1701: Special Guest Ed Mathews
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Speaker 1 (00:00:01) - Welcome to episode one of season 17 of The Growing Empire show. This season, we're going to talk about emerging trends and opportunities for real estate in 2024. And I couldn't think of a better way to start this season than with this special guest interview that I did with Ed Matthews. Ed is the owner of Clark Street Capital, and he's located in the Connecticut area, and he really has a great, diverse background in not only finding multifamily deals emerging into other markets, but he's going to also talk to us about social media, about raising capital and how to really scale your business. A lot of the things that Ed's going to bring up are going to tie in with our theme very well, because it's talking about the new wave of real estate, the new wave of social media, and how to utilize those vehicles and those opportunities to create and scale your real estate investing business. So without any hesitation, please enjoy my interview with Ed Matthews. Speaker 2 (00:01:03) - Welcome to Growing Empires, hosted by real estate entrepreneur and trusted investment advisor Jennifer DeJesus. Speaker 2 (00:01:10) - Growing empires provides insight to building wealth through passive income, producing real estate investments for those who want to build and manage a more profitable real estate portfolio. Speaker 1 (00:01:23) - Welcome Ed, to the Growing Empire show. I'm so glad that you're here. Speaker 3 (00:01:27) - Thank you. It's good to be here. Speaker 1 (00:01:29) - I'm gonna start this off by asking you to give a little bit of a background about yourself and what you're doing now. Speaker 3 (00:01:37) - Sure. So who am I? Why am I here? Right?, so I am Ed Matthews. I'm the president of Clark Street Capital here in Connecticut. Way back when I was a Silicon Valley tech exec,, sales, marketing operations, ran a couple of companies, did a whole bunch of stuff. And then back in 2008, a very close friend of mine handed me the,, the Purple Bible., rich dad, poor dad. And I read that, and it fundamentally changed the way that I kind of viewed the rest of my career, and that I knew that I needed to start a business in order to kind of break out of the corporate rat race. Speaker 3 (00:02:17) - And so we started, and it took me three years to get the gumption to actually pull the trigger on a deal. But from 2011 to just the about the end of 2017, we scooped up a whole bunch of multi families. And,, you know, we would buy a multi, flip a couple properties, take the capital, buy another one and you know, build, rinse and repeat., over the course of about seven years. And then in 2018 I left DocuSign to do Clark Street full time and haven't looked back since. So we are in the multifamily business. We, you know, run a portfolio., time was it was all across New England, mostly in Connecticut and Vermont., we're now in the process of trading up. So we're selling off a lot of our smaller properties and investing in much larger properties in North Carolina and elsewhere. Speaker 1 (00:03:08) - Awesome. Well, today we're going to talk about a lot of things,, creating deal flow, raising capital, multifamily investing as a whole. Speaker 1 (00:03:17) - And I've asked dad to join me to share his wealth of knowledge he's gained throughout the years on these subjects. So we're going to jump right in. Can you share some insights ahead to how your firm creates deal flow in the real estate market? What strategies have been most effective in sourcing new investment opportunities for you? Speaker 3 (00:03:35) - So it depends on the market. But, the two that have really created deal flow for us or, you know, one, we go in and we work with the top brokers in the marketplace. And so, you know, basically I stack rank the brokers., we start with the CoStar power players and start to create a relationship. And, you know, it's it's the old marketing axiom, you know, create awareness, build a rapport and then a relationship,, earn the, you know, earn the trust by serving them with no expectation of being served. And, you know, eventually you're in the right to do business with them. And sometimes that takes a few weeks. Speaker 3 (00:04:11) - Sometimes it takes a few years. And either way is okay with me., you know, we're here for the long haul. So that's, you know, that tends to be our primary focus, which is but we we approach brokers in a very specific way. And that is, hey, look, we've been doing this for a while., we have a portfolio in, in the northeast. We're looking to expand our business into your market., here is our buy box, and we're very specific about that. So it's not just, hey, send me your best deals because, you know, having been in sales, I know that is. That's a time waster, right? And so, you know, our focus is on, you know, being as specific as we can so that we can help the, the brokers identify properties that are good fit for us., and then, you know, over the course of time,, the second thing that we tend to do is, you know, we want to build relationships with the building owner. Speaker 3 (00:05:04) - So I know, like here in the state of Connecticut, for instance, there are 1208 buildings that someday I'd like to own. And so we,, start that relationship with a letter. Hey, you know, this is your building is the type of building that we tend to invest in. We would very much like to to talk about your property if and when you're ready to sell. And if you're not ready to sell, then let's let's get to know each other at least. And so, you know, perhaps we can help you, given our background in operations and marketing and, you know, all the other things that we do, and we're very active in the investor communities that we occupy. And so we find a lot of deals that way as well., you know, one of the, one of the things that has worked really well for us,, other than the brokers who I know spend their entire days building relationships with the building owners that I'd like to meet someday., so that's obviously focus number one. Speaker 3 (00:05:59) - But focus number two is,, I'm looking for. Building owners who are stressed, right? For one reason or another, they have. You know, poor performing tenants. The building isn't performing. There's deferred maintenance and they can't catch up. They're undercapitalized for some reason. They're overleveraged for some reason. And so, you know, we'll send out a,, an email or a letter or a postcard inviting them to our website to give them, you know, here are the top five things that building owners are dealing with these days. And here's how to solve those problems. Right. And so we just want to create that that conversation so that at some point, you know, it could be weeks. It could be months, it could be years down the road, one or more of them raise their hand and say, okay, I need to bring this building to market. I don't want it anymore. And so then we're trying to position ourselves to catch that ball eventually whenever it happens. So those are the two biggest ways. Speaker 3 (00:06:54) - , you know, we work with property managers and as we get to know them,, you know, one of the one of the questions I end up asking is, who's your most stressed out landlord and who can I meet them?, I'll buy you guys lunch. And, you know, if we end up buying the property, you property manager will continue to manage it, at least for, you know, a year or so. And we'll see how it works. And if we work well together, you continue and off we go. So everybody has, you know, a reason to make that meeting happen. And,, you know, sometimes that produces deals, sometimes it doesn't. The, the I was, I was listening to the Biggerpockets podcast years ago and there was this guy on,, his name was Big SIP. He was a guy for an investor from Mississippi, and he talked about the three foot rule, which is if I'm my version of that is if I'm standing,, in front of somebody consuming oxygen and they happen to be consuming oxygen as well, somehow, some way I'm going to bring up the fact that I'm in the real estate business, I'm gonna strike up a conversation. Speaker 3 (00:07:53) - And every once in a while I meet an investor. Every once in a while, I meet a property owner, and occasionally I make a friend. And, you know, majority of people think I'm weird, but that's fine. I'm okay with that, too. Speaker 1 (00:08:05) - So what is your portfolio look like now? And are you doing deals with multiple people? Are you syndicating things? What what is your multifamily space look like now and what states are you currently in? Speaker 3 (00:08:19) - So right now we're in Connecticut and Vermont with a whole bunch of offers and a couple under contract in North Carolina. Okay., and, you know, basically we are at our height, we were probably about 195, 96 units., right now we're under 100. And the reason being is that, you know, we've sold off a whole bunch of buildings, and we're 1031 exchanging into other syndications or into our own properties., and we also have a big development deal that's,, that's cooking here in Connecticut as well. So, you know, basically we're trading up. Speaker 3 (00:08:52) - And so,, that is our focus. So we've kind of transitioned from buying C-Class buildings in Connecticut and Vermont to to selling off. Most of those were now working on a 100 unit development here in Connecticut. And we're also looking to buy 50 to 125 unit buildings in North Carolina. Speaker 1 (00:09:15) - Okay. Tell me why you picked North Carolina. Speaker 3 (00:09:19) - , multitude of reasons., first and foremost, it's where my life is starting to move., I have a a junior in college and a sophomore in high school. And as soon as my youngest is out, my wife and I are probably moving that way. So that was kind of the first thing I looked at from a business perspective. It was,, in the in that triangle between those three cities, Chapel Hill, Raleigh and,, and Charlotte, the,, in that area,, you know, population is growing., it's a high activity, high, highly active investor community. The the job rate,, the unemployment rate is really strong there. Speaker 3 (00:09:58) - , the crime statistics are within our parameters., the fact is, is that the the market rents in those cities and between, particularly in the secondary and tertiary towns, you know, our,, you know, the median income is three more than three x what the rents are. So there's, you know, a there's opportunity for growth and be the folks that are renting there,, can afford to rent there., which is important., you know, there's probably, I think, about 13 or 14 different things that we look at, you know, we look at in the cities where we make bids., you know, we're looking at the ten year plan to see where construction is going. If there's a conventions that are coming in, what are they doing with the malls that are dormant right now? All of those things. Right. And then we also look at we actually go so far as to, to subscribe to the local newspapers. I want to know everything that's going on in that town,, in terms of, you know, sentiment in terms of,, you know, where the business community wants to take the town. Speaker 3 (00:10:58) - , you know, we're looking at, you know, we look at a whole host of things. Speaker 4 (00:11:01) - Okay. You. Speaker 1 (00:11:02) - She already answered a question I was going to ask. I was going to ask how you identify and what are some of the key factors. So you already went down that path for me. So, you know, I definitely understand population growth, job growth, unemployment rates. You know, I think when you ask any investor, those are kind of the the key things that people are looking for, because obviously the demographics and the economics need to support the rental market as a whole. Now, you mentioned, though, that you were in C class in Vermont and in Connecticut, and that's typically and you also mentioned distressed sellers, right? So you typically kind of assume that those two kind of go in hand in hand. Right, right, right. What makes you now transition to a development project, which I would assume is going to be a class when it's done in the Connecticut market. Speaker 1 (00:11:53) - And then what are you targeting in North Carolina? Speaker 3 (00:11:56) - , so the transition from C class to development was actually a pretty natural one in that. So I, I grew up being the child of, of one of the, you know, one of my residents. Right. And in terms of demographics, you know, I watched my mom work, you know, 2 or 3 jobs to make ends meet for me and my brother so that we could eat. And quite frankly, neither of us are small kids. We ate her at a house and home on a weekly basis. And, you know, God bless her for for keeping us in, in food and milk and whatever else, because we did not make it easy for her. And so I have a, you know, I have a massive amount of respect for the people that work hard for a living. And, you know, all they want to do is, is provide for their families. And so I felt a connection and and that's why we focused on C class because, you know, we would go in, we make them clean and safe. Speaker 3 (00:12:50) - , you know, we rebuild the relationships with the residents that want to stay. We upgrade those the common areas, we upgrade the units, you know, new kitchens, new baths, new everything. And and then we, you know, put them, put them back on the market at, you know, probably about 85 to 90% market rate. So because I want to make sure that they stay you know vacancy is the game for for us in that business. Right. And so the reason and then you know, the reason that we want to focus on, on the vacancy is because on average, because we do a good job repairing those relationships on average, our residents stay, you know, just over 4.1 years where the average in Connecticut is, I don't know, it's like 17 or 18 months, which means on average, people are moving every couple of years, which is really hard. Right. And,, you know, I want to make sure that,, that we're doing a good job in serving those residents because, you know, a it's it's I feel good about it. Speaker 3 (00:13:45) - Right. In terms of I feel like I'm, I'm doing right by the folks that that rent from us. We treat them like customers because they are. And two, it's also really good business because with every year that they stay, that's one less turn, that's one less lease up. I have to do. And that is hundreds and in some cases thousands of dollars per unit. That drops right to our bottom line, which drops right to our NOI. So if you put a ten unit building on the left and my our building on the right, pretty good chance. In fact, I pretty much can guarantee that our building is a cash flow is better and B is more valuable for those reasons alone. Right. And so that's that's why I focused on C is because I really see an opportunity to outperform,, my peer group and, you know, create a create little small communities throughout the neighborhoods,, that,, you know, enable us to outperform our peers. Moving to development. State of Connecticut has a as, as pretty much every state does has an affordability problem. Speaker 3 (00:14:47) - And so., we're going to be building affordable housing,, here in the state of Connecticut. And it's a it's an interesting program because what it does is it allows we can acquire real residential land. And through a program here called 830 G, we can override the local zoning and develop multifamily, as long as we hold 30% of the units,, available for some level of of affordable housing, workmen's housing, all the way down to section eight. And so we're happy to do that because the numbers work really well. And again, I'm serving that same community. So, you know, the the folks that live in our buildings are the the people that crank a wrench for a living at the local garage. They're, you know, a teacher. They're the captain and the fire department, you know, they're good, hard working people, right, that serve the communities. And the whole idea here is to allow, enable those people to live in the towns in which they serve. Right? Instead of having to live five towns away to be able to afford their their living. Speaker 3 (00:15:51) - So that is the Connecticut strategy as it's transitioned. Speaker 1 (00:15:55) - So talk to me about a little bit more about this, this program for this land., is this a national program or is this something just strictly based in Connecticut? Speaker 3 (00:16:05) - I think most states have a similar program, but no, it's a it's a state by state thing. Okay. And so Connecticut has has targeted 10% affordable housing in each of the communities. The cities have that in spades, that it's never a problem to find affordable housing. But when you get out to secondary and tertiary towns, you know, those rates drop. Like town I live in here, it's 1.4%. Right. And so the average home, in order to afford a home in this school district, you've got to it's it's probably, I want to say about $380,000 to buy right now. Yeah. And that's pushed up over the last couple of years because of inventory. You know, there isn't any. But,, but the the fact is, is that a $380,000 house, you know, quick math, you've got a you probably need to make $100,000 a year in order to afford that. Speaker 3 (00:16:54) - Yeah. And the average average American makes 76,000. So they're $24,000 short., so what what these affordable housing opportunities create is the ability to live in a really nice two bed, one bath townhome,, that's costing you 18, 19, 22, $2,300 a month. But you're not paying the taxes. You're not paying the insurance. You know, you've so you've got your. Your living expenses very well managed and you can live in a nice, well-appointed home that enables you to. Commute to the high school because you're a local teacher and it's five minutes away instead of 45 minutes away. Speaker 4 (00:17:38) - So yeah. Speaker 1 (00:17:40) - So are there any,, grants or tax benefits to doing this affordable housing? Speaker 3 (00:17:47) - , there can be. It depends on the town and it depends on on the type of project. In, in the one that we're working on. I'm not aware of any,, tax benefits. In fact, it's it's actually helping out the town. We're converting a, you know, 58 acres of farmland that that they get, I believe, about $44,500 a month a year in taxes on because it's farmland. Speaker 3 (00:18:11) - , we're converting it into, you know, a 35, $36,000 a year taxable entity for the town. So it's actually helping the town. And so that's one of the reasons that they're more or less supportive. We've got some things to navigate around the you know, not in my backyard folks, but other than that it's, you know, it's a win for the town., as far as at the state level, yeah, there are grants everywhere for this, this kind of stuff. It's just a matter of navigating that, which is not straightforward because it's government. Speaker 4 (00:18:42) - Tis true. Speaker 1 (00:18:44) - All right. So let's I want to jump into talking a little bit more about how you're raising capital for the deals that you're funding, specifically your syndications. And, you know, you and I both know that raising capital is crucial in the real estate investment world. So what methods or approaches have you found most successful in attracting investors and securing capital for your projects? Speaker 3 (00:19:03) - , so one is we focus, right? So I spent 24 plus years,, being an, you know, C level executive. Speaker 3 (00:19:13) - Well, not all that time in the sea level, but at some point I was. And so I think and act like, you know, someone who operates at that level and I speak their language. So we tend to focus on business owners,, professionals and executive level folks and help them diversify out of the stock market. And, you know, take a little slice of their of their net worth and put it into the real estate market., we tend to be very conservative. So, you know, where where some of our, our colleagues are talking about 18, 20, 25% year on year IRR returns., you know, we're we tend to stick in that 12 to 16% and, and then deliver to the upside. And so we are we buy very slowly. We finance very slowly., we manage very, you know, we manage very,, from a discipline perspective and we tend to outperform our commitments. But,, you know, the whole idea here is to be as responsible as possible. Speaker 3 (00:20:18) - The way that we raise,, we use LinkedIn quite a bit., we do webinars quite a bit. I have tons of one on one meetings., we have a newsletter that we use. We do lead magnets in terms of educating people. We have our own podcast, Real Estate Underground, that all we do is meet with other syndicators and other professionals within the business., we have, you know, educational seminars that I'll do for local groups., we'll do the same thing on a webinar basis for folks all across the country. And,, you know, I most of my job every day is, is meeting with, you know, potential investors and, and figuring out kind of where they are in their journey, where they're trying to get and then determine if we have a project coming up that fits there, you know, fits the bill. Speaker 2 (00:21:06) - The episode will continue in just a moment. Speaker 1 (00:21:10) - As an investor, we know it's important to stay on top of market trends and real estate opportunities that add value to your portfolio. Speaker 1 (00:21:16) - We also know that having a trusted source of reliable information to help you stay a step ahead of other investors is critical to your success. If you're interested in having these types of resources as well as access to me and my team, I invite you to join the Empire Investment Club, a free service that gives you an easier way to make sense of today's and tomorrow's real estate opportunities. As a member of the Empire Investment Club, you'll get access to relevant resources and investment focused experiences such as live interactive webinars, market trend presentations, and investor socials designed to equip you with what you need to succeed. So whether you're an active investor, passive investor, a combination of both, or just starting out the club is where you'll get what you need to build a portfolio you love to join. Just head over to Jennifer dejesus.com. Sign up and we'll see you in the club where everyone's on a journey to becoming a better investor. Speaker 4 (00:22:08) - Okay. Speaker 1 (00:22:09) - Let's talk a little bit more about the social media., so specifically LinkedIn. Speaker 1 (00:22:13) - So give me some ideas of how you're utilizing LinkedIn specifically. And is there other social media channels that you are using to not only navigate raising capital, but, you know, find and attract investors? Speaker 3 (00:22:26) - So primarily our two primary social media channels for investors are YouTube and LinkedIn. And we are educating, you know, one of the things that has happened over the years is whenever I meet with a potential executive, they ask, you know, why can't do why can't I do this myself? Right. Classic Type-A, controlling personality. Right. That's that's who you want running your company. And that's who I'm I'm trying to connect with. And my answer is, you can absolutely. And I'll help you do it. And so we've built a an investors academy with a whole bunch of training. We put a lot of that out on YouTube. We put a lot of the the strategies and tactics and frameworks that we use to run our business,, out on LinkedIn as well. And, you know, my job is to educate folks that want to do this themselves. Speaker 3 (00:23:18) - , some of them take that and run with it and, and go off and buy their own properties and, and do great. And I'm happy for them. And that's wonderful. And, you know, as I tell people, I'm a cheap I'm a cheap date. You want to pick up the phone and call me or meet me for a cup of coffee? I'll I'll gladly meet with you. And in most cases, I'll buy the coffee. So I'm happy to do that and answer questions and whatever else., most of them realize, Holy cow, I work 80 hours a week. I actually require sleep, and I'd like to see my wife and kids every once in a while, or my husband and kids every once in a while. And,, so they realize, you know, it's probably better that I invest with someone who knows what they're doing instead, because I just there isn't enough time. And,, you know, in some cases, we're a good fit. In other cases we're not. Speaker 3 (00:24:03) - And I'm happy to introduce them to other other professionals that do this that, you know, provide projects that are a better fit for them. And that's okay, too. Speaker 4 (00:24:11) - Okay. So what exactly. Speaker 1 (00:24:13) - Are you doing on YouTube? Are you doing a lot of videos specifically about projects that you're working on, or what does that look like? Speaker 3 (00:24:21) - A lot of it comes from our podcast. So it's it's it's snippets of interviews that either I've done with other podcasts like this one,, or they are snippets of our own podcast and, and,, you know, where someone that we're interviewing drops a gold nugget, we try to capture it and push that out. And,, and a lot of it is, is a growing piece of it is me just talking about, okay, you have a problem. Here's how we fix it. Here's another problem. Here's how we fix it. Here's an opportunity we see. Here's how you take advantage of it. Right. And just simply educate them. You know, here's how to evaluate a tenant before you sign the lease. Speaker 3 (00:24:59) - Here's how to target a market. Here's how to onboard a building. Here's how to onboard a a resident. You know, when blood flood or fire. Which of the three emergencies in our world happen? What's our process. Right. It's stuff like that. And you know, the idea being that I believe education is is most helpful and most useful to our audience. It also demonstrates credibility because we know what we're doing, and it also demonstrates to potential investors that what we do is, is pretty intense, and it takes a lot of effort and a lot of systems and a lot of hard work. Speaker 4 (00:25:33) - Okay. Speaker 1 (00:25:34) - You know, with the rise of digital platforms, you know, there's there's old traditional methods, right, which is that hand to hand contact or that face to face contact, which you actually did mention earlier about your relationships with brokers and meeting investors and your coffee chats and all that. And then you've got kind of the new, newer digital approaches, LinkedIn, YouTube, social media strategies, you know, how do you balance all the things that you're doing? Right. Speaker 1 (00:26:02) - Because that that in itself sounds like a very full time job. So are you employing people to do it? How how are you navigating that? Because I can't imagine that you're having all these meetings doing all this, you know, networking and still having time to even be home with your family. Speaker 3 (00:26:17) - Yes, I have dinner with my family every night, pretty much every night. Speaker 1 (00:26:21) - So how do you navigate all that? Speaker 3 (00:26:23) - A lot of help. So we use virtual assistants liberally. And so our entire back office,, social media podcast,, investor relations, bookkeeping,, property management, outbound calling for acquisitions., all the content editing that we do is all done by a team that we employ, individuals that we employ in the Philippines. And so, you know, one of the things that we've discovered over the years is that culturally, they are amazing, hardworking, honest, sincere people who are very well educated. And,, you know, we'll do we'll do an excellent job, especially when you take the time to train them well in. Speaker 3 (00:27:08) - Doing it your way. My way. And,, they do it for, you know, a fraction of what we could hire similar talent for here in the U.S. and, you know, we pay them well., you know, the equivalent., from a forex perspective, the equivalent of basically $140,000 a year in terms of annual salary and in U.S.. Right. But,, the fact is, is that a $5 an hour rate cost of living wise in the Philippines is equal to $125,000 here in the US, just based on cost of living. So we pay them a little bit better than that. And,, we train them up and we manage them well, and they do an excellent job. And that's how most of our work gets done. So I create content on Monday afternoons where I'll sit for 3 or 4 hours and I'll have, you know, 5 or 6 topics that I want to talk about., I will video those, you know, I would record those videos and then I'll send them to the team via teams. Speaker 3 (00:28:06) - We use Microsoft Teams and. They will edit it, chop it up, make it presentable out of all the bells and whistles that we like to add to make it, you know, to brand it as a Clark Street piece of intellectual property. And then we pushes out to, depending on the topic and the and the target it pushes out to YouTube, LinkedIn. In some cases we're pushing it out to Twitter, Facebook and Instagram if it's more student focused. Because with the Investors Academy, we're making that available, those courses for sale as well. So if you want to learn how to do this, we're happy to teach you for really reasonable price. And yeah, so that's most of it. Some of those transcripts get well, the transcripts for the long form get translated into,, blog articles as well. And those get pushed out to our site., I'm also on a fairly regular basis on Twitter. I use Alex Moses model where I'll push out, you know, ten, 15 different concepts, and I'll message them differently and push them out and see which ones resonate. Speaker 3 (00:29:11) - And the ones that get the likes and engagement becomes witty, becomes videos for next week. Speaker 4 (00:29:17) - Okay. Wonderful. Speaker 1 (00:29:18) - So with all this content out there and all these virtual assistants that are doing this for you, how are you actually measuring your effectiveness of your marketing efforts in terms of generating leads and attracting investors, raising capital? Are there specific like key performance indicators that you're using to determine your how well your marketing strategies are doing? Speaker 3 (00:29:39) - Yeah. Great question. So we tend to keep it pretty simple. You know the goal we're very clear about our goals on a quarterly basis., so this quarter for instance we're looking to meet and engage with 50 new investors., I think as of yesterday or last week, we were at about 35 or 36. So we're right on target. And, you know, so that's that's the key., you know, in terms of like, are we managing, you know, return on ad spend and things like that? Not really, because we don't advertise. This is all social media. Speaker 3 (00:30:09) - So I'm paying attention to,, growth metrics in terms of,, the podcast video engagement,, as well as post engagement. And. You know, anything that that seems to resonate in terms of anything over, you know, a thousand,, a thousand engagements becomes a video. So it's it's pretty straightforward. I mean, we're not I can't tell you that we're we're managing,, you know, to specific, like, return on ad spend because our ad spend is on personnel, not necessarily on advertising. Speaker 4 (00:30:44) - Sure. Speaker 1 (00:30:45) - So what advice would you give other real estate investors or investment firms looking to improve their deal flow, raise more capital, or enhance their marketing and digital presence? Well, what advice would you give? Speaker 3 (00:30:57) - So first and foremost, recognize it's not about you. Like most of the advertising that I get, most of the most of the interviews that I get, you know, when I, when I interview another syndicator, the first 45 minutes is about them. And you're forgetting a key piece of, of the, the puzzle there. Speaker 3 (00:31:17) - And that is the investor. And so if you can understand that your job as an acquisitions person, your job as an investor relations person, is to understand the human being before you and understand where they are in their journey, where they're trying to get, and then being very specific about helping them and solving their problems. You're going to be really successful if you walk into a meeting or have some sort of,, advertising interaction, you know, marketing interaction. And it's, you know, the first 20 minutes is about you. You've already lost them., I see that mistake made all day, every day. Speaker 4 (00:31:58) - Sure. Speaker 1 (00:31:59) - So looking ahead, your 2024 outlook, what do you see as emerging trends in the way of social media? Real estate investing. What do you what are your market predictions. You know, just kind of give me your 2024 outlook 20 even into 2025. What would you what would you be telling people that are either having gotten off the fence or are in the in the business, trying to grow their portfolio and maybe feel like they're stalling because of the market fluctuations and dynamics? Speaker 3 (00:32:35) - A couple of things. Speaker 3 (00:32:35) - So first and foremost,, mortgage rates are probably never going to be, at least in my lifetime, back down in the threes and maybe even the low fours. I think that from a historical perspective, if you look at mortgage rates today versus where they have been over the last 50 years, we are smack dab in the middle of the historic range, right? Yeah. You know, agency debt right now last I checked was like six and a quarter, you know, somewhere between 5.75 and 6 and a quarter and the average mortgage rates,, over the last 50 years, I believe the last time I looked was like 7.74%. So we are right spot on in that, in that healthy range of of where we should be. So. So that's step one., the the other thing that I've seen is that you're seeing a lot of tumult and a lot of,, choppiness in the multi commercial multifamily space, according to, you know, the major newspapers and other media outlets. And the here's the facts. Speaker 3 (00:33:37) - , the fact is, is that there are just a little bit more than a million multifamily properties in the in the U.S. only about 3000 of them are having any or having major problems. And by problems I mean that they, you know, bought adjustable rate mortgages without either the their cap, their caps either,, you know, have gone by the wayside or they didn't buy one at all, which, you know, shame, shame. But,, you know, the fact is, is that those are the ones those 3000 properties are the ones that are going to have a major problem in refinancing. Those are the ones that will most likely be sold at a discount. But by and large, the other 97 plus percent,, actually 99.7% of the market is quite healthy because it's all on long term debt., you know, it's Mom and Pops, which still own the majority of the buildings out there. And they've they either own them free and clear or they're on 30 year debt, 30 or 40 year debt and are doing just fine. Speaker 3 (00:34:41) - , so that's one thing, is I don't see the opportunity, you know, the market, the sky is not falling. Right. And so so that's, that's, you know, first and foremost, however, there are 3000 plus buildings out there that, you know, are going to have to be bailed out. And that does present an opportunity. And so we're ready for that. Right? That's one of the reasons we're transitioning our portfolio and having, you know, and keeping a lot of it in cash right now is just for that reason. I think the other point is that if you're waiting for the mortgage rates to slide back down, don't, because they're not going to, you know, they we may get into the fives again, but the, the, the cost of debt that we've seen for the last, I don't know, ten, 12 years,, you know, in the twos, threes, fours percent,, is just not coming back because it would it would take another event like 2008, in order to create that environment. Speaker 3 (00:35:36) - And, and, you know, the, the reasons that those occurred,, have already been legislated and regulated out. So they're just not it banks are far better capitalized than they were back in 060708 okay. Speaker 4 (00:35:50) - So what what would. Speaker 1 (00:35:52) - Be the best method for my listeners to get in contact with you if they want to learn more about Clark Street and all the things that you do and all the education that you have available for investors. Speaker 3 (00:36:00) - So the easiest way is to reach out to me directly at Ed at Clarke Street. Com. You can also visit our website Clark Clark street Clarke street. Com., you can find us on social media at Clark Street Capital all over the place., you can also find me at Matthews with one t,, all over the place. You know, the. Fortunately, I'm an old guy, so I've had all these accounts for years, so I'm. I'm not. Ed Matthews. 12345. I'm just Ed Matthews out there because I was, you know, a techie when Facebook was invented. Speaker 3 (00:36:29) - Right? Right. Exactly. Speaker 1 (00:36:30) - You're the first, the. Speaker 4 (00:36:31) - Original OG. Speaker 3 (00:36:32) - For sure. Speaker 4 (00:36:35) - That's awesome. Well, Ed, it's been a pleasure. Speaker 1 (00:36:37) - Talking to you. I certainly wish you all the best in your new acquisitions in your development. And,, thank you for taking the time to talk to me and help to educate our investors about some of the tricks that you use to be successful in real estate and multifamily investing. Speaker 3 (00:36:53) - My pleasure. Jen. Speaker 1 (00:36:55) - Thank you for listening to the first episode of season 17, where we started to discuss the emerging trends and opportunities available in real estate and multifamily for 2024. I hope you enjoyed my interview with Ed Matthews from Clark Street Capital. And until next time, take care. Speaker 2 (00:37:12) - For more information about how Jennifer can help you plan, develop and manage a strong real estate investment portfolio, visit Growing empires.com.