You're listening to the REI marketing nerds podcast, the leading resource for real estate investors who want to dominate their market online. Dan Barrett is the founder of AdWords nerds, a high-tech digital agency focusing exclusively on helping real estate investors like you get more leads and deals online, outsmart your competition and live a freer, more awesome life. And now, your host, Dan Barrett.
(0:40) Hello, and welcome to this week's episode of the REI marketing nerds podcast. As always, this is Daniel Barrett here from AdWords nerds.com. And if you need more leads and deals online for your real estate investing business as always, you know where to go. It's AdWords nerds.com. You can go the get a free call with someone on my team and they will help you put together an online marketing strategy for your real estate investing business. Okay. This week, folks, we have a really, really awesome interview with Edie Matthews. Now if you don't know, Edie, he was the, you know, one of the sort of main people behind the CT Ria.
He is an investor here in Connecticut, where I am actually located one of the few investors that have ever interviewed from Connecticut, which is pretty awesome. But he was the head of the CT RIA for a long time and is now one of the sort of most influential investors in Connecticut doing multifamily syndication. He's got an incredible podcast called The Real Estate underground. But here's the thing that I think really makes Ed stand apart from most real estate investors, first of all, an incredibly kind, giving a welcoming person, right, you can really tell after talking to Ed, why he could be behind something like a RIA for so long because he is dedicated to helping real estate investors figure out this industry.
So he is one of these people that is just a true go giver, someone who is willing to put himself out there to help people. He's got a tech background, which makes him an awesome talk, you know, awesome conversation for someone like me. And he's really amazing at explaining what goes into something like multifamily syndication, right. He makes these topics approachable, he makes them seem doable. He is just one of the most legit people I've ever had on this show. I cannot wait for you to get to meet Ed Matthews. So without any further ado, let's jump in to the interview. I am here with Ed Matthews. Edie you may have heard from the real estate underground podcast, which you can get over at Real Estate underground. podcast.com. And welcome to the show, man. I'm so happy to have you. Thanks, Dan. Good to see it.
(3:02) We were talking about this very briefly before but you are one of the only investors I have ever had in my home state of Connecticut. So I am very happy. Very proud to have you here. Connecticut is like strangely underrepresented. Yeah, so I wanted to dig into that. But let's talk about you today want to give people kind of like the overview. So for people who aren't familiar with you, or maybe what you talk about on your podcast, which again, you guys relisted us you can get this anywhere that you got this podcast is real estate underground. podcast.com, you want to go check that out as well. Give people kind of like an overview of who you are and what you're doing today. Yeah, so
(3:41) I am a recovering technology executive. I spent about 24, almost 25 years working for Silicon Valley companies that nobody's ever heard of, and had a blast. I learned a lot. I met some amazing people. And along the way, I started to look at real estate as a way to build generational wealth. And so you know, I always tell people that in 2008, I read Rich Dad Poor Dad, and it changed my life. Right? Three years later, it you know, it took me three years to get the gumption to start investing in real estate and I bought my first property and 11 and, you know, over time, you know, as as commissions came in, or bonuses or a little extra money, I would save up and we started flipping houses, and we flipped houses and that would buy a multi and flip a few more houses and buy a multi and pretty soon those Multis added up to the point where they were basically equal with my salary from the company I was working for.
And then I decided that having a life was more important than than managing the career I was managing because I was traveling 150 200 days a year. And I was missing a lot of really good stuff with my two daughters and my wife who turns out they're still fond of me and I'm awfully fond of them. So I wanted to spend more time with them. And so we made the decision as a family to that I would put Through the real estate thing, you know, full time and so I've been doing that since 2018. Since then we've kind of dialed down the flipping business and moved the multifamily business from a, you know, a Connecticut based property operator to a syndicator. And so now we've grown carceri properties into Clark Street capital, and are now growing our portfolio both in Connecticut as well as in the Midwest and southeast.
(5:26) So okay, I have a bunch of things I want to talk about but that's all I want to talk about. I want to go all the way back to you mentioned you read Rich Dad Poor Dad, very common Greg, larger real estate investors Bible. Yeah, exactly. Right. It's, it's up there. I really want to know what secret sauce went into that book, because it just, it is amazing. But the thing that I'm interested in is you said you read the book, and then three years later, you started investing. So I'm wondering, in that three year gap, what were you doing, like, what was something holding you back where you sort of working up the nerve? I'm curious, like, what that three years sort of interim period was, like,
(6:06) deep, profound fear, absolute fear, and, you know, his fear of the unknown, it was fear of, you know, the imposter syndrome of you know, who am I to go invest in, in a property I don't know anything about this. And you know, fortunately, I had a handful of people who either saw something in me or took pity on me and another another local real estate investor and realtor here at REO showed me 1520 30 properties with in each one, I would find something teeny tiny wrong with it all, as blue shutters it has a stained glass window, it, you know, I see one of the shingles is, is not quite adjusted, right.
And I came up with every single excuse in the business, you know, that I could think of, to not move forward. And finally, she found a property on Clark Street, which is why I named the company that's a four unit and she said, Look, this is a very good deal, you really need to pay attention to it. And if you don't buy it undone, never call me again. And she was a little more aggressive about it, but I'm not gonna swear out your your show. But so you know, she, she literally put the contract down in a pen and handed it to me and said, sign this contract.
This is the best deal you're gonna find, you know, right here right now in this market. And, you know, I'm six, four, and Amy is probably five to on a good day. And she scared the living daylights out of me. And I gently took the pen from her and signed it right on the hood of her car. And I still own that property today and realize that actually wasn't so bad. And wow, that began, you know, this, what? 12, almost 13 year odyssey man, it's the so fascinating, right? Because the this sort of myth, the classical mentorship story is kind of like it's a lot of like puppy dogs and rainbows and yada, yada.
(7:51) She was gonna kill me. Yeah. But it's like, what so much of the time, that's what you need, right? You need a kick in the rear. A lot of times, like, like you said, we all have this kind of defense mechanism. Like, it's not like the blue shutters or the stained glass window or whatever. And the thing we're going to point to as the reason we can move forward, right. Okay, so that's absolutely fascinating. I want to talk a little bit about your background, because you mentioned you were working with tech companies, are you working with these companies? They've got their roots in Silicon Valley? And you're doing that you did that for? It was almost like, decades, right?
Yeah. So So I'm curious, coming from that culture, that workplace culture, have you brought anything from that part of your life into your real estate investing business? Are there places where you see the sort of culture of real estate investing in the culture of these kind of like tech, not necessarily startups with these, like, your worst startups? These are tech companies? Are there places where you see those cultures really diverge? Are they more similar? I'm just curious, like, what you see as the connections or the differences?
(8:53) Well, I mean, I see that both markets are very competitive, right? I mean, you know, in the technology world, you know, speed is, is just about everything, right, in terms of getting the market in terms of growing share, in terms of acquiring customers, so that you can build a valuation to be able to then, you know, scale the business right here. And in the real estate world, it's very similar, right? I mean, you You snooze on a deal. And there are five or six other investors, even here in Connecticut, which is a really different market than, you know, some of the markets out, you know, in the in the Midwest and southeast and elsewhere.
But the fact is, is that you snooze, you lose, and so you've got to be able to very quickly find a deal, evaluate it and make a decision on it, you know, and, you know, in terms of what we do, we're trying to do that in a matter of minutes, two hours, in terms of at least initial underwriting. So yeah, I think that's a big thing. The other thing that I think is really important and why I was actually so fired up to come on your show, is that, you know, with with regards to the technology, business, fundamentally marketing business, right, you're trying to establish a brand you're trying to create awareness.
You're trying to build rapport, a relationship with your end customer got to the point where you build trust, you know, from a brand perspective and then ultimately earn the right to do business, real estate's the exact same thing, right? I am in the marketing business I market to building owners, and I'm trying to build a relationship with them so that when they're ready to sell their property, I'm their first phone call, right. And so, you know, my job is to create awareness to build that relationship actually become friends with them. And, and then over the course of time, as I serve them, and as they, you know, serve me like friends do, right, we help each other out, I build that level of trust, where I earned the right to buy their property at some point that can be a month from now, or that can be three years from now, it doesn't matter to me. Yeah, you know, I'm looking to do, I'm looking to build that relationship and make some friends along the way. But, you know, ultimately, I'm looking to to acquire properties. on the investor side, same thing, right?
I mean, it's a giant responsibility to take on someone's capital. You know, in a lot of cases, it's retirement money. And it's definitely family money, right? It's college money, it's, you know, the way that they're going to pay for their future. And so it's the same thing, create awareness, here's what we do, here's how we operate here, the values that we operate from, build a relationship where we get to know each other and actually become friends and and then build a level of trust is, as I you know, serve them and answer questions and help them get their head around a pretty big decision in their financial world. And then ultimately, when they're ready, they they invest in one of our projects. And that is entirely a marketing motion. Right? Yeah.
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(12:02) Yeah, I like who started the script and described it as making friends and rebuilding relationships in exchange for in the future at some point and probably going to buyer maybe, maybe not, right? Like, it's that that long term mindset, I think is really powerful. But I think a lot of investors, a lot of business owners period, right? I know, I'm not picking on investors by any means. But we fall into the trap of, well, I need revenue nap, I need a nap right now need in three years. I need it now. So what can I do for that short term gain. But it's ultimately those long term strategies.
(12:40) I mean, I would love to talk about your podcast, but for me doing this podcast is a long term strategy, saying it produces very little revenue in the short term. But over the course of the last few years, more or less, all of my best clients have been like, Hey, I've been listening your podcast for a year, two years, three years, right? Like, it's, it builds that relationship ahead of time it does. And, you know, people start to understand, okay, you know, Dan is a good guy, and he wants to help. And he's really knowledgeable, and you start to build that knowledge base of, of the fact that you know, what you're talking about you, you know, you want to serve your clients, and you're, you know, you tend to do a good, you do a good job for them.
And, you know, over the course of time, he I mean, the fact is, is that, you know, with the internet and and social media and all that, you know, the people that we meet in our professional lives have checked us out six ways to Sunday before we even know their first name, right. And, and so, you know, using a podcast, or social media or any other media, to be able to make that connection is is so important. And that doesn't necessarily mean that it's three years from now, it can be I mean, I get phone calls all the time with people that just came across my profile on LinkedIn or, you know, saw something I posted on Twitter or Facebook that resonated with them for whatever reason, and then, you know, then it's a conversation to see if we fit and see if you know, the way that they operate is the way I operate. And does that fit together? And, you know, can we help? Yeah, sometimes we can't, sometimes you can't.
(14:07) I think it's one of the fundamental sort of marketing lessons, right? Like that conversation in that initial conversation is a lot easier if someone approaches you than if you are approaching someone like tapping them on the shoulder and be like, Hey, by the way, I would love to buy your house like that can work right but it's just a very powerful sort of reversal there that I think you've done really well. I want to talk about your relationship building before we get into that. This is a bit of a diversion but I want to touch on this while we're talking about we were talking about your third time in tech. I am curious your opinion because you're gonna sell embedded or you were so embedded in that world for so long. Yeah.
Tech wise. What do you think the next 510 years looks like real estate because the thing that I have my eye on is mostly artificial intelligence, this kind of idea of like you said, there will I'm if there's not this Somebody already there will be, hey, you plug all your property data into an AI model, and it makes an offer for you. Right? Like that kind of thing, I think feels like fairly inevitable to me. I'm curious, because you've been behind the scenes there a little bit. What are you kind of putting your, you know, keeping your eyes on in terms of the next five to 10 years? Or is it? It's not really going to be anything, it's always going to be the same old, not necessarily same old but no, the core business never really changed.
(15:27) I think the world has fundamentally changed, and it will continue to change every 18 to 24 months for the rest of our lives and in perpetuity. Right. Yeah, you know, the adapt or die thing is real. Yeah. And so I agree, I think I think artificial intelligence, but I would actually take it one step even beyond that, where you know, where there's like lookalike audiences on Facebook, where I can, I can say that I'm looking for this person in this socio economic space in this geographic area, and so on and so forth. I would bet that there is.
And I think some companies do it to a certain extent, but I think that there's a lot of room for, for opportunity, and a lot of room for growth and opportunity is to be able to create look alike properties. Look, I own a 10 unit in Jewett city, this is the median income, this is the rent roll, this is the you know, so on and so forth, and be able to plug in, here's exactly what this building is. Now go out and find the other 10,000 that look exactly like that building, because those are the buildings I want to buy, right? And then taking it to your step of then automating the process of based on the numbers that were were created. And a lot of this is publicly available, right with audit, you know, with annual reports and everything to be able to then in turn around and offer on properties basically sight unseen, to at least start the conversation.
(16:46) Right? Yeah, I think it's gonna be a truly weird three to five year period. And we are very excited for it. But I also think it's very weird, like, literally, you know, like, I have a personal blog. It's not real estate related, but I write it every week. And literally, I've made it to a beta thing where you feed it all your past blog posts, and then you write sort of like a Google Doc and if you're ever stuck to what to say you hit plus, plus plus, and the AI completes like the paragraph for you in your own voice. Yep. And I was like, Is this the best thing in the world? Or the worst thing you want to read? Like it's like, no, I just know it is a thing in the world. So there's nothing that you could do about it. Okay, so I don't want to go too far down that rabbit hole because I will literally talk your ear off I want to talk about Connecticut a little bit. So you had started your eighth Connecticut, you know, and you've been investing Connecticut in Connecticut now for a very long time.
I mentioned this before when we met Sir before we did the show was that? I've only had a few clients ever in Connecticut. In fact, I think Ospreys are I think you had on your show as well. Yeah, yeah, was a past client of mine. Also for like two years straight, just absolutely kicked my behind in jujitsu just every single day that I would ever meet him. We're just admin, you have amazing dude. Right? So but beyond him, and like a few other people, I do, like, I don't really meet investors from around here. I'm never really known why. So give me your take sort of from the inside. Why is Connecticut? Not as? What's a good word? It's not as popular among investors, it seems. Is that true? And if so, why? And to Why do you view Connecticut as such a great place to invest? Like why choose Connecticut as your
(18:31) mark? You know, it's fascinating, because Connecticut has always been the, in my experience a cash flow state, right? So it's not quite as sexy. You as, say, in New York, or Massachusetts, or LA, you know, California or, you know, some of the other places where it's a lot more straightforward to force appreciation. But it's interesting, though, because when you look at the investor population, like if you look at CT Ria, right, but the EDS D, I used to I was recently I recently left but you know, I, I ran that for quite a bit of time with with my partners, and that RIA that Real Estate Investors Association is the fifth largest in the country. And I actually think it might be the fourth and by far the most active I mean, there's 1000 numbers and I had no idea that's true amazing, fourth largest in the state and it's the most accurate fourth largest in the country. Oh, wow.
Yeah. Oh, yeah. I'm sorry. Yeah. Yeah, that's amazing. I had no it's amazing right. But but here's the thing so a lot of investors want this you know, you go on like a bigger pockets or clever investor and all those and they're, they're really interested in appreciation because that's where the big wealth comes from right here in Connecticut. Traditionally, it hasn't been true over the last 18 months to two years where we have become a more of an appreciation market but it's always consistently better cash flow market where you know, you could buy at a certain price point and the rent that you charged, you know, you could make a consistent you know, 234 $100 a month per door in the in the properties that you own and you know the weed Investors build wealth here in Connecticut was really focused on creating that cash flow to the point where it eclipsed your monthly salary, annual salary. And then that gave you the freedom to be able to go out and do it more more, you know, on a on a full time basis. Yeah, that's my story. Right?
Yeah. And, and so Connecticut isn't quite as sexy as New York, where you buy, you know, a little brownstone in New York for, I don't know, 2 million bucks, and you throw 500,000 into it, and turn around and sell it for $5,000,000.02 years later, right? Just not the way it works here in Connecticut. And so, but what's changed over the last couple of years is COVID, right? I mean, COVID changed everything. And so you look at the opportunities within, you know, we use New York and Boston as as two examples, right? Where they, the appreciation for a period of time about six months stopped, just stopped. And then you know, that money, that institutional money and kind of the next couple of tears down, poured into Connecticut, which increased the, you know, the property values, so where I could buy a, you know, a building for, I don't know, 45 50,000 a unit today, you know, today, that unit, that building is probably anywhere from 85 to $100,000. And really, nothing changed other than in time and demand.
And so, you know, obviously, that that corrected fairly quickly, because everything started to appreciate, but but Connecticut, you know, it's not sexy, it's not get rich overnight type a type of market, it's a get rich over 1520 year market. Right. And, and that's why it's probably, you know, you probably don't see, you know, the the heavy hitters, you know, walking around here is, is for that reason is that, you know, it takes a long time to build wealth and Connecticut for real estate perspective.
(21:46) Okay, I find that really fascinating, because again, it sort of ties back to what we were just talking about. It's like the short term versus the long term, you get to a certain extent, all investing is like long term, and is right. But I think that sort of gradual steady build is like to someone like me, so I would say like, I'm not an investor. I've worked with investors and have for almost a decade now, but I've never invested and I'm like, Okay, next year, my goal is, I'm going to do my first real estate investing.
I have no idea what just I set that goal for myself. I haven't thought of that. Right. So yeah, exactly. So I was like, okay, one of the things that to someone like me, right is like the sort of very volatile investing turns me off because I'm like, is that just not what I'm looking to do? Right, that's sort of slow and steady. Makes more sense. Okay, guys, hope you enjoyed part one of this episode. It's just too good to limit one show. Join us next week to hear the rise
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