Tag Archives: investing

Matt Javitch on Networking in Boston and the Mathematics of Real Estate Investing

Listen to this episode of Hacker Practice on iTunes.

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

Please 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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Michael Alexis: International Investor and Philanthropist on Growth Hacking, Mastering Craigslist, and Surviving Chinese Parasites (e001)

Michael Alexis (left) and myself (right) in Georgetown in the Cayman Islands

My first ever podcast features investor and philanthropist Michael Alexis. I’m so glad to start with Michael because we are good friends and he is a master at making people feel at ease.

Michael got started in adult life as a lawyer, but quickly moved into startups and investing (but not investing in startups). Now he is a growth consultant for some of the highest performing startups and an international investor with stakes in places like China.

Michael and I worked together at an award-winning startup and have since built a relationship around challenging one another to do better everyday in life and business.

Our discussion revolves around investing, growth hacking, marketing, security, startups, business, ethics, life hacks, and risk mitigation while gallivanting in foreign countries (travel is a favorite past time for both of us).

You can hear our conversation here:

  • Michael helped Pavlok win the Shopify contest. (1:55)
    • Have a great team + a great product idea
    • Best Practices = Average Results. Test assumptions by challenging existing models
    • Michael discusses specific conversion results.
    • “Build the email list and prioritize getting people on it over prioritizing the sale right away.” – M.A.
    • Trade email address for price information on low-price consumer products.
    • Simple, single column websites can convert 3X better than “flashy” bootstrap-style websites.
  • Michael talks about his investment thesis [15:30]
    • Why he is an Investor / Philanthropist hybrid (hint: Building wealth is not the end-goal)
    • Why he invests in projects that pay dividends and NOT STARTUPS
    • Why he is willing to lose everything.
    • Michael’s ideal emergency fund lasts for years
    • Why Michael invests in competitive markets (because the model is proven)
    • Better Marketing + Better Service = Winning Strategy
    • Why startup employees should be open to equity compensation even though they likely won’t exit
  • Michael talks about the podcast he convinced me to start (31:30)
    • Risks are low
    • Networking opportunities are high
    • Are podcasts the new blogs?
  • What would you do to market Hacker Practice (36:20)
    • Write up guest posts based on the content. Try to get 8-10 posts out of each interview. [For this episode: Growth Hacking, Drastic Changes, Simplicity as a Philosophy]
    • Interview high profile people and retarget ads at their followers (on top of native promotion)
    • Think about SEO: use transcripts and notes etc to capture long tail [POTATO MARKETING]
    • Multiple Win Scenarios
    • Why you should start a podcast
  • Experiments I should try on the podcast [46:30]
    • Connect with someone for intentional practice. (PEN TESTING, NVC, DIFCON)
    • Make a sale on the podcast.
  • What Michael would ask Mr. Big Data, Jesse Anderson [50:00]
    • How did Jesse teach himself complex skills?
    • How did he acquire his big, impressive, clients?
  • What single critical system should I develop to make the Podcast awesome?
    • Have a great process for ensuring that you have an ongoing flow of guests.
  • What does Michael think of 2-factor authentication [54:50]?
    • Most people should use it. Especially for email + banking
    • Using 2 factor auth is difficult across many accounts
  • Other security measures everybody should do[56:45]
    • Make passwords difficult (long 8+ characters)
    • Diversify your passwords
    • Use a password manager (like LastPass, Michael and I both use this)
    • Encrypt your computer and external hard drives.
  • What’s the worst Black Swan event that’s happened to Michael? [59:45]
    • He picked up a vicious parasite in China
    • How to mitigate the risk of terrible sickness in China:
      • Don’t eat from sketchy street vendors (China is especially bad)
      • Look for hygiene markers
  • How does Michael manage Celiac disease that could kill him? [1:50:50]
    • Cook at home. Some restaurants that claim to be gluten-free aren’t concerned with cross contamination because they don’t take the risks of Celiac seriously.
    • Eat the same things every day.
    • Over-communicate the seriousness of your food allergy.
      • As a side note: Seems like there is no such thing as over-communication. Great teams talk more than you think they should.
  • How Michael makes money sleeping on great mattresses [1:08:15]
    • Good mattress = good sleep = high performance
    • Buy a Tempurpedic mattress on craigslist, negotiate the price down
    • Use the mattress
    • Sell the mattress on craigslist when you’re done at a higher price using superior sales writing and copywriting skills.
    • Negotiating heuristic for Craigslist: offer 20% off posted price, accept 10% off.
  • How Michael stole Groupon’s business model for fun and profit [1:14:30]
    • Steal models that are “hot”, resell them on Craigslist.
    • How he improved his programming skills and made money at the same time.
    • Repeat
  • Michael made a podcast because of the Mixergy podcast (see link below for Interviewing your heroes)
  • Michael talks what he learned working with Ramit Sethi [1:22:30]
    • Ethical Persuasion: If your target customer had all the information available, would the buy your product?
    • Reminds me of Simon Sinofsky’s great question: “Am I inspiring you to act, or manipulating you to act?”
    • Create a product that is totally aligned with your audience’s interests
  • Copywriting Resources and Tactics [1:28:10]
    • You should read George Orwell’s Politics and the English Language (LINK BELOW)
    • Name dropping works. Soundbites work.
    • Read and re-read everything you plan to publish. Reconsider every single word.
    • Headlines should convey benefit and target market: “Learn Practical Copywriting Tactics from the Masters”
    • Subheader should say HOW you’ll deliver: “This 8-week video course includes ____”
    • WHY > WHO > HOW
  • Michael advises me on my blog strategy [1:38:55]
    • What’s the goal?
    • Systems for blog promotion
      • Syndicate the material everywhere: Medium, LinkedIn
      • Post to aggregators: Reddit, HackerNews, GrowthHacker
      • Post to social: FB, Twitter
  • How does Michael cultivate respect and relationships? [1:43:20]
    • Be authentic and honest with yourself.
    • Be truthful even when it’s to your detriment. In the end, it won’t be.
    • How I improve client relationships by applying honesty to my detriment
    • How I talk to girls by being honest
  • Michael says: interview people who do big things that most people have never heard of.

Links

 Conclusion

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