this point And you know
they're handling all themaintenance and you know I use
BILDIUM.
You guys have to call them andget some royalties from them,
but I use them to manage mysoftware or my property.
I use their software to managemy properties And it's as easy
(11:45):
as if somebody moves into theproperty.
We tell them.
You know here's my phone number, but the only reason and it's a
Google number, it's not mypersonal cell, but the only
reason why you would ever needwe don't talk to you on the
phone.
You know we don't need to hearyour excuses or any of that.
The only reason why you wouldever need to text me is because
you're heat out or you haveactive water coming into your
property Other than that, usethe BILDIUM app and let me know
(12:09):
what issues you're having.
If you have a light bulb out ora breakers out or whatever your
issue is, let us know throughthat system so that I can send
it out to my guys who are in thefield And let them handle it
right and so that that gives mea lot of free time.
That way Do not not, you know,just shuffling some people
around, you know, every day andthat type of thing.
Speaker 3 (12:30):
How about on the on the retail team side of you?
one of the things I feel likewe hear Over and over again from
high producing agents is thatthey want to take themselves out
of the listing game.
Or, you know, everybody wantsyou as the team lead.
you know, like your face, you,they want to deal with you.
(12:51):
How have you, how have youaccomplished that?
because I feel like that's onethat a lot of people struggle
with.
Speaker 4 (12:58):
Yeah, i think a lot of people are control freaks,
right, i mean, i think you hiredthese agents team for a reason,
and the reason, hopefully, isbecause they're pretty good at
what they do.
And yeah, there's a handful ofpeople you know I still sell
maybe 10 or 15 homes a yearBecause it's, you know, a best
friend or a family member, justsomebody that I feel like
(13:18):
hanging out with, or whateverthe case may be.
Well, yeah, the rest of it Isend out to my team And,
honestly, you know my team, youknow I've got guys and girls on
my team that are selling 50 or60 homes a year.
So at this point, you know,they're probably more equipped
to handle that transaction thanI am.
Anyways, right, i mean, i thinkit's just finding good people,
(13:39):
trusting them and being there tosupport them.
You know, i need to make sure,obviously, that they're giving
the same level of support in thetransaction that I would have
been, the same advice and allthat same type of stuff.
But that comes with time.
But you know I work closelywith them in the office.
I'm still coming to the officenearly every single day from 9
to noon and work with the agentsthat are here.
(14:00):
So it's not like it's not likea full time vacation or anything
, and you know, on the days thatwe're not here, What would you
say Yeah, and?
Speaker 3 (14:09):
then noon to 5 noon to 5 on the boat.
Speaker 2 (14:12):
Yeah, but I mean we're out on the water.
When it's 50 degrees out, it'salso a fun day.
You know, we're down here inFlorida where 50 degrees is like
the coldest day of the year.
He's got his speedo on.
He's cruising around like here.
Speaker 3 (14:25):
Trust me if I didn't have to be here for my real life
.
Don't place those images please.
Speaker 4 (14:28):
I'll tell you the next story to you guys.
Speaker 3 (14:31):
That's right.
Speaker 2 (14:32):
Well, we've always told you the door is open for
that opportunity.
Speaker 4 (14:36):
Well, yeah, i just think to go with all that stuff,
though I mean it's just we'rehere in person for those hours.
But I mean you guys know how itis.
I mean you're getting up earlyin the morning and maybe you've
got some stuff you're doingbetween like 6am and 8am, and
then maybe you work out orsomething.
Then you hit up the office andthen you know you're still
probably doing some computerwork in the evening and stuff
(14:56):
like that.
I mean we're always working.
It's just a matter of whereyou're working at.
You could work from a boat.
Speaker 2 (15:01):
Sure.
So how many times do we go tothese masterminds and we, you
know, like the one that we'vemost recently been in, starts
out with everyone sitting at atable discussing you know what
is working really well in theirbusiness and what are their
challenges.
Yeah, and these are the highestperforming teams in the country
.
Right, everyone says I meanwithout question.
Every single time I'm stillstruggling with having really
(15:24):
good people.
Speaker 4 (15:25):
That's the hardest part.
Speaker 2 (15:26):
And it's like you'll never probably have enough good
people, because then you getsome good people, you grow, and
then the people that just don'tgrow with you leave, and now you
need more good people to growagain.
Speaker 4 (15:38):
Yeah, yeah.
I mean the best thing you couldbe doing, no matter what role in
this world, is finding peopleto work with.
right, i mean for us it'sfinding good real estate agents.
It's finding good operationspeople.
It's finding good roofers,finding good guys to deal with
your landscaping.
It's right, like anywhere Any.
(15:58):
you're always looking forsomebody to do something right,
or just add them to your on deckof you know.
the one guy right now is doinga good job, but just in case he
doesn't show up one day, can Icall you?
Speaker 2 (16:10):
When you have to be grooming these people, i think
to have something else that theycan look forward to.
You know, i love the fact thatyou're helping people on your
team by properties, but you knowit's like you know you have
these people that join your teamor your world and then they
reach a certain point where youknow you've determined either
they're great great people ornot.
(16:32):
And if they are great people,what is their next step?
look like, because most greatpeople aren't just going to be
content being whatever they areat that point.
Sure, i would think most peoplewant to know what's the next
step.
So I think having that plan ofaction is very important to
creating that culture for yourorganization where people don't
(16:53):
people don't want to leave.
Speaker 4 (16:55):
Yeah, that's the hardest part, but it's the most
important part.
Speaker 2 (16:59):
Yeah, i would agree with that.
So let me ask you this yourinvesting strategy.
You know you've mentionedseveral times on this call the
market is changing.
I think there's withoutquestion.
You know it's been so crazybecause it's like as soon as we
think everything is fallingapart, it comes back again.
Right, at least it seemed likethat for the last couple years.
(17:19):
But you know the writing is onthe wall that we can't sustain
printing money, having a hugeinflation rates, interest rates
super high and not having somekind of dramatic effect on real
estate market.
What does that look like foryour investing strategy, come as
you move forward?
Speaker 4 (17:38):
So I don't know if I figured that out yet, but you
know what?
what's really worked for us istrying to identify the guys and
gals that have been in thisbusiness for a long time and
just forming a relationship withthem and seeing you know, when
they're finally sick of owningtheir properties, can we buy him
, right, like I mean a lot of alot of the property.
(17:59):
Probably 80% of the propertythat I've bought is not from,
like, an institutional investorand is not from, you know, young
person that bought it and gotin over their head or something
like property for 40 years andis just getting to the point of
wanting to be retired or justsick of dealing with it, or just
They're just done.
They've made all their moneyand they don't have anything.
(18:20):
They don't have a next of kinthat wants to deal with it.
So you know they tell to me,right, i mean that's that's what
I'm looking for.
Speaker 2 (18:28):
Yeah, but I guess my question is more around the
changing markets.
It's not really.
It's just gonna change the wayyour offer is, or what.
Speaker 4 (18:35):
Yeah, i mean it.
So I look at cash flow you know, I don't, you know.
I know everyone likes to talkabout cap rate and all that
stuff and I, under I look at thecap rate, but you know, i look
at how much money is this thinggoing to throw off every month
and if it's, and I just I justwent under contract on a three
unit over the weekend for Youknow, hundred and sixty thousand
(18:57):
, and probably five years ago Itwould have been a hundred
thousand, right, but the rentshave gone up.
Five years ago The rents wereprobably six hundred dollars a
month and now the rents areeleven hundred dollars a month.
Speaker 2 (19:09):
So 1100 each unit, yeah, yeah, so thirty three
hundred.
I mean that's.
you know, i think we weretalking before the call.
I mean, andrew and I starteddoing some wholesale stuff in
Cleveland and I'm blown away by,yeah, the fact that you can get
properties for fifty, sixtythousand bucks that are bringing
in Fifteen or twenty thousanddollars a year.
Speaker 4 (19:27):
Right now I'm guessing that property will
never appreciate.
I mean it might.
It might keep up with inflation.
It well At a normal inflationrate, not current inflation, but
it might keep up with a two tothree percent normal inflation
rate over the next 20 years.
But it's not like it's evergoing to be a home run where
we're selling it for a milliondollars.
But it will.
Speaker 2 (19:47):
Yeah, and you've been in Cleveland through a couple
different.
You know markets.
You know when you first startedI'm sure you went through.
You know the huge collapse.
What did you remember?
what rents did then?
like Something that right nowmight rent for eleven hundred,
if you know the bottom falls out.
What does that look like?
Speaker 4 (20:06):
So I mean that was a while ago, so no, and I wasn't
playing in the rents at thattime.
But from what I remember isrents did not go down Because
you had an influx of rentersentering the market.
You know when these people aregetting more closed on right.
Like they all had to gosomewhere.
Speaker 2 (20:21):
That's kind of my thought too.
Is I never, i can never Corally, when there's a terrible
housing market, how rents couldgo down, because all these
people are, i think.
Speaker 3 (20:30):
I think rents Rents really only go down when you,
when you're flooding the marketwith inventory of similar
product, which you know, yougotta, you gotta say does that
buyer pull that, does thatcreate a new buyer pull, or or
are they?
Or are they just runningsomething that is, you know, the
same product at a differentrate because there's more of it?
Speaker 2 (20:51):
But I think the lag time on that is long too,
because if they're closing onthe property the bank has it
sure.
Speaker 3 (20:57):
I think it's that, and I think it's also demand
right, which I mean we have sucha strong labor market that I
Mean.
I don't see that disappearinganytime soon.
So I mean wages are still gonnabe be up for a while.
Speaker 2 (21:08):
So yeah, so you're really looking.
you know, have the fundamentalsof analyzing the deal, but yeah
, but have cash flow be your,your number one.
Mm-hmm, that's good, i likethem.
Speaker 3 (21:19):
Yeah, that's always me.
We always talk about keeping itsimple and I mean you're doing
that.
Keep it simple and And staytrue, to stay true to those
basics.
And you know, you may not hitGrand Slams, but you're hitting,
you're hitting doublesconsistently.
Speaker 4 (21:33):
Well, it's exactly.
If you had enough singles anddoubles, who cares Right?
Speaker 2 (21:38):
Yeah, well, and you said, well, we need to have a
model around this, which Idefinitely agree with.
but you know The fourproperties we were talking to
you about beforehand.
It's like we can visit four orfive, it's four.
It's four properties, fiveunits, five rental doors to five
rental doors and it's bringingin like 6500 a month and we can
(22:00):
buy the whole thing for 200grand.
Mm-hmm, Yeah, that's a 38 car.
Speaker 3 (22:05):
Yeah, you know it's like mean, well, and Matt's
gonna, matt's gonna manage itfor free for us too.
Speaker 4 (22:10):
So of course I mean, why wouldn't I?
Speaker 3 (22:13):
Yeah, they're closed.
That's his.
That's his new afternoonactivity.
I.
Speaker 2 (22:18):
Tire marketing plan is centered around where's the
closest Marine?
Make sure everything's good.
I know let me go back to this.
You know you said that you'vebeen in real estate for 16 years
.
Really started buying about sixor seven years ago.
So I know in the beginning ofthe call you said why you might
(22:40):
be inflating Massive portfolio.
But I think that most peoplecan't say that they have 60
doors.
So to me that's still a verygood achievement.
You have a family that you wantto leave things to.
You want to help them.
You know You want to leave yourlegacy with them.
How do you, you know, fromgoing from zero to 60?
How do you transition?
(23:01):
You know your kids to have amindset that they still need to
be working, still need to beestablishing Their own goals in
life, where you're not justhanding them, you know, millions
of dollars of real estate andsaying, you know, go do whatever
you want to do, be wild, becrazy, whatever.
Speaker 4 (23:19):
My wife does that.
She, she's with them all daylong and and talks about that
type of stuff.
But I mean, you know, from myperspective, is them about?
you know, if I buy a Boat,we're not living that lavish of
a lifestyle, right Like?
I made a commitment to myselfand in my wife along We're not
(23:41):
gonna buy, we're not gonna goout and buy brand new hundred
thousand dollar cars.
We're not gonna go out and buybrand new five hundred thousand
dollar boats.
We're not gonna live in amillion dollar house.
Now like, we live in a reallynice house, but it wasn't like
beyond our means.
We drive nice cars but they'reall used.
I have a nice boat But I boughtit used, 25 years old, right
Like.
And I explained that to my kidsthat you know we only spend the
(24:05):
money that we've, that we have.
You know we don't use creditcards.
We don't finance things.
We wait until we can pay for itin cash.
And I just involve them in theconversation, you know they, we
were talking the other day aboutmaybe getting a new boat, and
so my one daughter, just she,asked me well, how many rental
(24:25):
properties would we need to buyso that we could pay for the
boat, right, i mean that'sawesome Yeah.
That's, that's what I want.
That's how I want them talking.
And you know They don't do aton with the rental properties
right now, but they like once,once I buy them, they like to
hear the numbers.
You know they're teenagersright now, i, so they like to
hear the numbers.
I think they're kind of halfwayin between understanding it and
(24:45):
not understanding it, but theylike to see the property.
They understand that we'reproviding affordable housing to
people who need it And you knowthey like to go see it.
Sometimes they don't trust methat I had it cleaned the right
way or that it was painted theright way, so they go see it And
I want to make sure like, okay,you know, i saw them once.
They came into a place.
(25:05):
I said it was ready to go andthey went out to like the local
dollar store and they were backin there and they had, you know,
rags and tile cleaner and theywere like scrubbing the bathtub
one more time because they'relike, oh, good enough, you know
that's great.
Just keeping them involved inthe small stuff and just having
them understand what's going onlike as a broad view.
You know, just get them to getsome involved and just get some
(25:25):
to just understand the process alittle bit.
Speaker 2 (25:28):
Unfortunately, our academic system doesn't have a
whole lot of value on financialliteracy.
Speaker 4 (25:35):
All right.
Speaker 2 (25:35):
You know you go through and it's.
I have come to realize it's bydesign.
You know, i think that theywant people to be in debt.
You know, that's why the youknow they can control everything
a little bit better, at leastit surely seems that I'm reading
a lot of books right now, whyit's called the, why a students
(25:57):
work for C students and Bstudents work for the government
.
Speaker 4 (26:00):
So I recommend that book.
But he talks about that Likewhat you just said, mike, that
like the whole system isdesigned to train you to be an
employee who just works to coveryour debt and to, and that you
have to stay indebted to theseemployers forever, right, and
that you don't question when thegovernment spends, you know, a
(26:22):
hundred thousand times moremoney than it earns.
We don't question that.
Speaker 2 (26:26):
Right, and our deficit is so huge that most
people can't even comprehendwhat that number is.
But I was thinking about itactually this morning and I was
like, imagine if you logged intoyour Wells Fargo account and it
said, you know, in our terms,like negative $7 million, we
would freak out, but our deficitis trillions of dollars.
(26:49):
You know, and I think RobertKiyosaki even said money.
You know, once they got rid ofthe gold standard, money is debt
.
Speaker 3 (26:56):
Yeah, that's true.
Speaker 2 (26:58):
So, but you got to obviously structure your debt in
a smart way.
You know, I think that's wherea lot of people kind of get hung
up on.
Speaker 4 (27:05):
It depends on what debt right Like, if you if you
left real estate debt.
It's amazing.
But if you have consumer debtand you're paying, i mean just
people say, oh, it's just 24% orwhatever.
But I mean, if you actually dothe numbers on that, because,
because you couldn't wait youknow what 18 months or whatever
to spend however many thousandsof dollars to buy a vacation or
(27:26):
buy whatever it was, it didn'tcost you the five grand for the
vacation.
It probably cost you $20,000 bythe time you paid it back,
right, right, if you ever pay itback.
Speaker 3 (27:35):
Yeah, well, that's the design, is I mean?
yeah, that's what I mean.
Yeah, it teaches financialliteracy.
Speaker 2 (27:41):
Yeah, then by the time, by the time you learn it,
it's too late, because mostpeople are so far in debt that
they can't get out of it.
You know, with a normal, youknow their salary is X amount of
dollars a year.
It's impossible unless they dosomething else.
Speaker 3 (27:56):
Well, what's in me when he said it's how come?
Speaker 4 (27:58):
how come you can make .
You can make 100 grand W2 or100 grand 1099 gross owning your
own business and the 1099 guycan't finance a popsicle, but
the guy W2 can get a milliondollar home.
Speaker 2 (28:12):
Right, yeah, see the conspiracy theorist.
Yeah, i know Getting deepgetting deep, here I got Andrews
the outlier at least for somereason.
Oh, he normally is.
Speaker 3 (28:23):
Yeah, that's why I have him around, otherwise
that's like being jailed by thepeople.
That's the counseling part ofthe job.
You know All right?
Speaker 2 (28:30):
Well, Matt, you got anything in closing.
Speaker 4 (28:32):
I don't, i got nothing.
Give me, give me.
What do you want to hear fromme?
Speaker 3 (28:36):
Well, i think, what's your, what's your number one
tidbit of wisdom, my number onetidbit of wisdom.
Speaker 4 (28:42):
I would say just do it right.
Like the Nike, yeah, nike, thefirst property I bought.
I remember my wife was likewhat are you doing?
We need a spouse for ourselves,this, that and the other.
And then I said, just go withme for a while.
And now, however many yearslater it is.
She's asking me like well,when's what's the next one going
to be?
When are you going to find thenext one?
(29:03):
Where can I see the next one?
Can I see the current, whatever?
right, you know?
now she's like hey, go buy 10more.
I think, just do it, yeah, andyou can't.
As long as you hang on to it,long term you can't mess it up,
right, like that's where thecharacter of the terms in Yeah,
that's the coolest thing aboutreal estate is.
You know, obviously, take someclasses, read some books, don't
(29:24):
just blindly jump into something.
That's not what I'm saying, butlike once, once you have a
pretty good understanding ofwhat it looks like, just just go
get something and just get theexperience and just do it.
And even if something goeswrong or there's a big repair or
whatever, just so what if you,if you just hold onto it and
definitely you'll get that moneyback.
Speaker 2 (29:44):
Yeah, i love that.
Well, Matt, we appreciate youcoming on taking some time away
from the boat.
This is, you know, as always.
Speaker 4 (29:52):
I've already shared with you.
I'm in my real estate office,So we are working.
Speaker 2 (29:59):
He's on the clock You want to give a quick plug to
Thanksgiving Heroes.
Speaker 4 (30:03):
Yeah.
So Thanksgiving Heroes is anorganization founded by all of
our good friends, the Rob Adams,and we feed families during
Thanksgiving.
We provide enough food to afamily of five that they get a
like a 20 pound frozen turkeygravy pie like everything that
it takes to have a really niceThanksgiving meal And if anybody
(30:25):
is interested in doing thattype of thing in their area they
can give me a call.
My number is 440452-2000.
That's my cell phone, so giveme a call if you want to know
how to do something like that inyour town.
But this past year we fed 2000families in the greater
Cleveland area through Rob'smentorship and his ideas.
Speaker 2 (30:45):
Yeah, we actually had Rob on I think he was like
episode four or five And youknow I've always been inspired
by him.
I'm inspired by the fact thatyou took action and now you know
, 2000 people that wouldnormally not be having
Thanksgiving are able to do it.
It's pretty awesome.
Speaker 4 (31:02):
We've gotten some corporate sponsorships this year
.
So we have several largecorporations now where you know
I'm pretty good friends with,like the CEO or the founders of
the company, who donate money tous And you know, just getting
involved in something like this.
You know, obviously it'samazing to help these families,
but when I got started you neverunderstood.
I didn't understand the gravityof the type of people that
(31:24):
might come into our world right.
Speaker 2 (31:26):
Right, I mean, it goes a long way And it's all
about giving back, it's aboutcreating that legacy.
It's not just about you knowhow much money do I have, How
much wealth have I made, Butwhat am I going to?
you know what's my mark on theworld, And I always hats off to
you, brother.
Speaker 4 (31:41):
I appreciate it.
Speaker 3 (31:42):
We appreciate you.
So thanks for doing it, Matt.
Appreciate you coming on andspending some time and imparting
your wisdom and your goals andyour successes with us.
Speaker 4 (31:52):
Cool.
Thanks, guys Happy to be here.
Speaker 2 (31:54):
All right.
This has been another episodeof the Legacy Wealth Code
podcast.
Until next time onward.
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