Real Estate Investment Funds with Matt Christie

Microphone 9 64

Podcast Transcription

Announcer [00:01:19] Tired of the 9 to 5. Tired of only dreaming about the things you want to do. Want to have more time for your family. More time for you. More time for you. This is the Breakthrough Real Estate Investing podcast, where we interview qualified guests in the real estate industry all across Canada. We want you to live life on your terms, and we want to help you break through to that life through the power of real estate investing. This is the Breakthrough Real Estate Investing podcast. Now your hosts Rob Break and Sandy MacKay.

Sandy Mackay [00:02:08] Hello. Welcome to another episode of the Breakthrough Real Estate Investing podcast. I am here your solo host for the day Sandy MacKay. And of course Rob is not here today, but we, we miss him dearly and his perspectives here and insights. He is doing an amazing retreat at the moments with some of his core group of investors and friends and partners in Costa Rica. So we’re letting him hang out there for the day with the group and hopefully they’re taking action, buying some fun properties and having fun together. We’re here to keep the show rolling and provide lots of value for you. You’ve got an amazing show. Excited for our guests, Matt Christie to come. And we’re going to talk about real estate investment funds, which is something we have not done too deep on this show in the past and something I’m really excited about. So hang tight with us. We’re going to get into that interview very shortly. And before we do that, as always, want to recommend and remind everyone to go over to our website Breakthrough REI podcast dossier where you can pick up our free gifts, the ultimate strategy for really wealthy real estate. And of course we do that. You’ll get on our email lists and never miss an hour show or an update or webinars or whatever we’ve got going on. You will stay up to date with all that stuff, so go over and do that again. Breakthrough ARIA Podcast dot CA and remember to leave us a review we love when we hear from our guests are our listeners are our followers, and we would love some recommendations on what you want to hear from us, what kind of guest you want us to bring on. We really do our best to read through every single one of those and bring on the guests that you want to hear. We can write the type of value that you’re looking for and yeah, so go over, do that. Apple is a great place to do that. ITunes over and leave us some reviews. Five star ratings are always recommended and that and appreciated helps us get in front of all the great Canadians that listen to our show and it helps get us to top the list so we can attract the best guests, provide the best content, and ultimately create the best experience. So that’s about it for the housekeeping. Like I said, it’s just me today. And so a little less to talk about upfronts. I do want to introduce before we get to our guests, Matt here, I want to introduce on our past show. Rob was asking me about a couple of things that I’ve been doing lately, which is involved has involved a real investment funds that’s a group of us have put together that’s really exciting and something we’re going be talking about with our guests here on the show today. And so we’re going to get into all the details of it. I will just start out by saying that we’re really excited about it. There’s a lot of things that I’ve done in the last 18 months that led to this and really restructuring our investment strategies and really focusing on like we always have the value add approach, doing some bigger, more exciting deals. And I’m really excited to say and share that we can allow a lot more people to be involved in what we’re doing. And so there’s a lot of opportunities if you’re looking to reach out, if you’re looking to get involved with deals that we’re a part of and you want to learn more about that, I can certainly talk on it and help you out. You can always reach out to me. Sandy at Freedom Rams dot com or throw it in social media channels or we can also talk you can also talk with our awesome guest who we’ve got coming on the show here with us, Matt Christie. So, Matt, welcome to the show.

Matt Christie [00:05:33] Thanks for having me. A pleasure to be here.

Sandy Mackay [00:05:36] So I’ll read a brief bio here. And Matt is one of our partners in the fund. And so we’re going to get into all the details of that. He’s got a great history and running and managing investment funds and his bio is that he is a residential and commercial real estate portfolio. He’s built a residential commercial real estate portfolio from the ground up rapidly, scaling from 0 to 365 rental units in ten years. He’s got a portfolio of hundred 15 million under management. He’s actually a chartered accountant with TWC or was a chartered accountant with Fidelity TWC, and he found his full time passion in real estate in 2011 when he started investing in beautiful Hamilton, Ontario. And that is since use his financial acumen to assemble dozens of off market property acquisitions while raising tens of millions of dollars under various strategic corporate structures. That’s the experience. Real estate investor, a developer and licensed realtor who recently passed as Market Dealer, might ask you a bit about what that means just recently passed that course, and he’s assembles profitable investments for his partners with a specialized eye for hidden market opportunities simultaneously tenuously, Madden and the Property Management Company is managing partner for several limited partnerships active member of multiple business improvement districts and maybe quite, quite the feat on top of all that is that he is a proud husband and father of four beautiful kids. So busy life, lots of stuff going on there. Matt, why don’t you want to share with us how all that got put together and kind of what your investment journey? Like so far.

Matt Christie [00:07:10] Yeah. Thank you for the intro. I like how you added that I’m a proud father and husband at the end there. I always I always stay thoughts of thank you for preventing the tension. It’s actually the forefront of everything that I do. How I got started in real estate. I had a defining moment. It was actually in in university. Now I had a landlord at the time who for some reason always wanted to come pick up his check in person, always late, which I didn’t understand. He was, you know, a calm, relaxed individual in his late forties. And I found out he just wanted to sit down, have a beer with me, which one day I finally asked him, you know, what is it that you do? Like, why are you here on a Wednesday afternoon offering to sit outside and have a beer with me? And he simply just pointed to a property across the street and one two doors down a laundromat and said, you know, I only saw student rentals and that’s it. And a light bulb went off. You know, the option of having passive income, it attracts me at that time. So from there, you know, I actually that year I was already doing an internship with PricewaterhouseCoopers. I was in school for accounting economics. And so I was able to scrape together $5,000 and buy a condo. I was in University of Ottawa, you know, 5%, down 5000. I bought a two bedroom condo for just over 100,000. I moved into that quickly, realized that I wanted to be back, all my friends, where it was at the time. It’s called the student ghetto. This is why I went back, but ultimately rented that out to Carlton. Students, move back to the student, get out of University of Ottawa, and from there next year I decide to refinance like and another property. And then I really got distracted with university. I stayed distracted. I got started with university and going through to get my designation as a senior, I was referred to as a CPA and didn’t do anything else with real estate until eventually I transferred from Ottawa to Toronto downtown, you know, from the greater Toronto area. So just a matter of time before I came back to that to move to Toronto. And with that I sold my two investments in Ottawa and affordability took me to Hamilton, which, you know, was very eye opening. I saw this like City of opportunity, and I do understand why my colleagues at the time were referring to Hamilton to me, as you know, they would actually call the area of Ontario. And I’m like, How is that possible? There’s so much opportunity here, you know, like my first year with my investment and actually a 20% return on just cash flow alone. And I, you know, a light bulb went off reminding me of that landlord back in third year university. And you know how he seemed so relaxed, calm, collected. And he was a family man, all things that I looked up to eventually to be. So at the time I was doing child labor with a public accounting firm. So I heard of child labor occurring in the office when stark leaving when it’s dark, rarely see my friends and family. I eventually switched into financial reporting for a public mining company. Better pay, better hours. At the end of the day with the same grind. And I was looking to start a family and really just focused on that passive income. So I did what everyone told me not to do. I quit my job. I focused, almost made my girlfriend now wife cry because we’re just calling it a student debt. But I quit my job to focus on real estate. And, you know, I was like, what’s the worst thing that can happen to fall back on my designation? Maybe you squeeze a year of seniority and really knew that my focus and I never looked back. I was 13 years ago.

Sandy Mackay [00:10:56] What was that first property you bought in in Hamilton? And like you said, yeah, it was kind of the armpit of Ontario. I was referred to that by a lot of people. 22% sounds pretty attractive. I don’t know if that’s maybe impossible to find nowadays in Ontario, but certainly that’s attractive. There’s you know, I think you’ve told me before what type of cap rates were you looking at that time in Hamilton compared and maybe even compared to like Toronto or Ottawa where you had looked previously?

Matt Christie [00:11:25] Yeah. Yeah. This is why I said it was a city of opportunity. I couldn’t believe it. Like I was looking at a property that was 8%. Cap rates are higher and this was when I started, you know, I kind of summed up quite quickly, but there’s a lot of research and the diligence that was done. You know, behind the scenes I come from an accounting and analytical background, so I was really dramatic diligence and created my own financial model that fit exactly what I was looking for. And my realtor at the time, before I got my own license, you know, I would send her my financial model and she would go around and like look at 20 properties and narrow down like five, like jump on it, go train and go out to Hamilton. And we just look at the five and write down what. But I was looking at properties that had like an 8% or higher cut rate, if you can imagine. And so you think of like, why is someone selling something with an 8% cap rate? It’s it was like a lot of headaches, right? Like such a great asset is being sold. You know, I inherited a lot of talent issues, capital expenditures that were required. You know, it’s been sold for a reason. So it wasn’t easy but seemed to stick out through it.

Sandy Mackay [00:12:35] So when we talk about some of those like challenges and you know what all those look like because first of all, you know, I’ve got to congratulate you on taking action. A lot of people that I, especially coming from accounting and more analytical background, seem to have a bit of a challenge taking action because they can. What do they call that? The information, what’s it called? And they overload themselves with information ads and they can’t take action. So I think that’s a very common thing with people that I’ve met. They’re more on the analytical side. How do you overcome that, I guess, or and then or some other challenges along the way.

Matt Christie [00:13:14] So I overcame it from trial and error challenges along the way or that. Really myself. You know, I try to do everything myself, which in hindsight wasn’t the best approach. You know, you always hear people saying, do I have to reinvent the wheel? I wasn’t trying anything necessarily new here. People have done it before me. It would have been optimal if I was able to find a coach. I could have followed in the footsteps. But, you know, I went from sitting behind a desk being accountants to all of a sudden being the plumber, the painter, the cleaner, the tenant placement agent. I was, you know, all the things I actually remember when a nightery getting in and apartment ready for some of those women in the next morning and I’m picking up my mouth and clean material and walking out at eight in the morning with intense women. And she’s like not like she thought I was just the agent that placed you there. So it was kind of eye opening. But, you know, you learn along the way and I do come from a, you know, construction background, actually. My father was a carpenter, so I grew up around tools like that. But I would say, like in hindsight and you try to do everything myself, it was a bit limiting. I learned a lot through it. I know those properties now inside and out because, you know, I just pick up the tools and do it myself. However, it’s not a scalable approach. And if I look back, I would I would address that differently.

Sandy Mackay [00:14:40] So can you take us a bit through the, you know, from buying the property to and an often and the evolution of going from that to you know, roughly where you are today with the funds and all that. And we can talk a little bit kind of transition into what a fund structure looks like. Well, we’ll get to that. But how did the entity get to that point of saying, yeah, this funds, you know, bringing other people’s money and pulling together and that sort of arrangement makes sense. How quickly did you develop that sort of thought or that strategy and that approach? And what was that evolution like from, you know, yourself solo to let’s bring in all these people?

Matt Christie [00:15:19] Yeah, good question. So, you know, I said I quit my job. So, you know, I took it very seriously and I had to make this work because I had to, you know, still pay the bills. So I dug into it and put 100% into it, but it quickly ran out of my own capital. So the first three properties I figured out a way to acquire and finance on my own and also with the help of my wife, you know, to get the mortgages and the financing. Oh, thank you, Christine. But then subsequently, you know, I ran on my own capital and all of a sudden another light bulb went off, which was creating simple co ownerships. So my first properties.

Sandy Mackay [00:16:01] Were there was duplexes or are they something bigger? What’s that? Property is worth it.

Matt Christie [00:16:05] Yeah. So the biggest was the triplex duplex, single family home, and it was just because of price point and also the model that I was trying to achieve. But yeah, so I acquired three properties and then and then didn’t have the capital to do it anymore. And I was wondering what my next steps were and just had a conversation with actually an old boss of mine, you know, she said, Matt, and I’m inspired by what you’re doing. I always want to get into real estate myself, but I don’t have the time, energy or expertize to do it. If you’re ever looking for a partner, I’d be more than happy to write a check and you do all the work. And I was always second. I could do this with other people’s money. And I’m not using or sorry owning the property owners like myself, but that’s exactly what we did. So creating a simple ownership, which we clearly wrote out what I was bringing to the table, what she was bringing to the table. And then, you know, gave me the funds I needed to go and acquire another one. I’m still following the same formula that was working for you. And then from one corner, just word of mouth through my network. I ended up with six different co-owners, all slightly different parameters that they’re looking for. But more likely than not, if I brought them to an opportunity that I wanted those parameters, they were willing to write a check. And then one of those corners actually came from a legal background. We had five assets together. Very grateful for the relationship. And he eventually took me aside and said, You know, this is great. I’m enjoying my business with you, but let’s turn this into a real business. And from his legal background, you know, we looked at all the different types of structures that we could create and ultimately landed on a limited partnership. And with that limited partnership, I was able to bring my existing co-owners together under one structure that’s, you know, combining our forces gave us a larger buying power to go out and start looking at larger assets.

Sandy Mackay [00:18:06] Awesome. So we’ll get into what that fund structure looks like. And I think one of the things though that came up in your in your story there, is it because a lot of people that listen to our show, you know, we get a lot of questions around finding money, raising capital, and how do we do that? Most people, when you start out, that seems to be the stumbling block. And then, as you know, you get a little more into it and all of a sudden that becomes actually kind of kind of the easier part of finding the deals becomes a bit of a challenge at the time there. You seem to have you’re not unlimited, but there’s a lot of deals in hand with them. So that seem to be maybe not the stumbling block, but you came across money, seemingly by your strikes, you mean by accident? Almost. What do you think it kind of contributed to that? Was that just by luck? Was it something you were doing day to day that was, you know, attracting that type of person to want to partner with you? How did that come about?

Matt Christie [00:19:03] Yeah, you know, if I look back to it, you know, I came from a network of accountants. Most of them are doing relatively well financially and in their individual careers. But again, just, you know, so focused on what they do best, which was their job. And, you know, here I am, you know, suggesting opportunities to invest in real estate, which most people, you know, without having a lot of knowledge on it, tend to lean towards that. You know, real estate’s a good place to invest. So I guess I come from a finance background, you know, just my network and word of mouth started to connect me with certain individuals who are looking to invest real estate and into any type of advertising or anything of that nature. It was just really, you know, got that one corner. She was happy. She’s like, You need to talk to my friend as you’re looking to do something similar. And just from that, I played on a hockey team a bunch of positions. So there’s the relationships that came out of that. And then, you know, the one co-owner that just came from a legal background, I actually met him at a wedding. So you just never know the people that you’re going to meet and the opportunities that might come out of that. You know, I address or I approach every conversation as if I’m going to learn something from that individual. And once they asked me about what it is I do, you know, I just stick to it at that time. It’s those that are interested about it, you know, sometimes results and co-ownership.

Sandy Mackay [00:20:31] Awesome. Yeah, that’s great. This is a great story because I think a lot of people really overcomplicate that. I think it’s like a lot of it’s going about your day to day and just, you know, who you’re around matters, who you surround yourself with matters. So when you get inside the right groups sitting here, you know. You know. It does give you advantages to be in a career where there’s people that have some wealth building there or some finance or whatever that matters. But then beyond that, I mean, you just got to look around for those opportunities, the kind of every day there in your day to day there at your wedding that you go to, that your whatever right there show up in different places. But if you’re open to it and you’re and you’re like just aware of those could be anywhere, then you never know where you come across the right person.

Matt Christie [00:21:16] Yeah, it was a hurdle I had to come out of Overcome because at first I didn’t realize that these cool ownerships actually could exist. And you know, also that I said they really undervalued what I brought to the table. So I was like, wow, you know, they’re putting in the majority of the money. They should get the majority of the returns. But really it was, you know, me pulling this nightery and grind it out and finding the right opportunities and the expertize of having boots on the ground that brought them, you know, above average returns on their investment. So yeah, I’m very grateful for the relationships that I’ve created over the years. And really it’s just it’s word of mouth and just taking those extremely seriously. It’s all comes down to relationships in my world and those are all based on a couple of core values. You know, one is trust. You know, I think I know coming from a CPA background, you know, I always held my integrity to a certain degree, and that really came out with my next, you know, life cycle in real estate and just never, never do anything that is going to have anyone question your integrity and just keep that at the forefront. And with that is your, you know, trust and transparency. And there’s a couple of hurdles I had to come up overcome. And, you know, there is no easy way out. You know, I took that. I just made sure that no one ever questioned those core values. And it’s. No, it’s a paid off, but it resulted in keeping those relationships. So this woman asked me the other day and I never even thought about it like that. I’ve never had an investor walk away from, you know, ownership or partnership. So it’s been 100% retention, which the staff haven’t told me they should start telling people, and it just shows that they’re happy and content with the scenario.

Sandy Mackay [00:23:06] Yeah, I think that’s I think that’s that speaks to especially when you have a lot of professionals in there that are that are retained at 100%. I think that speaks to the quality of service and integrity they deliver.

Matt Christie [00:23:18] Yeah. Yeah. When you’re dealing with fellow accountants, I mean, they want to know where every single penny goes and then, you know, physicians are. And I want to stereotype of the not as particular, but the lawyers as well. I mean that’s basically my network and attention to detail is some less. Sure. Yeah.

Sandy Mackay [00:23:37] And were those initial co-ownership deals they’d put together; would they be like a 5050 structure? Was it kind of a variation depending?

Matt Christie [00:23:45] Yeah. I mean, it’s simplifying it, but really it depended on the asset. So we had to look at the opportunity and what we wanted to do with the assets and sit down with them and just make like a simple t diagram, you know, on a sheet of paper with a pilot and say, you know, this is what you’re doing, this is what I’m doing, and what do we think is fair here? And even though I was the same co-owner, you know that the allocation might differ from property to property. So it depends. You know, if a property required a lot of initial oversight of capital expenditures, then they would say, like for you to oversee that and run, that’s going to take more of your time. And therefore, you know, we’d set up a formula that made sense to acknowledge that, but we start with 5050 and then sometimes that would vary.

Sandy Mackay [00:24:32] So in so we went from, from kind of doing yourself to the co ownership and then through your one co-ownership partner there decided to go into this more space type structure. What other structures did explore during that phase? Was there others that were on the table that kind of were considerations? Was it like if just made the most sense instantly or how did you get to that structure? And maybe just explain what that is? Because I’m sure a lot of our listeners really don’t understand what that term means.

Matt Christie [00:25:02] Yeah, I mean, there’s a lot of ways you can structure a deal. You know, you hear a lot of people say joint ventures initially. So I say go ownerships because there is a difference there. The main difference is how you can amortize the asset and where that happens. But yeah, I mean, so going from owning the property myself to bringing in partners, having to book ownerships and then bringing co-owners together in a large tragedy, we landed on a limited partnership for several reasons, but I mean, you could set up a corporation and that corporation goes up to buy properties, but we landed with that and there’s a lot of ways that you can structure these deals. So I do want to dove into each one of those, but we landed on a limited partnership for various reasons. So what a limited partnership is, it’s very similar to a co ownership and that you have someone that is the main decision maker and, you know, boots on the ground doing everything that’s required to oversee the property. And that individual falls in the role of the general buyer. And then you have individuals that really all there want to do or ask do is contribute funds, money towards the project. Right. And those are the in looking at our and why we decided to go with a limited partnership which has the two roles. A general partner in a limited partner within a limited partnership is just understanding our investors, the limited partners. They’re able to invest in the property, but they have limited liability because they’re not a decision maker. Worst case scenario, which has of up to it, is, you know, they could lose their investment, but that’s it. You know, if there is a major lawsuit or anything of that nature, it wouldn’t come back to those living partners. So that they’re protected from those worst case scenarios. The worst thing they can do is just lose their investment that they put into the structure. But if there’s a slip and fall or something more serious happens and there’s a lawsuit, so nature they’re protected from that. But as a general partner, I would take that on. The other advantage is the limited partners are required to guarantee the finals. So it’s a great structure for someone that was an investor in the city. It doesn’t want it impacts that personal debt to equity ratio. So, you know, investors looking to save up and eventually buy this cottage here a second home their investments with us what impact that. You know, they’re a lender to trying to get financing. It doesn’t really come up because they’re not guaranteeing that loan. So that’s another big one, is the financing falls of the general partner. And then it’s also more direct route ownership itself. So, you know, if you set up a corporation that goes on and buys real estate and then the investors buy into that corporation in the form of shares, they really own a portion of the corporation and not the physical assets themselves. So if you’re talking with our investors, we realize that they want to have a more direct line of ownership to the property. So this allows for that. So they actually own units in the property itself without sacrificing their personal debt to equity ratio and also protecting them from those worst case scenarios, which ultimately, you know, it’s one of the most important matters when you’re looking into these structures.

Sandy Mackay [00:28:38] So what about so with this structure, you’ve been how long have you had the version of this GP lease sort of structure with the properties you’ve been buying ends up in a lineup?

Matt Christie [00:28:48] Yeah. So our first partnership was established in 2017 and we’ve been acquiring property in that structure since. But then from that, you know, the more a smaller limited partnership, we’ve stepped down into this fund, which is being launched in the summer, which again is just so when we stepped in from owning the assets. As an individual and the ownerships stacking up now in a partnership, a smaller structure, more partnership, and then stepping into a larger formal partnership of the funnel is being launched this summer next month.

Sandy Mackay [00:29:28] Yeah. So basically pretty much as people are listening to this and beyond, it’ll be launch. So tell us about that. Why don’t we transition into that with the new maybe the new structure of the fund, what it is, what’s called maybe a little bit of how it came together and what’s sort of what’s so exciting and different about that than what you’ve been doing for the last five, ten years and your other fund structures.

Matt Christie [00:29:55] Yeah. Okay. So the fund itself is called Essential Real Estate Partners. Basically, what how it came about was a lot of likeminded individuals with the same integrity, transparency and experience that we’ve been operating in the same space, you know, simplified. There’s even assets that we’ve been competing with each other on and ultimately coming together to say, like, why? Why are we bombing heads here, try to compete at similar properties? And we also have properties that are side by side in the same neighborhood, on the same streets. Why don’t we align our forces here, come together, amalgamate, for lack of a better word, and utilize efficiencies, bring our networks together and move forward collectively. And what why it was a great fit for me is, you know, as we’ve talked about, you know, historically at work, many hats do a lot of things myself. And with that, you know, there’s some things that I do a fairly good job at and there’s some things that I don’t. But it was just me kind of caring the whole thing. And then with essential real estate partners not aligning myself with other individuals that are experts in their own areas and therefore we complement each other and where I don’t do the best job. You know, one of my partners does can really pick up that switch for me and just make sure that we’re being as efficient and effective in optimizing that opportunity in every single area of our business. So it’s very similar structure. It’s just bringing, again, likeminded people together and, and moving forward. And with that, our network of investors, larger buying power, better management, which I think is crucial. I’m looking forward and also deal sourcing. So like I like simple example like a month and a half ago opening opportunity, I put in an offer and another opportunity that I thought I had my ear to the ground and saw it first. And one of our partners in this time was like, Oh yeah, I saw that three weeks before you. And, you know, so that’s just an example. Like just it’s also bringing our connected network and, and deal sourcing, which is huge. So, you know, high level I might have looked at 20 opportunities a year and selected a few that made most sense and the best opportunities and what I saw at that time. But again, he was wearing so many hats, I was all looking at everything. And so now it’s looking at the 20 opportunities in a year. We’re literally going we’re looking at thousands of opportunities a year and really just cherry picking those best opportunities to make sure that we’re bringing the highest value to our investors. So by bringing these teams and these networks together, we’re really in a position to therefore optimize the returns, the value that we can bring to our investors.

Sandy Mackay [00:32:57] Awesome. Yeah, it’s exciting thing to be a part of. Obviously, we’ve got a great group of likeminded yet unique specialties among the group to complement each other that that’s exciting. You know, all of our listeners who have heard my story would know I’m not I don’t have the accounting backgrounds, I don’t have the legal background that we have in our group, multiple accounting backgrounds, actually in our group. So there’s lots of lots of complementary pieces yet likeminded in in the way we, we do business and our and our main core values. So that exciting thing is central our APIs dot com is where you can go if you’re listening and want to check out who is a part of our group in more detail and what that all looks like. I agree. Certainly the, you know, looking at thousands of deals a year really brings the cream of the crop out there to the table that we can that we can look at and fast, move, move fast. Because, you know, and the great deals out there, it doesn’t last too long. It typically needs to be jumped on as quick as possible or someone else is going to scoop it up or find out about it and take action faster with our with our group and our tools and systems we have in place. If we can really efficiently go through that list of thousands of deals, do and take the appropriate action, right.

Matt Christie [00:34:06] Yeah. Yeah. Actually, you just remind me of something that I think is also crucial to this thing. Structure is historically a limited partnership. What I will do is once I found that property, I got it in your contract. I do all my due diligence. And then once I was extremely comfortable with moving forward with that asset and comfortable with the financial model, the numbers that I put together, you know, I’d waive conditions and I’d put myself in this time price for that. I’d have to put an investor back together, put it out to everyone in my network and deal by deal. Those investors were saying, okay, that makes sense for me. You know, a prior investor. And they would contribute to that. With the fund we’re raising the money upfront are saying where’s the money? We’re getting commitments upfront. So we know that we have access to that capital and that when we go out and we find the opportunities, we can really pull the trigger with confidence, knowing that we’re going to close that gap with no issues, no delays, and really be able to jump on those opportunities, which I am a strong believer. Just going full circle in back to when I entered the Hamilton market in 2010, I think that we’re really stepping into a similar market in 2023. I think there’s going to be a lot of opportunity where you can see those higher corporates or if they’re not closing with those higher rates, is an opportunity to still create that value. And so to have those funds committed upfront and allow us to really jump on opportunities as they present themselves, I think is going to be beneficial about your money.

Sandy Mackay [00:35:40] And so our listeners know I don’t do a whole lot of selling at all on this on this this platform. We are talking about a fund that we’re pretty excited about and then being a part of. I do recommend anyone who’s interested wants to learn more to go to a central you can book a call right in there with us if you want to chat with us deeper, learn about what this looks like. I would say we’re on our target our target number to just to deploy target amount of capital to the fly is a is an exciting number. I think it gives us an opportunity to diversify quite well across the table of the type of assets that we look at. And it isn’t pretty, I would say big opportunities that are exciting. So our target, there’s 200 million. Do you have a you have a prior I guess you you’re looking at a bit smaller numbers, but and what’s the value of being a part of a larger fund, I guess for an investor who’s looking at doing something in this space invested with us or with another fund, what would be the advantage of being a part of that bigger, bigger number as well? It really is today, but ultimately it translates into a bigger diversified pool of assets, right?

Matt Christie [00:36:55] Yeah. I think you just hit it there. So is that diversification within real estate? So, you know, there’s many different asset classes within real estate. There’s many different opportunities that are available within real estate. So when you have a larger number to work with in a larger buying power, you’re not limited to proceed with these opportunities present themselves. Now, one thing I realize, and I used to say that I’m fine with hitting singles and doubles as a baseball reference all day long and did. That is very great. I still have a portfolio of single family homes, duplexes. Triplex is the one you’re able to put more doors and around roof in one location. There’s a lot of efficiencies to be had there. So, you know, once our limited partnership got into larger assets, we really saw that. And when you get into larger assets, you can you can capitalize on that. But the fun itself, it’s really for people ask like who who’d want an investment fund like this and. After a lot of thought, you know, it could be anyone. It could be ultra-high net individuals who want to invest in real estate but don’t have the expertise, the resources, more so the time to put into it, to do it themselves or they do it themselves and they don’t optimize it because they have two jobs. Right? They’re not like bring it up to its highest and best use per say because, you know, they’re focused on different day to day job. But it also allows those smaller investors who might not have the means to do it on their own, to also own a piece of larger assets. Now, we have we have investors that we’d never be able to own a 15 storey building on their own. But when the investment fund, that gives them the opportunity to actually own a percentage of that. So really it’s a wide spectrum of investors that might be interested in something like a fund and, you know, obviously have a bias towards real estate, but I’m all ears to other opportunities out there and assess other opportunities all the time. I just it always brings me back to the real estate and specifically, I really enjoy our appreciation from all tourists coming through a pandemic. You know, you really see that people value having a house, a roof over their head. If you look back in time through the recessions that we have lived through, multi rents is an asset class that is proven to do fairly well compared to other opportunities. So I think I answered your question, but a fund is really out there forever for anybody, in my opinion, that wants to, you know, have real estate in their portfolio. And one thing I’ve seen through my existing investors, especially coming out of the pandemic, is that they’re willing to allocate more of their net worth to real estate and give up that, you know, small heart attacks they had with their stock going up and down. So it’s just got to be the right fit for you.

Sandy Mackay [00:39:54] Yeah, it makes sense. And so can you speak a bit to the maybe and I agree with multi residential, there’s a severe shortage of housing in general in Canada and in Ontario, especially in Ontario. And we’re kind of targeting kind of these secondary markets. I call them for the most part, which have lots of opportunity to grow. I know you and I are still both pretty all in on Hamilton, but there’s some other great markets too that are emerging that are exciting that we’re looking at pretty, pretty closely. But what are some of the what are some of the maybe the risks or maybe the advantages of like today and the market we’re in, which is different than it was six months ago or a year ago, and know markets are always shifting. But we kind of say that we’re in this shifting market right now. That is a bit of a you know, it’s shifting a lot faster than we have seen over the last five years, at least in a lot of ways. What are the advantages of that and what are the maybe if there are any added risks that come into play? And, you know, what should an investor be thinking about? I guess this is probably a global kind of a question, not really necessarily just for our fund, but in general, how should people be addressing the market and taking action accordingly?

Matt Christie [00:41:07] Yeah, so it’s just not a lot there when we’re saying like shifting market and risks, you know, I really conclude that that’s a lot of opportunity. So in my opinion, it’s in the, you know, all part of a fad and again, that has those committed funds upfront. You know, there’s a lot of opportunity that presents itself, a lot of opportunity that we seek out where maybe people are looking to divest part of their portfolio because all of a sudden their interest rates have gone up, for example, and, you know, they’re having a cash flow issue or, you know, it just doesn’t make sense for them anymore or they want to put their money elsewhere. Those people that are looking to get out of the market, you know, they’re going to be selling their assets maybe at a better price point for someone that’s looking to buy than, you know, eight months ago to a year ago or further. So I see a lot of opportunity with that. It’s kind of like reminds me of when I first stopped in Hamilton. And you’re right, I keep referring to Hamilton because that’s where I started that Greater Hamilton area. I still think it’s a fantastic market, but we do everything across Canada. There’s a lot of secondary markets that we focus on outside of Hamilton. But yeah, I really equate that to a lot of opportunity. But with our financial models and how we analyze these things is with, you know, we proceed with absolute caution. And in doing that, you’ve got to make sure that you are budgeting for, you know, interest rates where they are today, where you think they’re going to go, where’s ultraconservative with that? And, you know, in a value add fund, you’re not just looking to acquire a turnkey asset, but you’re adding value through better management, making the building more efficient. So a lot of like most of our buildings the first thing that. It has come in with an energy on it. So everyone focuses on trying to get rates higher, but saving money is making money as well. So if you can reduce the gas expense, the hydro expense by having a more efficient building, you know, that really helps with your bottom line as well. So. I’m kind of rambling on here, but I think it’s, you know, a lot of opportunity that’s going to present itself, which is why I line myself with a file that is going to have, you know, the commit. It’s available upfront so we can jump on those opportunities. And, and then you just have to be, you know, ultra conservative and let the numbers speak for themselves. I’ll try to force a deal because you get your emotions into it. You just think it’s a great asset. You really have to let your financial model, the formula that’s worked for you in the past, ripped repeat why? What you want to really deviate from that formula. It’s going to have a lot of self-control to make sure that you don’t, you know, take on too much or step into an asset that really is riskier than what you comfortable with.

Sandy Mackay [00:43:57] Yeah. That’s why I said self-control can be a big, big thing in this business. And I always think of it as the sum all that up. I think of being short term, a short term cautious, long term optimistic. And I know we’re a long term we’re a longer term sort of play here anyway as a value add fund that takes some time to develop. It’s not a quick flip type of scenario where, yeah, it really matters what the interest rates are in a month or two months from now. Our six months where we have a longer timeline, we can we know we’re going to add value. We know in 5 to 10 year time frame. I would feel very optimistic with the Canadian real estate market in general, even more specifically the ones the markets we’re targeting. So yeah, short term is long term optimistic. That’s kind of how I think of it and that’s pretty much how I’ve thought about real estate ever said been in it. And the only time I’ve ever had any challenges was thinking was when I looked at some flips or things like that that I thought were short term plays and you just never know. The market can shift pretty fast, so.

Matt Christie [00:44:59] Yeah, yeah. Well said. I wish I said those words. Yeah. I mean, when you’re when you’re flipping real estate, to me that’s a whole different game. You know, there’s a lot of speculation there. And, you know, when the market shifts, you know, all of a sudden it could be in a negative position. So flipping real estate isn’t something that’s attracted me in the past. It’s always been long term wealth creation. So when you model out ten plus years, it’s a lot of students a lot different than, you know, six months to two years.

Sandy Mackay [00:45:30] Okay. So we know how people can invest with us. They get they go to a central They can also we’ll have your contact info as well after we’re done here. And in the show notes, everyone knows how to reach me. We’re definitely looking for more awesome people to collaborate with on this. So feel free to reach out about this. And if you want to be an investor, you want to bring some sort of other strategic value that you think you might have. Then we’re all open to that and really look at the types of funded this over the next bunch of years and grow something special. So I would urge you to reach out to us and chat to us if you have any thoughts or ideas around this or want to invest with us. Now, what about for those people that are listening that are not going to maybe do this with us, but they might want to do this on their own? What’s maybe one suggestion you can give them? Because, I don’t know, probably hundreds. What’s one suggestion you might have for someone who’s thinking about doing a fund like this for themselves?

Matt Christie [00:46:23] Now, I would really get them to challenge themselves on the why. I mean, one of the first questions you asked me was, you know, the trials that I had initially, and it was because I tried to do everything myself and I didn’t want to reinvent the wheel and just come full circle to that. You know, someone who’s looking to start a fund of their own, that’s great for you to do it. But I’d want to them to really understand why they think that they can go out and go out and do it on their own. And, you know, maybe they think that there’s a value that they can provide that our fund or an existing fund doesn’t provide. And if that I actually encourage them to contact me, I understand why, because maybe we can just align ourselves. I, you know, ton of due diligence, make sure you have all the right relationships. You know, I spoke to relationships with bring in sources, but also, I mean, when we are looking at financing a deal, we get underwriting from the lenders themselves and not just, you know, in closing, but what they’re expecting years to come with eventually, like refinance it. But if I had to sum it up to someone who’s looking to step into this for the first time or grow their business to be at a stage where we are, I mean. I’ve been doing this for 13 years. Collectively, a group, I think we have 95 plus years of experience. We’ve been through a lot. If someone out there is looking to do something similar, I want to understand why. Maybe there’s an opportunity to align themselves with us. But I get your point.

Sandy Mackay [00:48:01] That’s a great point. Actually, if someone is listening to this and they go, I want to do this myself, I think we should chat because I think maybe there’s a way that we can either we can definitely help them and in terms of guiding them on what the next step should be. Beyond that, we’ve I’ve certainly come across a lot of opportunities in the short time, you know, this year kind of working through this and setting all this up that has kind of led to conversations that you wouldn’t have expected just because there’s a lot to it. There’s a lot to setting up, a lot of legal hoops to jump through. There’s a lot of corporate structures, all these different things that set up that that I’ve learned a lot about this year. And we all collectively have a lot of experience around that now or prior to this. So certainly we can help out, but there’s also lots of opportunities to align and work together. I think that’s one of the best things about real estate is there’s so many ways to work together and the people that are in this for the long haul generally like to help and work together and find ways to provide mutual win wins and value and all that. So we’re I know and I’m sure you are, and I am definitely willing to help out and have some conversations with people around that.

Matt Christie [00:49:10] Yeah. I mean, I get very grateful for the relationships I have. And even though I kind of find myself a coach that I can really look up to a lot to follow. And trust me, I was looking for one, but I was very specific and I was looking for kind of find the right person. But along the way, there’s many people who helped me and you question why they would help me. But there’s so many opportunities out there, it’s really not taking opportunities away from them. So I think real estate is in an industry where we collaborate and we help each other and anyone who has questions, I’m more than happy to give my insight and help them along the way and not a problem. But if someone’s looking to start what we have from scratch, I truly want to understand why, you know, not reinvent that we are. Maybe there is a way that we can work together or, you know, he was helping out and got them perfect.

Sandy Mackay [00:50:06] So let’s leave. For those of you who maybe don’t reach out to us, maybe you’re not ready to or, you know, you just listed this and this is the first time ever listen to our show. What was it like to leave people with one piece of advice? So what’s one of your kind of great. Insights or pieces of advice or knowledge that have stuck with you that you’ve learned over the years that you could share with our audience here today.

Matt Christie [00:50:30] I really spoke. It sounds silly to some, but. I think that that’s an exercise that I have ever done is creative vision work. So it really forced me to look at where I want to be in two years, three years, five years, ten years. And I sat down with a piece of cardboard and created a visual that actually. Mapped out what my goals and objectives were and why I take the fall for this, and why am I engaging in this person. And then to place that somewhere that you see it every day, it really made me focus on ultimately what I want to do. And for me, that was creating family dynamic. That is my sense of financial freedom and retirement is that I can be engaged with my family and be present as much as possible. And I did this exercise. I think seven or eight years ago. I still have the board in my home. I pass by it every single day, and I think that’s been the biggest thing that helps me stay focused on the path is creating that vision board. And when it was first presented to me to do it inside of real estate coffee, this one got up and spoke about doing a vision board. And, you know, as I did roundtable, I, you know, I just took it for what the person said, but I didn’t put a lot of weight on it. And there’s this gentleman sitting beside me who leaned over because I think he didn’t see me get as inspired. And he goes, I have a thousand doors. I’m like, Wow, this guy’s got a thousand girls, a big number. And he goes, And the best thing that I did was create a vision for it. And I’m like, Really? And he’s like, and at first I had it in my office, and then I literally secured it to the ceiling above my bed so that every night I looked at it before I went to bed. And every morning as the first thing I looked at, he goes, I just built the house. I didn’t realize it, but the house that I built was identical to this house, the background of one of the pictures. And it’s like just the psychological of seeing that vision board every day really helped me and I took that seriously and I created my own vision garden. To this day, I have it. Sometimes you modify it because life changes. But I would. My one piece of advice, I’d encourage individuals to make a vision.

Sandy Mackay [00:52:48] Well, you told me in a couple the other day that I think it was by 35 or so that your original vision board, everything was already done on it. I’m 35, so I mean, that speaks to the power of it right there in a short time frame. Just that visualization, I think that’s inevitably kind of directly towards the results that are that are in that vision. And it kind of gives you that motivation day to day to take action around getting to, you know, whatever is on that board. So I think it’s as simple as it is and maybe even kind of cheesy to some people. Super valuable.

Matt Christie [00:53:22] Yeah, I agree.

Sandy Mackay [00:53:25] Awesome. Well, thanks for that. Lots of stuff shared here. This has been fantastic. Lots of things we’ve we haven’t talked too deeply on our show before. So grateful for you and your time to join us here today. Thank you. And how can people we’ve talked about it, but maybe the best way to reach out to and I’m sure we’ll have lots of people that want to ask questions and everything around how do you set this stuff up? How do they do that?

Matt Christie [00:53:48] Yeah, absolutely. Thank you for having me. People want to reach out the best way with the email. That’s my I’m 88 essential rep espn t i l rtp dot com.

Sandy Mackay [00:54:02] Perfect. I encourage everyone to reach out to matt’s and take your questions his way. And again, you can always reach out to me Sandy at freedom reps dot com or find me on social media. It’s Sandy MacKay on Instagram or Facebook as well or LinkedIn. Thanks everyone for joining us. That’s a wrap and have a great day.

Announcer [00:54:25] You’ve been listening to the Breakthrough Real Estate Investing podcast. We hope you’ve gotten some useful and practical information from the show, and we hope you’ve been inspired to take control and live life on your terms. We’ll be back soon. But in the meantime, make sure to like, rate and review the show. And don’t forget to subscribe and listen on Apple Podcasts and Spotify. See you next time.

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