Real Estate Nerds 64: Best Deals

Scaling Up Your Investments

Matt Faircloth

Real Estate Syndicator

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Have you ever wondered if a deal was the perfect expansion, or perhaps just a little too much of a stretch to jump into? Matt Faircloth explains how he approached his best deal, which happened to be a stretch for him at the time. Listen in to the Real Estate Nerds Podcast as Matt explains the steps he took to ensure that this stretch of an investment was a success! Matt is now an experienced syndicator and also dives into what investors should look for when looking to work with syndications, and what separates a syndicator from the crowd in the market.

Scaling Up Your Investments

[:30] Matt Faircloth introduction

[2:35] Matt dives into the different forces at work in each deal: hard work and luck

[3:23] Matt explains how he doesn’t believe in stopping short. He explains that at times he has broken even and even in the red to fulfill his obligations to lenders and other investors.

[5:45] Matt explains what investors should look for when diving into a syndication:

  • How long the syndicator has been in business
  • How deep is the team
  • What markets are they shopping in
    • Why are these markets focused on
    • What contacts do they have in this market?
  • What really matters is the DATA behind the deal

[10:10] Matt’s 10 second deal vetting process: review the market, the team and the plan. If they look solid, then that would be a great investment!

[11:10] The syndications team:

  • The “hunter” who finds the deal
  • The “brain” who analyzes the deal and makes the plan
  • The “money” raises the money, puts together the financing, etc.

[14:10] Overview of the “best deal” – an 18-unit building in Northeast Philadelphia. It was out-of-state, but still close to home and could be managed.

[16:15] Matt explains that this investment was a “stretch” in familiar areas, then compares it to what it would look like if he left his “investing lane.”

[19:50] Matt starts going over the specific details of the deal in Philadelphia. This was a new market, so they had to learn all the rules specific to this new area!

[24:00] Matt explains his approach to deals: Matt approaches investments with a tandem approach. He sets up the investments with “outs,” then bases those “outs” on what is best for the investor. His baseline questions is always, “How can I outperform the investor’s expectations?”

[26:10] Good investing is about controlling the variables that are at play.

[28:30] Lessons learned: Stretch to the very edge of your comfort zone, but not beyond it. Anything beyond that turns into a gamble.

[31:00] Connect: derosagroup.com

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Hosted by Scott Smith, Lead Attorney and Founder of Royal Legal Solutions

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