You know those people that everybody seems to like? They have charisma. They're affable. Like Jeff Daniels on the Newsroom.

That's Matt Javitch.

Matt has been taking a barbell-approach to investing in Boston real estate and startups. He's my go-to resource for investment advice because, unlike some advisors who try to sell me their advice, he makes a living off his investment thesis. Also, he's never tried to sell me a thing.

I invited Matt on the show to give me a deep dive into real estate investing fundamentals, quitting corporate life for startup investing and more.

We talk about

• The networking scene in Boston
• How to quit your job and start a business
• The real estate investment market
• How real estate investing is different and complementary to startup investing
• How to get started in real estate investing
• How to be successful in real estate investing

Pleas enjoy this episode of Hacker Practice with Matt Javitch:

Notes

[00:00] How Justus and Matt met

[01:00] Networking in Boston

• Events are becoming more and more niche-specific
• You know what you’re getting when the event is very specific

[5:00] Matt’s background in finance

• Financial advising and real estate investment

[7:00] Why small networking events can be super valuable

• Most events are really hit or miss
• Networking is a numbers game

[10:00] What Matt did to prepare to leave

• Saved capital
• Built a network
• Honed a valuable skill set as a real estate investment analyst

[14:45] Specific numbers around how to leave your job and get into real estate investing

• Matt had 3-4 months of living expenses saved

• $300-400k pledged from investment partners

[16:30] To be successful in real estate investing

• Have a long term vision
• Understand the financial risks
• Have a safety net or “plan B”

[19:00] What would Matt do different if he started over

• Would have been more aggressive buying properties while at his job

[20:30] What is Matt doing to mitigate risk of negative macro economic conditions

• Invest in “primary” markets (cities etc.)
• Some factors can’t be controlled but should be understood

[23:45] The dumbbell strategy and Matt’s investment in startups

• Real estate is somewhat predictable compared to startups

[27:00] Angel investing in Boston vs. Silicon Valley

• Boston has a conservative social and financial culture

[30:00] How to get started real estate investing without any debt

• It’s challenging.
• Usually you make more money when you favor debt over equity
• Start with as little as $150-250k
• Start in a secondary, suburban market. Matt gets specific in greater Boston area
• Renovate, then rent or sell
• Can also experiment in other markets like San Antonio, Texas
• Southern markets are usually less expensive

[34:00] Different geographic regions have different risk factors

[37:00] Have $250k, bought a property, need to renovate, where do I start?

• Everything is quantified on a per foot basis
• Market research is critical. Different locations have different /sq ft costs. Understand the local housing market
• Look at last 6 months and what prices local homes have sold at vs. your prospective investment
• Brokers and legal costs often add up to around 5%+ of the cost

[42:30] How much money do you budget for renovation?

• Again: focus on cost per square foot
• P = initial cost / sq ft
• R = cost of renovation / sq ft
• C = P + R
• F = price you sell the property at / sq ft
• PROFIT = F - C

[46:00] Working with many contractors and sub-contractors

[47:15] Selling the property

• Matt often lists and sells the house himself if it’s local (saves 2.5% commission)
• Real estate agents have less incentive to negotiate on your behalf than you (Freakonomics)

[50:00] The most challenging part of real estate investing for Matt

• Inspectors vs contractor drama
• Local politics often play a role in inspection

[56:00] A big part of Matt’s success can be attributed to his likability and how he incentivizes contractors to do quality work

• EQ is valuable in this regard

[59:00] Final requests and contact info

• Do your homework and know your risks
• Matt is happy to talk to any aspiring investors (startup or real estate)
• Axilon Capital Partners
• 973.788.9333

What else?

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