I had the awesome opportunity to sit down with Matt Theriault. I've been following Matt's journey for quite a while, and let me tell you, his insights on real estate investing are seriously mind-blowing.

Matt has a knack for tackling challenges with a unique blend of creativity and critical thinking. From his early days in the music business to bagging groceries at 34 to building a 350+ unit real estate portfolio, Matt stresses the importance of overcoming the fear of large numbers and recognizing that a one-million-dollar deal takes the same work as a smaller one.

Matt's experiences, ups and downs, and approach to problem-solving are inspiring and packed with sensible tips. If you're a lifelong learner and value practical advice, you don't want to miss this episode.

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Episode Transcription

Editor's note: This transcript has been lightly edited for clarity.

Seth: Hey, everybody, how's it going? This is Seth Williams, and you're listening to the REtipster Podcast.

This is episode 178. And today I'm talking with my friend, Matt Theriault. So Matt is somebody I've followed for a long time since before I got into the blogging and YouTubing world myself.

And I remember back when YouTube was still a relatively new thing and I would look for real estate investing videos on YouTube and I would always see Matt's videos. And I appreciated them because they were really well thought through. They made me you think critically about real estate investing as a profession and how to deal with problems and think outside the box. And these things weren't surface level. They were pretty deep. And as a fairly deep guy myself, I appreciated his approach and his teaching style.

So today, I get to talk with Matt about his story and where his real estate investing and content creation journey has taken him and where he's trying to steer his ship in this ever-changing business environment we're all finding ourselves in.

So Matt, welcome to the show. How are you doing?

Matt: Thanks, Seth. I appreciate it. I had no idea that the history went back that far, but it's good to know.

Seth: Yeah, man. I'm sure you've had an impact on a lot of people through Epic Real Estate and just, I mean, I don't know how many millions of views you probably have on your videos, but you've been doing this for longer than most, right?

Matt: Yeah. As far as I know, I think I'm the longest-running real estate investing podcast that's still going. So we started in 2009. I think the only person that was there before me, and he had like 10 different podcasts, was Jason Hartman, but a little bit more like higher level type.

But as far as the how-to and the nitty-gritty and strategy and technique and tactics and stuff like that, I think, yeah, the longest one.

Seth: Yeah. So I don't think I've ever even heard the actual origin story of how you got into real estate and what your journey looked like. like and even like the how and the why behind why you started Epic Real Estate Investing. Can you just like give me the backstory on how that all started?

Mat: Yeah. And thanks for asking. It's been a long time since I've been asked. When I got out of the Marine Corps, I spent the next 14 or 15 years of my life in the music business.

Seth: Oh, really?

Matt: And I did really well for myself.

Seth: What did you do in the music business?

Matt: I had a small hip-hop label, but we had major label distribution. It just happened. I was really blessed and fortunate that people liked what I did and they're willing to pay money for it. It’s very different than how real estate started because there were no goals. There was no discipline. There was just waking up and doing what I loved and I was just really fortunate.

And then, when the digital download came along, it just kind of killed the music. When you make all your money selling CDs and records, you know, it made it kind of tough. And I would say in about six quick months, I had no idea what was happening. I mean, in hindsight, it's crystal clear. But at the time, had no idea and went out of business in like six very fast months, like on the emergence of Napster.

You know, the whole underground music scene, whether it was underground hip-hop or underground rock or underground dance, they embraced that digital download, the technology, far before the mainstream population even knew what it was. So if you fell into one of those genres, then you got wiped out before anyone else even knew what a download was.

Seth: Are there any well-known artists that you signed that I could search for and find?

Matt: Right. Signed? Not really. I mean, Michael Myers was my only artist, but kind of what we did that was a claim to fame was two things.

We made records specifically for disc jockeys, like the battle hip-hop DJs. So we made those instrumental records with all the little scratchy sounds and stuff like that on them.

So we did that and then… As far as I know I'm the first one that did this, but at the time, dance music compilations were really big but then they would like center on a DJ who was like the actual artist or the star of the thing, and then they would mix their music and so they're mixed like legal mixtapes. If you remember what a mixtape was, I don't know how old you are, Seth. But I used to sell those in high school.

Seth: Okay, nice.

Matt: Did you ever have a cassette player? Are you that old?

Seth: Oh, yeah. Yeah, for sure.

Matt: Okay. I kind of lost track of where that technology started and stopped.

Seth: All my childhood, it was tapes.

Matt: Very good. And so I just took that same idea from the dance music industry and went over to hip-hop. And so I had the Beat Junkies, their compilation on my label. And they're still going as far as I know today. And they all went off to do other things. And then they all came back together. And they all kind of operate individually and as a group.

And then on our compilations you know I was able to work with you know Jurassic 5 and Eminem and Mos Def, and so all the kind of, not necessarily your mainstrea, I guess. Eminem is mainstream now but he wasn't at the time, no one knew who he was. But I got to work with a lot of artists but never really had anybody signed to me except the one, Michael Myers and another guy named Akbar. But anyway.

Seth: Wow, nice.

Matt: Once we decided that, I don't know how I'm gonna make my way in entertainment because I didn't necessarily have the talent myself. I was a little bit more of the executive type and you know, I produced a lot. But it turned into a, all of a sudden, only the people with the deepest of pockets were going to stick around.

And so I just had to find and do something else. And I went and bagged groceries. I was 34 years old and I was bagging groceries because I didn't know how to do anything else. I didn't have any certifications or degrees or anything. I didn't know what to do, but I had to eat.

Seth: Was that like a low point for you? Like, did you get depressed or anything? I mean, that's a huge fall, right?

Matt: For sure. I mean, when you're in your hometown and you're bagging groceries at the local grocery store and your high school girlfriend comes through the line, you're like a paper plastic man. You know what I mean?

Seth: Ouch.

Matt: That one hurt that day for sure. But yeah, you know, 34 years old and taking my lunch breaks with 16 year olds was kind of very humbling, for sure. And so did a lot of complaining, you know, blaming everybody and everything for my situation. Life was unfair and poor me for about six months and I finally realized, wow, if I don't do something, this might be my future and I don't want that.

And I became kind of close with the grocery store manager who was also 34 years old. Coincidentally, you know, he was managing the place and I was pushing the shopping carts. He was only two years away. This was the big eye opener. And this is like kind of really like the launching ground and the foundation of everything I'm about today.

And he'd been there for 18 years. He started there bagging groceries just like me, but he started when he was 16. He was two years away from being there 20 years. And he was going to be able to withdraw, I think, 70% of his pension. For indefinitely. I mean, he stayed there for 30, he could get a hundred percent, but he was going to go ahead and take that then.

But he pulled me aside and he showed me, and he used to have a photo album. Do you know what photo albums are?

Seth: Oh yeah.

Matt: Okay. All right. It's funny. I have assistants and interns. They have no idea what I'm talking about sometimes. And that makes me feel really old. I must be kind of out of touch with the young ones too.

I told one that I was the other day, I was like, yeah, I used to sell compact discs. And she was like, what's that? I said, you know, CDs. She goes, oh, I didn't know that's what that stood for.

Seth: You know, I actually had a moment like this last year. I was talking to somebody, I think he was like 23 or something. And I don't know how this came up, but we mentioned Ricky Martin. Like, I remember back in high school when Ricky Martin was a big deal?

This kid's like, who's Ricky Martin? What are you talking about? I was like, are you serious? No way. But I guess it kind of made sense. I mean, he hasn't been a big deal for a long time.

Matt: For a very long time. That's right. So he had showed me a photo album and he had like, I don't know, it was three or four multiple angles of it, but lots of pictures. But of three or four different apartment buildings he had been able to amass along the way while he worked at the grocery store.

And he shared with me how the passive income from his apartment buildings will surpass the pension that he's going to receive. And so he was retired at the age of 38.

And he told me these words. And these words, I've said them a million times. If you've listened to the show, you've heard them at least 10 times. But he shared these words with me. And it's just been the foundation of my whole existence ever since when he said, “You know, Matt. If you really want your money back, if you really miss your money,” and I really did because, you know, I made my million before I was 30 years old. And he said, “real estate is the final frontier where the average person has a legitimate shot at creating real wealth.”

And I was like, the final frontier? This is the last one? He says, “Yeah, unless you can know you've got an amazing three pointer and can jump three feet or, you know, swing a baseball bat better than anybody or whatever.”

But he basically just kind of broke it down. You've got to be super talented. Or you have to have an amazing business idea. You have to be an inventor. You got to be a writer. You got to be a composer. You got to have a gift for sports. But for the average person, real estate is where their best shot is at getting wealthy.

And I was like, wow, at this point in my life, I feel far below average. So who am I to aspire above average? So I took it on and I did what I thought the logical thing to do was I went out and got my my real estate license.

And I did okay. You know, I got rookie of the year in my office the first year and then it just kind of settled down. And I lived in an area where I was very blessed. It was the million-dollar homes. So I only had to sell one of those things every other month to make a really, really good living.

And, but there was one Saturday where I was meeting with a client and I had two good clients, really good clients. They just did repeat business. They gave me business over and over and over again. I didn't have to work for it. Once that relationship was established. They just gave it to me.

And there was a Saturday. I was all dressed up in a suit and tie. I remember it specifically as in Palos Verdes, California, at the top of the hill of Palos Verdes. And I was in a suit and tie at 10:30 in the morning. They were supposed to be there. They didn't show up until about 11. And they came in, they signed all the paperwork. I had all their papers out and everything, coffee and snacks and everything for them to sign the paper. They were closing a bunch of deals.

And they came in 20 minutes late in jeans and a T-shirt, signed all the documents and took off for the day. And then I was left there to finish up the paperwork. And then I had to go hold their properties open. And I was like, you know what? Real estate's been good to me. But if this is where the money's at, I'm sitting on the wrong side of the desk.

And so that was like my breaking point where I was like, okay, no longer am I going to represent other people in their sales and their transactions. I'm going to act on my own behalf. I'm going to buy and sell myself. But I had no idea how to do it.

So I went and made a huge investment, like so many people do in their investing education. I think I paid $22,000. And back then, my family thought I was absolutely insane. That was unheard of. I remember my grandma, she's like, well, you're going to get like a degree or something, right? A certificate? And I was like, no.

She goes, well, do they have a good job placement program? I remember her asking me all these questions. And I was like, no, I'm going to go be my own boss. I'm going to do this all by myself.

So that's how that transition started. That's how I got into real estate. It really was for the money, but then it really became that whole moment of this guy, the grocery store manager. He was able to recreate in parallel to his day job's pension an income that far exceeded it and did it inside of 18 years.

And most people strive for 40 years and can't do that through the traditional means. I was like, you know what? No one ever taught this to me. This is a brand new thing, idea to me. And gosh, if I didn't just luckily end up bagging groceries, I still might not ever know. So I was like, okay, this is what I'm going to do. And that kind of became my, I mean, sure, I got into real estate for the money, but then it became a little bit of a passion of mine to actually share what I had learned.

Seth: Yeah, it's interesting. You talk about what if you had never started bagging groceries and had that revelation and heard all that? It makes me wonder, I have a feeling a lot of people are in that situation and hear about it, but they just kind of blow it off or dismiss it. Or it's like, no, it's not real.

And man, I even think about myself, like how many business ideas have I heard about that maybe were real, but I just blew it off and dismissed it. And it's a good reminder. Like it comes down to action, but I guess also being able to tell, okay, this is a real legitimate thing versus now this is not worth my time.

Matt: Yeah. But this guy, I had evidence staring me right in the face.

Seth: Yeah. I'm sure that helped.

Matt: And he was my age and he was done and I was just starting over. And that was, it really hit me emotionally.

Seth: For sure. So did you start trying to get apartment buildings like he did? Or did you go after houses? You're like, what was your first step after you paid 22 grand?

Matt: As much money as I made in real estate, I spent it as fast as I made it. So I didn't have any capital and having, you know, left the music business, I had to file bankruptcy there. And, you know, my wife left me with all of her debt and, you know, she didn't like it that I didn't have a job anymore, basically. And I was no longer a celebrity, a music celebrity.

So I was really drawn. I got really lucky. The program I chose... It's not around anymore, but it was kind of like a buffet. You got to learn whatever you wanted to learn. It was a two-year program. You go out to Glendale, Arizona and, you just kind of walked up and down the halls and okay, they got wholesaling over here and they got short sales over there. And then there's legal strategies here. And I just kind of walked up and down.

And so I was really drawn to the creative acquisitions class. And because I had to go there because that's what my resources allowed me to do. And I just really embraced that and got really good at it. And went into single-family houses and buying stuff subject to and seller financing and built a portfolio, got it to over 350 units at one time.

I was completely unlendable from a bank standards the whole time. And that's what I was able to build just with that. And then when I started getting money, I was like, well, why would I go to a bank? I don't need their money. I know how to do this myself. So it was really a blessing to be able to start with really no money at all.

Seth: Wow. So you bought a lot of these properties or maybe all of them with owner financing where the person sold them to you on installments?

Matt: It was either owner financing, subject to, private money, a combination of the three. So those are my three main tools.

Seth: Okay. Gotcha. Like a hard money lender or you had a rich uncle who would partner with you or something?

Matt: Friends and family. Friends and family. Yep.

Seth: Cool.

And just people that I I would meet. I met a lot of people at my RIA clubs. What's funny about RIA clubs is that, when you're going in there as a newbie, you're like kind of in awe. I haven't been to one in a while, but there were like 100 people every time I went.

And I just look at all these people like, oh, my God, these people are all real estate experts. Look at all this stuff that they're doing and blah, blah, blah. And then once you do one deal and you tell somebody about it, all of a sudden the crowd starts to gather. And all of a sudden, you find yourself holding court explaining how you did this one deal. And then you realize nobody in there knows what they're doing.

Becoming an expert attracts money, buyers, sellers, partners, investors.And so once you do a few deals, you become the de facto expert because no one else has done just a couple of deals. And what that does is it attracts a lot of money. It attracts buyers, attracts sellers, it attracts partners, it attracts investors.

And, you know, a lot of those people have money and they want to put it to work, but they don't know how. So they cling onto the people that are actually doing it. So that's, that was a big launching ground too, as far as the private money goes.

Seth: Wow. So just out of curiosity, the owner owner financing piece, what percentage of your deals would you say you got that way versus subject to or private money?

Matt: They almost all started with seller financing. So I would say probably 70%, 75% of them were all seller financing.

Seth: Okay. What was a typical structure? How would you explain it to them or get people to go along with that versus just wanting cash? Like what was their motivation for saying, yeah, I'll do that?

Matt: Good question. Beause when I first started doing it and I see a lot of people do still do this today is when I first heard about how, in seller financing, the seller could step in and be the bank, I was like, that got me all revved up and raring to go. So I would just go to my sales appointments and present that right away. And lots of rejection when you do it that way.

And then over time, I started to learn that, okay, so there's this other guy down there a couple couple of years later, he said, you know, Matt, we buy, we're real estate investors. We buy properties in one of two ways. It's either our price in the seller's terms or the seller's price in our terms. You only need to get control of one of them. And, what you need to understand is, it's easier to go for the terms because the seller doesn't really understand anything but price.

So that was the big pivotal moment for me when he said, when you go in, you have to talk price because that's all they understand. They didn't go to some educational program and learn how to sell creatively.

So when you walk in and they're in some sort of distress and you start presenting all these creative things, you sound like a scammer. You sound like someone's trying to steal their property. You sound like they're trying to pull the wool over someone's eyes and doing something that's illegal.

So you just always have to go through the price. And then, if you reach an impasse when discussing price, then you go, well, I might be able to give you a little bit more. If I could give you some money now and the rest later, how much do you actually need right now?

And that was always the transition. And I still use that exact line today. And once they give you an answer, now you've dialed in, you've closed for the down payment, so to speak. Now you just have to decide how you're going to pay the balance. And that's typically in payments.

Seth: Yeah. So is there some kind of, you know, once you get to that point where you wrote the subject of payments, that kind of thing. Is there a standard set of terms that you default to? Like five years, this percent interest, this down payment, or is it like there is no standard? You just figure out what they want and tailor it to that?

Matt: So my default, my go-to, like I always want them to tell me what they want, right? But if you ask them what they want, they don't have an answer. So you have to kind of feed it to them and let them and help them figure it out.

But it'll always be, once they give me the down payment, I'll say, okay, well, you know, most people that everyone else I work with, but they allow me to pay the balance in 300 equal monthly payments. Are you okay with that? And they almost never are. Oh, no, that's too long. It's 27 years. I'll be dead by then. I've heard that a million times.

And I was like, okay, well, how many payments would be acceptable? And now I can go from there. But I planted the anchor with 300, which I wouldn't get, I think it's 27-something years. And I also didn't, if I say 300 equal monthly payments, I'm also starting at zero interest too.

Seth: Do you say that or is that just kind of the underlying assumption?

Matt: No, just 300 equal monthly payments until the balance is paid off. So I didn't introduce interest at all.

Seth: As far as the down payment, is that just whatever they say they need now or do you have a standard down payment that you try to shoot for?

Matt: As little as possible always, right? You always want as long a time as possible and as little down money as possible. And if they say they need a half, then it's like, okay, well, what are the payments going to be? And what is that ROI going to calculate to? And now that gives me a number of what, how much I can go pay a private money person for. You know what I mean?

So that's how I do it. If they wanted a big, giant chunk of money down, then my payments are going to be really small and drawn out.

Seth: Sure.

Matt: And it's like, well, if that's too small, well, I'd be happy to raise them up for you, but what can you do for me on the down payment? And so it would just be like this little seesaw balancing act until we met someplace where it was a good deal for both of us.

Seth: Of all of these people that you've talked to with seller financing, I mean, obviously it sounds like it's worked out plenty of times, but what percentage of the time is it just like, no, we're not doing seller financing versus, yeah, we'll consider that.

Matt: I wish I was tracking that. I've gotten to the point where I just don't pay attention to the no's. I'm just looking for the yes-es. Most people don't like the payments idea. I just don't have a number. I mean, it's obviously just buying properties at a discount, period. Or it’s going to be a low number, right? I mean, one out of 10, you are knocking it out of the park.

Seth: The reason I asked that percentage of people to say yes to that is because I've heard people say that when they're trying to go down this self-financing path, it's usually like 20% to 25% of people will say yes, and the rest are just no. But that probably has a lot to do with other factors too. Like how well they're explaining it and how flexible they're willing to be on the terms and all this stuff. So I was just curious if you had any wild guess.

Matt: I would imagine my conversion rate is better than most just because I break it down. Like I don't say, well, how about you carry back the financing for me? Or I want you to do a seller carryback, or why don't I take over your payment subject too?

But I'll just say, hey, how much money do you need right now? Great, then I'll give you the rest later. Is that okay? So I remove all the jargon from it. So it is easy to understand.

So I think my conversion rate is probably better than most.

Seth: Yeah, that's actually huge. Being able to speak it in ways that are easy for an eighth grader to understand. There's a lot of people that can't do that. I feel like the smarter you get, the harder it is for people to be relatable like that.

I was just talking to somebody yesterday who was going on and on about all this stuff. I just didn't understand what he was talking about and it really hurt our communication. I feel very disconnected from what he was trying to explain to me. So yeah, it's a good, good point.

Matt: It's so true. I mean, and I've gone through where I didn't know anything and I was successful. And then I started to know a little bit of something and started to feel like I might have been a little too big for my britches and would get in my own way. And then I had to just dumb myself down again.

And, you know, when I have clients come through now with our program, they're all nervous and scared. And I said, good, don't let that go. Hold on to that for as long as you possibly can, because it's when you're the least threatening when you're the most dangerous. And so I've learned to actually play that role now.

Seth: Interesting. So of those three, seller financing, subject to, and private money, is your preference to go with seller financing?

Matt: Seller financing is always the preferred option for deals.

Seth: Like if you could always have your pick, is that what you would go with?

Matt: Always, always. As long as it cash flows and it produces an ROI, I'd rather do that every single time. I mean, I wish I would have gotten a few more loans when the rates were down at 2.5%, 3%. I wouldn't mind some more of those. But yeah, the seller financing is always the way to go for me

Seth: Yeah. So did you always stick to residential units or did you ever do anything else or how'd that go?

Matt: I dabbled in three different apartment buildings in Memphis and I screwed all three of those up.

Seth: What went wrong?

Matt: I got them really, really cheap. They needed a lot of rehab and managing a big rehab from Los Angeles and going halfway across the country to Memphis. I just couldn't keep my eye on the prize, you know what I mean? So I delegated too much. Didn't even delegate. I abdicated.

I said, here's the money, go fix it. And then I just trusted that it would get done. And it didn't. And so I would never do that again. But I did it three times, like all within the same year. And I said, okay, let's stop doing that.

Seth: Of those houses that you bought with seller financing, you're subject to private money. Were these ever requiring like full rehabs where you had to get a general contractor and fix the whole thing up because it was a piece of junk? Or were they just kind of ready to go where they didn't take a lot of work?

Matt: Both, but mostly needed rehab.

Seth: Okay.

Matt: Most of the time, if it needed too much rehab, it turned into a wholesale flip for me. So my intent was always to hold the property until I decided that I didn't want to. And usually one of the deciding factors is if it needed too much rehab.

Seth: And one more question about that seller financing. So under what conditions, if you got down that track of the seller seriously considering this, under what conditions would you say, no, like this isn't going to work? Is it just if it didn't cashflow, or was there like a minimum amount of cashflow you needed? Or like, if they wanted a balloon in three years, was that a deal killer? What did the box have to look like for it to work?

Matt: First and foremost, it had to cash flow. That was a must. If I'm not making a giant equity position or if I'm not making a stream of income, it's not a deal for me. So that's the first thing.

Second thing, if I'm going to hold on to it, then I have to have property management in the area that can get the property to perform. That's going to be more vital to your success than anything else, in my opinion, is having good property management that can screen tenants and can collect money and keep the maintenance down low and all that.

So that was always those two things—you know, those were the deal breakers.

Now, when it goes from there, it's a give and take on what the equity position is and what the cash flow position is.

Here's a good example. I mean, I'm always looking for the cash flow, right? But when I moved here to Vegas, I got a couple properties here that don't really cash flow at all. But they are the nicest properties in my portfolio.

And from what I've learned over the years in managing property managers that are managing my properties is that sometimes the nicer houses with the lower ROI are a better experience than when you go into a lower income area that has an amazing ROI. At the end of the day, what actually performs in real life is typically the nicer properties.

So I made that shift about four or five years ago and started really just focusing on much nicer properties and okay, like I don't need the cashflow to live. So cashflow hasn't been that much of a focus, although it's important. I don't want to carry a bunch of negative stuff, but that's just kind of an example of that.

There's so many variables and there's kind of a wide spectrum and it kind of depends on what does the deal present. And then second thing is what do you actually need at that time? Do I need cash to replenish my marketing budget or make payroll or am I cool there? And I can just keep adding to my portfolio and adding cash flow.

Seth: Another question I had was on the cash flow piece. Was there any kind of ratio either back then or now with the nicer properties you have where it's like, if I've got this much equity tied up in it, it needs to make this much per month in cash flow?

Like if you've got a million dollar property making you 25 bucks a month, I'm assuming that's probably the juice isn't worth the squeeze. So like, is there a minimum threshold?

Matt: I didn't have a strict box, no. But kind of what I would go for if I could get somewhere between a 10% and 15% cash-on-cash return, then I knew I could borrow the down payment and pay somewhere between six and eight and create an infinite return. So that was kind of like my minimum income.

Even though it wasn't written down anywhere that in my mindset, I was like, gosh, if I can get between 10% and 15% cash-on-cash, then I know I can pay somewhere between 6% and 8% for the private money and my private money pool would be more than happy with that. Because I only need 10 grand here and 50 grand there for those down payments.

Seth: Yeah. It sounds like you're clearly not afraid of hard work. Trying to think of, why do you think you were able to do so well and continue to do so well and all the different things?

I mean, you've succeeded in multiple domains, you know, the music business, real estate, education. Like, why is that? Why doesn't everybody succeed like this, like you do? Is it because you're not afraid to get on the phone and just talk to people and wheel and deal and negotiate, whereas other people might be scared or timid or shy? What do you think your unfair advantage is?

Matt: I think I'm very clear. I don't want to struggle, right? I don't want to just get by. I don't want to be mediocre. So that's inside of me. So I want more than average, first.

And I think second is if I don't go get it, who else will? I think those are probably the two things. Like no one's going to do it for me. And apparently today that does make me a little bit of an anomaly.

It seems like you pay attention to social media and you start reading the comments underneath. It's just like, wow. You know, one of the big comments that I heard, things I see all the time and hear all the time is when I talk about rental property and people say, yeah, but then you got to deal with tenants.

I was like, okay, so here's the trade off. I can spend four hours a month managing my property managers and deal with a bad tenant every once in a while. Or I can report to a boss for the next 40 years. You're telling me that sounds better? Because I feel that mindset a lot out there. Like that's the trade-off. Like you're going to say, no, real estate sucks. You're a loser and you're a con man and blah, blah, blah. And you're an idiot and you're irresponsible. And how dare you teach this to people? Because everyone's going to lose.

I'm just like, wow, is that really, that's really what people's mindset is when it comes to income property. They think they're going to mess up with every single tenant's going to be terrible for them.

And then they think, oh, there's the other one. If the water heater goes out, there goes your whole years of cash flow. Like I hear that all the time. And that's a reason not to do it. I was like, yeah, but I got the appreciation. I got the depreciation. And the tenant is still buying the property for me. And then whatever improvements go on, I just adjust my cost basis.

And it's beautiful. There's no other investment class that allows you to do all this stuff. And people hear just one thing and they're like, oh, no. And they walk away with the wrong lesson. And that's a shame.

Seth: Yeah, that is a shame. Well, I'm actually curious. So when you rewind the clock from when you're 34 and you're bagging groceries, to then you make this decision, you get your education, you start going down the real estate track as an investor, not just an agent. So how long did it take you from the day you started doing that to the point where you had more than enough properties to give you the cash flow to give you a much better life? I get that's kind of an open-ended question.

Matt: No, it's fine. Just under four years, about three and a half years.

Seth: Okay. So I guess you were working as an agent as you were buying these properties and building up that cash flow?

Matt: No, those two things did not run parallel for more than six months. So I was exclusively an agent, did not own anything. And then I made the transition. I started owning and I stopped being an agent altogether.

Seth: Okay. So during that runway up to that four-year period, were you still bagging groceries to live off of that? Or how were you supporting yourself?

Matt: Kind of what I said. I did the marketing. I did almost all networking, though. I mean, it was almost all face-to-face. And I mean, I didn't know people would respond to postcards back then. I thought that was ridiculous. Who would send that trash?

God, if I only knew then what I know now, I would have sent twice. I would have gone overboard on postcards back then. I had no idea they were working so well. But my intent was always to hold the property. But I ended up flipping a lot.

Seth: Oh, I see.

Matt: Did you know Matt Owens over at Owens Capital Group?

Seth: I don't think I do.

Matt: He's in Redondo Beach. And he had a big turnkey operation before I even knew what turnkey was. And I would go out to all the REIA groups. I would go to the Chamber of Commerce and all the little networking parties and I would sell his properties for him.

I got by doing that and he paid me 3,500 bucks for every turnkey property. And so I just went out and looked for busy professionals and brought them to his doorstep and I got commissions for that. So that paid a lot of bills for a long time.

Seth: So you got up to 300 units at some point, and then did you you decide to like start selling those off? And at what point did you decide, Hey, I should get into the education part of this business and do that. What made you realize early on that you'd be good at that?

Matt: All right. So that's a good question. I had no intention of ever becoming an educator in the beginning. I went to a rah-rah seminar. I was in one of those little pyramid multi-level marketing things for men.

And they were just like, well, loaded you up with all the personal development stuff. And they'd always have speakers. And there was one guy there. And this is right when I was just getting started in real estate.

And he said, you know, the wealthiest people in the world, they have one thing in common. How they make all their money is they get really good at something and then create multiple streams of income from that one thing that they're really good at.

And he says, most of the time, it ends up as being a consultant, a teacher, a tutor, or something like that. And so I heard that. Oh, okay. Well, maybe I'll teach one day. Let me get some more transactions under my belt. Maybe that's a possibility.

And I've always been the perennial opportunity seeker. And I got invited to this one thing. And this was when I was brand new. The internet was brand new. And someone went to this little workshop on membership websites. I was so blown away because I was receiving passive income from real estate. And now I want to diversify and get passive income from another source.

And so now I kind of put those two things together and went, well, maybe I could put some little videos together, put them inside this membership website, have another stream of passive income. So that's how it really started; it was the desire for another stream of passive income.

So we did that. And, you know, I sold it for, I think a hundred bucks a month or something like that. And we had probably a hundred people in there. And so that was kind of like, okay, well, hey, that's money. I don't really have to work on it. It's all automated, they can watch the videos.

And one day I walked into the house and Mercedes said, hey, I got you a coaching client. I was like, what's a coaching client? What do I have to do? And I said, I don't want to do that. I just want this passive income thing. I don't want to talk to people. I just want this to be this passive thing.

She said, well, he's already wired the money, so you've got to do it.

And so that was kind of where it started and he turned out to be wildly successful, that very first client. And I think I got kind of hooked on living vicariously through him and recognizing something I knew had value to other people besides myself.

And then we put out and sent out a little email, hey, who else wants to do this? And gosh, that was when you could send out an email and he had 30 new clients by noon. And that's kind of how it started.

Seth: I'm actually curious, how do you split your time between this education side and then the actual transacting of real estate deals yourself? I know this is something everybody who's a real estate investor and teaches about that has to figure out how to balance.

Is there some kind of organized structure where it's like, okay, I'm going to spend this day doing this and these other days doing this, or does it just kind of change from week to week? How do you make that happen?

Matt: Yeah, that was a big, big problem in the beginning because I would sell this thing that was like for 12 weeks, an hour of a phone call a week for 12 weeks. And then guess what happens when you get to 40 clients. Like that's all you do all day long and there is no time for anything else. I was like, okay, this is insanity.

I remember the year, it was 2014 or 2015. I would give all that money back to have that year back because all I did was stay on the phone for these little consultations. But what I did is I moved everything to a group structure. And so on Thursdays, there's a group call.

So it originally started off, I just work an hour a week now and service the same people and get the same results. And then I gave them access to me via the free app on your phone, Voxer. If they had deals to look at and they needed explaining of complex things, then they would come to the group call and I would do it then.

But if they had a quick question or two that I could just answer really quickly and get them going again, then that's what they would use Voxer for.

And that changed everything. All of a sudden, it became almost a lifestyle business. And now I had six and a half days a week now open to continue my real estate investing.

Seth: That's a great idea. Yeah, it makes sense to batch things like that. Is that still how it works today, that kind of group format?

Matt: Yeah. I mean, Thursdays are dedicated to my coaching. So there's like a few calls now that I do on Thursdays, depending on what experience level that the student is in. And then, yeah, the other six days are freed open for me to take the real estate calls.

Seth: Do people ever give you crap about being an educator at all? Like if you can really do this…

Matt: I’m just gonna say yes, I don't know what people give me crap all the time.

Seth: I mean, is that like a thing that you ever encounter?

Matt: The new word I keep hearing is grifter. Go ahead.

Seth: I mean, is that a thing you ever encounter where people like almost looked at you with a skeptical eye? Like, OK, how are you trying to scam me or something? You're not real because you're teaching stuff instead of doing it. Or is that a you ever deal with that or not really?

Matt: Yeah, it comes up particularly in the comments. Right. I do remember the day where someone said just another stinking guru. And I was like, guru? Is that what I am? Like, all of a sudden, it was like the first time anyone ever called me a guru.

And I was like, oh, wow, that's weird. I didn't know I was a guru. I thought I was just kind of, you know, helping people and being a facilitator of this online education. I didn't realize I was a guru.

But you get that. But weirdly, I've had people come through here. And after we've had some time together, I said, you know, Matt, I'm glad I came here and I'm glad I chose you. But, you know, I was actually more skeptical that I couldn't find anything negative about you on the iternet. I would rather have found something, maybe one or two people that kind of had an issue.

And so I've had it both ways, you know, to where people, they have negative things to say and there's nothing negative about me that has been said. Who knows?

Seth: Yeah.

Matt: If that's who they are, then they're just not the right fit to work together.

Seth: Sure. Yeah, I was listening to this interview between Jordan Peterson and Oliver Anthony. You know who he is, Oliver Anthony?

Matt: Oh, he's the singer guy, the country guy, right?

Seth: Yeah, he kind of just came out of nowhere. Yeah, so he put a video on YouTube and it blew up. Now he's got all these opportunities coming his way.

And as Jordan Peterson was interviewing Oliver Anthony, Oliver was saying like, yeah, I don't really want to sell out or I don't want to just sign this huge record deal. Almost like it was a questionably immoral judgment to do that, to just take a bunch of money and do that.

But Jordan Peterson had some kind of interesting thoughts on that. He was saying, you know, a lot of people who criticize others for selling out are people who have never really had the opportunity to sell out because they don't really have the opportunity. So they kind of look down on other people who do.

And also like, if you do take those opportunities to get more exposure, spread your message, and seen by more people, inevitably, you're going to get a lot more feedback, which is going to give you more information on how you can be doing things different and better as opposed to just working in a silo and just putting your head down and doing your own thing.

So there's actually a lot of upside to getting bigger, so to speak. And I know it's not necessarily this evil move or selfish move to do that, even though there might be obviously self-interest in that. There's a lot of good things that can come from leveraging the internet and getting your message out there.

So i thought that was interesting.

Matt: That's a pretty common viewpoint, I'm not surprised Oliver Anthony had that position. That's a pretty common viewpoint inside the music industry, because it's such an artsy thing that people feel once you do it for money you lose your your edge, you lose the artistic aspect of it. So I had that, I experienced that all the time in the music business. It was tough to work with people that weren't motivated by money. It's like you're a brilliant artist, I want you to be on my label. What do I got to do to to lure you over here so I can work with you?

And I think there's a lot of me that way as well early on. But I think the older you get, you realize how society works, you know, and the way that money serves our society. There's nothing that replaces it the way that it serves us. It puts food in our stomach. It puts the roof over our head, the clothes on our back. It pays the hospital bills. And it allows us to do all of those things for the people that we love. And if you don't have money, you can't do that.

So I think the older I get, the more I think you have an obligation to make as much money as you possibly can. If you want to really live a fulfilling life in a society that we live on this planet, because that's just how society works and you don't need money to be happy for sure. Like I've never wanted to debate people on that because that's kind of silly debate in my opinion, but boy, life is a whole lot better when you got it. I'd rather be sad with money than sad without it.

Seth: Yeah. No, I hear you. I'm with you. So you were talking earlier about, you wish you knew that like postcards worked as well as they did and that kind of thing. Maybe, I wonder, when you think of all the stuff you've learned in all the businesses you've taken part in, is there a most important lesson you've learned that you wish you knew when you started that you know now?

Matt: Gosh, there's a few of them, but the one thing that comes to mind right away, and I was just at a Christmas party. And they asked like if you could go back and tell your younger self—one of the questions, the table topics, that they surrounded on the table was—if you go back and give one piece of advice to your younger self what would it be?

And immediately it came to me was don't be afraid of the zeros. Meaning, it takes no more work to flip a hundred-thousand dollar house than it does a million-dollar house.

And in the beginning, being from Los Angeles and, you know, I think the median price in Los Angeles at that time was $350,000, $400,000, something like that. But when I made my first trip to Memphis and saw that houses were 50 grand, I got so excited and my confidence just went through the roof. And that's when I really started to succeed.

But looking back, I could have done the exact same thing in Los Angeles with the exact same work, the exact same processes, the exact same steps, the exact same conversations, everything, and made 10 times the money.

So I would go back in and that would be one thing. One lesson was like, just don't be afraid of the zeros. That's because as a big thing, a big number attached to it doesn't make it more difficult or scarier.

Seth: Why do you think we are more afraid of the zeros? Like, I think I am to some extent. And you're right. I mean, I don't know why. It doesn't make a logical sense. I don't know if I'm thinking somehow there's a bigger consequence if I screw this up versus a small deal when, either way, I'd be kind of screwed. So I don't know. But what do you think is going on with people's heads?

Matt: There's one paradigm shift that I had that really kind of changed everything for me. And it just removed that fear altogether. In fact, it almost reversed it. It’s when you don't have any money, you think that's the hard part, right? You think, like, I got to want to put an offer on a million-dollar house, where would I possibly get that money?

Even if they said, here's a 5% down payment and I still need 50 grand to make that happen, right? So that will hold a lot of people back from even writing an offer, let alone getting into the deal.

But the operative word being “deal,” if that 50 grand down is going to produce 100 grand profit, then you must put it under contract or else that 100 grand profit won't be yours.

And it's not difficult. Like an example I always use when I'm speaking to a group live is that “I have a dollar in my hand. Give me 50 cents and I'll give you the dollar.” That would be no problem for everyone to do. People do that trade all day long. Right? And so that kind of connects. So that's how you kind of look at a deal is that I have 50 cents that's worth a dollar to somebody.

And if you have that, then you want to get as much control as many of those as possible. And the same thing will go is like I have a hundred dollar bill, do you have 50 bucks, so that you'll trade me for it. Now we just added some more zeros to that and the answer is still a resounding hell yeah. And if it was a million bucks and do you have 500,000 for it, it'll be like, no, but I’m gonna go find it because that's a quick half a million dollars I could make right now. So that was a huge paradigm shift that has me no longer afraid of the zeros.

Then also, when you start playing that way, you start to recognize, wow, it's actually a lot easier to raise a couple million bucks than it is 50,000. If the exchange is there, right, if the dynamic of the deal is still there, it's much easier to find that money because for $50,000, someone's going to get 10% on that in return. And they're like, eh, that's like no money. It's probably even worth writing up the paperwork and signing the docs.

But hey, if I could put a million bucks out there and I can get 10% on it, then now you capture actually not necessarily more people's attention, but you get more serious attention and consideration from the people you do share it with.

Seth: Oh, that's a great illustration. I love that.

It sounds like things have gone resoundingly well for you as a real estate investor. Have things ever not gone well? Like have you had any horror stories or deals that fell apart or things gone really, really bad or anything like that?

Matt: Well, all of my multifamily ventures have really gone bad and I tried to do them from afar and they were major. I just bit off more than I could chew. They were big projects.

Seth: Does that mean like you lost money on them or something, or it was just a waste of time or how'd they go bad?

Matt: The one I got out by the skin of my teeth and broke even and was able to get all of my investors their money back. And I actually had to sell that with seller financing just to, so I could at least get my price. So that was okay.

Another one, yeah, I probably lost about 50 grand of my own money. But then there's another at the same time, and these three all happened relatively in the same time in relatively the same area.

Then there was another thing. I just bought this building. It's 50 doors and it's just a brick building and they were all gutted. Like every single unit had to be redone. And I got that for $1,000 a door. And I was like, well, hell yeah, just take it. We'll figure out what to do with it later. And I held onto that for a year and just paid the property tax.

And I'm finally just like, you know what? I'm never going to get to this. And now I've got these open wounds from these last two multifamilies. And I sold that one for $2,000 a door.

So that was actually a great day. But I haven't ventured back into multifamily since. But those were my disasters. And I'll do it again. But now that I'm local here in Vegas, I just told Mercedes last night, I was like, I want to get a multiunit here. We've got to start looking for multiunits here.

Seth: Cool.I mean, you got into buying houses. It was pre-2008, right?

Matt: It was right at 2008, 2007. I got the bug in 2006 when prices and the market were really flourishing. And then that's kind of when I was getting trained and educated.

Matt: Okay. And fortunately, I didn't lose a whole bunch of money like everybody else did around me. And so when the prices came down, now I was armed and ready to go.

Seth: I mean, if you were trying to do that exact same thing, buying those first 300 units or however many you got in those four years, do you think that'd be a lot harder to do right now in this environment in terms of getting people to do seller financing or getting lower prices and that kind of thing? How much of that success do you think was tied to just the time of which you were doing it?

Matt: Well, there was a lot more desperation. So if there's a lot more distress in the market, that makes it a little easier. And the other big difference from then between now is there are just a lot more houses than there were people. So that made it easier.

But, you know, life comes along and kicks everybody in the teeth every once in a while. And it doesn't matter where they're from or what demographic or how much they make a year. So us as real estate investors that exchange equity for peace of mind, there's people every single day that need peace of mind. And they're going to turn to their property for that financial relief and they need it fast and a real estate agent can't handle it. And so I don't think it's remarkably different or more difficult.

Seth: We talked a little bit about some of the harder deals you've done where you didn't come out ahead necessarily. Are there any astoundingly amazing deals that were just grand slams? What do those look like?

Matt: I think my grand slams came at the beginning of COVID, when everyone was kind of like, I mean, the very, very beginning when everyone was kind of panicking, they thought the economy was going to collapse and everyone was predicting the real estate market was going to crash.

And I was able to scoop up quite a bit of properties from people who had just bought turnkeys. I've got all of those with just seller financing. People just want to be out of it. And then we know what happened over the next two or three years as they all doubled and tripled in price in some places.

So that was a whole slew of grand slams just at the time where I was, I just want more cash flow. And if I'm going to get it with seller financing, I don't have to put a bunch of money down and I don't have to get a bank finance. I was like, I'll take them all. Yeah, let's go. This ain't going to last forever.

And so those were my, those were my really, really big wins. Otherwise everything has just been, you know, nice little single-family purchases.

Seth: Yeah. It's interesting. I kind of see with high interest rates, certain sectors of the real estate market slowing down a lot. And I just get excited when I see that stuff.

Are you kind of like that too? Like if people are freaked out, like it was three months after the pandemic hit, when it was like a huge depression for a really short period of time. I mean, that was a cause to get excited. There were tons of of opportunity there.

But it just makes me wonder, is there ever a time when it's appropriate to be scared? Like, oh, things are getting a little too crazy. Watch out.

Matt: Well, I think to justify it, to be really scared, we need a crystal ball because we don't really know what's going to happen next. If you look at right now and I get a lot of disagreement with this, but here's my theory about right now.

There's several dynamics at play that were different from 2008. And everyone says, oh, it's going to be 2008. It's a cycle. It's going to happen all over again.

I was like, well, if it does happen, it's not going to be for the same reason. And it's not going to be for a reason that we've ever experienced before, because the supply and demand has gone to such an imbalance that there's more people at home buying age. Like the millennials are now intersecting with the first time home buyer age. We have more demand for housing than any time in the history of this country. And we're also coming off of a 10-year deficit in building, so right there prices can only go one direction.

The second thing would be the interest rates obviously affect affordability and how available money is, but the prices keep going up. So although a lot of people are hurting, there's a lot of people that are still doing just fine and buying what's left because the inventory is so low.

I think now after the Fed's last little signal and they did not raise rates and then they suggested that they're going to lower them two times in 2024. And just based off of that news, we've seen the biggest decline in mortgage rates in a four-week period than we've seen since 2000, whatever. It's like the fastest drop in 20 years.

And so rates have already come down almost a full point than they were just five weeks ago. And if that's just before they even brought the rates back, so the Fed brings those rates down again, we hit 6.5%, 6%, I think a new bottom has been established and you'll see a bunch more people just because there are that many people to to dive right back in.

And I think that's going to happen in the spring. It's an election year. And the current administration doesn't want to sit there and debate and have to defend their position on the economy if the economy is going good. So I think they're going to do whatever they can to boost the economy.

And I think at that time, because of the supply and demand imbalance, right now, houses are probably as cheap as they're going to be for a very, very long time.

Seth: Well, given that and the whole crystal ball thing, are there any particular pockets of opportunity you think exists right now, just given where things are at?

Matt: I think the pocket of opportunity exists with single-family homes. If you look at Blackrock, it’s on track to own 60% of all single-family homes by 2030. Blackstone just raised, I think it's $40 billion, might be $30 billion, whichever. It doesn't really matter. I guess every billion is just another billion. But they just raised that to compete with Blackrock.

Weirdly that there are ones named Blackrock and ones named Blackstone, but they just did that. And then just two weeks ago, there's a giant press release from Jeff Bezos. Just came out of retirement and started a single-family fund.

Seth: Oh, really? I didn't hear about that.

Matt: So the race is on for single families right now. And I think, you know, as the expression goes, a rising tide lifts all boats.

The opportunity is to own or control as many single families as you possibly can right now. Because over the next few years, if all of those are institutionally owned, those that are privately owned are going to be at a premium.

That's kind of where I think the opportunity is right now.

Seth: Interesting. No, I hadn't even heard about that. I don't really follow the single-family home space that much, which is weird for a real estate investing person, but that's just not my area of focus.

So it's a good lesson in how to stay ahead of things, depending on whatever your strategy or your niche is. Information is powerful. Just being aware of that stuff and what's going on, that can educate your moves in a lot of ways.

Matt: Yep. I mean, do you remember the name Lee? Lee Iacocca?

Seth: Oh, yeah. Was he with Chrysler or something?

Matt: Yeah, he's the one who went in and saved Chrysler. And all he did was look at this type of information and look at demographics and look at where the population is aging. And he just based it off the Baby Boomers.

And when he did that, the Baby Boomers were starting their families. And he's like, okay, so what does this massive portion of our population, what do they need? Well, they need something to transport their families. And he essentially invented the minivan. And so he made that whole decision and it turned out to be a genius move and it brought Chrysler back to life just based off of looking at demographics.

And if you go back and the baby boomers had the same impact on when they were teenagers on Levi Strauss and on the Mustang, and then they had the same impact on Gerber baby food when they were born.

And so we've already seen that happen. And now we have this other bigger bubble, bigger population in a shorter timeframe that were born, being the millennials. They're going to go through and have all the same impact on all the same industries that the Baby Boomers did.

And one of those industries is housing. And right now they've just reached home buying age.

And there was just an article, I think it was in Business Insider last week, because the conception was millennials don't really want to be owners. They just want to rent. They want to be mobile. They want to be loose. And so they've kind of hit the home buying age a little later later because they have totally flipped.

Bank of America just did a whole new poll, new survey on it. And I was like, 70% of all millennials think that's their only chance to ever be wealthy is by buying real estate, but they're scared to death that they're not going to be able to. So I think when these rates come down, there's going to be a frenzy for them to try and get theirs.

Seth: Now that whole thing about Lee Iacocca and just like understanding the general populace and what they may or may not need. Like, how do you do that with confidence? Like what if you made the minivan and it just didn't work? What if that was just a miss, a misunderstanding?

I mean, I feel like we all look at him like a genius because it worked out, but I don't know. What if you made some other kind of weird car that people didn't buy? It's obvious in hindsight, you know?

Matt: Yep. But I mean, it's kind of like when you look at a human's basic needs, if you invest in a human's basic needs, a human's desire for water and food is not going to go away. So that could be a good investment. And the same thing with shelter, unless, you know, just kind of sleeping under the stars actually comes into fashion. And that's never been a thing. We've always had a roof over our heads.

If you're going to make a prediction, I think that's probably the safest prediction you could make. And if you look at Baby Boomers now, they're having a big impact on health care and retirement homes and vacations. And because now they're at an age where that's what they need. And they're having that big an impact on that whole industry. And this is going to happen all over again.

Seth: Have you seen the stuff about how birth rates are plummeting in most first world countries?

Matt: Yep.

Seth: So do you think that plays any role in this? Like, I've even thought about this with self-storage. Like, so it's going great today. But what if the population drops and a bunch of people just don't need storage anymore or whatever it is? I think the U S is in a better position because a lot of people want to emigrate here, which can make up for that loss.

But do you think that has anything, or worth looking at that in any way for the future?

Matt: I mean, I'm going to say absolutely yes. But there is a caveat that I have for it is there is enough people that have already been born to support the housing industry for at least the next 10 years, right? For at least that, probably well into the 20 years. And that's if we didn't add any more people.

But the Census Bureau came out with their report showing that we're having a million new immigrants a year, as you just mentioned. So there's a million new people. And that brings our birth rate slightly above the replenishment value. Forget what the number, I think it's like 1.8 babies average per family to maintain. But with the immigration, integration, it puts us at 1.9 and a half or something, just slightly over.

So as long as that policy remains in place, then I think real estate in any capacity is probably job security for quite a while.

Seth: how do you know all this stuff? Is it like a website you're going to, where it's like, hey tell me stuff I didn't know as a real estate investor? Is it like a ChatGPT thing or how do you stay on top of all these stats?

Matt: It's probably mostly because of the YouTube channel. I got to keep making stuff that's relevant. So I got a bunch of Google news alerts on and I'm always reading and like, what's the interesting thing to talk about today? And so I learned a lot, just kind of de facto being a content creator.

Seth: Well, when you and I were talking earlier this week, we were talking a little bit about AI. What role do you think AI is going to play in the lives of real estate investors in the years to come? Like, do you think it's going to cause a cataclysmic shift in anything or is it just kind of a fun little thing that's going to be around?

Matt: Well, fortunately… Each little AI bot out there doesn't need a house to own, right? So it's this intelligence that doesn't need shelter.

Gosh, you know what? I don't even know if I can make a prediction because it looks like all the experts that were creating AI predicted incorrectly. Have you heard that?

Seth: What were they predicting that wasn't right?

Matt: Well, they were predicting that AI was going to gobble up all the low-paying, menial jobs first. And they thought when it gets to more creative stuff and the stuff where you really need critical thinking and like that, that's probably going to be last in the food chain for AI to go ahead and take over.

But it actually started the exact opposite. It started taking over art. It started taking over music. It started taking over all the critical thing in writing and stuff like that. And, you know, the assembly job, assembly line jobs that we thought was going to take over, those seem to be all be pretty safe right now.

I use AI, like I use the ChatGPT thing almost every single day, probably for 40% of my day. I'm on it because it's so helpful and I'm so much more productive. But where their ideas of that advancement is going, I don't know.

I just saw this reel on the hologram. So they've had these holograms that they could actually literally, you would mistake them for people and they could cast them out anywhere. They've had that for years. The CIA has had this for years. And I don't know if this is true because it was on a reel, but they're pretty good at faking that stuff. But I was just blown away on that technology. And like TVs are just going to go away. Everything's just going to be a hologram show that sits on your desk. And if you don't like it there, you can pick it up and put it over here. And so wait until we have this little hologram sitting on our desk and there's AI attached to it.

Like, I guess, that could be the future, but I don't know what their capabilities are.

Seth: Have you used the ChatGPT Plus app, like the voice thing where you can have a verbal conversation with it?

Matt: I have not. No.

Seth: Dude, you have got to try it. It's nuts.

Matt: Is that on the App Store?

Seth: Yeah. So if you got ChatGPT Plus, do you have that?

Matt: I do, yeah.

Seth: So if you get the app from the App Store and just download the thing and sign in. So right down where you would normally type out your prompt, there's a little set of headphones. And you tap that and you can just start talking to it.

And, um, the voice that comes back to you is stunningly real. It's crazy. It's like, it has like breaths and it says like, um, and like, and he says things that a person would say. And it's like the most realistic thing I've ever heard. And I've heard from people who are using this to practice their calls with motivated sellers. Like they tell ChatGPT to pretend to be a motivated seller and ask challenging questions back.

And I tried this the other day and it was weird. I almost was like getting nervous talking to this chat bot. It's like, you know, starting to sweat a little bit. I was like, wait a minute. This is just a machine. It's okay. Relax, Seth.

But if you're somebody who is a verbal auditory processor and you like to just talk your thoughts instead of writing them out, it's gold. It's an amazing resource.

Matt: I have the app down on my phone. I don't even play though with the voice commands on my phone either though.

Seth: So I don't usually do it either. Like I actually prefer to type stuff out cause I can say what I actually mean. I just think better that way. But yeah, there's a lot of times, especially if you're like driving or something and you just, you just want to be able to talk it out with somebody and it's really good at that.

Matt: No. Interesting. I'm going to check that out.

Seth: Yeah. Well, it's made me think, I mean, if it can talk that real to me and make me feel like I'm talking to a real person, imagine what that means for phone calls and call centers. And I mean, any kind of customer service where people need human contact. I mean, it's not that big of a stretch for this to replace that now, or even like texting and chat bots and all this stuff. Like, I know that stuff exists already, but I feel like that's going to take huge leaps forward.

Matt: Well, I mean, just at the Google conference four years ago, there's a YouTube video. I remember AI calling up and making an appointment for a hairdresser, right? And it had the little breaths. It had a little chuckle. Ha ha, that was a good one or something like that. And so that was four years ago.

So yeah, I mean, I'm sure it's already here. We just don't know which app it exists in at the moment.

Seth: So is there anything you still want to do in your real estate investing career that you haven't done yet? Like do you have any big audacious goals where it's like, yeah, I got to do that, but you haven't been there yet?

Matt: I want more houses. The pandemic wasn't great for my education business. And when you're a live event business and they shut down live events, it kind of kills the business model. And so I sold a lot of my real estate, a lot of units to keep that whole education platform running.

I guess the biggest thing is for me to replenish everything that I sold. And it's focus number one at the moment over the next three or four months, because I think as soon as the rates go down, the prices are going to go up and it's going to be even more difficult to find.

Seth: When you're out finding new houses to buy these days, I don't know how much you're actually buying houses right now, but are you using direct mail? What's your way to find those deals?

Matt: I just released a video on exactly how I'm doing this.

Seth: Oh, cool.

Matt: So it’s on YouTube on the channel.

Seth: I'll find that and I'll link to it and I'll put it in the show notes.

Matt: Okay, cool. First, you have to know, yeah it is direct mail, but it's a very different type of direct mail. And a lot of people don't think direct mail is working and the reason it's not working is because you have thousands, hundreds of thousands of people sending the same direct mail pieces to the same people. And I've been in the appointments and I've seen stacks of postcards on people's desks, like all the letters and correspondence they've received from investors that are trying to get a deal.

And so what's required is first, you got to know who you're looking at or looking to. The second thing is how you got to personalize that communication. You have to get noticed and recognized in that person's mailbox above and beyond what everyone else is selling.

So rather than sending the same thing everybody's sending, you have to send something that nobody is sending.

And so I've gone to a few different direct mail houses that aren't real estate mail houses. And, you know, they send things in bulk that look like birthday cards and special packages and stuff like this and other direct mail stuff, but not necessarily real estate-related. Sure, it costs more, but I don't have to send out as much because it gets recognized, it gets noticed.

And then the message within, this is where I've been using ChatGPT to death because I've got this long, lengthy prompt of what's the ideal thing to say. And this is, in a nutshell, the ideal thing to say to an out-of-state owner of a vacant house that has a tax lien on it, to create a letter or a sequence of correspondence through different mediums. Creating a campaign, so to speak, that's speaking directly to that person's issue. Like that was the only letter I sent out this month was to this person. And that's the experience that they get.

And so that's working really, really well. And I put the step-by-step process on how how to do that.

Doing that and then also the other part where the stats are, and you've probably seen these stats before, the sales stats. But most sales or deals don't happen until after your fifth contact, right? And then most people will quit after their fourth, which is really remarkable because they're three feet from gold and most people quit.

And so I think with the direct mail, how I generate the interest, that works. But how I actually close the deals is with my follow-up sequence that you have to follow up and you have to leverage as many different types of communication and correspondence as you can for that follow-up. And that's what that whole video entails.

But between those two things is, uh, it's working really well. That's still working for me.

Seth: This is the best real estate lead generation strategy for 2024? Is that the one?

Matt: Yeah, that one. Yes.

Seth: Anybody listening to this, go to retipster.com/178. It's in the show notes and I'll have a link to that video here. Or you can just go to Matt's channel, Epic Real Estate on YouTube, and you'll find it there too. But that sounds awesome.

So it makes me wonder if you're able to send out a lot less mail, let's say I've got a list of, I don't know, 5,000 people and I've established, okay, I only have to send out a thousand now because this is going to work a lot better.

Do you have some logic you go through to figure out, okay, these are the 20% that are the lowest hanging fruit, and these are going to be the easiest ones to get. So I should go to these ones, not those other 4,000. Or is it just pick a random thousand from that 5,000 list and go with that?

Matt: Good question. So there's kind of two ways I go about it.

The first way is I try to stack as many of these distressed factors on top of each other as possible. So as I was just saying, if I'm going to send a letter to an absentee owner of a vacant house that has a tax lien on it, that's like three factors of distress.

They're an absentee owner, which means they might be a frustrated landlord. They have a vacant house that's not producing income. And they have a tax lien on it, which is a symptom of potential financial distress.

So I can do that. And so that would produce a certain size list. And then if I added one more thing, I was like, and also it was showing foreclosure activity. If I add that one more factor, then the list gets dramatically smaller, right? And so by adding those factors, that kind of reduces the size of your mailing list just by doing that.

But once you add too many, I mean, you're starting to get these small little micro lists of 20 houses here and 15 houses there and 30 houses with that one. So that's one way. If you can find the right combination that gives you what your number is according to whatever your monthly budget is going to be.

The second one is I use DealEngineer. It's kind of like PropStream, I guess. It has all the data and everything, but it has the predictive analytics. So it has all the same property data that every other software basically has. They pull in their data feeds and there are these aggregators, right?

So it has all the property data, but with the AI, they've been able to add people's data to it as well. And it does these predictive analytics by researching, you know, 40 years of properties sold off the market. What did the people have in common? Not just what did the properties have in common?

So it'll go deep. It's very intrusive. What magazine were they reading? What were their neighbors doing? And who was their neighbor? What was the school system experiencing at the time? What was the crime rate at the time? So it takes all of these different things. And I think it has their credit reports and everything.

And so it takes all of these information points and it creates a predictive score or a sellability score. And then I use that to sort as well. So I kind of go back and forth and create these different lists.

Seth: You go back and forth between PropStream and DealEngineer. Are those the two websites you're using to do this?

Matt: I use primarily DealEngineer and I use this other thing called Seller Sniper. DealEngineer gives me all the data that PropStream has. So I can reduce my list in one of two ways: by either just the factors and see how many that gives me or I can just use the AI and reduce it that way.

Seth: Does DealEngineer actually generate the lists for you as well or does it just tell you this is what these people look like, these things in common?

Matt: Yeah it'll it can generate the list for you because it has a score between between zero and 1000. So anything above 500 is, is at least two times more likely to sell than the stuff below 500. So there, that'll fix and clear up a whole bunch and clear out all the people that aren't going to sell to you at discount right away, just by doing that single one.

Seth: And how long have you been using DealEngineer? Have you used it long enough to know like, yeah, this works, this gets consistent results?

Matt: I'm going on almost two years now.

Seth: Oh, that sounds pretty sweet. I got to check that out.

Matt: I think they have a land thing thing too. I didn't pay for the land plugin, but they have a land upgrade.

Seth: I'm sure I and many others will check that out.

Matt: I think what really makes the marketing work is not necessarily the list and not necessarily what you're sending, but it's like a combination of all of them. So if you can find somebody that has a problem that would be open to sell in their house to solve that problem. That's first of all.

Second of all is standing out in a sea of marketing messages out there. So you got to stand out. If you make it personal and then if you're consistent and then you follow up, I think they all work if you have those elements in your marketing.

Seth: Yeah, I think I have some trust issues with some of these data services because I know kind of, not entirely, but kind of what goes on under the hood. Like there are some counties out there that are just super rural and remote where like the data just doesn't get updated for years on end or at least every quarter. Like, it's just not current.

Whereas in California, it's about as good as it ever gets. I mean it's like almost perfect data they just do such a good job there. I think that's where it all started. ut you know if you go to some place in Timbuktu or North Minnesota, it's like the the data either isn't there or it's going to be really old and these data services aren't going to tell you that.

So, I don't know, it just bugs me because I see them advertised like, yeah we'll show you delinquent tax data and this and that. But I know they don't actually have that data in a lot of counties. And they're not going to tell me when they don't.

But you work in like Las Vegas and more populated markets, right? So you probably don't run into that too much.

Matt: Yeah. So yeah, you're 100% right. I mean, totally.

And then even the data, even if it is updated, and I learned this as a real estate agent, is that that data is entered by someone that's working at minimum wage and who’s just sitting there watching the clock and can't wait to go home. So mistakes get made and they get made frequently, right? So there's that aspect as well.

But, you know, is it is it better than no data at all? That's kind of the question you can ask yourself.

Seth: Well, especially if you've used it and seen it work repeatedly in a certain market. I think that's all I need to know. I mean, you're golden right there.

Matt: Yeah, it's I mean, it's a better starting point than just, you know, sending a letter to every single house in your city.

Seth: Yeah, absolutely.

Matt: And if you did that, you'd need a pretty large budget. If you had the budget, it probably wouldn't be a bad strategy anyway. But if you don't have an unlimited budget, you've got to reduce it and get your list smaller in some way.

And so we just use the tools that give that to us. I subscribe to probably five different of those services. So they have their little strengths and weaknesses on each one of them.

Seth: Yeah, it's nice to have access to a few of them, especially when you know where certain ones shine because you can kind of pick and choose.

Awesome. Well, Matt, I totally appreciate you taking the time to talk to me today. It's been great having you on to close this out.

I've got a few final questions that don't have so much to do with real estate. It's more just to understand you as a person.

So first question, curious to hear your answer to this, because I don't get the sense that you have a lot of fears, but what is your biggest fear?

Matt: It's so interesting that you just asked me that question because I was asked that question when I was teaching a class, I was representing somebody else at the time.

I wasn't selling anything of my own in 2009 and they had asked me what do I fear, just what you asked me. And it was that it came out so spontaneously, that I won't be able to buy enough.

Seth: Like buy enough houses?

Matt: Yeah I wouldn't be able to buy enough. And I fear that right now.

Seth: What's enough? I mean, it's interesting to hear you say that. I mean, you strike me as somebody who you're not going to go starving anytime soon. I mean, are you afraid you're going to lose the roof over your head? Why is that fear even there?

Matt: Well, I know that the more that I control, the more that'll be there. I mean, the more that I'll gain from it. And I'm concerned a little bit about the value of the dollar and inflation. And if something were to happen to that, you want income-producing assets that represent a human being's essential need, like housing.

So if the dollar collapses, my house is not worth nothing. It might be worth zero dollars, but it'll be worth chickens and eggs and pelts. You know what I mean? Like whatever we're going to use it for currency next.

And if it goes to a digital currency, or if it goes just to a different currency altogether, or if the yuan comes in and all of a sudden that's our currency, whatever it could happen, the real estate is going to maintain value. You are just going to be paid in a different currency.

And so I guess that's maybe a little bit of a doomsday prepping type thing as well.

Seth: Yeah, that's what a lot of fears are, is doomsday stuff. It's not really rational, but we have those fears anyway. I got plenty of myself.

But that makes me wonder, what if you weren't allowed to buy real estate anymore? Like you can invest in anything else, but you can't do real estate. What do you think you would default to?

Matt: I've become pretty good at marketing. So rather than build something new or invest in something new, I think I would become, I don't know, I guess the simplest term is an affiliate marketer.

So that way, I could be very flexible and mobile and could point my marketing machine at whatever the trend was.

Seth: Yeah, you'd be great at that. Totally.

Matt: Yeah, I think I would do that.

Seth: So what are you most proud of?

Matt: I'm most proud of that I've built this platform that my 12-year-old won't have to take the long route to learn everything that I've learned. And I like that. And I've been able to help a lot of people who have been able to piggyback with their kids off of what I've built as well. And, uh, that's pretty awesome.

Seth: Cool, man. Last question here. So suppose you just had a hundred million dollars wired to your bank account. You don't have to worry about money anymore. You're also not allowed to continue on your current career path. So no more real estate, no more education, none of that.

What would you do for the rest of your life?

Matt: You know, I just have to say the first thing that came to mind, because that's what I've always wanted to be since I was a kid, is I always wanted to be a dolphin trainer at SeaWorld. So I think, I know that's a little bit like, a lot more information has come out about the humanity of, or the inhumanity, according to the animals we hold captive at our amusement parks.

But I think it would be some sort of like a marine biologist or researcher or something like that. One of my favorite shows is with Jeremy Wade on the Animal Channel. And just for him to be able to travel the world to these amazing places and go fishing. Something equivalent to that. I don't like to fish too much, but something equivalent to that is probably what I would do.

Seth: It's great, man. So if people want to find out more about you, what's the best place to go? What website or YouTube channel or what should they do?

Matt: Yeah. Epicrealestate.com will lead to everything that we do. So if you can find your way there, then pick your pleasure from there.

Seth: Cool. And I'll include links to that and Matt's YouTube channel and podcast in the show notes. Again, retipster.com/178.

Thanks everybody for listening. And if you're still here, go ahead and text the word FREE, F-R-E-E, to the number 33777. You can stay up to date on all the stuff going on in the REtipster world.

Thanks again for listening. Thanks, Matt. I'll talk to you next time.

Matt: Thanks, Seth.

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Seth Williams is the Founder of REtipster.com - an online community that offers real-world guidance for real estate investors.

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