Don’t Use Your Own Money to Invest in Real Estate

In addition to being a real estate investor and syndicator, Matt Aitchison is a speaker, author, and host of the Millionaire Mindcast podcast. As a real estate flipper, he built an empire that was ranked in the Top 1000 in the U.S., and now focuses on raising capital for syndications and scaling his passive income portfolio, including commercial strip centers, hospitality assets, and single-family rental homes.

Using what he calls “a very expensive piece of paper,” Matt graduated from college without ever using his degree. After finding a mentor-seek-mentee ad on Craigslist, he spent the next year flipping over 100 houses for the man who’d posted the ad. Despite not earning a dime, Matt got an education that has paid off big time!

In the beginning, Matt Aitchison was very cautious in the risks he took because he knew he was using other people’s money. As a result of holding his private lenders in such high regard, he gained their trust.

With that in mind, if you’re ever wanted to get into the real estate game, here’s what you can learn from Matt’s successful journey.

Regardless of where you start, you can succeed.

For so many of us, starting something is always the biggest hurdle to jump. Maybe you’re afraid that you won’t succeed. Perhaps you find change too overwhelming. Or, sometimes, life throws a wrench in your plans.

As Matt points out, it does not matter where you begin.

“My biggest mental and physical hurdle was — I’m living at home with my dad. I have $800 in my bank account. I’ve got a $2,500 credit card limit, and it’s already maxed out. Nobody’s going to give me money. I’ve never even bought a house for myself. Why would somebody give me money? And one of my very first mentors said, Find the deal, and if it’s really a deal, the money will follow. I believed her, and then I adopted that mindset.”

Then, at 21, Matt decided to go on his own. Three months after purchasing his first home for $75k, he sold it for a solid $210,000.

But what if the fear of failure is still holding you back? Well, use your mistakes as learning opportunities.

“It’s been stepping stone after stepping stone after stepping stone,” Matt says. “A lot of failing forward happens every single day. Those face plants are celebrated and welcomed.”

“As long as you get up and you brush yourself off, and you continue to improve and grow from those opportunities, there’s no way you’re going to lose. That’s our mindset, and it’s been a really fun journey.”

You can connect with anyone by using the “Likability Formula.”

Whether you want to connect with mentors or potential investors, networking is key. Mike realized that from the get-go. And that’s why he developed what is called the “Likeability Formula.”

“You know, no matter how successful, how “awesome,” somebody says somebody else is, when somebody shows up with this sense of humility to a conversation or an engagement, it really kind of breaks down the barriers and creates this connectivity, this authenticity that whether you’re rich, poor, successful, in the middle of your journey, just beginning, it allows this bridge to be built for two people to connect,” he explains.

Secondly, confidence plays an important role. “So, I’ve always known that I’m not the smartest, I’m not the fastest, I’m not the strongest, but I am confident in my ability and who I am and how I show up that if I don’t know something, I can figure it out or there’s some way that I can bring the third piece of this value,” Matt says.

Finally, you need to add value to every opportunity, experience, and situation you encounter. All of that, coupled with being a hard worker, makes someone likable.

Also, when you add value to others, you’ll create value for yourself.

“Something that I lead with on a daily basis is, How can I add value to people? How can I show up with humility? How can I bring confidence?”

“Not only in myself but to other people, as others have done for me on my journey. When you look up after 11 or 12 years of doing that, you realize that you’ve got a pretty cool group of people that you have access to, with great opportunities,” he clarifies. “At the same time, it’s allowed me to build some very genuine, authentic relationships. That’s a great way to build out a network and appreciate your relationships.”

It is important to choose role models who are aspirational.

Just because you can use the formula above to connect with anyone doesn’t mean that you should. For example, you should spend less time with toxic people.

In Matt’s case, he was surrounding himself with people who were gossiping, naysayers, pessimistic, and always asking: “Why can’t I do something?” rather than, “How can I do something?”

“And so, I really started getting a lot more tension around my relationships, and I kind of drew some lines in the sand, honestly, around who I was going to engage with,” he says. “Not that I wasn’t going to still show love and appreciation, respect to those people, but I also kind of raised the standard of what I would and wouldn’t tolerate in my life, in my business, in my network, in my circle.”

Since then, Matt has been more selective about who he surrounds himself with, especially when it comes to role models.

“I have role models and mentors based on all the gardens of my life. Some may be in close proximity, and some of them may be online influencers like Tony Robbins. Whether it’s in time of crisis or of opportunity, you can be that much more purposeful and pointed, knowing that these are the individuals that you want to model yourself after.”

The benefits of owning a small piece of a big pie.

One thing that people tend to overlook, according to Matt, is what you give up in exchange for money. Even though Matt missed out on making six-figures while working for free under his mentor, he learned valuable lessons.

“So, that is one of the things that I think people often overlook is they don’t want to give up too much,” he adds. “But really, you have to always remember like what are you gaining? And if you’re playing the long-term game, how much value and ROI can you turn on what you gained by applying that for the rest of your career, your investing life?”

Because of this, owning a small piece of a big pie is good because you learn so much on the way.

“I’d rather own a slice of a watermelon than 100% of nothing,” he elaborates. “When you’re first starting out, bring that watermelon to somebody and slice it up, and everybody wins. And now you’re going to have some real momentum behind you.”

“You’re going to have a newfound confidence at the next opportunity you find, which will get you across the finish line. Maybe you start structuring things differently as you get more of your own money, or you’ve got more leverage.”

Sweetening the deal for private investors.

After you’ve built connections with the right people, you can approach them for investment.

Matt says you can do this in a variety of ways. For example, it is possible to bring in a capital partner who will split the profits 50/50. “I always tell people when you’re first getting started, instead of trying to do it all on your own, go to someone like Justin, go to someone like me, go to some other investor in your market or in your network that you trust, that you know has the experience — that you know has a good track record, that has all of the team that you need so that when you get that learning curve really shortened up, you get it expedited, you know you’re going to get quality results, you know you’re going to get a tap into other resources and networks that have taken those individuals years, sometimes decades to build.”

“No matter how you borrow from others,” Matt says, “you should take it seriously.”

“If you’re going to take other people’s money, you’re responsible for something that is extremely important to their livelihood, their lifestyle, and their happiness,” Matt asserts. “I hold that responsibility in very high regard. If you want to be reckless with your own money, go for it.”

“But when you’re talking about other people’s money, there’s another level that I wish more people would operate at,” he says. “The people who are massively successful and who have used other people’s money have approached every single deal with that mindset.”

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