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Show Summary
In this episode of the Real Estate Pros Podcast, host Kristen interviews Carrie Matuga, founder of Fynd Capital and an experienced real estate investor. Carrie shares her journey into real estate, emphasizing the importance of education and understanding financing. She discusses the current market changes, buyer strategies, and the opportunities available for investors. Carrie also explores various exit strategies and the risks associated with over-leveraging in real estate investments, providing valuable insights for both new and seasoned investors.
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Carrie Matuga (00:00)
So when people talk about finding the 70 cent deal or the 75 cent deal, you actually have to find the 50 cent deal if you’re leveraging that high. Because when you go to refinance, if you’re doing a cash out refinance, you’re going to be limited to 75 % loan to value. And so if you’re 100 % leveraged on that, there is a chance, a good chance that you’re actually leveraged.on the purchase side before you even get into a refinance ⁓ more than what you can do a cash out or a rate in term for, which that really caps out at 80%.
Kristen (02:08)
Welcome back to the Real Estate Pros podcast. I’m Kristen and I’m here with Carrie Matuga, who is the founder of Fynd Capital. She’s an investor herself. So we’re going to get a very well-rounded perspective of the whole market. I’m excited to get into it. Thanks for being here, Carrie.Carrie Matuga (02:22)
Kristen,I’m really excited to be here as well.
Kristen (02:25)
So, you you have such great experience in this industry and I feel like you’re going to be able to help a lot of people on kind of what you see in the market and where you see it going. But let’s start at the beginning. How did you get into the industry?Carrie Matuga (02:38)
I think like everybody else, I listened to the Bigger Pockets podcast for years and years and years and I had, I started investing in real estate on my to-do list. I just, ⁓ my mom got sick and COVID happened and I decided it was time for a major pivot. So I sold my house and I took the capital that I had from that and decided I was going full force into real estate.Kristen (03:04)
wow, so you just went all for it.Carrie Matuga (03:07)
Yes.Kristen (03:09)
How wasthat in the beginning? how did that, what did that look like when you just went all in?
Carrie Matuga (03:15)
Well, I took a mentorship class so that I could really learn. And I did that while I was working. ⁓ And so I really learned the ins and outs of basic underwriting and theprocess and identifying a market. And I started networking with people. ⁓ You know, I think.
I wouldn’t be where I’m at if I hadn’t made those decisions. But I think if I could go back with the knowledge that I have right now, I probably would have gone a little bit slower. not, I think you make different decisions for investing in real estate when you’re trying to live on the funds than whether you’re trying to use it as time freedom, generational freedom, like something down the line. ⁓ But again, like I wouldn’t, know, all journeys are,
are worth it and I wouldn’t be here and I wouldn’t have experienced and be able to reach all the people that I can reach now had I not gone through everything that I did.
Kristen (04:13)
Absolutely, and how has that kind of shifted your perspective of where you’re at now? Like what’s your goal with real estate and how has your strategy kind of adjusted over the years?Carrie Matuga (04:23)
Yeah, so I mean, I come to Fynd capital really as an investor first. And I saw a need in the market where, you know, there aren’t always that many women in the financing space. there also isn’t, when you’re talking to lenders on the other side, there isn’t always, they’re not always…you have to meet people where they’re at and they’re not always investors. And so, you know, I think as a newer investor, are thinking that like the people that you’re going to are going to be able to be a second set of eyes on the deal and not necessarily tell you whether a good deal is a good deal. And you realize that like for many lenders, they don’t actually care if it’s a good deal, if it’s something that they can put in their books and earn their commission because they have to work really hard to get these deals done.
And I didn’t really feel like there was
a space to ask questions. didn’t know if I was getting, ⁓ when it was like, here’s your term sheet, take it or leave it. I didn’t know if what I was getting was a good option. And so I was really able to take what I had learned and the mistakes that I made in investing and being put into the wrong loans, because I only talked to one lender, ⁓ and really roll that into what I’m doing for fynd capital. And honestly, it’s been…
I’ve done a lot of things in my career from trading to being a vice president and like really high up in the beauty as a beauty executive or in built other people’s businesses. never in a million years would have thought that I would have found the level of joy and contentment and almost like a mission helping other investors being on the phone all day. Like, you know, in this kind of a role is so different than anything I’ve ever done. But what I love about it is the people connection, the coaching. love.
of helping people to not make the same mistakes that I did. And so my real estate investing side has been on pause for a little bit and I’m about ready to start to pick it back up and smarter and better and with a lot more knowledge. ⁓ But I’m able to use Fynd Capital to really reach a lot of people and mentor a lot of people. And I just, I’m thrilled with where I’m at.
Kristen (07:24)
that’s amazing. I mean, that’s so awesome to hear that you’ve tried a lot of stuff and this is really what’s fulfilling you and sticking. ⁓ I feel like that education aspect and the knowledge aspect is so important because I think a lot of people, especially when it comes to the money stuff, I think a lot of people just outsource it and they don’t even really want to think about it. So can you talk more about that education piece and kind of the value you provide there for your clients?Carrie Matuga (07:51)
think that there are a lot of amazing coaches out there and I think that there’s a lot of amazing content out there. ⁓ I think that the really understanding financing and underwriting and how lenders think and… ⁓understanding like the cost of, you know, borrowing your gap funding and your, all of your closing costs and what happens, what your impact is on your profitability when your days on market go from, you know, 45 to 90 or 120. And, you know, really like building that in and, and, and modeling that out. think that, you know, from, from the simplest perspective of like, Oh, it’s a 70 cent deal.
like that’s all I need to worry about, like really misses a lot of the nuances of, you know, what different lending options are, that they’re not all the same, that they cost different things, ⁓ that they have different terms, that, you know, it’s probably potentially worth it to pay a little extra to have a year long term versus like going in for six months because these extensions, you know, eat into your capital. And so I think that layering in not only what you should pay for it, but all of your holding
What happens, you know, if you’re going to be doing a refinance transaction, you know, going into a deal, especially if you’re doing a rehab knowing like
What’s the long-term rent going to be? What’s the short-term rent can be? What are your true options if worst-case scenario happens and you can’t get out? And so I think that these are things you don’t know, you don’t think about, and a lot of the classes touch on financing, but it’s like a module. And it’s because they’re trying to teach so much that it needs to be more than a module because if the numbers don’t work and you’re putting too much hopium in, then you can find yourself into a world of trouble that is also not talked about a lot.
Kristen (09:43)
Yeah.Totally. It’s definitely an aspect of the business that requires creativity and strategy. And I think the misconception I’ve seen is people kind of think it’s just one size fits all. Well, I need money and that’s kind of it. ⁓ So I think that’s wonderful. you’ve talked to me a little bit before this podcast and you were talking about kind of the changes you’ve seen in the market and people needing to be a little smarter with their numbers now and with their underwriting. I would love for you to expand on that.
Carrie Matuga (10:49)
Yeah, I think that in the last six months, eight months, we’ve seen this pretty dramatic change from this being, you know, a seller’s market. so, I mean, anybody who has gotten into real estate in the last 10 years is only used to it being a seller’s market and we’re not there anymore. I mean, we haven’t experienced a crash and I don’t, you know, I think that there’s enough of a housing issue that I’m not expecting a crash, but there’s definitely a lockup and a freeze because the buyers and sellers are coming at it from two totally differentperspectives, know, buyers are like, ah, it’s 2008, know, we can, you know, um, we can negotiate and whatnot. And sellers are like, no, it’s, it’s 2018. And that mismatch with also having like 40 % of all households like have no mortgage. And the 50 % of those that have mortgages are like less than 4%, then there’s no incentive to move because moving and getting into a six or seven percent mortgage.
is double your expenses. And so there’s a real disconnect. And so that means that anybody that’s getting into an investment property and, you know, they’re trying to do a fix and flip, like they’re just not selling as fast and appraisals are coming in light and that has an impact on you, whether you’re refinancing because you want to hold on to it or whether you’re trying to sell it. And so more and more people are having to hold on to properties for a year, hoping that, you know, inventory because the ratio of inventory
⁓ is off pretty significantly, meaning in many markets there’s four times more sellers than there are buyers. so ⁓ things just aren’t moving and buyers are being pickier than they’ve ever been able to be in the last 10 years. And so that just means you have to double down on your underwriting and on your exit strategies and on your due diligence. And I think many people wait to have conversations about financing until they’re actually under contract. And I think the smarter thing
now is actually to have those pre-conversations so that you know what you’re getting into when you’re not under the gun to close based on your closing date.
Kristen (12:59)
Yeah, absolutely. how do you, I mean, when you’re talking about this and people need to be a little bit more careful, like how do you suggest that they learn what they need? Like where do you even start to get the knowledge base?Carrie Matuga (13:13)
I think it’s challenging. think that anybody that I talk to, you know, we have these conversations one-on-one ⁓ as a part of like, okay, great. So you’re looking to make a purchase for X. This is the rehab. This is the ARV. Let’s talk about your exit. And so I’m having those conversations on a one-on-one basis with my clients, but I think it’s a missing spot in the market that I’m actually looking to address with some additional coaching about financing and underwriting.and just being careful because you can lose a lot of money if you’re not careful with your numbers.
Kristen (13:50)
Yeah,absolutely. And then on the other end, I would love for you to talk about the opportunity being a buyer.
Carrie Matuga (13:58)
⁓ for sure. mean, that’s the thing is that you make your number on the buy side, right? No matter what you do. And so right now, I think that there is ⁓ a glut of opportunity in so many markets where you have for the first time in years, the opportunity to negotiate and put in for seller credits or temporary, you know, buy downs so that your rates get better. ⁓It’s a really powerful spot to be in. And this isn’t even just in one asset class. It’s in single family, it’s in small multifamily. mean, even in larger multifamily, all those people that bought in 2020, the entities that bought in 2020 are facing a reset of their interest rates and their cap rates. So it could be a really interesting opportunity
larger multifamily as well ⁓ because there is going to be a lot of people that are and have already started to experience issues with not being funded the right way based on where the new cap rates are.
Kristen (15:50)
Yeah, and I love, mean, of course there’s always two sides to the market, but I think that there’s a lot of trepidation right now, people not knowing if it’s the right time to get into the market, and I think it’s always great that there’s excitement and opportunity around the market still, and it’s still a great time to get into it.Carrie Matuga (16:09)
I mean, they always say what the best time to plant a tree is 20 years ago and the next best time is today. And I think that that applies to real estate too. mean, if you look at the graph of most of real estate, it’s kind of gone in like a, you know, at least a line that’s like this historically. So yeah, lock your numbers in, make sure you’ve got your exit strategies. But I think if you’ve got the room and you’ve crunched your numbers and you feel really good about the market and you’re looking at, you know, economic conditions that are affectingthe market, whether it’s like a new data processing center or Amazon or something that has to do with AI or universities and you’re seeing a population growth ⁓ and the numbers work, I think it would be a shame to sit on the side.
Kristen (16:54)
Yeah, 100%. And I would love for you to talk more about exit strategies and maybe multiple ways to drive the income.Carrie Matuga (17:03)
Yeah, so mean, obviously your exit strategies are to sell it, you know, but also, you know, just some interesting rental models right now, right? You have short term and short term models have been under some stress. And so people who have had short term rentals are pivoting and including midterm rentals and they’re finding a lot more stability with that. So the rent might be a little bit lower, but it’s more consistent. There’s less cleaning costs. There’s less turnaround. So it’s not, it’s, it’s, it’s a significantly higher rent thanlong term and you’re filling a need for people that have had some sort of maybe crisis, whether it’s an insurance issue or whether they’re traveling or whether they have to move for, because they’re moving to a new market and they need to find a permanent housing. So it ⁓ tends to be something that people are finding a lot of joy in. And from a financing perspective, really, you qualify that those kinds of midterm rentals, either using long term rental,
the DSCR rate would work or short-term rental. I think the other interesting strategy that seems like it’s being talked about in all kinds of real estate circles is the co-living model with pad split. And that really originated in the Atlanta market and the Atlanta market has really taken off from that. And I know a lot of investors who have picked up a lot of properties really quickly and they’re making an incredible amount of money, filling a need of people that can’t afford to have
awful
place, but they really want and deserve to live in nice quality housing. And, you know, when you look at the ability to divide up a house and, you know, use more spaces for bedrooms and what that means on a weekly basis, it can be really profitable. Now, the flip side to that is that, you know, neighbors don’t necessarily like it. You create parking issues and financing it, you know, is,
is still being developed, right? Most people are getting into it using like qualifying it based on a short-term rental. And the challenge then comes when you go to refinance it or you try to sell it because no lender really knows what to do with the house that was like a five bedroom, three bath. And now it’s like a nine bedroom, four bath. just, the houses like that aren’t really created and you kind of walk the line of being like a boarding house. And so you have to be careful with that model. Like Philadelphia is notoriously
tough for that. They’re just shutting down this and they’re making people who are doing it get boarding house permits. But in markets like outside of Atlanta, there’s a handful of cities where if you have a nice place that are extremely lucrative. And then there’s other places where it’s just getting well known. But I think the risk is that it has to do with regulations. So no matter what you do for an exit strategy, you should be talking and calling the city and understanding
what kinds of rental options are available. That’s a mistake that I made in Chattanooga when I bought a property there. the realtor that I worked with had said, well, it’s a quadruplex and you have the opportunity where you could turn half of them into a short-term rental and the other half into long. And that ended up not being the case. I should have done more due diligence on my side to realize that Chattanooga does not allow short-term rentals at all. And they have really strict regulations. So then that just becomes
becomes
like a major exit strategy that isn’t a possibility. They also don’t have pad split there. They may soon, but it’s not a market that pad splits in. So again, another avenue that’s a bit more challenging. So as you’re analyzing these markets, you just want to know what your options are and make sure that they’re actually viable.
Kristen (20:51)
Absolutely, and I think specifically with short-term rentals, I think the regulations are kind of changing all the time. I think that you have to stay on top of it. Like if it was the case a year ago, it might not be the case today. So I think it’s really good advice to just stay up on your research of the areas that you’re investing in.Carrie Matuga (21:11)
And I mean, honestly, the best situationis where multiple options work and then you can pick and choose what you want to do.
Kristen (21:19)
And I would love for you to talk about maybe some other risks that you’re seeing out there with some investors and how maybe they’re leveraging their money.Carrie Matuga (21:28)
Yeah,so I think that for years and years we’ve all been told the story of like the unicorn deal that you can do this without any money and you shouldn’t put any of your money in and I think that that can still be ideal but you have to go into it knowing the risks and I don’t think that a lot of investors know the risks particularly when you’re doing you know a rehab deal so you know not all money is good money and so you want to make sure that like your prop if you’re using
that they know and you guys are in agreement in terms of like when the exit’s gonna happen and how it’s gonna happen that you know they’re not gonna pressure you to be selling the house when
you’re doing every thing you can to get it out there. And so I think that when, when an investor comes into a deal and they’ve borrowed the down payment and they borrowed the closing costs and they’re borrowing, you know, the, cause at least in terms of fix and flips, it’s all on like a reimbursement basis. So you have to have a certain amount of capital upfront to get the project kicked off. So if you’re borrowing all of that money, plus you’re borrowing, you know, 90 % of the purchase price and all of the rehab, you are essentially leveraged.
over 100%.
So when people talk about finding the 70 cent deal or the 75 cent deal, you actually have to find the 50 cent deal if you’re leveraging that high. Because when you go to refinance, if you’re doing a cash out refinance, you’re going to be limited to 75 % loan to value. And so if you’re 100 % leveraged on that, there is a chance, a good chance that you’re actually leveraged.
on the purchase side before you even get into a refinance ⁓ more than what you can do a cash out or a rate in term for, which that really caps out at 80%.
And so what you find if you’re over leveraged in many markets, I’m seeing appraisals come in five to 8 % lower than what original valid comps were. And these are comps that don’t have hopium in them.
rehab takes longer or the market shifts or there suddenly becomes more inventory online. And I think that if you’re over leveraged, the risk is you.
you have fewer exits. You’re gonna pay for that money at a certain point. You’re either gonna have to ⁓ bring more money to the table, you’re gonna be limited on what kinds of price cuts you can do if it’s not selling. You’re gonna have to find other sources of private money lending or family funds or gap funds to get you into your next transaction and you kind of just end up kicking the can down the road and it becomes really stressful.
So it’s just, it’s a cautionary tale that says like partner, maybe even think about instead of doing, you know.
taking on that extra funds as debt, consider doing it as a JV partnership. And so then everybody gets paid when it’s sold and that cost of doing borrowing money and doing it as a JV as opposed to doing it as a second lien or additional private money or gap funding, which comes at obscene rates, ⁓ can save your deal. what 12 % and three points for gap funding and less
but not even talk about what gators are charging, it can wreck a deal and it can do it fast.
Kristen (25:01)
Yeah.I mean, I think it’s such good advice. think it’s something that people don’t really think about, especially when they’re starting out. I think a lot of people think the more they can leverage, the better. ⁓ Yeah, you have such, I mean, you have really good practical advice for people. think that Fynd Capital is going to be such a success because, I mean, you really are providing something that people need. ⁓ And, you know, sadly, we’re coming to the end of our time, but, you know, I just really appreciate how much knowledge you have on the industry, on the
market and kind of all of the tips you’ve been able to share with us. So please tell everyone where to find you and where to find Fynd Capital.
Carrie Matuga (25:39)
Thank youso much, Kristen. It’s really been a pleasure to be here. So ⁓ you can find me on LinkedIn or on Instagram at Carrie Matuga. Fynd Capital is f-y-n-d capital.com. ⁓ And you can also call or text me. My number is 773-562-6616. And I love talking with investors. I’m a second set of eyes on many deals. ⁓ This is really a part of how I give back because I think that real estate is the best vehicle
for wealth in the future. don’t think there’s anything else that can beat it, ⁓ but I also think don’t do it alone.
Kristen (26:19)
Right, absolutely. Well, thank you so much for being here, Carrie.Carrie Matuga (26:24)
Thank you,Kristen, it’s been a pleasure. ⁓
Kristen (26:28)
and thank you everyone for listening. hope you learned a lot, got some inspiration to maybe look at your deals a little differently and we will see you back next time.
