How to Find Off-Market Real Estate Deals & Raise Private Money | Mathew Frederick

Mathew Frederick (00:00)
I buy pretty properties, I don’t buy self storage, those are garages. He says it’s a million dollars. I says all I have is a hundred thousand. He says I’ll give you a seller take back mortgage, vendor take back mortgage for nine hundred thousand dollars for ten years. I go, but you said you’re dying of cancer. He says, I won’t be here in a year, but my grandkids will be. Mm.

Hmm. And you know, funny, I said to him, why me? He goes, Because over the last couple of years you brought me coffees and a Boston cream. And I thought, Wow Wow. I didn’t do this for the property, but not even an asset class that I invest in. He said, You’re the only person who talks to me.

Quentin Edmonds (02:11)
Hello, everyone. Welcome to the *Real Estate Pros* podcast. I am your host, Q Edmonds, and I am indeed excited to be here today. I have another fantastic guest.

This gentleman is is experienced. I if he’s gonna get into his age, I of course I’m gonna let him do that. But I’ll tell you what, this gentleman looks amazing. And not only is he looking amazing, what he does, the the experience that he provides is amazing. And so this gentleman he he raises money, he can find off market deals. He is an investor, he is a

Builder, again, a wealth of knowledge. And his business is called Next Systems. And so I’m so excited for us to kind of peek through his lens, learn from his experience. So I want to introduce you all to I’m gonna say the government name, but then I’m gonna go back to Mat. But this is Mr. Mathew Frederick. Mr. Mat, how you doing today, sir?

Mathew Frederick (03:07)
I am doing fantastic. I look forward to this conversation and some time with you.

Quentin Edmonds (03:12)
Absolutely, sir. Me too, man. And and I’m so glad you’re here. I’m gonna say this now and you’ll hear me probably say it again. Thank you for your time. You know, I value people’s time. And so thank you for giving us some of your time today. And Mr. Mat, I am the type I like to dive right in. So I would love for you

to tell the people what’s your main focus these days. If you don’t mind, give us a little bit of a origin story, kinda how you got into the space that you’re in. And then tell what what markets you’re operating at, where you are. So Mr. Mat, sir, you have the floor, my friend.

Mathew Frederick (03:42)
Well my main focus today is building. Right now I’m building a three story hundred and forty-four thousand square foot eight hundred and six unit self storage in Ohio. I’m also building forty-two units modular in Corpus Christi, Texas area. you know, I got into this when I was nineteen years old. Today I’m sixty one. feeling it sometimes, feeling it but there is experience and wisdom, ups and downs that come with that.

You know, I got to that nineteen years old because I grew up in an area where I was the only person of my color. Everyone in my school was a different color. And people

were good to me, but at the same time many thought I was going to underperform in life. So I really needed to get out there and make sure that I listened to what my parents said to me, which is work twice as hard to get as far. And I did. By nineteen years old, I was able to buy my first two family home. And although interest rates in nineteen eighty four was thirteen point four percent, I still was able to buy that property with being in business for four years.

From sixteen to nineteen with my own personal business. When I bought that property, I thought, okay, that’s it. I’m not an investor, just want to own a property, so now people will believe that I am equal to them. And when I bought the property a few years later, you know what, I thought let me buy another one.

my brother was a police officer and came to me and said he wants me to invest with him. I said, I’m not gonna invest. He goes, listen, you’re gonna invest with me. I’m thinking I’m thinking of buying one. He says, Listen, I’m your older brother, I have a gun, you invest with me because I’m a systems analyst. So that’s pretty much how I started. my brother and I started investing together four years later.

Quentin Edmonds (05:29)
Yeah. Yeah, yeah. So give me a little bit about where you are now. Like how where do you what do you have your heels dug into now?

Mathew Frederick (05:35)
Well, I do two things right now. So as I said, I’m building self storage, a very large one. I do build small subdivisions, meaning forty five to sixty five houses. And I am building with a modular build now, as opposed to building on site, I build mostly

through a factory. In other words, I get factory pre fab equipment to come in. Now, I’m landlord. I have about twenty one buildings and that’s over five hundred four hundred and fifty to five hundred clients or tenants, I guess we call them. I treat them as clients. And so I manage my assets, my portfolio. At the same time I try different things.

And my portfolio does have multifamily buildings, twelve to thirty-four units, and strip plazas, eight to twelve stores, and and some self-storage. So I spend my time asset managing my opportunity, but not property managing. I manage the the asset. People have managed the property for me. And then I build and I also coach. I I I teach people how to raise money, grassroots, and how to find properties off market.

Quentin Edmonds (06:47)
Yeah,

yeah, yeah. Well I love it. Thank you. Thank you for taking us through the journey, telling us where you are, kind of how you got there. you know, and you know, I I hear you, you know, working twice as hard, you know. Of course, that’s something that you and I we’ve kind of had to hear a lot. And so I often say, Mr. Mat, destiny has no wasted moments, right? We are learning from every leg of the journey. We learn from our failures, we learn from our success. So I would love to know, Mr. Mat, throughout your journey.

What has your journey revealed to you about yourself? Has it revealed discipline, humbleness, innovation? Like what has this journey taught you about you?

Mathew Frederick (08:11)
most of the the deals that I’ve achieved came from I would say humbleness. to give an example, my first self storage well was probably it’s two hundred and fifty six units. I got it financed with seven cups of coffee and one Boston cream donut. So I

I got into my first self storage. I had five cottages in an area. Every month I would stop by to transfer things from the cottages to a self-storage that I did not own. The gentleman who owned it never talked to anybody, his head was always down. And but I knew he liked double double, which is a coffee. So the Nair’s coffee place was about forty-five minutes away. So when I was coming in, I’d get him a coffee, leave it for him. He’d just say, Yeah, wouldn’t talk to anybody. No no one liked him. Years later.

Later, about two and a half years later, he said to me he had cancer. He was dying of cancer, and if I would buy his self storage. And I’m like, Well, I buy pretty properties, I don’t buy self storage, those are garages. He says it’s a million dollars. I says all I have is a hundred thousand. He says I’ll I’ll give you a v a seller take back mortgage, vendor take back mortgage for nine hundred thousand dollars for ten years. I go, but you said you’re dying of cancer. He says, I won’t be here in a year, but my grandkids will be. Mm.

Hmm. And you know, funny, I said to him, why me? He goes, Because over the last couple of years you brought me coffees and a Boston cream. And I thought, Wow Wow. I didn’t do this for the property, but not even an asset class that I invest in. He said, You’re the only person who talks to me.

Quentin Edmonds (09:47)
Yeah.

Mathew Frederick (09:47)
And that’s why he gave me the deal. And that’s how I got my first self storage property, which happens to be my most profitable property because the carrying costs are tremendously low. It does not appreciate like a multifamily building, but the cash flow is amazing. So that’s seven coffees and a Boston cream donut.

Quentin Edmonds (10:05)
Yes, sir.

Mr. Mat, man, thank you, sir. Thank you for that reflective answer. I love asking that question because at the center of our businesses, us is us, the business owner, right? And so your mindset, your character, all these things play a big role in how you’re successful. And so sometimes you know you have to think back and connect the dots. And you just gave us a beautiful story of connecting dots over Boston cream and coffee.

And so sometimes when we, you know, if we take a little inventory back, we’ll start to see our mindset maybe shift and it may open up innovation the way you think, because you you you’ll start to think like, yeah, you know, I did put some strategies in place, but this one strategy of just being kind pays so much dividend, right? And so I appreciate you for answering that.

Mathew Frederick (10:56)
Now that one was humility unplanned.

Quentin Edmonds (10:59)
Yeah. Yeah.

Mathew Frederick (11:00)
But there’s also the opposite, which is I’m bold because fortune favors the bold. What I wanted to learn to build in the city I was in, couldn’t really get into the boardroom to understand how to do what’s called, you know, the soft costs, the inside the office calculations of how to build. I didn’t I wasn’t in the right family perhaps. but I called a lot of companies and I found a comp a company about three thousand miles away.

and I noticed that they would go to the same group of doctors to to fund their construction.

Quentin Edmonds (11:35)
Yeah.

Mathew Frederick (11:36)
That means they can do one construction project at a time. And that could be a three year process. Well I called them and said, I can sh come out there and show you how to raise money from average everyday people so you’re able to do multiple projects at one time. And they said, Don’t come out. And then what I did was I jumped on a plane and I flew three thousand clo three thousand, let’s say, miles away, showed up on a Tuesday morning and said, I want to talk to Regan and Norm. I just

came halfway across the country to speak to them. And both of them said, Well, but we said we were not interested. I go, who else just flew to see you? I spent about three hours with them.

And I convinced them that if they brought me on and allowed me to be in the boardroom, be on the job site, to learn the culture of their company, then I would be able to raise money for them because I showed them that that was your Achilles heel. And I said to them, All you have to do is pay me five thousand a month for fifteen days, pay my flight, pay my car, pay my hotel, I’ll take care of my food. And within six months, I’m gonna start raising money once I understand your culture. They said yes, because I was that.

That bold. They couldn’t believe it. Today I’m a 25% owner of that company, and it meant that when I flew out there, I got to be in the office and got to be on the job side with the general manager for all their projects. That’s how I learned to do the onset. I offered something, but I was bold enough to jump in a plane, fly halfway across the country, and show up when they said no, because I’m okay with no.

Quentin Edmonds (13:04)
Yeah.

Yeah. And you gotta be comfortable with no. You have to be. And thank you, man. Thank you for showing us the boldness and how boldness paid dividends for you. Mr. Mat, let me ask you this. Well, I’m gonna get into some some systematic things, right? I wanna give somebody a simplistic, systematic thing that maybe they can implement. So I’m gonna ask you this. What’s one thing?

Let’s say you put in place, let’s say the last two years, operational thing, one up one operational thing you’ve put in place the last two years that’s kind of changed the way you do business.

Mathew Frederick (14:15)
Well, to simplify it, waking up waking up at six a.m. So I wake up at six a.m. then I spend an hour learning, let’s say a different language. Could be Chinese, something difficult. And so I spend my first hour learning something difficult, hard to do. And then my next hour, I I work out.

Quentin Edmonds (14:32)
Okay.

Mathew Frederick (14:36)
So I open my mind the first hour, I work out the second hour, and then I spend the next thirty minutes organizing my day so that I do not waste my day. Then I run my day, I make sure to put people into my circle that understand what they’re doing and th I’m always open to take a question. And by the end of the day, I make sure that I

Quentin Edmonds (14:46)
Yeah.

Mathew Frederick (15:01)
I put into practice a principle that I’ve read. So you know, people would read fifty books a year and say, Man, I read fifty books. To me, that’s just a bookaboo, someone who just reads lots of books. Whereas I might only read six books in a year, but then I would take about five things from each book

So I might read a book in January, I’ll take five things from it, learn to apply it in February, integrate it by March, and then on a daily basis, which of those principles am I adhering to?

Quentin Edmonds (15:34)
Yeah.

Mathew Frederick (15:35)
So therefore I don’t read a lot, but whatever I do read, I absorb and I live it. So that practice of controlling my day I found that that made a lot of difference in every aspect, whether it’s my restaurants or my real estate, every aspect of your life and relationship works better.

Quentin Edmonds (15:53)
Yeah.

So well said. Yeah, I am similarly I I listen to read a lot of books. mostly listen to if I’m being honest, but I’ve got back to actually reading as well. But I am listening to the book and it’s about a five hour read. And in a week I’ve only gotten through about an hour because I kept stopping it and taking notes on what they said, but also taking notes on what I heard.

Mathew Frederick (16:20)
Fantastic.

Quentin Edmonds (16:20)
Because you know, one of my mentors said, you know, don’t just try to copy what they say. What are you hearing when you hear what they say? And I’ve started doing that. So I’ve started doing both copying what they say, you know, understanding what they said, but also what what am I hearing them say? And how has that applying to me? And so I’ve really started slowing down with books. And so now I know it’s gonna take me a little longer to get through books, but I’m okay with that because I am applying the knowledge that I’m getting. And so

Very well said. Exactly, brother. Let me ask you, sir, what is next for you? What is next for Next Systems? What is your next goal? What are you looking to solve to scale next, isn’t that?

Mathew Frederick (16:57)
Well, because I’m sixty one, I’m looking to set up a few businesses to then coast for the next ten years. So when I say coast, always do something relevant but more consistent. Because being forty one, forty two years in the industry it meant I went through a series of up and down markets. You know, eighty nine the interest rates were nineteen to twenty one percent. In ninety nine, two two thousand we had the the dot com market bubble burst. In two thousand seven eight the market fell apart.

mortgage back securities. so the fact that I’ve gone through many, many cycles it means I’m a survivor because I’ve had to survive. I’ve not always been successful, I have failed at things as well. But I’m looking for more steady. So right now I’m saying who are the industries that are growing? Yeah. Well, you know, I also taught college for a decade within my period of time. So I’ve done a few things. Back in those days, people really pushed science, technology, engineering and math.

Quentin Edmonds (17:51)
So

Mathew Frederick (17:57)
Those were the things to do. Today AI can replace some of those things. So now it falls back to, you know, are you a mechanic? Can you do heating, cooling, can you do refrigeration? Can you do electrical and plumbing? So these companies right now that are six some of them are very successful, the owners don’t know how to manage them as a successful business. They just know their skill set. So I’m bringing AI tools to help them be able to walk away for

ninety days and still work. But here’s the real estate part. They generally have what’s called retained earnings, money trapped in the business. One, two, three, four million that they cannot take out as pay, they pay too much taxes. They cannot take out as dividends, they pay too much taxes. That money can be transferred into a nice holding company and that can go into real estate. So what I’m doing is I’m creating a partnership with those companies where I help them with their AI systems to be replaceable

so that when they do sell their business they can get more for it because they’re not the business. Simultaneously, how do you take your trapped money and invest it with me in projects and also in multifamily buildings? So I’m helping and I’m also receiving. It’s a two parts of the coin.

Quentin Edmonds (19:01)
Yeah.

Yeah.

Sure.

I love that. you so I do a lot of reading too, and what I I love reading proverbs, right? and there’s a proverb that says when you refresh others, you in return will be refreshed. And so when I what you just laid down was just is an ecosystem helping people and knowing that that’s gonna come right back around because you’re building a community, right? And so I love that. And so speaking of communities, Mr. Mat, I would love to get your perspective on relationships.

How have relationships served you in the business world? Who are some people, some of the relationships that you hold there that has helped you? I know you talked about the cup of coffee and the donut. So talk to me a little bit about building healthy business relationships and what are some of the relationships that have helped you in business.

Mathew Frederick (20:39)
Well, you know, so many people they get together with people in their same position and they try to work together to get out of a situation. Now, that’s good and bad, because if everyone’s stranded on the beach, it doesn’t mean that somehow they’re able to get off the beach just because they’re all together stranded. So you always have to have people in your circle who understand how to get off the beach. So I circle myself with sure, peers, people who are at my level.

There are people below my level, let’s say only because I have more time and rank, I’ve made enough mistakes and had enough success that I’m further on than they are. Yeah. But I also try to find people to bring to my circle who I can turn to also. And you know, sometimes they may not have the answer, but they may have the way to ask the question. And that helps me to find the answer. And sometimes they have the answer. So I believe it has to be a multi-level system where, you know, just with everybody else who are on your

Quentin Edmonds (21:29)
Yeah.

Mathew Frederick (21:39)
Or said less than twelve and even spoken parables to everybody else. So the fact is you have to have a hierarchy of people you can go to to help you through the tough times. And it’s important. And I I’ve been able to establish that. I’m always looking for people like that as well.

Quentin Edmonds (21:51)
Yes, sir.

Beautifully said. so beautifully said, Mr. Mat. I appreciate you so much, sir. Listen, Mr. Mat. If someone wanted to reach out to you, connect with you, collaborate with you, learn more about what you’re doing, Mr. Mat, how can they get in contact with you, sir?

Mathew Frederick (22:12)
Well the fastest way is to jump on to an email which is simply Mathew with one T, [email protected] And also I have a phone number that’s dedicated only for people who call who have issues, and that’s 289-440-2335. Yeah.

with both of those contact methods I’m able to contact people. I mean right now I am doing business in as I said in Texas, in Florida, Arizona and Ohio. I do business in Canada as well, Alberta and Ontario. And I’m also doing business down in Belize, which is Central America. Yeah.

Quentin Edmonds (22:56)
Yeah, yeah.

Mr. Mat sir, I wanna thank you again for coming on. I wanna say three things to you sincerely. Again

I want to thank you for your time. I think time is our most precious commodity. So, sir, thank you for your time. I value it so much. I want to say thank you for your stories. Thank you for showing up as your authentic self. I would even say, like, the gift of your vulnerability, the gift of your integrity and authenticity. I thank you for that because I believe our stories plant seeds. You talked about Jesus taught in parables. I say that a lot, and they plant seeds, and we never know when that seed is going to take root and grow.

But when it does, it can produce something just totally mind, you know, mind boggling. And so thank you for planting some real seeds. Lastly, sir, thank you for your mindset. Thank you for the way you think and bringing that mindset to this platform. Mr. Mat, I greatly appreciate you coming on today, sir.

Mathew Frederick (23:47)
You know, I wanna thank you also, Quentin, for having me here at the same time, spending time with someone such as yourself, who I can see that I will respect and spend more time with. I look forward to the relationship. Yeah. So thank you.

Quentin Edmonds (24:04)
I greatly appreciate that, man. More than you know, I appreciate that. so listen, y’all heard Mr. Mat. You’ve heard the knowledge he’s given. His information is in the show notes. So please get in contact with him. Get in contact with Next Systems. Let it really work for you. But definitely make sure you’re subscribed here. Because I promise you, we’re going to continue to bring up amazing people, just like Mr. Mathew Frederick. So, sir.

I say thank you again. And everyone else, you have a fantastic day.