In this episode of the “Passive Investing from Left Field” podcast, we have the pleasure of speaking with Matt Faircloth, a successful full-time investor with over 15 years of experience in the industry. Join us as we delve into Matt's expertise in raising private capital and building a successful real estate empire.

About Matt Faircloth

Matt has completed a variety of projects, including fix-and-flips, office buildings, single-family homes, and apartment buildings, amassing a portfolio of over 1,000 units. He has also raised tens of millions of equity for these real estate projects in both debt and equity positions from passive investors. As an Amazon best-seller with over 50,000 copies sold, Matt is the author of "Raising Private Capital: How to Build Your Real Estate Empire with Other People's Money," published by BiggerPockets publishing.

Here are some power takeaways from today’s conversation:

[04:00] Figuring out your investment goals  and getting clear on your 'why' 

[09:00] Things to consider when looking for deals

[16:00] Deals with amortizing loans vs. interest-only loans

[18:00] How to calculate the IRR

[21:35] Why HUD is the redheaded stepchild

[28:17] Leveraging local resources

[32:05] The concept of entropy

Episode Highlights:

[04:00] The Importance of Clarity in Passive Investing

When it comes to passive investing, simply googling and blindly throwing money at the first company that pops up in your search is not a wise strategy. Instead, take the time to do your research and get clear about what you want to achieve through your investment journey. Consider your long-term goals, such as generating enough passive income to quit your job or building your net worth, and whether you enjoy your current job or not. While Wall Street can be tempting, it's important to recognize that it shouldn't be your only means of financial freedom. By gaining clarity and doing your due diligence, you can make informed decisions and set yourself up for success in the world of passive investing.

[09:31] Maximizing Wealth through Strategic Passive Investing

 To succeed in passive investing, it's crucial to have clear investment goals. Consider factors such as appreciation growth, cash flow, and tax leverage before choosing an asset class like oil and gas or multifamily real estate. Without a clear understanding of your objectives, it's easy to make the wrong investment and miss out on long-term wealth-building opportunities. 

[15:57] Maximizing Your Return on Investment: Understanding IRR Components

Understanding IRR components is crucial in passive investing. While appreciation, cash flow, and return of capital are important, it's essential to scrutinize projected profit-sharing percentages and differentiate between controllable and uncontrollable factors. Operators can control operational thesis and business plans that govern cash flow, but they can't control future market demand or cap rates. Thoroughly assessing investment opportunities and operator strategies can help maximize return on investment.

This show is for entertainment purposes only. Nothing said on the show should be considered financial advice. Before making any decisions, consult a professional. This show is copyrighted by Passive Investing from Left Field and Left Field Investors. Written permissions must be granted before syndication or rebroadcasting.

Resources Mentioned:

BiggerPockets

Raising Private Capital: How to Build Your Real Estate Empire with Other People's Money

Passive Investing from the Left Field Podcast Episode 38 

Podcast Recommendations:

The Ed Mylett Show

The Joe Rogan Experience