Grow Your Cashflow Podcast

pascal_wagner:
All right, hey, they're welcome to the Legacy Wealth Podcast Today, I have on the show is Matt King, And I know Matt King from Gobundane, We, He's the Ceofgbundant and we're bringing him here on the show today to help us understand investing from the L P. perspective. So welcome to the show, Matt.

matt:
Yeah, thanks, Pascal. thanks for what you're doing, man. I think there needs to be more education put out for L P's when making in investments. I think it's like the Wild Wild West right now, And so I think educating people and teaching them what to look for and what to pay attention to a super important. So I applaud you for that. I think it's really really needed in the space right now.

pascal_wagner:
Thanks man. Yeah, we're all we're all learning on this journey together, So

matt:
Yeah,

pascal_wagner:
let's kind of start out with what. Give us your background? Your story related to how you eventually started investing in funds.

matt:
Yeah, so I was just born and raised in a small town in Wisconsin. Man, I thought L. P's was a type of Pro Payne natural gas like when I was growing up like I had no idea. I meant Limited Partner was fortunate enough to move to Austin, Texas about nine years ago to work for David was born, whose family office I now run and oversea. in addition to being the co of Gobundance, and the way I was exposed to investing was just through like trial, M. David is serelontre aneure in a serial investor, And so Everything from C, p, G or consumer product, good stuff to different debt structures to l, p, l, P funds to G, P funds. Like I've seen everything and I've just really gotten a crash course and what to do. M through being a part of his family office growing up, I never would have thought of myself Ice as an investor In this in this vein, I didn't even know it was possible. candidly. I thought an investor was somebody that bought a house and rented it Like to me, that was the definition of an investor, So I've really had to learn all of this By just getting in the trenches rolling up my sleeves and seeing it first hand. I never graduated from college. I dropped out to start my own business, so I'm not like Harvard trained or M B, A, trained, and like underwriting deals and understanding structures, It's just like School of hard knocks and just learning it by cutting my teeth. getting out on the streets and seeing deals and doing deals and comparing things, asking questions, being curious and talking to the right people that have educated me along the way,

pascal_wagner:
Yeah, so so when it came to investing, did you first start investing your own funds? Did you invest on behalf of David

matt:
Yeah,

pascal_wagner:
Osborn? It sounds like from from David Osborne's perspect,

matt:
Yeah, I've been very fortunate to be able to invest, you know, to watch him invest his funds and then transition into slowly investing his funds, and then as a by product of that getting to invest mine, too, so the journey started with me just looking over his shoulder and watching him to ploy his capital and choose where to put money, and its slowly evolved into me now being the driver. I mean, ultimately it's his world, so he's got final say so, but I do all the due diligence. I do all the underwriting. I bring the suggestions to him and then and then make the decisions, and you know, just get his stamp in his blessing. Um, and so I started off with his money, but I've always looked at his money as if it were my own. I think the problem a lot of people make when over seeing other people's funds is they don't have the same attachment to the outcome, because it's not their money. And if you don't have attachment to the outcome and assume it's not your money, I think you started to run into some issues with, just like you know, Mis management, and not not paying attention to the details, which is the most important part in investing. So started with his money and him doing it. It led to his money and me doing it, and now it's you know, Money and my money and getting to do both of them, which is a pretty cool journey that I've been on.

pascal_wagner:
Definitely definitely okay. That's awesome. So that's a. That's a great little back story there. What tell us tell us about? Uh, you know, this one is a little bit nuance Because you've been working with David.

matt:
Yeah,

pascal_wagner:
Tell us about maybe your first fun. You know it wasn't you know your first fun because you were leveraging the experience of David. But talk to us about maybe the first fun that you were involved with, And how what that process was like How you picked the deal. Why that asset class? Yeah,

matt:
Yeah, so really? what? What? from an L P perspective Like, Kind of my beliefs have come full circle. I really suggest that people should only make L p investment if it's outside of their area of expert. Tis, you know, it stands for limited partner for a reason, And really, the only time you want to be a limited partner is when it's not in your area of expert. Tis, if I'm a doctor and I'm investing in some sort of a doctor medical device. If I can't create that own medical device, That's a great opportunity to be an l. P and a fund that does those investments. If I'm a real estate developer, I probably have no business being an L P and other real estate developers opportunities. If I can control the outcome and be the G p inside of a deal. the economics are in my favor, So the first time I was really exposed to an l P deal, it was in the text space, So David is mostly real estate and we really understand real estate, So when we want exposure to different asset classes that were not experts in, that's when we seek an l. P position. And so I remember, it was a techfun based out of Austin, and it was focused on Merely like tech companies based in central Texas, and we wanted to exposure to the space. We didn't really have as much exposure to technology nine years ago is as we thought we needed. And you know Highndsight, we got the exposure we wanted. We should have just gotten out about a year ago because we would have time the market perfectly, but that's impossible to do, because when you're an l. P and a fond, you don't control the duration. You're just a. You're just a passive participant in the deal. Um, so I always look at the sponsor first and want to really understand who is the person we're in Singing. You're investing in an opportunity, your investing in an asset Cross, but at the end of the day, who is the most important thing? If that person has a track record of success across many industries across many markets across many cycles, it gives me a really good vote of confidence. If that person is doing their first over real estate fund and their main job is being a doctor, I'm probably pretty nervous to be an l. p in that deal Because remember being in l P, your passive capital. And so basically what somebody is saying is is I don't have enough. We need to put in this deal by myself, And so I need other people's money and I need to pay them a return for using their money as a way to get this deal done. So if I'm you know, there's a saying like teaching somebody how to shave, but on your face, so I don't want somebody to learn how to shave on my face, so I don't want to be an l. P in a deal where somebody's first deal, because my capital is at risk right like they might have a little bit of skin in the game. but generally my capital is at risk, so when we first made our investment we were a small chunk of a very Large tech fund. It was the second fun the guy has done. He had had a track record of success. He had had really good founders around him On his board. He had really good companies co investing like Saco, and some other big names co investing inside of the fund. And so we started to see all of these signs of like. Just like this is the right deal for us because it was De risked a lot. Um, so you know that was really like the first fort into Deal is now you know, Fast forward nine years, I've seen tech. I've seen real estate. I've seen single Amy, multi family development, C, P. G, Medical space, like you, name it, I've had the opportunity to see many of the deals and the question I'm always asking myself is who is the sponsor and what is their track record like, I want to know that they have a track record of success and they have an unfair advantage in the space that I cannot get in the space unless I am with them, and that space is in going to the moon, spaces in the asset class. So if it's single family homes, for instance, investing in our fun that David Runs, you have an unfair advantage. He owns the eight largest residential real estate brokers in the United States, with five thousand agents across North Texas, New Mexico, and Memphis. Like we have an unfair advantage. We know the market, we see the market. We have boots on the ground across the country If you came to us and said, Hey, I want to invest in your oil and cash fund. We don't know the market. We're not experts in the space, and we don't have an unfair advantage. But if we invest in Brian Sheffield, fund for in Tara, His grandfather grew up in Midland, They own thousands of acres. He grew up in the oil Fields. He knows everybody that there is to know in West Texas, And now we have an unfair advantage because of investing in his fund, we get access to all of his resources off his deals. And so that makes us feel comfortable about going into his deal as an l. P.

pascal_wagner:
Yeah, it makes sense. So when you're when you're investing, do you have like a? You have a cash flow goal In mind, you have an equity growth goal. Are you? Are you saying? Hey, I'm investing in this for primarily the tax. Like, What is the? how? How do you figure out first what your investment objective is? And then are you saying like, Oh, I'm interested in equity growth only so like, Don't even care about the cash cash flow portion of this deal or I'm going to focus more on things. Don't return any capital until the end of the investment. How do you think about that?

matt:
It depends, man. so I think you need to look at your capital is as in buckets of capital. I think some of it needs to be growth only. I think some of it needs to be growth plus income, And then I think some of it needs to be income only, And you look at it as if it's growth only. It's probably got a higher downside potential than if it's cash flow only. So things that have a huge growth potential probably also have a huge, huge downside po potential. So I would say about five to ten percent of our portfolio is growth. Only. It's like investing in tech, hoping it gets to On. and if it doesn't we probably lost our money. Um. Now, the beauty of investing as an L. Pan tech funds is you get diverse exposure to multiple technologies, Rather than trying to pick the one winner out of all the possible winners in technology, you get to invest in a fund that hopefully is diversifying its assets across ten or fifteen different assets. And now you have some sort of downside protection because you have diversity across the portfolio. An you don't need all of them to hit a home run. It would be great, but not likely. Then I think some of it needs to be some, Both with a cash flow component. That's where. like I would say, you want about fifty percent of your portfolio, forty percent of your portfolio. That's where like you have some opportunity for upside, but you have consistent cash full along the way. This would be like multi family. That does some repositioning or re. have. This would look like a fixing, flip type Fun. Now now it's not a good time to invest and fix and flip, But you know opportunities that the cash flow day one is solid, but there's juice left in the deal. If you can improve the product, increase The occupancy, improve the rent collections, et cetera, and then the main portion of your of your portfolio that other fifty per cent should be cashful. Only this should be like the boring, horizontal income super safe. It's going to grow at three to five per cent a year, but it's going to spit off a seven to cent per cent distribution annually, And that's where you're like. that's your safe money. That's like I can go to bed and know that I can rely on that check to keep coming in. I'm going to hopefully outpace inflation, which in this market it's tough to do, but over the long term I'm going to outpayseinflation And I'm not going to lose that capital. I think you have to look at your capital like soldiers when you, when you have this army of soldiers. If you send them into a war that they can win, all of those soldiers can come back plus take the territory you sent them to take. If you send them into a war that you're going lose some people. now. Whether or not you take that territory, you may have lost some of your soldiers along the way, and so you might not be able to generate the same amount returns from your money as if you had all of those soldiers still today. So you kind of got to take your assets and put them into Gets, and say what is my risk exposure, which depends on you know how big are your guts, and then most importantly, like, what is the tenure of your investment career? If you're twenty eight or thirty two or thirty five, Like us, you have a longer duration, so you can be a little bit risky. Er be cause you have time on your side If you're sixty and you just sold K, f. C chicken, and you got fifty million bucks, But you don't want to work any more. I'd put all that money into a safe bucket, because if I lose it all, I don't want to have to go back to work. So you kind of got to look at where you're at in Life and what fits you, and then you've got to diversify across those three buckets to make sure that you have exposure to everything, but you protect your downside and don't cap your upside to a place you feel comfortable.

pascal_wagner:
Give me. give me an idea of like how much how much you've helped deploy with David, and maybe with yourself and help me understand like are you? you know you're not. I'm assuming you're not investing in every deal that David is investing in, So first, maybe like, let's check that assumption.

matt:
Yeah,

pascal_wagner:
But you know how do you go about picking which one you're participating with? Are you focusing more on cash flow or you more on equity? or you? are you kind of diving it across all three. Like Mentioned,

matt:
Yeah, so I've probably been a part of the deployment. I mean, if you look at our fund that we manage as well as in our debt funds as a part of that, we've probably deployed over three hundred million in assets over the last nine years. I'd say of David's capital alone, it's probably been forty to fifty million. Now you know, capital recycles and stuff like that. So, but we've just seen a lot of deals. I mean, we've We've probably invested in a hundred hundred and fifty deals since I've been with him. Um, so I've seen a lot of opportunities. I've seen Lot of things. How do I deploy my capital is a great question. Obviously, I don't have as many soldiers in my military as he has in his military. for that analogy, so I have to be a little bit prudent about where I put my soldiers. I can't invest in every single thing he does, because I just don't have that much capital, but I look at it the exact same way I just laid it out. I have some in the long run, you know, home home run, swing for the fences bucket, Understanding that if it's a strike out, it's a strike out. I have some like trying to hit doubles or triples, but at least getting on base and then I have somewhere just Base hits and boring, but it's at least spitting off some cash flow, given where I'm at. I'm thirty two. Given where I'm at, In my age, I have probably about fifteen percent in the home run bucket, about twenty to thirty per cent in the super safe boring bucket, and then the rest is in the swing for the doubles or the triples, but have a little bit of downside protection too, because I have a longer track to continue to make money, because I'm only thirty two. Now I don't want to work forever, but time generally is on your side. The greatest determiner of how your wealth will compound is time and so like, I'm fortunate that I have time. If my parents were looking at making investments there in their six. He's talking to my retirement. I'd say like, don't put anything in the swing for the fences, buckets. put everything in the safe bucket, but maybe ten per cent put that in the doubles and triples bucket, but super safe at the same time, so I kind of look at that that way with my money. I'll sit down and talk to my wife about what we're doing and why, Um. she's interested in it, but it's sort of a foreign languae To her. Um, and so she'll ask a lot of really good questions that you know. sometimes I can get frustrated because I just want to go fast, but it forces me to slow down and be like, Yeah, that's a great quest. And am I okay if we lose that twenty grand or thirty grand? Am I okay if we only make ten percent on that thirty grand? Like are we okay with this or how is it going to look? Um, And then the other thing we do is we always try to be conscious of like the tax consequences, So I always say this like I don't like paying taxes, but you only pay taxes when you're making money. So you know I tried to Conscious of, like, Am I putting it into vehicles that are taxed advantaged, not avoid tax all together, Because I haven't found a way to do that yet. If there is one long term, I'd be interested in it, but my gut tells me it doesn't exist, so I just look for things that are taxed advantaged. Um, and just try to make sense Like if you invest in notes, For instance, depending on the vehicle you invest through, you can be exposed to U, b t I, which is like an access tax that you just now An exposure to. So if you're investing in and ask that class that has the U B T. I, you want to make sure you invest through the right trust, or for a one case, so that you can avoid that U. B T. I. and you don't hinder your returns through, you know, paying too much tax, So you know all of those things I take into account, but at the end of the day I look at the operator. I look at the opportunity, and then I look at my risk appetite and say like, is it the right operator? If it's a s, then I go. Is it the right opportunity? you know? right now? if it was The right operator in real estate, I'd probably be like. I don't think now was a good time to do fixing flips. I know you have an amazing track record. You have a really unique advantage, but I don't think right now I want exposure to equity and single family residential real estate from a flipping perspective, So I would say right, operator, wrong opportunity for me at this moment in time Now, if it was oil and gas or a different commodities and it was the right operator, I'd say right operator, right opportunity. Now, how much of my risk do I want to expose to this asset? Um, And so that's sort of like the matrix Use are the lens I look through and thinking about investing.

pascal_wagner:
So what I'm hearing is you, you're taking. You're building up cash from your cash cow, you, your job. whatever, and

matt:
Yeah,

pascal_wagner:
then you're starting to invest it in these deals. How are you finding the? How are you picking the asset class? So you know how did? How do you decide? like? Oh, you know right now I want to invest in oil and gas versus

matt:
Yeah,

pascal_wagner:
multi family. Is it like? Oh, I have opportunities come to my desk and then and then I evaluate the operator and then the opportunity. or is it or do you come at it from All right, I, from an acid application perspective, I want to put you know twenty per cent of my money into oil and gas. Let me go look at oil and gas opportunities.

matt:
Yeah, so I'm a little bit more of a gun slinger than a calculated tactician when it comes to like how to deploy money, but I do think of it from an asset application perspective, and then I think from like what we're going through in this market or in this cycle, what do I want exposure to in two years? My gut tells me we all have gone through some sort of a recession or correction in real estate in two years from now Might be a great time to get exposure back into real estate in a heavy way, so I might say well, like, given that real estate values of just corrected forty percent, Say it's the doomsday of dooms days, and everybody s panicking and there's blood in the streets now, all of a Sudeni'll. O. Well, wow, like three years ago I could have bout that dollar for a dollar, but today I can buy it for sixty cents like. Yeah, I want that dollar. That's a good. That's a good advantage for me. Um, but I also didn't think a little bit about like, I don't want to put all my eggs in one basket. I think like, in life, we often times we'll end up putting all of our eggs in one basket, and then we become behold it to whatever that basket was, whether it's a wealth manager, whether it's a house we live in, whether it's a community We grew up in, or whether it's a job, or whether it's an investment like we kind of like are all in type creatures, Generally speaking, And so I try not to be all in with my capital, so I don't want a hundred percent exposure to the stock market. So like the traditional thing is work really hard. Put money in your four or one work until you can retire and then retire and live off of your four or one k. But guess what if you have exposure to the public markets, and that's the only exposure you have if the public markets are done twenty percent When you go to retire, Guess what your retirement s worth twenty percent. Then you thought it was, and that may change your ability to retire. I don't want to be able, holding to one thing, so I want some exposure to the public markets, which is a game I'm not smart enough to understand and it's played by professionals that I don't know how to bump elbows with, so I don't play it much because I think like the people in the bars in New York are manipulating the system and figuring out Ow to win in ways that I don't have an advantage, nor do I want an advantage, So I have a very small exposure to that. I'll have exposure to like Carnival cruise Lines winning Ovid. The book value of their ships was more than double the stock price of their stock. Like, Yeah, that's an unfair advantage. That doesn't make any sense. They could liquidate their ships for more than what the company is worth. that I'll invest in that. That's an easy investment for me, but right now I don't have a bunch of exposure to the stock markets because I think you know there's a blood bath waiting to happen and be, I just don't understand it, so I'm going to stay out of it. Um, but then when it comes to like oil and gas, I'm like I don't see oil and gas going anywhere. Yeah, I think Elon, must, Tesla, and battery powered things are changing the world, but I haven't seen a battery powered plane yet and I'm sure it's coming. It's only a matter of time, but until they solve the problem of traveling without fuel like oil and gas is still going to be a thing like it's powering ships. It's powering car is like. That's a pretty safe stable space for me to be in. So then when you look at during Covid, when gas was a dollar, sixty year, dollar, eighty, but a year prior it was four dollars. You go well, That's more than fifty percent on the dollar Like I'll invest in Oil and gas. Um, So you kind of just look at where we're at In the market. You kind of look at the different opportunities and go like, what do I feel comfortable with And what do I want exposure to To make sure that my assets are allocated in a way that I feel comfortable, but I'm not beholding to one single asset glass.

pascal_wagner:
Yeah, and I guess you mentioned you don't have that much exposure to stocks and stuff. like. what? What made that transition happen? Why? why are you so interested in funds over? You know something else?

matt:
Yeah, you know I do nothing. The only thing that made that transition happen was the job I picked. So when I came to work for David, there was no for a one. K. it was like you have the opportunity to invest alongside of me and deals, And I don't know. I don't put money in the stock market. This was David. He's like, Don't put money in the stock market, So I'd be a false profit if I set up before one for you. I'm like Well, that's cool. Like let me learn about it. And so I

pascal_wagner:
Yeah,

matt:
just saw like this opportunity to like. I don't want to say, manipulate, but control the outcome a little bit more like If Can be an active participant even as an l. P in the space and understand it better than I kind of. I invest in test, and I'm just beholding to whatever Elon Musin is beautiful company. Do I want to like stack the chips in my favor, and I can stack the chips in my favor if I have some influence in some understanding on the asset class. And so for me that was much more interesting. I'm kind of a control freak. Um, and so when you can have a little bit more control over your investments like I have this belief like nobody's going to care about my money as much as And my family do. I don't care how incredible a wealth manager is. I don't care how nice of a human is. They're making a fee to manage my money, but they're getting paid that fee, regardless of my assets go up, or if my assets go down, so I would rather invest my money with a g. P. who's put their money in the same deal as mine, and when I win they win and when I lose they lose like that to me is exciting, so you know, I just, I was just fortunate to never be exposed to the stock markets in the in the career path I was. I was And then I've earned, and to me it's just never been a possibility because again, I'm just not willing to learn that space.

pascal_wagner:
That makes that totally makes sense. to you. you've been harping a lot on the operator like you know. First and foremost, the deal could look great. but if you don't trust the operator, it doesn't matter. Give me. give me an idea. What's your diligence process look like? Is it? Hey, go on a trip with this person. If I, just if it doesn't feel good, then you know or is it like I asked these questions? I do. background. Like. What does that process look like?

matt:
Yeah, so it depends on where the operator came from. If it came from. Like a trusted uncle who's invested with this operator for fifteen years. I don't have to do much. Do diligence. I trust my uncle. He's put his money in there. He showed me the returns. I don't have to do a bunch of due diligence if it's a random dude that emails me that I don't know who it is. Yeah, I need to get on a phone with him. I need to see some sort of a background check. I need to talk to a reference and see what they've experienced. How long they've invested. Really what I want to see in a human is how They manage adversity. If you talk to an investor that says like I've never lost money, either their full a ship or be, they've never sold anything, so they haven't realized the lost, but they have something that's lost money. Like that's just fact, like

pascal_wagner:
Right?

matt:
Warren Buffet says, like you never lose money. if you don't sell an asset, That's true and I'm not going to argue with Warren Buffet. However, I still want to know when he's losing money on a deal. How does he manage through it? Does he ignore it and try to pull the wool over the eyes of his investors, or does he confront it head on and say guys Made a mistake. I thought, See, Candy was going to do this and it did this instead. So here's how we're going to pivot, and here's how we're going to re position like. I want to see how a human manages through adversity, because that to me, tells me everything I need to know. Are they going to stand in the front of the room with their chest puffed out and saying I made a mistake. Let me tell you how I'm going to fix it And here's the plan, or are they going a hide in the back of the room and be a victim of the markets, and not answer my phone calls and not show up when things go wrong,

pascal_wagner:
Do you have

matt:
Because

pascal_wagner:
a an example? You? Ve? like? maybe

matt:
I have

pascal_wagner:
like.

matt:
a lot of examples, but I'm Going a use him. I'm not going to

pascal_wagner:
Yeah,

matt:
use.

pascal_wagner:
I'll get a fair fair.

matt:
But

pascal_wagner:
That's a.

matt:
there's

pascal_wagner:
yeah.

matt:
so many examples. Man like, there's so many like I can use. I can give you some examples. So there's some tech companies we've invested in some tech funds when things are going, while they call all the time, telling me about how great it's going. Like Hey, I got some really confidential news. You can't tell anybody. I'm like. Well, you breach confidentiality by calling me, so it must not be that confidential. So they call me like. I got some really good news. You can't tell anybody. But hey, we just got this valuation and we just got this offer. When packs were sexy. We think we're going to sell as a speck for a hundred X. Like so you get all excited. But guess what, when tech goes from, you know, five million dollars to two million dollars. They don't call. They don't return your calls as quickly. They're not quickly eager to call you and say like they were down fifty per cent. We just got an offer to sell at a loss. stock price got hammered like they're not eager to pick up the phone.

pascal_wagner:
Yeah,

matt:
So like that tells me a lot about the operator. I'd have way more respect if the dude call me in good times and in bad and said, Hey, We're down. Here's how we're managing it. Here's how we're thinking of repositioning our portfolio. Here's how we're increasing the value. Here's the way we've changed our investment thesis, Like I want humans that will hit problems head on with honesty and integrity. Um, and to me, that's like all you've got at the end of the day, Man, that's it. Um, So the operator? Like, how do I do my due diligence? I see where they came from. If they came from a trusted source than grade. It's a lot easier if they didn't. I want to see their financial. S. I want to see their underwriting, I want to look The loan documents like I want to ask to see under the hood completely. And if they start getting tight around things, that's usually a red flag. That something is not what they told me it was gonna be if they only will show me their model in P. d F. and they won't send me. the Excel format probably means formulas are hard coated, because either they don't know how to make the formula do what they wanted to do, or be, they're making the formula Show me numbers. I want, not me numbers that I should have, and an example of that is one time I asked for the Excell model on a p. d, F, and the guys En it to me, and I went into cells that were calculating the total return quarter by quarter, and when they were doing the cumulative year over year, it was taking the quarters and multiplying it, taking one quarter, multiplying it by four point two, five, and I was like, Why is it multiplying by four point two five? There's four quarters in the year Is like. Oh yeah. Well, that's just to manage out the the sicklicalness of the quarters. I m like. Well, you can't put a buffer to your favor To manage out the volatility of the quarters like that doesn't make any sense to me, so it was Showing me that, like, Hey, I want to show this number better than what it is in reality, and I'm going to add in a quarter of a quarter to make the numbers look better like red flag number one. I'm out

pascal_wagner:
Totally

matt:
and I would have never caught that if I took his p d f thing for word, Like, if I took the p d f thing for word, I would have been like. looks like a pretty good deal. So

pascal_wagner:
Yeah.

matt:
you know I asked a lot of questions and then I see how the human responds like you know, I had the privilege of talking to you a bunch like you're an honest. transparent like open book like, let me show you the now. Let me show you everything. Let me like. Sure you want that. Let me get it for you. That to me gives me faith that me gives me confidence. But when you talk to somebody I'd like. Hey, sorry, we don't disclose that or hey, I'm going to need you to sign an N. D. or hey, I'm gonna need you to do this. It's like what do you try to hide Like unless you have the next recipe for Coca Cola, Like nothing is confidential in this world any more. like everything is on the Internet,

pascal_wagner:
All right.

matt:
So like I don't want to go figure out how to do oil and gas wells, Just send me the model so I can see the numbers. That's it. That's all I want.

pascal_wagner:
Yeah, yeah, Do you so? In terms like great points, great points on on honesty and trust and really understanding, the operator also loved. Actually, just had a discussion the other day about checking P. d F, and making sure you get the Excel models and just making so plus one on that and it kind of just like you know this was. This was awesome. So far, I would love to just kind of wrap. maybe with one or more Two questions. I'd love to understand. maybe one of your best or like favorite investments, And why that is, or maybe one of

matt:
Yeah,

pascal_wagner:
your favorite operators, and why they're one of your favorite operate.

matt:
Yeah, so one of our favorite operators is a guy that focuses on distressed debt and he's my favorite operator because he always underwrites conservatively and always doesn't assume any juice or upside potential. So when you see the deal and you see, it's like like a one point seven multiple, given his track record, given his underwriting, given the deals, you know, it's probably going to be higher, but he doesn't make any assumptions that the juice is going to actually be realized. He assumes like base case, worst case scenario, we're hitting One point seven X. And so I feel like really confident about that. And the thing I like about that space a lot. Is it all has collateral value tied to real estate, So that's a real asset that will have some value somewhere Now. If I bought the real estate asset for a hundred dollars. Maybe I can't sell it for a hundred, but it's certainly not zero. It's somewhere in between. No matter what happens, Even if there's a fire on the property and the property burns down, the land still has a value, so I know that some of my capital is protected. So like that space is my favorite because you have downside protection, but you're not kept on your upside potential because of you know just how you can how you can manipulate distress debt, and how you can work out do different work out scenarios and lever it and all that stuff. Um, so that's probably my favorite space to invest in. I understand it. I understand how you can underwrite real estate. I understand how you can come up with a value. I understand that the borrowers paying us something, even if the sub performing. I'm getting some cash fill on my investments, So I really really like that space. Um, I've always been a fan of that space. Um, you know, another space that I like liked a lot and I still like it. It Just don't think now is a great time is single family like, I think that's an incredible space to invest in, but I just don't know that right now is the right time to buy single family homes Now if you're doing land and you're doing stuff with publicly traded in large regional builders like that's really interesting to me, because again you have a value that land has value. If you can structure the deals in the right way, you can have the end Buyer, the builder paying you some sort of an option for current pay component to have the rights to that land in the future, And so to me that space is super attractive, So you ll hear like the same sort of narrative echo through it. I want to protect my downside to make sure that I can't lose all my money. I don't want to count my ups, but I want some cash along the way. That's sort of like miamo.

pascal_wagner:
Yeah, that was awesome, Matt. thank you so much for

matt:
Yeah,

pascal_wagner:
joining

matt:
I,

pascal_wagner:
us on the show And if if anyone wants to reach out to you, how best can they do that?

matt:
Yeah, I think the best way just to go through abundance or just now, Facebook or Instagram, or whatever, I'm not a huge social mediawebsite or you know something, guru, I'm just pretty simple. and if if I can be of service, I'll give you my email to throw in the show notes. If I can be of service, feel free to reach out. but you know my last piece of parting advice to everybody. you would just be like. Pay attention to fee structures associated with deals. Pay attention to the leverage is sometin associated with deals, and ask a bunch of questions and ask for rest. Reference is always like. always ask for references. Even if you don't call them, At least get a list of people that you know you could call that that person told you has invested with them before, so you can at least do some sort of checking on on the deal itself and make sure you're not getting into the next Burney made off Pons scheme.

pascal_wagner:
Love it, love it. thank you again for camping on the show Mat, and

matt:
Thank you

pascal_wagner:
thank

matt:
man.

pascal_wagner:
everyone for

matt:
Appreciate

pascal_wagner:
tuning in.

matt:
it

pascal_wagner:
Ah, that was awesome.

matt:
Losing. I'm like losing my voice because of the damn cedar here, so hopefully it was okay, recording wise.

pascal_wagner:
No, that was that was awesome. Here. I'm gonna stop the recording.