Are you still skeptical of the idea that you can build a real estate business using other people’s money? Or, maybe you don’t think that your network has access to the kind of capital you would need for a multifamily investment. Matt Faircloth argues that you simply don’t know where to look, and he is living proof that with the right approach, you can develop a robust real estate portfolio by raising private capital.

Matt is the co-founder of The DeRosa Group, a real estate investment firm headquartered in Trenton, New Jersey. Matt and his wife, Liz, have been investing in real estate since 2004, and they have vast experience with single family, multifamily, office and retail properties. Matt’s firm has completed more than $30M in real estate transactions involving private capital, and he is the author of Raising Private Capital: Building Your Real Estate Empire Using Other People’s Money.

Today, Matt joins me to share his journey from house hacker to full-time real estate investor. He offers insight around taking capital from friends and family, educating your network on where to find the money to invest, and aligning with a seasoned partner. Listen in to understand the three different investment opportunities Matt offers through DeRosa Group and learn his transparent, jargon-free approach to raising capital.

Key Takeaways

Matt’s introduction to real estate

  • Rich Dad Poor Dad, CASHFLOW Board Game
  • House hack to pay off student loans

Matt’s transition to full-time real estate investor

  • Reduce expenses to live below means
  • Strategic decision to delay having kids

Why it took Matt several years to find his niche

  • No solid set of attainable goals
  • Distracted by shiny objects

Matt’s shift to raising money from investors

  • Refinanced portfolio to get cash for next deal
  • ‘Carousel stopped’ after crash

Matt’s insight on taking money from friends and family

  • Offer value, confident in returns
  • Allow people care about to benefit

How to overcome a lack of track record

  • Align with seasoned partner
  • Start small, work up to bigger projects

Matt’s advice for aspiring investors looking to partner

  • Don’t solicit free advice
  • Put other person first and CONTRIBUTE

The three investment options Matt offers

  1. Single family fix and flips (short-term capital)
  2. Turnkeys (100% ownership)
  3. Multifamily syndication for passive investors

The argument for real estate investment over other asset classes

  • Leverage tax deferment through IRA for fix and flips
  • 8 to 10% yields, compound over and over
  • Tax benefits of owning via syndication or turnkey

Matt’s approach to raising capital

  • Avoid speaking in jargon, keep it simple
  • Explain how money protected
  • Discuss if, thens (worst case scenarios)

Where to find money in your own network

  • Homeowners that qualify for HELOC
  • Leverage retirement accounts

Matt’s three tiers of raising capital

  1. Local contacts
  2. Referrals, networking groups
  3. National voice as thought leader

Connect with Matt

DeRosa Group

DeRosa Group on Facebook

DeRosa Group on YouTube

Matt on Bigger Pockets

Resources

Raising Private Capital: Building Your Real Estate Empire Using Other People’s Money by Matt Faircloth

Financial Freedom with Real Estate Investing: The Blueprint to Quitting Your Job with Real Estate—Even Without Experience or Cash by Michael Blank

Rich Dad Poor Dad: What the Rich Teach Their Kids About Money—That the Poor and Middle Class Do Not by Robert T. Kiyosaki

CASHFLOW Board Game

Deal Maker LIVE

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