Hey, welcome back to the Investor Fuel Show! Super excited to have my buddy, Mathew Pezon with us today! Mathew runs a pretty impressive business, has a nice rental portfolio, built a lot of it while he’s still employed in his W2 job, and just recently jump off into full-time real estate investing. Today, we are going to talk about when is the right time to jump off if you’re still employed and how to scale your business. You’ll enjoy this episode, let’s get started!

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Mike: [00:00:00] Hey everybody, welcome back to the show. Super excited to have my buddy Matthew here to talk today. He runs a pretty impressive business, has a nice, uh, rental portfolio, and, uh, built a lot of it while he was still employed with a W2 job and just re recently jumped off, um, into full-time. So we’re gonna be talking about, you know, when the right time to jump off is if you’re still employed, and then how to scale your business.

Mike: He’s really has an engineering mindset and thanks a lot about how to build his business up and has gone from a one man. With actually a nice rental portfolio, actually more than most of us, more than me, uh, and uh, and just was doing everything himself and just recently started to kind of beef up his team.

Mike: So we’re gonna jump into those today.

Mike: Professional real estate investors know that it’s not really about the real estate. In fact, real estate is just a vehicle of freedom. A group of over a hundred of a nation’s leading real estate [00:01:00] investors from across the country meets several times a year at the Investor Fuel Real Estate Mastermind to share ideas on how to strengthen each other’s businesses, but also to come together as.

Mike: And build more fulfilling lives for all of those around us on today’s show, we’re gonna continue our conversation of fueling our businesses and fueling our lives. I’m glad you’re here.

Mike: Matthew, what’s going on? My friend

Mathew: Mike, thanks so much for having me.

Mike: Yeah, yeah. Great to see you. You’re, you’re one of those guys that you joined the group in, uh, I won’t say how many rental properties you have, but you kind of got up in front of the room and nobody, nobody, I don’t think a lot of our members knew who you were at that point.

Mike: And you just like, yeah, here’s what I’ve been doing while I’ve got a job. And everybody was just like, what the heck is going on here, ? And you’re like, is that good? And we’re like, oh, that’s awesome, dude. So super humble and excited to have you here with us. Yeah. Thanks

Mathew: so much. Yeah. I’m excited to be here and share a little bit, so, yeah.

Mathew: Yeah,

Mike: yeah. [00:02:00] So tell us a little bit about your background. Like how, how you got, uh, I know you just recently left your, your W2 job after a really a long time. Yeah. Um, but kind of tell us a little bit about your background and how you got to where you are

Mathew: today. Yeah, sure thing. So I am a chemical engineer by trade.

Mathew: Um, I, I was in the industry for 12 years for a large Fortune 500, uh, chemical company. Um, I really found real estate investing actually outside of the United States, so I found it in Spain. I was doing a master’s, and that’s where I really understood the business mindset. Um, the, the thing about engineering that I think is so applicable to business is there’s a certain set of rules and principles like gravity makes stuff go down.

Mathew: And if you understand those principles and rules, it’s the same in business. And I was able to take those, those principles, apply them to business, and there’s a formula and, and if you understand that formula, and you can apply. The results take care of themselves. So I’m, I’m an engineer by trade, but I kind of stumbled into business and, um, I’ve been buying rentals in the Lehigh Valley, Pennsylvania since 2014.

Mathew: And, [00:03:00] um, uh, now I’m a full-time real estate investor.

Mike: Yeah, that’s awesome. And you’re so right. I, I, I, uh, I have a financial background, not an engineering background, but I, I think in terms of systems and processes and we’re always focused on that. And even though a lot of real estate investors, even some very successful real estate investors, understand that they just.

Mike: Get outta their own way sometimes at building those systems and processes. And so, like you said, there is a formula. This business is actually not that complicated at all. Um, but sometimes, uh, we’re small and we don’t really have big enough teams to where it just never becomes you. You’re constantly kind of putting out a fire or dealing with the issue of the day instead of kind of building those things.

Mike: And so I think that engineering mindset really helps you, uh, with, you know, Understanding that it’s a formula and there’s a series of systems and processes that you have to do to run a successful business. So that’s awesome, man. Yeah, that’s right. Yeah. Yep, yep. Um, and so let’s talk about that transition.

Mike: So you, so you said you [00:04:00] started buying, uh, about nine years ago. Is that right?

Mathew: Yep, that’s about right. Yep. Yep. 2014 we

Mike: started buying rentals in 2014. It’s 2023 now. So, um, and, and it just didn’t occur to you for a long period of time, of maybe I could do this full-time. Like when, when did that happen, uh, for you?

Mike: Yeah.

Mathew: Yeah. So the, the whole, the premise behind keeping my job and initially when, when getting started, it was really just about bank ability and, and showing the bank I have a solid W2 income, um, and they, they’re looking for other means of repayment after the property. So really for me, um, people look at, well, the job is holding me back and I looked at the job as a way to get money, um, not just a W2 wage, but bank money.

Mathew: And for, so for me, that was leverage. Um, it was financial leverage and. Uh, fortunately I had a high paying W two salary and, and the banks loved it. And so as the market was, was going up, uh, from 2015 through, through currently, um, they, you know, they were willing to refinance and do other things, uh, because I had that income.

Mathew: So that job for [00:05:00] me, Was really the, um, that that was the leverage point. Um, I didn’t wanna leave that too soon because it was such an advantage. I, I saw other investors getting started and they were kind of plateauing, you know, maybe they get 10, 15 deals or whatever, and, but then they just, they, they couldn’t really get past it because they couldn’t, uh, they, they, and maybe it was a system or process issue, but I just, I just didn’t wanna be able to run outta money.

Mathew: I, I always wanted the banks to be there. And so for me, that was my, So, yeah, and, and

Mike: you’re right when you go out on your own, I mean, when I first started, so it’s been, you know, fif over 15 years ago now, I don’t know, something like that. A long time. Um, and we went in cold Turkey, and you’re right, we went from having high paying jobs to like, you know, banks aren’t even willing to talk to us until we have two years of experience with tax returns and all that.

Mike: And so, right. Um, it’s a real thing, right.

Mathew: Right. Well, I wanted to really, what I wanted to do was, uh, I wanted to build the real estate business and the rental business alongside of my job so that I could say, well, I have nine years of experience in this business. By the time I was full-time in it, you could go back as [00:06:00] far as you want with my tax returns, and you’ll see the, the, the experience.

Mathew: So I just wanted to have that credibility and, and reputation with my lenders. Uh, going to, to ask for money without that experience, I, I just wanted to have it right out of the gate when I quit my job. Yeah. So, which I do. Yeah.

Mike: Now, so, and, and when you first joined Investor Fuel, like last, uh, summer mm-hmm.

Mike: you were still employed and so you were like one of those people that were there. Like, I can’t name any, there’s probably a couple others, but I, I can’t name anybody else that has a W2 job. They’re all pretty much full-time people. And so not that, not that that was the catalyst for you leaving your job.

Mike: You probably got a little bit of validation there that. You should, should consider it. Right. , right. What, what, what, how did you make the decision to, to jump off, uh, full-time and, and, um, and then how would you advise other people if they kind of asked that question? Like, when is the

Mathew: time Right. Yeah, no, it’s a personal decision, but for me, there were four things and I, I, I had to choose three of ’em.

Mathew: Um, I, it was my business, my family, my job, [00:07:00] and sleep , and I had to choose three. And I chose, you know, I, I can’t exclude my family. I, I, I couldn’t, uh, you know, I needed to sleep just for health reasons. I didn’t wanna give up real estate because I saw what the returns were like. So I, I said I, there’s only so much time in a day, and I, I finally chose the job now, you know, and, and, but that was after nine years.

Mathew: Experience in this business. Sure. And building a rental business on the side. And there just wasn’t enough time. I mean, I just, it the, the, the writing was on the. I actually kept it, uh, probably longer than I, I should have, but we were moving, so I wanted to use the W2 wages to, to qualify for a primary residence loan.

Mathew: And there were personal reasons, but I mean, so for, so for the listeners, I mean, it, it’s really depends on your risk appetite. Obviously Mike, you, you know, you um, you kind of quit cold Turkey and I was, you know, easing in, I don’t think there’s a right or wrong. But I would say make sure you’re bankable, make sure you have liquidity, um, and, and make sure you have experience and knowhow, um, so that you, you don’t get to the, the, the promised land [00:08:00] of, of no job and find out Uhoh, I can’t get a loan or, uh, oh, I can’t find deals.

Mathew: Right, right. So yeah, it’s, you have to be prepared and have a plan.

Mike: and I think for a lot of people too like that, you have to be willing to do, to work two full-time jobs for a while, right? You have to be willing, oh yeah. You can’t just like come home from your W2 job and like watch TV for six hours and like , push off your dreams, right?

Mike: You have to be willing to kind of build one up to where it gets to the point to where you obviously have a higher level of confidence that you see the vision for what it can become and you build up another stream of income so you know that, hey, I’m just gonna replace this with that. Right? You have to kind of see that vision.

Mathew: Oh, that, that’s absolutely right. And you have to take a little bit of risk too, like if you’re at a full-time job. I, you know, I was ducking into conference rooms to take seller calls and, you know, I was walking over lunch and just calling sellers, you know, for an hour. Um, and it was hot out there. It was cold, and you just, but you can’t call in the building, so you have to like, work your way around it, but you have to, so you have to be tenacious in that way.

Mathew: Yep. Um, but yeah, that, I mean, it, it’s, it [00:09:00] really is double hating. Like, you’re not coming home and, and watching tv. You’re, you’re building stuff. You’re rolling out systems and processes. You’re calling sellers and. You’re working two full-time jobs for a while if you take the path. I did. The interesting thing about it’s

Mike: risk, and the interesting thing about you is you were keeping them all as rentals.

Mike: Like you weren’t essentially wholesaling or you doing any fixed and flips at all. Was it all it? Hundred percent rentals. Yeah. So hundred percent rentals. You were advertising, you were generating leads and if it didn’t make sense as a rental, then you just

Mathew: passed on it. Correct. Yeah. So I was only pursuing, I was sending letters.

Mathew: I had no online presence because I didn’t want my boss or, you know, co coworkers finding me. So I was mailing all these letters and you know, I, no one ever brought a letter to work and said, Hey, what’s this? You know, no one, it didn’t really come, it didn’t come full circle, which is fortunate, but, Yeah. You know, it, it was, uh, um, it was kind of under the table for a long time.

Mathew: Yeah.

Mike: Yeah. So that’s awesome. So then let’s talk about, so you, and you were doing this almost all yourself, like skeleton crew, it’s just you and your part-time. Yeah. [00:10:00] Uh, built up a nice rental portfolio over the years. And now, uh, you know, you’ve been focused a lot on, um, scaling, right? Putting people in place so that you can buy your time back and you have a young family, all those things.

Mike: So let’s talk a little bit about kind of scaling. So you’ve gone just in the past, like few months, you’ve gone from essentially a one man band to a small team of people that you’re Yep. Using to kind of one scale to buy your time back, right? Yep.

Mathew: Yep, that’s right. So yeah, sure. So, um, I was a solopreneur, um, for a long time and, um, it was because I was only pursuing the deals that we were going to buy and hold, like we just said.

Mathew: Right. Um, now, , um, that’s still the case, but we’re doing more volume and so I can’t be sending out the marketing letters and working on SEO stuff and our PPP c ads and, and taking all the calls and then following up on all the call. There’s too many tasks. Yeah. At, at scale. And so, um, I’ve hired a lead manager.

Mathew: Um, I also [00:11:00] have a documentation and marketing coo. Um, and they’re also, and then there’s basically a full-time 10 99 that’s pulling all these lists in the public data, who didn’t pay their mortgage, who didn’t pay their taxes, who has credit card judgements and a property, um, who owes the irs, who owes the Pennsylvania Department of State who owes, you know, who owes money, right?

Mathew: Yeah. So there, that’s a full-time job. And, and getting that data into our C R m letters sent out, calls come in. There’s so many of these tasks and hopefully we can unpack some of that. There’s, um, I was doing what I could, uh, with some help, but it, it was, it was burning me out, frankly. I mean, you could spend all the time doing that and you lose and then going on the appointments and it, it just, you run out of time in the day.

Mathew: Yep,

Mike: yep. So, and, and you pretty much, you know, um, you’re so for. The, I’ll say the average, but most real estate investors are wholesale. They’re doing more wholesaling and flipping activity than, than you are at at your number. You’re just, [00:12:00] I mean, you’re doing what everybody wants to do is just keep ’em all.

Mike: Like I look back at the hundred thousands that I didn’t keep and be like, oh my God, I wish I had kept ’em all now. Right, of course. Times 2020, but that’s not gonna change. I mean, the dollars being destroyed, like it’s a great place to. Um, hedge inflation is owning rental properties for sure. That’s not gonna change, right?

Mike: Oh, . But I think for the average investor, they have to scale up because they need that additional revenue to be able to pay for the team. Right? You gotta, you basically, that’s, that’s how you offset your costs is just through scale for you. You not only have that, but you’re keeping so many that you don’t necessarily, and maybe your model’s set up where you take some money off the table when you refi.

Mike: Uh, you probably do do that.

Mathew: Yeah, I do that. Yeah, that’s, yep, it’s refined. So you get some,

Mike: you get some kind of today money today, right. But, but, um, but uh, yeah, the, the case for scaling is to be able to build your team,

Mathew: right? Yes. Yeah. Yes. Yeah. Yeah. I mean, there’s a lot there. Um, you know, the, the, um, properties that, so the, the rentals that I’m holding, the ones that I’ve had for six or seven years, you can [00:13:00] only refinance a single family home so many times.

Mathew: And with the appreciation, it, there’s, there’s little business case anymore to keep those. So I’m selling some of those after seven years, but rolling them into, To three units or two units or four units, just to kind of reposition the equity and make more rent on the same capital. Hmm. Um, but the, so I’m investing in properties, but you hit the nail on the head.

Mathew: So I, I’m focused on acquisitions and property investment and we retain all of them except for maybe as stray flip occasionally. Um, but the, the real investment right now is people, so we invest in properties and we invest in people. And my, my sole focus this year is building out a team even at the expense of a slower growth rate because it’s an investment in the future to have a team and systems and processes in place so that things.

Mathew: Just happen without me necessarily needing to send out all the letters myself. Like I used to. I was starting writing the letters myself and you just run out of time. So Yeah. Investing in people and [00:14:00] properties this year. Yep. Yeah,

Mike: that’s awesome. And, and one thing I want you to, to, uh, point I wanna point out here is you, you’re in a relatively small market, right?

Mike: And so a lot of folks, I mean like sometimes scaling and operating in a small market are, are they conflict a little bit? So how, how big is your market roughly? Like what’s the rough popul. Yeah.

Mathew: So, um, Lehigh in Northampton County, um, it’s about 650,000 people in the two counties. So that’s, that’s within like a 25 to 30 minute drive of me.

Mathew: Yeah, yeah. Including Berks County, where I also buy, that’s another 400,000, so it’s about a million people in this general area, but that’s within an hour. Yeah.

Mike: Yeah. That’s awesome. Yep. Yeah. So, um, and then as an engineer, maybe you could share some wisdom on, uh, putting systems and processes in place. I think a lot of people have the best.

Mike: Of intentions and it’s just, they just don’t get to it because they, I was gonna work on it tomorrow. I was gonna work on it yesterday and I came in and I got hit in the face with a pie or something and next thing you know, like you just [00:15:00] don’t get to it. And that seems to be a recurring thing over and over and over again.

Mike: So, as an engineer, uh, I know you have a different mindset. Maybe you can share some tips on like how to chip away at those things for real.

Mathew: Yeah, and I, I don’t remember who said this, but I heard this on a podcast somewhere. I’m a recovering engineer, , so, you know, I, I, uh, when I was in my engineering role, the reason why systems and processes are important, like from the, the level of a, someone trying to invest in real estate or get started or investing, I remember my engineering life for 12 years.

Mathew: We would get stuff from sales and it wasn’t clear we couldn’t deliver on it. They wanted to put the equipment too close to this thing that we couldn’t put it next to and couldn’t. You just make it work and there’d be missing information. And I was always the guy who had a deal with that . You know, when it was unclear, when it was inconsistent, when we weren’t doing the things that our standards said we needed to do.

Mathew: It caused pain or someone. Which is the worst thing. And so I got to see what happened when things aren’t followed, that we have a best practice, [00:16:00] here’s what we do. And I saw how bad it hurt sometimes, unfortunately, um, actual, uh, like, you know, recordable osha recordable incidents. And so when we don’t do what we’re supposed to do, whether it’s a training reason, lack of clarity, um, just negligence, It causes pain.

Mathew: And so for me, systems and processes are about reducing pain. It’s about creating clarity so that we can do more with less and more and deliver a better service to our customer at the end of the day so that there’s more consistency, more clarity. So people hear that word and they think, oh God, another systems thing, another process like, Ugh, it just sounds so terrible.

Mathew: Like, why do I want to record this video and write this stuff? . And I agree. Like even I even think that, and I’m, I’m engineering cause it is a little tedious, but the process sets you free. So, um, yeah, that’s

Mike: exactly right. Can you build it out in a way to where you don’t have to do it anymore? Right. Yeah.

Mathew: And so like I, I try to do um, three to three to [00:17:00] four things to really set up a clear process. So maybe I could dive into that quickly. First things first. Like if I’m already doing something and I’m trying to, to build a system, I’ll just record myself doing it. I’ll just get a Loom subscription, or I’ll record a teams, uh, teams meeting and I’ll just record step by step and I’ll talk out loud.

Mathew: I’ll say, I’m doing this, this financial transaction. I pay it, and I, you know, here’s how I do it in QuickBooks and blah, blah, blah. So I’ll record it next for critical, uh, processes, I will write a, uh, an instruction. Step by step to supplement a video. And occasionally I’ll record videos multiple times. The, the third thing that I’ll do is, is clarify the, the frequency to do that thing, whether it’s daily, weekly, monthly for follow up.

Mathew: If it’s a hot lead, follow up now if it’s a cold lead every 30 days. Um, and then, uh, lastly, uh, what is, what is the last thing that I do? Um, let’s see. No, there’s, there’s one other thing. Well, yeah, just, yeah. The, the, the [00:18:00] course, you know, I record myself. Yeah. And then the cons and then the frequency. Yeah. So th tho those are the things that I look to do.

Mathew: If I think of the last one, um, I’ll, I’ll say it, but I, I just basically record everything I’m doing and, and hand

Mike: it off. And do you, do you maintain like a hit list of like the things you need to create processes for, or do you just do ’em as you think of ’em?

Mathew: Well, it’s, it’s usually as I’m doing the task or what the most painful thing is

Mathew: Yeah. So like where, what, what am I having a problem with that I need to focus my energy on and. Uh, that’s, that’s what I’m focusing on to create the process. Yeah. Um, but, you know, and, and what delivers the most value? So usually it’s, it’s sales related things. Um, you know, how do I document a transaction?

Mathew: You know, taking it from start to finish. How do we coordinate that transaction? That’s stuff I’m recording right now. It’s just stuff that I’m doing. I just record and, and make a process.

Mike: Yeah. That’s awesome. That’s awesome. Yeah, so hopefully that’s helpful, but yeah, yeah, for sure, for sure. Yeah. So Matthew, you’ve been a part of investor fuel, I think for, uh, six or seven months or so.

Mike: Now, would, would you mind just sharing a little bit [00:19:00] about your experience so far and maybe, uh, as somebody that was leaving a W2 job and jumping into real estate really kind of full-time, like what even drew you to investor fuel from the beginning? Yeah,

Mathew: so I, you know, I, I was drawn to investor fuel because, um, I was looking to do deals at scale and I knew that other members of investor fuel were doing that.

Mathew: So I wanted to get around those people and learn from them. And I gotta say that it’s been an awesome experience. Um, it’s been a great investment. Um, and, uh, I remember the first meeting that I went to was, it was mind blowing because all the things that I wanted to. all the things that I was having problems with, or pain points everyone else was experiencing too.

Mathew: And, and so I, it was a little bit of a camaraderie, but also best practice sharing that, that was so valuable to me. And, um, I remember, um, in the middle of, of, uh, the meeting over the summer, last summer, I, I, I just decided, oh my gosh, I gotta get a virtual assistant like now because I have all this stuff and other people were doing it.

Mathew: [00:20:00] And it just inspired me to, to, to get a virtual assistant for some processes. Um, just an overall, an awesome, awesome group of people. Great, uh, great group, and lots of best practice, Sharon.

Mike: Yep. And you would, would you agree that, uh, like nobody holds back? Like, if you need anything, you ask people in the group and No, you’ve never heard anybody and never would hear anybody saying, well, I can’t really tell you that, right?

Mathew: Yeah, no, no, no, no. It’s, everyone’s super open and, and, uh, you know, just throwing the microphone around and, you know, get everyone’s just super open and sharing and, and, uh, uh, willing to, to.

Mike: That’s great. That’s great. Yeah. Well, Matthew, if folks wanted to, uh, you’ve notice some impressive things up there and, and have built an amazing business, if folks want to connect with you in any way, whether they’re kind of local or otherwise, like where, how would they reach out to you?

Mathew: Yep. So I’d say, uh, my, my website, um, which we can link in the show notes, um, and then Facebook, Instagram, our YouTube channel. We’re really active and, and, uh, and just reach out, send a message through, through one of those channels. And we, I’d love to connect, [00:21:00] um, you know, I, I connect. Uh, a lot of it, I, I actually donate time, um, to help new investors here locally get started, uh, in Allentown, and I’m involved in some philanthropy, so I’d really like to, um, help anyone any way I can.

Mathew: Yeah. That’s

Mike: awesome. Well, thanks for sharing your story today. Yeah. Yeah. Thanks for having me. Great meeting you. Excited to see where you, where you take things from here,

Mathew: my friend. Yeah, likewise. Yep. Can’t wait to keep working with you and, and see where investor fuel takes to solve, so

Mike: yeah, I appreciate that.

Mike: Yeah, everybody, hope you got some great good value from today. Matthew’s really built an amazing business and we have a community of hundreds of amazing people like Matthew that are big givers sharing, you know, betting on themselves and betting on each other like every single day, right? And so if you haven’t yet talked to us about investor fuel, just go to investor fuel.com to learn.

Mike: You can schedule a call there with us and see if you’re a fit for our group and if we’re a fit for you. Until then, we’ll see you on the next show.

Mathew: Are you an

Mike: active real estate investor? If so, and you want to latch onto the power of surrounding yourself with over a hundred of the nations [00:22:00] leading real estate investors. All committed to building stronger businesses and living richer, fuller lives. You should jump on a call with us. To learn more about investor fuel, simply visit investor fuel.com to get

Mathew: started.