There is always a risk that comes with any investment. But how do you navigate around that and choose investments that support your financial future? Chris Seveney and Jamie Bateman sit down with triathlete, investor, and host of the Ice Cream With Investors podcast, Matt Fore. Matt is currently the Regional Sales Director at DELL EMC. Beyond that, however, he is taking control of his financial future through investing. He has worked in real estate, the single-family space, note investing, and more. Today, Matt gives practical financial advice that will help guide and motivate you to start investing for the long term. Keep your ears glued to learn what’s good in blockchain, life insurance, and why Matt prefers note investing!

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Listen to the podcast here:

Finding The Path To Owning Your Financial Future With Matt Fore

Welcome everybody to another episode. Chris, how are you?

I’m wonderful as always. Jamie, yourself?

I couldn’t be better. We also have a special guest joining us, Matt Fore, out of Nashville. Matt, how are you doing?

I’m fantastic. I have been waiting for this all week.

A little bit of an introduction, Matt and I know each other somewhat. I’ve been on Matt’s podcast. Was I the first guest, Matt?

You were one of the first five but number one in our hearts.

I don’t know if we connected on LinkedIn, through Wealth Without Wall Street or a combination. We’ve worked together a little bit, you as more of a passive investor with me. You have a rental property and multifamily background, big into real estate and owning your financial future. I don’t want to put words in your mouth. I think those are accurate statements. If you don’t mind, can you dive into your background for us?

By way of introduction, I’ve spent the past decade in sales and sales leadership at one of the largest technology companies in the world. Part of how we got connected is through real estate. My long story short is I was part of a large acquisition pursuit of a $10 million net new logo at our company. This is not the company I work for now, but my eyes started seeing stars, and I was supposed to get this life-changing commission check.

I was looking at how to invest that money. Fortunately, I had a mentor at that time who told me, “You should look into this real estate thing. You get cashflow appreciation and tax benefits.” I had everything lined up. I was ready to go and start buying properties. I got that call from my employer that said, “We’re not going to pay you that commission check. It’s way too much.”

I remember the call that I had with my VP at that time. It was the week of Christmas. I said, “How did we come to this number? What happened here?” He said, “Matt, haven’t you made enough money this year?” It was at that point that if I wanted to control the goals that I had in my life and be able to give abundantly, I was going to have to find a new path into real estate. That’s how I got down this rabbit hole and met some awesome people along the way. You guys included. We’re happy to dig in further.

Can you give us a ballpark? I’ve heard this before but I’m curious.

It was close to seven figures. I’ll put it that way.

None of that came to you.

I got $0.02 on the dollar. I did get some of it.

What are you complaining about?

I don’t complain. I should clarify that every big company has their policies that say, “If there’s an anomaly commission check, we have the right to review.” To be clear again, this is not the company I work for now. I ultimately did get a commission check that was about half of what my mom made when we were growing up. It was enough to get me down the road.

There wasn’t illegal what they did but it certainly was a very disappointing surprise.

How quickly did you quit after that?

I was fully committed to real estate investing after that point and slowly worked my way out.

I understand the anomaly component to it. For me, it’s all about people in a company. If a company is going to give me their word on that, then they back from it and there was no reason why except to say, “Haven’t you made enough?” That’s not a company I want to be associated with personally.

It was also a large Fortune 500 company.

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They don’t care about you. That’s the problem, though. You were just a number as well.

Where did it go from there then?

I started in a single-family. That was in 2016. I bought my first rental property in 2017. It was a townhome. It was like you, Jaime, when we first got started right around the street. It was a turnkey. It was a new build in 2016. My thought process was, “Eyes and ears on the property. I know the area and all that kind of stuff.” Looking back on it, it’s a terrible logic because I don’t know how to fix anything in the house or even YouTube and fix things. It started snowballing from there. I started going from MLS to wholesalers to multifamily investments and things like that.

We still have our local rentals but I don’t ever go there. I may as well be in Australia, although the numbers are pretty bad there.

I have a rental. The company I work for has a 26-acre campus with 1,400 units retail office and everything. I have a rental within a mile of that place and I never go there. I have a property manager because I live 30 minutes away. All of a sudden, all the sinks clogged. I don’t want to deal with it. I would rather pay somebody $150 a month that I pay them to deal with it and collect the checks.

That’s where I’m at in 2020. I do have a good W-2 where if I spend more time there, I can add more value there in the passivity of real estate. Specifically, notes are more of my focus. Even though I wasn’t the one fixing it, I was always getting a call from a property manager like, “This needs to be done. Are you okay with it? We need to find a new tenant.” Every time you turn over a property, it’s huge. Whereas in the note space, borrowers are paying. Everything is good and it’s more passive. I can be more intentional elsewhere.

One quick question back on the rentals, though, that I’m curious about because I’m on BiggerPockets a lot. I have a few rentals and mine are in decent areas. I see a lot of people on these rentals putting in, “When I run my numbers, I’m going to have 5% vacancy and 10% for maintenance and turnover.” I’ve always seen that as being significantly undershooting the actual costs. Do you agree with that?

I’ll give you two examples. In general, I do agree with that. In 2020, I had two examples that changed my mindset on how I look at single-family. One was, I always set aside reserves but there was minor water damage in one of my places. It was $4,000 or $5,000. It was nothing huge but that wiped out the whole cashflow for the entire year. Now, I am even on that property for that year. If nothing happens in 2021, I’ll make money.

The second thing was I had an HVAC unit go out in one of my properties. I had owned that property for years. I was cashflowing. I’ve set aside reserves but that was $3,500. That wiped out the cashflow for the entire year. Overall, it’s good to set aside money for the things that need to happen but in the single-family space, you’re either betting on appreciation, nothing will happen or you’re betting that you’ll keep a tenant for the long-term.

It depends on what your goals are. Do you think they can be a solid quality part of a portfolio? If you’re thinking long-term, if you’re not necessarily banking on that cashflow, they can be good over time for sure but you got to scale it. One single-family rental is not going to be the life-changing check you were expecting.

I was lucky I got in on Nashville property before Nashville became Nashville. It’s a booming town. We’ve got AB and Amazon moving here. We’ve got a bunch of different logistics companies and car manufacturers that are putting their headquarters here. I got a nice little tailwind from all of that but if I would have been in other parts of the country or other areas, I might not have seen that appreciation.

I’m from Massachusetts and the area I’m from is where Smith & Wesson was. They’re moving out of Massachusetts down to Tennessee. I didn’t see where but I know they’re moving. That made some big headlines as well.

It’s right outside of Knoxville. I’ll add to the Tennessee greatness here since we’re talking about the Tristar state here. Ford announced that they’re going to invest a $5.6 billion EV plant out towards Memphis too. There are lots of good things going on in Tennessee.

You pivoted over more toward multifamily. Have you stayed with Tennessee or ventured out?

We’ve ventured out there. I’m a part of a couple of syndications, one in Florida, one in Greenville and I have some notes to offset some of the portfolios as well. For me, I’m in the stage where I’ve got a decent W-2. What I’m trying to do is pile up cashflow more than anything. Appreciation and tax reduction are great benefits but I’m trying to stack on cashflow.

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It sounds like somebody I know.

Who is that?

Me. On the W-2 and see on stack on cashflow, I’ve got a daughter shortly going to college and it’s getting the cashflow. We’re putting in cash. My wife and I have a goal of when our daughter graduates that she is debt-free from school. We’ll cover that cost for her. Some people sometimes have negative things to say about parents paying for kids’ college and having them start out with some debt. For the most part, trust me, I teach my daughter about that.

We had Eric Smith on the show a while back. It reminds me that he’s got a good high-paying W-2 job. It’s sexy to talk about quitting your job and starting your own note business or real estate business. That’s great. It works well for a lot of people. One of the things I love about this space is you can make it what you want. Everybody has a different situation and goals. Chris, if you would quit your W-2 job when you started notes years ago, it takes a little while to build up that cashflow.

Somebody would have bought my distress note on my house because I wouldn’t be able to pay my mortgage. The challenge with it is the inconsistency in cashflow, especially if you’re in a nonperforming space. Performing is a little easier but when COVID hit, people got nervous because people are going to be paying on the performing.

On the nonperforming side, I’ve got ups and downs where in October 2021, I already know I got a $50,000 check coming. In September 2021, I may have had $15,000 coming in and in August 2021, I may have had nothing. Most of us who were from the W-2 world like to see that consistent paycheck every two weeks, every week or whenever it is you get paid, not have all those highs, lows, ups and downs.

There’s a theme out there in the world that you should quit your job and do entrepreneurial things but where can you be intentional? What I’ve noticed through this journey and the journey that I’m on is when I started receiving cashflow from my real estate investments, I could show up more intentionally and be more intentional with the things and the people that I care about the most.

In 2020, for instance, I’m not saying when my equity portfolio dropped 30 to 40 points in that March-April timeframe that I wasn’t a little bit concerned but I knew that I would have cash coming in from my real estate portfolio to at least put a roof over my head and food on my table. That allowed me to be a better friend to my friends, a better leader to the people that I was leading and a better overall person.

You’re not spreading yourself too thin. You can still diversify from a portfolio standpoint but your own personal energy and time are more focused and intentional. Where do you see your investing career going over the next years?

I don’t know the answer to that. I enjoy the podcast that we’re doing. I have a podcast Ice Cream with Investors. The point of that is to bring on different people from the real estate niches to talk about the niche that they’re in, whether that be notes, multifamily or self-storage. We had someone on that was talking about crypto, blockchain and real estate. I enjoy exploring these little rabbit holes that I can go down. I have no intention to leave my W-2 but I do have an intention to continue to progress in my investing ability and real estate journey.

With the crypto thing, I know you’re not an expert but I know you also did tell me you dug into it a little bit after that episode, which I thought was a good episode. I don’t recall the gentleman’s name but that was a good episode. What did you learn about crypto and real estate?

We had Michael Flight on the show. Michael’s thing is he has created this first digitally tokenized asset on crypto. When you think about crypto and blockchain, they’re two different things. Blockchain is the underlying technology of all cryptocurrencies. What blockchain says is that we are going to create a master record and spread that across to all of these different devices and computers out there so everyone has access to read it.

Think about the title for a property. The local county or commissioner’s office holds that title, the deed of record and things like that. What if tomorrow we could spread that so multiple different people could see the access of information and verify that it’s real? That’s essentially blockchain. We’re going to put it on the blockchain. Everybody is going to be able to see it.

What I’ve found interesting about that is it speeds up the transactions in real estate. There’s a lot of paperwork and manual labor that needs to happen. If I could click a button, verify the information and it could be done in an instant, we speed up our transactions, adding more value to the space. That’s essentially blockchain.

What he was on talking about is, “We have these triple-net leases that are written on the blockchain with Starbucks, CVS, Walgreens, things like that. When you invest in the fund, you’re going to get tokens on the blockchain.” The token represents that information on the blockchain and then you can trade that token with Jamie, Chris or someone else if you want to.

You could sell it to an investor across a different country and exchange it for not US dollars but maybe EU, Chinese Yuan or any other thing out there. A long-winded way of saying as I continue down this journey, blockchain is the underlying technology of it all. That’s where the information sits. Tokens are what are known as the cryptocurrencies that you see out there sit on top of that relay onto the blockchain.

If I recall, his fund, in particular, crypto being involved with it, being paid by the token added an element of liquidity that wasn’t there before. Comparing different asset classes, note funds tend to be 2 to 3 years and multifamily syndications tend to be a little longer. One of the challenges with a particular real estate syndication is your money is locked up for quite some time. I remember he talked about that his fund is providing liquidity through the crypto.

He had a year-long vesting period. I don’t know all the rules with the SEC but there’s something around how you have to do it with the SEC. After a year-long, if you got five tokens from investing $50,000, $10,000 a piece, you could trade all five or two of them. You could sell one of them to Europe and get euros in exchange. It offers liquidity and flexibility.

Where is your brain going?

A few things, one is, for people interested in learning about blockchain, I took a free class by MIT. Gary Gensler, who heads the SEC, taught it at MIT back in 2017. It was a good course to give you an understanding and talk about the different types of blockchain versus the public versus the private and the different types of software. It went into detail with different case studies.

He gave examples of where he thinks it is excellent and also where he thinks it needs some additional development. The comment I’ll make about real estate and blockchain is I have a project that I’m looking to do that’s blockchain-backed using Hyperledger, which is a type of software, not with an Ethereum base with tokens and all that other stuff.

Chris has no shortage of projects going on.

It’s not crypto, though. The two things that pop in my head about it are, one, getting counties on board for the title is going to be impossible. I know people have been looking at that path. That’s probably a rabbit hole I wouldn’t go down. The interesting thing I would like to see is where it goes in upcoming years. I’ve done several funds and Jamie has done some as well.

The underlying thing I always get is the Keep It Simple Stupid. You want to try and keep the fund as simple as possible. If I threw out a fund to note investors talking about blockchain and tokens, people would be like, “I have no clue. I’m not investing in this because I don’t know what’s going on.” That’s one of the things that would concern me. If you had the ability and it sounds like this one does, to either be a traditional investor or also tokenize it, that would be interesting. Is that what happens in this one, Matt?

I’m not sure. I know he is talking about the token specifically. I don’t want to speak for him but I know he does do traditional syndications where it’s institutionalized. To your point around the counties, you’re right. You’ve got fractionalized ways of doing things all across this country by state, county and city. What is interesting to me about this space is how you can reduce friction and where there are pockets of economic opportunities that we’re not maximizing. For example, Uber took a look at your car and said, “You’re driving from point A to point B and you have three unused seats on there. How do we make that an economic value?” I feel like this is going down that path.

One of the interesting things that I picked up too when watching that class and this was one of the pauses on the blockchain, especially on cryptocurrency, are about lending and banks and getting a mortgage because of banks with fractional lending. There’s a whole other animal that people can learn about fractional lending. The Creature from Jekyll Island is a good book. The first half of it is but then it gets too political. It gets too far to the right, as you keep reading it but understanding the banking system.

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There’s still going to be somebody who controls the money for the banks, which is the Federal Reserve to back something. If there’s an open crypto, then there’s nobody there to back it. I don’t see banks landing in crypto because there’s nothing to back it from that perspective. It was interesting when you started thinking about the long-term where it sounds cool about the crypto thing. There is some type of future with it but what there is like the internet with AOL and dial-up. “This is cool and stuff.” It’s eventually going to morph into something different.

There are two points I want to nerd out on there. One is this idea of the De-Fi movement. If anybody goes and researches this space, they’ll keep coming back to this idea of De-Fi. What De-Fi says is that, “We don’t need a middleman at a bank. If I want to wire Jamie money to buy notes to invest in something, why does a bank have to sit in the middle and take their little cut? Why can’t I send it to him directly?”

That sounds great in theory but what we see over and over again, at least in the technology space, is a new technology emerges. Everybody goes out there to try to create their own spin, own standard, own view on it and then it starts to consolidate back down into you just can’t have pure anarchy. People have to communicate in a certain way. There’s got to be rules and a structure, at least guard rails around it. We’re so early in the crypto and the blockchain space that everybody is out there creating new projects and there’s no centralized way.

You’re putting your money on those bets as opposed to saying, “There are 3 or 4 out there and this is what they are.” The second thing I would say too is your point about the banks and who owns them. The US sees a threat in blockchain because the world is living off of the greenback in the dollar. Why you see everybody hesitant is because the government is going to want to own this space. They’re just trying to figure out how.

The one thing that was also brought up that I thought was interesting was when they talked about a global currency. The closest thing has been the euro. The reality is the euro is, a lot of people will say, a disaster from that perspective. Greece has its issues. When they look at it from a macroeconomic standpoint, it’s interesting. The one thing you mentioned too about the De-Fi space is that true blockchain are true crypto traders.

From my understanding, and this is a little bit about my head but if I was doing Bitcoin, they code it and I could send it directly to you but people aren’t coders. What they’re doing is they’re sending it from me to Coinbase to you, which is no different than me sending it to the bank to you. It’s still the same thing. It’s just a sexy name and people somewhat don’t realize that. One of the pitfalls that people are saying is like, “I’m doing blockchain. I’m buying crypto.” It’s like, “You’re still using an intermediary. It’s still not direct-direct. They don’t call my financial institute. It’s an app.”

Chris, we need to bring your wife on and pick her brain. It’s about global currency.

My wife works for World Bank. There’s a lot of stuff she deals with. She is ten times smarter than me. She makes me look like a fool. That was the interesting thing and this is an interesting episode. I’m glad we’re not talking about notes but this is an interesting topic. I go back to that euro. When you read euro and get out of it, it’s interesting when you look at some of the case studies.

If the US does see it as a threat, what people don’t realize is, the moment the US creates their own digital coin, they can tax you on every single thing. Every transaction is digitized in a ledger. They would probably be like, “This is great. I’m selling you my coffee mug.” That’s a digital transaction. They will tax it. I don’t know if this is true because the media is so inflated but there has been talk about like, “With the administration, any deposit over $600 or something.”

They’re trying to get banks to report any account that’s higher than $600.

That’s because of it. Then you got to 1099 somebody or whatever it is you needed. It’s almost like going down that path already. Let’s be honest. Our government likes to spend money on both sides. This is one side or the other. They always try and find ways not to collect it and keep raising that debt. “If you’ve got a digital ledger, I can tax everybody on every single transaction.” The amount of revenue the country would generate would be humongous.

To pull that string, people realize the fact that we’ve been able to inflate our problems away and ship our currency out and we’ve never felt inflation. Now that we’re seeing other economic currencies out there not needing to do transactions in the dollar, for the first time, we’re starting to see a lot more inflation. There are a lot of reasons for that. That’s not the only reason but this digital space, why it’s interesting is because you can’t inflate the currency out there. Bitcoin, for instance, I don’t know all the numbers off the top of my head but they can only produce 28 million coins.

We’re going back to the ideal of a gold standard, which the reason the US got off of that is because we wanted to be able to inflate our debt away. It’s going to be super interesting. Where there’s chaos and mystery, there’s always opportunity and margin. You just have to research and make sure you’re making the right decisions.

There’s also an interesting read. I forgot where I read it that if the US paid off all its debt, it would bankrupt the country because the money supply would go down so drastically that it almost like implode everything, which seems odd that, “It’s okay. You pay off your debt.” You think it would be in good shape but it would be like, “No, it would be the opposite.”

Matt, let’s go back to real estate and notes. What was it about notes that drew you in initially?

There are a couple of things. One, I read Invest in Debt by Jim Napier. I loved it because I work at technology and around a lot of engineers. I will go ahead and say that I am not an engineer but I do enjoy processes. I enjoy thinking about things logically. Notes to me make sense logically. Jim goes into his little formulas out there that says, “If you know this formula, you can determine the return that you want and plug in the numbers to make that return.” The debt space, in general, is very interesting to me because you do not have to manage with tenants, toilets and all that kind of stuff that people normally talk about. It’s consistent cashflow if you have a performing note.

Like anything, it depends what you make of it if you’re in the nonperforming space or CFDs. We keep it real. It’s not super passive in that space but it’s a passive investment if you have a performing loan.

It’s like any investment though. The more passive you are, typically, the lower risk, the lower return. If you get a nonperforming, you got to roll up your sleeves a little bit more and get more involved but you also have higher risk and higher reward. You can go out and lend all day long to people with 800 credit scores with 60% loan-to-values. That’s awesome because more than likely, they’re never going to default. You’ll get some nice cashflow but your returns are probably going to be 5%, 6% or 7%.

Unfortunately, once you factor in taxes on that, depending on which bracket you’re in, if you’re in the 30% plus bracket, which you get federal and state, all of a sudden, you’re losing half of that. Then your risk-free return is 1% compared to 2% compared to a T-Bill. It’s all about what you want to do. It is much more passive than it is owning real estate.

I think the flexibility of it. Jamie, you and I have talked a little bit about this in the past with your experience in Jacksonville. If you have a nonperforming note and own the debt, you can be creative with that borrower. You get a chance to come back to them and structure it in a way that makes sense for them. It keeps them in their home.

You’re providing some societal good there but also, it works for you and you’re still making a return. The flexibility of that interests me as well. I know you are big into the life insurance space too. When I started down that rabbit hole of understanding how to arbitrage interest rates, debt and notes made sense on that backend of, “If I could borrow it and put it into seven, arbitrage to the five things.”

We’ve got to get Chris on board with that.

The other one that I can’t get on board with is the people who arbitrage Airbnb, where they rent the place. They turn around and short-term rental it. That is something I can’t get my head wrapped around but with the life insurance, you’re slowly starting to get me a little bit. If you looked at a gas tank, if you need to get me over the 50% mark to full, I’m probably at about a quarter of a tank.

I don’t want to deter the conversation but I got to know why.

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You put it in there. You get a return. I can make more managing my money myself. I look at it from the perspective of somebody who is not actively investing in the day-to-day like moving money or buying. It fits that well but when I ran some numbers and it has been a while, the other thing is I don’t fully understand it. I’m the type of person that if I don’t understand it like stocks, PE ratios and stuff, I know enough to get myself in trouble but I don’t understand it enough because I’m an engineer. I want to be like, “Notes, here is the mathematical formula.”

I created this spreadsheet that is ridiculously complex that I overkilled it from going way overboard on it but I know exactly every single formula in there to do everything. Things don’t always go as they seem but I understand it. The life insurance part, I still don’t understand a lot of it enough. It’s part that. Part is if I took $100,000, I can do better long-term me investing it than putting in life insurance but I know you can also take that out and invest in some other things.

Time is a very slow-going thing. It is better if you’re younger like Matt. Time is a factor. If you’re getting into your 60s, it may not be the best time to start a high-cash value. For the readers, we’re talking essentially about infinite banking. It’s not for everyone. It does take 3, 4 or 5 years maybe to break even on the policy itself, depending on how it’s set up. You could still get access to 80% or 90% of that money and have almost as much money as you had before to invest. I love it.

The other reason why too is I have a solo 401(k) and my company is an S-Corp. I have the W-2 where I put $18,000 a year away or whatever that magic number is. My company contributes to that. With my S-Corp, the profits, I can take 20% of those. I’m also dumping about $40,000 to $50,000 into the solo 401(k) a year as well. I look at that but the interesting thing that I’m starting to move that needle a little bit more is this whole IRA thing that is potentially being proposed because if that does get passed, that is going to limit certain types of investments.

For people looking to try and grow besides 401(k) other avenues of tax-free because there are certain limits that I might not even be able to contribute, what other ways or paths are there out there? This could be another one. It’s not that I’m like, “Hell no on it.” I’m on arbitrary and short-term rentals. It’s like I’m pausing and waiting. Jamie hasn’t done a good enough job setting me on it.

Once I focused on it, it took me a couple of months to wrap my brain around it, which means it would take Chris about a week. There are moments along that path where you’re like, “Okay, I get it. I’ll push a little harder.”

Here’s what I want you to think about. Everything I’m hearing is this or this. “I could be putting this money in life insurance or I could go be investing it.” If you’re looking at life insurance or cash value life insurance from an investment standpoint, it’s not an investment. You’re going to get better returns everywhere else in the market probably but life insurance kind of thing. It’s an and-investment. What you’re going to do is you’re going to get the ability to invest it, pull it out, get death and tax benefits and all these other benefits.

Maybe we can write it offline here and I’ll go through how I switched my focus on that. You’re right. If you took $100,000 and you’ve invested in your business or what you’re doing, you’re going to get a better return because your most valuable asset is yourself but if you took that $100,000 out in debt to buy a building, invest in your business or whatever like that and you get hit by a car tomorrow, what happens? Your wife and your offspring or your family members have to take on that burden.

Life insurance says you can do that. You can put it in this policy and invest in that business. If you drop off the face of the Earth tomorrow, the family gets a large windfall to do whatever with. That’s where it started changing my perspective on it. I’m not a life insurance expert, salesperson or anything like that. It’s just I went down this rabbit hole that it took me six weeks to understand it. Once I understood it, it’s like one of those things that you can’t unsee again.

How long did it take you to buy your first note?

It’s less than that.

Do you own other than partials?

No.

You don’t own any whole notes yourself?

No. Partial is through you and then the end fund.

Since this is the Good Deeds Note Investing show, can you think of a good deed that you’ve done through your real estate investing?

I was going to touch on this a little bit. My sister had mental disabilities growing up and she was born in the ‘70s. We think she had Down Syndrome but unfortunately, there wasn’t enough research at that time. After she got to a certain age, my parents decided it’s probably best that we don’t go down this rabbit hole and figure it out. We love her just the same. My sister tragically passed before she turned 40 in my parents’ house. It was a very life-changing moment for us all. When I try to think about good deeds and things that I want to do is always to make sure that I give back to organizations that take care of folks like Whitney.

I feel confident in myself to say that being around people with mental disabilities touches my heart. It hurts me to be around people like that because it reminds me of Whitney too much. I always want to be financially supportive of it. Usually, what I do at the end of the year from my real estate profits is as least take 10% of that and make sure that I give to an organization called HumanKind, which is based in Virginia. They were the folks that helped take care of my sister after she got out of high school.

You can talk about making investments, IRR and ROI but what‘s your why? What’s the point?

That’s also making an investment in research or helping other people as well. That’s something that is important. Some people may not have the financial need to assist with that but a lot of these programs do look for people to assist with time, whether you’re meeting with people or serving lunch to certain types of individuals. There are a lot of things besides cutting a check that can go a long way with helping many different agencies and mainly two of these foundations and funds that help support people with illness, mental illness or anything.

It’s too emotionally draining for you to be personally hands-on and involved but the financial backing goes a long way as well.

It has taken me a long time to mature enough to be able to say that out loud because people like Whitney more than anything needs to know that people are there for them, that they love them and that they will help them and take care of them, for me to come out here and say that, even though I’ve experienced that in the past, I’m not that strong enough person. It’s a hard thing to say. I always try to, at least, if anybody has needs across that spectrum ask for a donation, I always try to make it where I can.

I have one that I’ll mention with mine. It does relate to note. It was a performing land contract that I had been paying and the borrower had stopped paying. The borrower’s mother called the servicer and mentioned that the son had cancer and was going through treatments and could not work. They said, “What do you want to do?” My first reaction was, “We’ll defer. We’ll push the payments off from that perspective.” Having had multiple family members go through cancer, it’s pretty intense, to say the least. We pushed it off. She called and said, “He is doing better, back to work. He started making payments again.”

I had spoken with this borrower as well. There was another issue where there were two tax parcels. There was another one that got sold and we had to buy back, which we took care of. About a year later, I saw my phone and she was calling. I was like, “I haven’t heard from her in a while.” She was choked up and in tears on the call.

All I could think of was, “Please.” She said that her son had passed. I was upset but I was more concerned also with the house because she lived there with his son, who was fourteen years old. “What’s going to happen with the house? I have the expenses of the funeral and everything else. I’m not going to be able to pay the mortgage.”

My exact words to her were, “You worry about your family. Don’t worry about the mortgage. We’ll touch base in a few months and figure out the next steps. You do what you need to do. Don’t worry about it. Whenever you’re ready to come back, get everything.” Three months later, she called back and said, “My other son is going to assist with the payments. He is going to move in to help take care of the son. If we pay this thing off, can it be put into the son’s name? Thinking long-term, how is that going to work? He was also divorced and wanted to make sure the ex-wife didn’t get a hold of it.”

We reached out to an attorney. We did some stuff that’s above the board but we got everything worked out. A month later, she called me up and was so thankful about that. We’re in this business again. There are times when you want to stick it to a borrower who doesn’t want to play ball with you but there’s the human side of things. You do at times need to put yourself in their shoes when they’re going through these difficult times.

If you own properties in an area that is not the greatest of area, I know other investors who had people who were shot and killed. It’s like, “What would you do?” It doesn’t matter where you live. What would you do if your child was shot and killed? We would all be completely distraught. For me, the last thing I would be worrying about is my mortgage payment. I would be like, “Put it on hold.” A reasonable human being would work that way. You’re up, Jamie.

A true settlement is one where both people walk away from the table, thinking that they left a little bit on the table. Share on X

One of the most challenging things in this space is figuring out. The problem when you deal with the nonperformers is your view gets skewed a little bit because we’re dealing with the borrowers who don’t pay more than the borrowers who do. Most borrowers will take advantage. Figuring out which borrowers you can work with or should work with is a real challenge.

The only thing that popped into my mind is I had a tenant who was a young kid. He got addicted to drugs. He had shoulder surgery and was on painkillers. This was one of our local rentals and I was dropping off a fire extinguisher because I realized, “We should probably have these in our rentals.” He came out and was doing the Baltimore lean where essentially, you’re on heroin and you can barely stand up straight. It was disturbing for me to witness trying to talk to him. He had some “friends” that were there. This was a bad scene.

Long story short, I worked with his father to keep him in our property. He is still there. My knee-jerk from a business standpoint is like, “This guy is clearly breaking parts of our lease.” I kicked him out and got a good clean tenant in there but we worked with him. The last I’ve heard, he has got a good-paying job and he is consistently paying rent.

It sounds like he is on a much better track. I’m not saying I was the one who played the major role in him turning his life around. He was a good kid. He just made some bad decisions and got caught up in drugs. It’s one of the things. You can do a lot of good in this space in real estate and notes. Chris, I don’t think Bank of America would have done what you did in your case.

I got a call from a borrower. The guy is good because he googled the company name and somehow found my phone number. It’s a land contract that has been passed around 7 or 8 times. The borrower called because he didn’t have a copy of the land contract. He was looking for it because he wanted to get the tax abatement, saying he is a homeowner on the tax.

The borrower had been in Chapter 13 and he had finished up the Chapter 13 plan. There’s $6,000 left on this loan. When I was talking to him, I said, “While I have you, do you want me to convert this to a traditional mortgage and note since it’s a performing loan? We’ll put your name on title. There will be no issues if you want to refinance.”

It was a fifteen-minute conversation. The guy, at the end of the day, said, “You are the first person I’ve talked to that has even given me the time of day.” I said, “Do you know why?” He said, “No.” I said, “All these other firms that owned your loan probably own 10,000 of these and you’re just a number loss in the deck. Don’t take it the wrong way. When there’s a $10,000 balance on something, it’s not worth their time to deal with it. I’m a smaller firm. I got a few hundred of these loans that we manage. We like to monitor and put a little more touch and feel to them.”

The guy was so thankful. I showed him the email with the information. He shot an email back like, “Thank you for your time. It’s greatly appreciated. If you could do this, this would be wonderful. My family would appreciate it.” The little things like that are so minor in nature compared to some of the other things like you do, Matt and everything else but you take all those little things and add them up. You can start to make a little bit of a difference slowly.

This warms my heart. I work in technology. As we move into more of a digitized world where computers are controlling a lot more through AI and guiding our life, the number one skill that’s going to separate people is empathy and your ability to connect with another human. Whether you’re White, Black, male, rich, poor, straight, gay, wherever you are, you come from different backgrounds.

It’s the sign of an empathetic person to say, “I didn’t come from your background or go through what you went through. I can’t judge the decisions that you’re making or you’ve had made in the past. All I can try to do is be empathetic to the situation that you’re in and help wherever I can.” I wanted to plug that it’s super humbling that you have this on your show. As a real estate investing show, you make it a point to always talk about good deeds. Kudos to you both for that.

Why don’t we pivot to our Note and Bolt section as we wrap up here? Do either of you have one that you want to share?

This goes to a common theme. I probably may have shared this one before but the saying is, “Pigs get fat and happy hogs get slaughtered.” When you’re trying to negotiate settlements with borrowers, whether short payoffs or whatever the case may be, remember that from that perspective. A true settlement is one where both people walk away from the table, thinking that they left a little bit on the table. I’ve got a situation where two of them and I won’t go into too much detail because we’re still in the process is we’re negotiating short payoffs.

In both instances, the borrowers could clearly pay 100% of what is owed. One of them has some title issues that if we don’t come to an agreement, it would cost me some dollars and a lot of time. Another one is the same thing. If we want to fight it, great but I’m going to continue to pump legal fees out. I’m of the opinion, “A bird in the hand is better than two in the bush.” From that perspective, don’t get greedy. If I’m making a 200% return on something, don’t go to 300%.

People may have seen the guy who was billing Google and Facebook to the tune of $120 million he made of sending them false bills. It’s like, “Why didn’t you stop at $5 million, $10 million, $20 million, $50 million or even $100 million?” You get the $122 million when you are finally caught and it’s like, “The guy is a genius,” but the guy is also an idiot because he kept doing it. That’s my Note and Bolt from this episode.

We had this performing loan that went nonperforming in Florida. I’ve talked about it enough. I don’t need to go into too much detail here. We did work with the guy. He was being scammed. My Note and Bolt is when you’re doing a modification and this is in the weeds for note investors, be sure to include language or have your attorney include language that addresses legal fees that have not been paid yet. My modification did not specifically call out legal fees that had not been paid yet.

Attorneys tend to bill pretty slowly. You’ll get an invoice as a note investor, maybe a month or two later and then you’ve already done this modification. The servicer says, “I can’t add this $3,000 attorney bill to the borrower’s account because the modification has been done.” The modification does not specifically call out lagging fees.

I’m not sure where mine is going to go but it’s something to pay attention to. If you’re a note investor doing a modification trying to work with a borrower, if there are charges that you’ve paid, have that language written into the modification agreement so that can be thrown onto the borrower’s account as a recoverable expense if it’s legal to do and it makes sense. Matt, what’s your Note and Bolt?

I’m going to give myself a Note and Bolt. Hopefully, it’s applicable to anybody else that’s reading. Jamie, you and I have talked about this in the past that I’m an Ironman athlete. Those are the 2.4-mile swims, 112-mile bikes and 26.2-mile runs.

My sister did one. It’s incredible. We watched her start. We went out to lunch and then we went to the movies. We watched Ladder 49 and then we went out to dinner. She was still doing this thing the whole time.

All in a single event, all in a single day. One thing that I’ve loved about that process is I’ve learned to set long-term goals, be consistent in my actions and do something every day that is moving you towards the goal. I’m on this big kick of running your race. What that means is it’s easy as I’m on the phone here with two people that have their own fund, heavily invested in a real estate or doing big things out there to sit here and say, “I’m behind them. I need to catch up, speed up and all this kind of stuff.”

You asked me a question around, “Where do I see the next years?” I don’t know. I’m still trying to figure out where my niche is, where I can add value and be valuable to other folks. It’s always important when you have good days and bad days, good miles and bad miles, that you’re further along than you think you are continuing to run your race. The people that fail in Ironman are the ones that get distracted when somebody passes them on the bike at mile 2 of 112 that they think they should be faster and don’t run their race. Mine is, “Run your own race.”

I’ll tack onto that too. As you move forward in life, things change rapidly. For myself, in the evenings, I was always doing sports. I’ve had three ACL surgeries, a herniated disc in my back and herniated disc in my neck. I woke up with the weather it is here and I had a screaming headache because of the disc in my neck. I pivoted because I can’t do that intense athletic stuff and switched it over to the mind games.

I’m going back to using my brain finally. My wife might disagree with that. You also pivot as you get older in priorities in life. When you have kids and all of a sudden, it starts. Matt, you’re doing both with the Ironman. God bless you. I would be in pain watching it and then doing that. It’s a great answer because nobody knows where the years are going to take you. Many things can happen.

One of the things I tell folks all the time is, “We are moving faster than the world has ever moved before and slower than it ever will be from now until the future.” Your ability to be adaptable in certain situations, be uncomfortable and learn new things is a competitive differentiator because tomorrow and so on, things are going to change drastically and you have to be able to move with the tide.

My son went and googled something. He was like, “Dad, did you have Google?” I was like, “No. We had an encyclopedia.” He was like, “What’s that?” I was like, “A row of books on the thing that we would have to pull out and look up what was in there. There was no opinion and that was it.”

Somebody told me about Google when I was 2 or 3 years after college.

Matt, I like to thank you for joining us on this episode. How can people reach out to you, learn more about what you do and your podcast?

Are you going to have Chris on your podcast? No pressure.

Yes, let’s do it. There are two places I would send people. First of all, the show is called Ice Cream with Investors. We’re trying to take a lighthearted view of the world. I feel like the world is very pessimistic and downy. By calling it Ice Cream with Investors, who is mad when they’re talking about ice cream? Ice Cream with Investors, go check it out. We would love for you to tune in and listen. The second place you can find me is LinkedIn. Matt Fore, if you type that into LinkedIn, if you find Nashville and if you see a big technology company, that’s me. We’re working on social media websites and things like that.

Last question, what’s your favorite ice cream?

I’m going to give you an answer out of respect for my father, who is a man who loves his ice cream and has meant a lot to me in my life. His is mint chocolate chip. He told me this when I was young. He was like, “Always get a mint chocolate chip because if you get it, no one will ask for a scoop and a taste of it. You can have it all to yourself.”

Mine is chocolate chip. Jamie, what’s yours?

I said vanilla on Matt’s show. I know it’s pretty boring.

One other question, jimmies or sprinkles?

Sprinkles.

We’re Southern though.

In Northeast, we call them jimmies. Where do we get that? Sprinkles or the rainbow? If they’re rainbow-colored, they’re sprinkles. If they’re just a little chocolate ones, we call them jimmies.

Chris, do you have toppings on your ice cream?

No. I’m the plainest guy on the planet. I don’t eat condiments. I don’t put toppings on anything. If I get a hotdog, it’s a hotdog. If I get a cheeseburger, cheese in a burger.

You’re fun to hang out with.

I can’t drink anymore either. I was the guy in the corner. Thank you all for reading this episode. As always, go out and do some good deeds. Thank you all.

Important Links:

• Matt Fore
• Eric Smith – Previous episode
• Michael Flight – Previous episode on Ice Cream with Investors
• Hyperledger
• The Creature from Jekyll Island
• Invest in Debt
• HumanKind
• LinkedIn – Matt Fore
• https://Ice-Cream-With-Investors.captivate.fm/

About Matt Fore

Matt Fore is a part time real estate investor based out of Nashville, Tennessee. In his professional life he has spent over a decade in sales and sales leadership positions at one of the largest tech companies in the world. When he’s not working or investing in real estate, he enjoys reading, training for Ironman triathlons and convincing his brother that he is the favorite twin.

Matt began his investing career when he was told that he wouldn’t be paid a life-changing commission check he had earned while working at one of his former employers. When he asked why they decided not to pay him, his VP asked him “How much have you made this year? Isn’t that enough?”

It was at that moment he knew he needed to take his financial future into his own hands. Since then, Matt has invested in 250+ units throughout the Southeast and various real estate notes.