Listen to the Podcast Here: If you’re not a millionaire yet, you probably would like to be one. If you already are, have you thought about how to apply the millionaire mindset to other pieces of your life, like family, service, and personal goals? Matt Aitchison, a real estate investor with a 7-figure portfolio, believes that wealth is about so much more than money. If you want both fulfillment and success, Matt says it all starts with you, and that being a millionaire is something you can do in all areas of life, from how you wake up in the morning, to how you treat your loved ones, and of course, how you pursue investments and philanthropy. In fact, it is exactly this mindset that helped Matt endure the legendary worst deal of his life. On today’s Bad Beats episode of The Real Estate Nerds Podcast, Matt joins our host and real estate attorney Scott Smith to share his millionaire mindset, the details of his worst deal, and tips for recovering from the deals that leave you wanting to quit. Spoiler alert: quitting isn’t the answer. Tune in now to hear their complete conversation. Description Useful Resources References Matt Aitchison on True Wealth: Being a Millionaire is About Much More Than Your Bank Account Scott welcomes Matthew onto the show and asks about his background and beginnings in real estate. The two investors discuss Matt’s early revelation about wealth. [1:00] Matt lives and works in Sacramento, but invests in Silicon Valley, the Bay Area, and in other states as well. He began his career as a real estate agent fresh out of college. But he knew in his heart he didn’t want to be part of corporate America: “I wanted the freedom and flexibility that comes with entrepreneurship. I wanted unlimited earning potential, to see what I could make and achieve.” [2:21] Matt also expresses his drive for independence. [3:00] Matt began flipping houses and buying rental properties 8 years ago, and has since built himself a 7 figure portfolio. He currently focuses on educating, mentoring, and generally helping others now that he has achieved his own success. At this stage of his life, he’s focusing on giving back. But today, he’s here to tell us about one of his “magestic failures.” [4:00] Scott and Matt discuss the drive for fulfilment beyond mere financial success. Matt shares that he learned a lot from joining a Millioniare Mastermind Group at age 25, but prior to becoming a millionaire. Matt quickly realized a simple truth to success: “It wasn’t about just being a millionaire financially, but about living like a millionaire in all areas of life.” [6:00] After leaving college, Matt was broke and eager to make as much money as possible. But his mentor invited him to an event several years into his career that provided a revelation and changed his focus: “I saw a lot of people that had a lot of money, but were bankrupt in all areas of their life. It’s not all about money.” [8:45] Matt turned his focus away from how to make money and toward a different question: “How do I become somebody that attracts more freedom, health, abundance, and money? Money isn’t the answer to that.” [10:20] Matt now focuses on living an intentional life, defining wealth in a broader sense, and pursuing greater fulfilment. His net worth is not the center of how he defines himself any longer: “Being a millionaire in all areas of life is much more important than being a millionaire in just your bank account.” Scott agrees, and points out that a life defined by just one’s financial wealth is incredibly fragile. He points out that building your strengths as a person doesn’t usually cost anything but time. [12:00] Scott hypothesizes that Matt’s strength in other areas of life played a role in his ability to weather a financial storm. Matt agrees and elaborates, believing things would have been much worse and that we all face adversity in life. How well we handle it depends on the core areas of our person, individual strength, and tools. The two investors discuss the areas of wealth that money only influences by allowing choice, such as health, family, relationships, and connection to community. [13:45] Scott shares some wisdom of his own: “People say I don’t have money so I can’t be happy, relaxed, or peaceful. But the reality is that being is a state that you choose.” He points out the many areas of life we can choose happiness for that don’t cost anything. [16:00] The two investors observe that hyper-focus on money is actually a form of weakness. Money can give us choices in how we engage with our other areas of wealth, but obsessing or building a sense of self on money is a type of character flaw that may indicate a need for internal work. In Over His Head: Matt’s Worst Flip Deal Matt and Scott dive into the details of Matt’s all-time worst deal. Matt now points to his overconfidence, lack of humility to ask for help and leverage his network, and failure to account for several major factors and do his complete due diligence as the factors that ended up costing him. [17:30] At the time of his worst deal, Matt was at a turning point in his career. He’d been flipping for several years but was trying to determine how to work less and earn the same amount. He’d been flipping houses that averaged between $300-500,000, while his mentor was doing flips with greater profit margins in a different part of California. Matt focused on his female mentor’s tactics and decided to kick his flipping game up to her level. He experienced some initial successes mirroring her tactics with Bay Area properties. [19:00] Matt selected a nice hilltop property in the Berkley neighborhood with a beautiful view. The home itself was inherited through a family member and run-down. He had high ambitions for renovation, and he knew from underwriting his own deals that the area’s average price per square foot was astronomical. Profit potential seemed high, he had an eager private lender, and on paper, everything looked good. His plan was to force appreciation. Although he’d never flipped in this particular city, he proceeded despite the unknowns. [21:00] Matt felt high pressure to close quickly. This led to him not doing total due diligence because he felt he had “wiggle room” with his profit margins. He felt he was being conservative with his assumptions based on past experience. He explains one of his early lessons–and which costs he now overestimates and underestimates to give himself an accurate budget buffer for unforseeable possibilities. [22:38] Matt’s conservatism of underestimating profits and overstimating costs typically pays off: “I’ve lost on 3 or 4 deals out of 150+. This one ended up being a great outlier, and a great learning lesson.” [23:00] In his overconfidence, Matt failed to account for a powerful third party to the deal–the City: “At the end of the day, the city can be a decision-maker that throws a wrench in your plans.” He also underestimated the scope of the flip and found himself amidst a full-blown redevelopment. He also failed to surround himself with people experienced in this particular type of deal, and speaks to the value of cutting in an expert to complete a project as planned and make the right moves. Lessons Learned From Matt’s Worst Deal: The Importance of Awareness, Routine, and Obeying Your Gut [25:15] In retrospect, Matt’s mistakes are clear to him: “Looking back there are a few things that in my gut I knew I should do, but I let my ego get in the way.” His first mistake, in his opinion, was failure to do his due diligence. Matt shares a lesson from the book Fierce Conversations by Susan Scott, which is “Don’t listen to your gut–obey your gut.” [26:49] His failure to do so ended up being one of the biggest mistakes he made in this deal. [28:00] The two investors discuss ways to pull an expert in. Scott likes to pay an expert hourly to double-check an issue. Matt agrees: “I’ve never had an issue paying for the expertise.” Scott asks what advice Matt would give himself as the “angel on the shoulder” of his younger self. Matt’s answer is simple, that he should have been more humble and simply asked his network for help. Because he didn’t, Scott observes: “You had a very expensive piece of humble pie.” That humble pie slice cost Matt roughly $180,000. [30:00] Matt speaks to the prices he paid psychologically and emotionally from this bad deal. But despite sleepless nights and a great deal of stress and self-doubt, he has come to view the failure as a lesson. He also offers some words of encouragement to our listeners: “Just know that what you’re doing right now was once a stretch for you. It was once something you didn’t know how to do or if you could do it, but you’re doing it.” Matt acknowledges that this was an expensive yet essential lesson. Failure is part of the process of becoming successful. Only by trying can you succeed–and trying at anything means mistakes will happen. Nobody is perfect. [33:00] Scott finds the silver lining: “There’s something you did in that process that allowed you to rebound.” He asks Matt what he did to engineer his comeback. For Matt, it was as simple as putting one foot in front of the other: “Take a small step forward every day. You at least have to keep moving.” He also meets with an accountability group weekly. The group holds one another accountable to quarterly goals, but also support their fellow investors through life’s struggles. [35:00] Matt also now sees he missed an opportunity with his network and friends: “One thing I wish I’d have done sooner is be extremely vulnerable and openly share what I was going through.” When he finally did, he found great support. He acknowledges it’s difficult to receive feedback when the failure is fresh and painful. Matt also shares one of his personal tools for his daily routine, accountability, and self-awareness that has proven vital for rebounding from low points. [36:30] Matt also had to learn to reflect on the fact that he landed himself in a development rather than a flip. He’s also taught himself willingness to walk away to avoid putting himself at unnecessary risk in the future. His failure to read the fine print and speak to city officials contributed to his loss that could have been prevented by giving himself additional time. He shares some of the unnecessary holding costs he endured. Basically, if he’d known he was on an earthquake fault line, he could have saved $120,000. He could have gained that information from a simple visit to the City Planner’s office. [40:00] Matt re-emphasizes due diligence for all investors and encourages listeners to learn his mistakes: “I got too comfortable and didn’t take the time that needed to be taken on due diligence. It’s so critical if you want to be successful on a real estate deal.” Scott elaborates on the importance of consistent process with an apt boxing analogy. [42:00] Scott asks Matt what his advice for listeners in a low place would be. Matt replies that getting vulnerable, while difficult, is essential when you’re down. Total honesty and vulnerability with someone who can help you can get you back on track. He plans to do this himself next time he experiences failure, and he’s certain he will. [43:53] Matt’s second piece of advice to listeners is also simple: “Don’t get away from what works for you.” For Matt, that’s using his planner daily. His planner is not just for organization, but also to see how he is showing up to various areas of his life and maintain a high level of self-awareness. [45:00] Matt also recommends a practice he calls “info-sponging,” which involves reading or listening to things that expand his mind and keep him on a positive track, rather than dwelling on his own negative feelings. Wallowing in the mire doesn’t serve him. Scott agrees that “simple awareness is curative.” Not living life on auto-pilot, and hyper-awareness can make a profound impact on how you experience life and set an intention for success–in investing or anything else. Scott also shares a funny story about the bizarrely therapeutic, yet egalitarian, nature of talking to people on airplanes. It’s an option for vulnerability and networking. [48:00] The two investors highlight the importance of taking action to do what works for you and build habits for success. Committing to something, even something as small as journaling, can make a huge. The Takeaways: Get Out of Your Own Way, Build Patterns for Success, and Fail Forward Scott and Matt wrap up the show with the greatest lessons they feel listeners can learn from their own stories. [48:55] Matt’s greatest takeaway for listeners is another simple, but not easy, truth: “Don’t let stubbornness make a bad situation worse.” He also encourages listeners to accept that stumbling is inevitable, but finding ways to correct and get back on track. He recommends that listeners not be afraid of failure: “Fail forward, fail fast, and fail often.” [50:55] As for Matt, he has learned to use failure as a launching pad to a better version of himself rather than shrinking beneath it. [51:18] Matt encourages cultivating a healthy perspective on failure: “Change the conversation you have with yourself–and others–about failure.” Scott points out that Matt’s practices didn’t start as a result of his failure. He developed them during a success. [52:00] Scott agrees that wealth begins with intentionality and awareness, and it begins with what you’re doing today. He doubles down on his own commitment to intentional awareness. Connect with Matt Aitchison Connect with Matt Aitchison through his website, or via email at [email protected]. He welcomes messages from his fellow investors Listener Resources Thank you for joining us on today’s episode of the Real Estate Nerds Podcast. For even more free educational resources on real estate investing and the law, check out the Royal Legal Solutions blog. You can also reach our host Scott Smith directly, connect with him on LinkedIn, subscribe to the Royal Legal Solutions YouTube channel, or join our investor community on Facebook. Don’t forget to subscribe to stay up to date and have the most current episodes of the Real Estate Nerds Podcast directly in your listening library. Every subscription helps us create new, custom content for you. What did you think of today’s episode? What would you like to hear more about in the future? Leave your thoughts and questions in the comments section below, or leave us a review in the iTunes store. We love hearing your feedback, so fire away. Join us again for a fascinating investing conversation with Matt Aitchison. Thanks for listening and joining us on our journey to become better investors! Hosted by Scott Smith, Lead Attorney and Founder of Royal Legal Solutions. Schedule your personal consultation now. If you have questions about our content or suggestions for future episodes or guests, reach our podcast team at [email protected]. About Matt Aitchison Matt Aitchison is a real estate investor, business mentor, speaker and avid adventurer. He has flipped over 150 properties in his 20s and 30s and built himself a 7 figure rental portfolio. Today, Matt teaches and trains other current and aspiring real estate investors around the globe how to leverage real estate into a means for creating more freedom and fulfillment in life.