You know those people that everybody seems to like? They have charisma. They're affable. Like Jeff Daniels on the Newsroom.
That's Matt Javitch.
Matt has been taking a barbell-approach to investing in Boston real estate and startups. He's my go-to resource for investment advice because, unlike some advisors who try to sell me their advice, he makes a living off his investment thesis. Also, he's never tried to sell me a thing.
I invited Matt on the show to give me a deep dive into real estate investing fundamentals, quitting corporate life for startup investing and more.
We talk about
- The networking scene in Boston
- How to quit your job and start a business
- The real estate investment market
- How real estate investing is different and complementary to startup investing
- How to get started in real estate investing
- How to be successful in real estate investing
Pleas enjoy this episode of Hacker Practice with Matt Javitch:
Notes
[00:00] How Justus and Matt met
[01:00] Networking in Boston
- Events are becoming more and more niche-specific
- You know what you’re getting when the event is very specific
[5:00] Matt’s background in finance
- Financial advising and real estate investment
[7:00] Why small networking events can be super valuable
- Most events are really hit or miss
- Networking is a numbers game
[10:00] What Matt did to prepare to leave
- Saved capital
- Built a network
- Honed a valuable skill set as a real estate investment analyst
[14:45] Specific numbers around how to leave your job and get into real estate investing
- Matt had 3-4 months of living expenses saved
- $300-400k pledged from investment partners
[16:30] To be successful in real estate investing
- Have a long term vision
- Understand the financial risks
- Have a safety net or “plan B”
[19:00] What would Matt do different if he started over
- Would have been more aggressive buying properties while at his job
[20:30] What is Matt doing to mitigate risk of negative macro economic conditions
- Invest in “primary” markets (cities etc.)
- Some factors can’t be controlled but should be understood
[23:45] The dumbbell strategy and Matt’s investment in startups
- Real estate is somewhat predictable compared to startups
[27:00] Angel investing in Boston vs. Silicon Valley
- Boston has a conservative social and financial culture
[30:00] How to get started real estate investing without any debt
- It’s challenging.
- Usually you make more money when you favor debt over equity
- Start with as little as $150-250k
- Start in a secondary, suburban market. Matt gets specific in greater Boston area
- Renovate, then rent or sell
- Can also experiment in other markets like San Antonio, Texas
- Southern markets are usually less expensive
[34:00] Different geographic regions have different risk factors
[37:00] Have $250k, bought a property, need to renovate, where do I start?
- Everything is quantified on a per foot basis
- Market research is critical. Different locations have different /sq ft costs. Understand the local housing market
- Look at last 6 months and what prices local homes have sold at vs. your prospective investment
- Brokers and legal costs often add up to around 5%+ of the cost
[42:30] How much money do you budget for renovation?
- Again: focus on cost per square foot
- P = initial cost / sq ft
- R = cost of renovation / sq ft
- C = P + R
- F = price you sell the property at / sq ft
- PROFIT = F - C
[46:00] Working with many contractors and sub-contractors
[47:15] Selling the property
- Matt often lists and sells the house himself if it’s local (saves 2.5% commission)
- Real estate agents have less incentive to negotiate on your behalf than you (Freakonomics)
[50:00] The most challenging part of real estate investing for Matt
- Inspectors vs contractor drama
- Local politics often play a role in inspection
[56:00] A big part of Matt’s success can be attributed to his likability and how he incentivizes contractors to do quality work
- EQ is valuable in this regard
[59:00] Final requests and contact info
- Do your homework and know your risks
- Matt is happy to talk to any aspiring investors (startup or real estate)
- Axilon Capital Partners
- 973.788.9333
What else?
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