Buying Your First Investment Property with 3.5% Down

What You’ll Learn in the Podcast:

• Why Matt decided to get into real estate
• The biggest misconceptions about using a 203k Loan
• Why you should only put down 3.5% on your first property
• His advice to first time investors
• How he’s been able to snowball his 203k method into greater success

Summary and Highlights:

Scoring deals can seem pretty tough for investment newbies. Matt Porcaro, however, is an investment guru who was fearless right off the bat. He began making offers as a means of figuring out precisely what was available. He wasn’t picky, either. He realized that he didn’t have enough money for anything that wasn’t the lowest of the low.

Beginners and 3.5 Percent Down Investment Property Purchases

Porcaro was relentless. Many people thought that his offers were a joke. Luckily, a property emerged after a bit of time. He discovered it with the assistance of foreclosure listings that are associated with Fannie Mae’s Homepath program. He accessed Homepath.com and came across a number of foreclosure properties that caught his attention at the time. The properties were all federally owned. The individuals who created listings of these properties want them all to get to people who are are trying to purchase homes without having ever done so before. The site is connected to an in-depth program that enables occupants to receive priority for available properties for a total of ten days. The program exclusively assesses owner-occupant properties during that specific time period.

Porcaro had a lot of focus and zeroed in on an investment property that wasn’t exactly in stellar condition. It was one that required a great deal of work. He compared it to a trap house and indicated that drugs were sold there for some time. It had been condemned on numerous occasions. The community had many problems with the property and its appearance. Porcaro went through with the offer. Although he knew in his heart that this property was the polar opposite of desirable, he had to think at length about his budget. He requested that the seller return six percent of the closing costs to him. FHA loans permit people to get concessions of six percent during closing. This amount comes from the sellers.

Buying a property without having ever done so before can be daunting. Porcaro suggests that newbies do a lot. They shouldn’t shy away from working tirelessly. They should aim for speed as well. Porcaro indicates that he appreciates that 203K loans enables individuals to establish equity that feels rather endless. It’s a massive return on investment.

Distressed Property Purchases

Porcaro thinks that people who are beginning should search high and low for distressed options. Finding them may not be as simple in the beginning. Many things call for additional amounts of capital.

Distressed multi-family properties give people the power to concentrate on equity. They give them the power to enter with values that are a lot lower as well. This can do so much for people who want to be able to rent out properties for higher price points. It can open them up to superior and more lucrative deals in general.

Distressed real estate purchases, in a nutshell, can be a game changer for folks who are looking to strengthen their portfolios rapidly and easily.

Episode 63: Buying Your First Investment Property with 3.5% Down with Matt Pocaro

Watch the Podcast | Read the Transcript

Transcript

[Intro] Welcome to the multifamily Millionaire podcast, the show that interviews multimillionaire real estate investors and top producers in the real estate industry. If you’re looking to create passive income and achieve financial freedom so that you can do what you want, whenever you want, you’re in the right place. Our goal is to simplify and make real estate investing easy for you. For more information, you can find us at www.jlm.realestate.

Jason Lee  00:29

All right, everyone, today we have a great guest. His name is Matt Porcaro. He’s an expert in FHA group 203k loans. A real estate expert from Long Island, New York, lived there his whole life. Matt, thanks for coming on the show today. How you doing?

Matt Porcaro  00:48

Thanks for inviting me, man. I’m doing great. And, you know, like we were talking about a little bit before this excited to talk about something that’s a little unique, little different, especially in this area, especially in the multifamily space. It’s a really cool way, especially if you’re looking to get started.

Jason Lee  01:06

Yeah, before we dive into that, I want to hear about your personal story and how you got into real estate. Can you tell us more about that?

Matt Porcaro  01:12

Yeah, so I feel like I’ve told it a lot of times at this point and to me, it never gets old. I think a lot of people always have a similar story. So, ultimately, grew up in a blue-collar family, you know, not a lot of money, not a lot of wealth or anything like that. You know, my dad had his own business. So, a lot of saw a lot of ups and downs, right? So, from a very early age, money was always just kind of like not taboo subject, but it was something that was always like the topic of, of stress in my house and you know, I could always know what my parents were doing well, or not well, right. So, when you’re a young kid that really sticks with you, you know, some of the some of the more stressful times or the bad times or anything that happened in the house that was the high tensions always revolved around money.

So, I think from an early age, I really was always just focused on like, how do I not have this, right? Like, the whole idea was like, I don’t want that volatility. Right. And, you know, to my parents, kind of doing the best they can, right? They tell me Well, listen, go to go to school, get a good job, get a consistent paycheck every week work for someone else, right? That’s the, you know, that’s the ideal situation for them. Right? The grass is always greener. Right. So, that’s what I did. Right? You know, I was an okay student went to school for electrical engineering. reason I got into that was mostly because I was good at science and there very adjacent to what I was just talking about, I looked on the list of what the highest paying jobs were at a school. And, you know, medical was not for me, I wasn’t gonna go that way and I definitely wanted to do the least amount of school possible.

So, I looked at four year degrees that were highest paying and engineering electrical engineering was topping that chart. So, kind of made sense. I’m like, okay, cool, I’m gonna go for engineering. Got by and for years, did it and got an internship was very lucky in New York City and got working and it wasn’t very long until I realized that this wasn’t exactly number one, how people get rich and number two, it wasn’t you know, the grass wasn’t greener in a sense, right? You know, I grew up in a in a blue collar, family extended family as well, but the extended family like everyone had their own business now again, that you know, struggles and everything, nothing crazy, but they all have their own business.

So, I came from that kind of entrepreneurial background. So, when you see the other side, realize that it’s not really anything to write home about either, right? So ultimately, what ended up happening was I started getting more curious on how I could supplement this and was just telling a story earlier to someone but I was walking down the street in my in my New York City internship and you know, in parts downtown, you got guys that are selling stuff on the side of the street, and there’s a guy selling used books, and I saw a stack of you saw a stack of books and on top was Rich Dad Poor Dad. So, I like to tell people that Rich Dad Poor Dad, it’s kind of like taking the red pill for a kid that kind of grew up in a blue collar family not really knowing the you know, not really knowing the way the world works and the way wealth is built. So, reading Rich Dad, Poor Dad obviously flipped everything upside down on what I was learning, growing up and you know, just the way you know, you told like go climb the corporate ladder, right that’s the way you get rich but ultimately learn more about real estate and owning your own business everything like that.

So, everything kind of clicked and that’s that kind of put me down the rabbit hole of trying a bunch of different things right so I you know, I was like, looking at different businesses and stuff like that. Obviously Rich Dad Poor Dad mentions real estate, but to me real estate was always like something that would never be attainable for me, right being in New York feeling like I would never be able to have enough money to buy anything. I was like, no, I can’t do that. But maybe I It started up like an E-Commerce business or, you know, an affiliate marketing business and different stuff like that. So, ultimately went down the rabbit hole, chase a bunch of different making money online trends, you know, tried stocks, options, all kinds of things, right, just scheming, trying to do something and lo and behold, I went through the process and started learning more about real estate and learned about wholesaling. So, obviously wholesaling, if anybody’s familiar is it’s kind of you’re finding deals, real estate deals for people, and you’re selling those deals off and making a profit on it, right?

So, for me, I’m like, okay, great, this is a great way for me to get into it without needing a lot of money. Lo and behold, I tried it for a while realize that, you know, if you don’t have a lot of money, you need a lot of time, right and I didn’t have that working full time job. So, I was in a lot of different masterminds, different things like that was trying to figure out a way to carve into real estate investing and it wasn’t until I was in my local real estate investment association that I met the head of it, this lady Melissa, going abroad to the site one day, and we were talking and I was, you know, I was working alongside with her with some of the classes she was doing and I said, listen, listen, you know, I’ve been trying this thing for a long time, you’re teaching a lot of different strategies out here. You know, I was like, 23-24 years old at the time, like, I don’t have much money. I don’t I’m not like these other guys in here in this RIA that have, you know, 100k 200k to two drop on flips, like, I got 10 grand in the back bank, maybe, you know, if you could do it all over again, like, what would you do?

She’s very successful, you know, lots of units on, you know, a lot of different properties and whatnot, and she’s Superwoman. So, I took it to heart and she said, well, if I do it at all, again, I would use something called a 203k loan. It was the first time I’d ever heard about it, okay, which is crazy, because I was studying real estate and watching YouTube videos and reading books and everything, and it never really popped up, right? It popped up in one book, which was one of the bigger pockets books anyway, fast forward. She told me about this loan, and I was kind of like mind blown. I was like, okay, well, what’s this? And she said, well, listen, you’re able to purchase fixer upper properties for three and a half percent down and the caveat is, you’re gonna live in it. Now you’re just starting out. So, you use this property, what you do is you find the property, renovate the house, find a fixer upper, renovate the house. The beauty of this of this mortgage is that you’re able to wrap the renovation budget into the mortgage. So, you’re only paying three and a half percent on whatever your total purchase price plus the renovation cost is.

So, for example, if you’re paying $50,000, for house using easy numbers, if you play $50,000 for a house, and you put a 50,000 rental budget into it, you’re all in for 100,000, the bank’s gonna ask for 3.5% of that, which is would be 3500 bucks. So, you can see the power of leverage there and what you’re able to do, especially when you look at it through the eyes of an investor, right, you’re getting low down payment plus very low interest rates, right, you’re getting homeowner occupant interest rates. So, I went home, started looking all into it, and found nothing found, like there was just no information on it. It was very convoluted and I kind of took it, put it, put it on the back burner for a while, went back was working a couple jobs really trying to save my downpayment. Lo and behold, I got connected with a family friend who was a, who was the only loan officer that I knew, I just called him like on my ride back to work one day after going to Starbucks to get my cold brew.

So, I’m driving back and I call him up and I asked him the question like, Hey, have you ever heard of this two or 3k loan before? And you know, he was all about it? He was like, oh, yeah, man, like, let’s do it. Let’s, you know, he’s a fast talker in New York guy and he’s like, let’s do it. Man, let’s get you here, this would be perfect for you. This is great for your situation, you’re single guy, you’re just starting out. So, by that afternoon, I was pre-approved and I don’t think I would have done it in the past. Because up until that point, I’ve always been kind of the analysis paralysis guy, right. I’m an engineer by trade. But lo and behold, he got me into it and that kind of put me down, put me down the path. It was a lot of trial and error. A lot of things I learned along the way, which we could tell you more about on how you know how this can be a great a great aspect if you avoid some of the pitfalls that I had. But at the end of the day, it was worth it. Because what I was able to do was I was able to one of the beauties of the 203k and for anyone listening, you know that’s into multifamily, the beauty of the 203K’s, it’s an FHA loan, FHA loans allow you to purchase up to four units, still with only three and a half percent down.

So if you’re looking to get started, if you’re looking to get some units under your belt and a couple of doors under your belt very quickly for a low amount of pocket and you’re flexible, where you could live, you’re able to take out this loan, live in the one unit and occupy the other. So, I found out about that accidentally, and was able to purchase a duplex that was really beat up it was literally a drug den. Previously it was the ugliest house on Long Island, but the only one that I could afford and lo and behold, you know, we figured out what the renovation costs would be and I knew looking at the property from all my real estate investing like training and books that I read in the past was, listen, if I could be all in on this property for about 75 cents on the dollar, I’ll be able to make a nice profit on it. So, what I ended up doing was wrapping the renovation costs into the mortgage.

So, we have a renovation budget was 80,000. So, I picked up the property for 270,000. The 203k allows you to wrap it the 80,000 into the mortgage. So, I was all in on the property for 350,000. Finish the renovation got through it at the end of the renovation got it reappraised to refinance out of the loan. It repays for 480,000. Now, this was all off of a $9,500 downpayment, that was the only thing that came out of my pocket. Not to mention when I was done, you know, when the brief time I was living there, I was living for free, because my tenant was paying off the mortgage, they were paying down the mortgage, and I was able to live for free on a multifamily and then very shortly after I moved out, and started tapping that leverage, started tapping that equity using other forms of leverage and that’s really what jump started my real estate investing career and all it took was, was 9500 bucks.

Jason Lee  10:47

Wow, long story, but good story.

Matt Porcaro  10:51

You know, I always kind of kick myself and want to make sure that I’m not boring anybody and hopefully, it wasn’t boring and everybody listening paid attention to it. But I think, why I like telling it is because, again, from what I found, and I’ve told it a couple times, now, a lot of people kind of come from that same world, you know, again, especially in these high cost of living areas, like New York and stuff, like, I really felt like my back was up against a wall, especially starting out, right. And, you know, just knowing that this thing exists out there and while it might not be the most popular way, just for people to know that there is a way and not to get discouraged, especially in the in the tougher markets, because three and a half percent in mold, and you know, damn near any market is attainable to get you into something.

Jason Lee  11:35

Yeah, I mean, I definitely looked into this loan when I first started. I liked it. But the only thing was, is that there’s a lot of barriers, right? There’s a lot of things that like you have to move through. Like, there’s a lot of paperwork and with the loan, so you don’t really know what you’re doing. So, I think it’s cool that like you’re trying to, like teach people to like exactly how to do this loan, because there are some intricacies that people might not know about, and there isn’t a lot of knowledge about it out there. Like I don’t know, anyone out there besides you that’s kind of promoting this 203K loans. It’s a product that’s not used very often by people. So, I think it’s pretty cool, man. What are some of those? Like, you know, what are some of the troubles that you had or someone might have when they’re looking to get a 203 k loan for the first time?

Matt Porcaro  12:23

Sure. So, so as you said, you know, I wouldn’t say that there’s not many done out there, there’s definitely a good amount done. Ultimately, there’s a couple of different renovation loan products out there. Now, the 203k is kind of just like the Kleenex term, right? It’s like the word everyone uses for every renovation loan. There’s actually a couple others out there. House I’m sitting in now to talk more about it later, I’m using another renovation loan again, for my forever home, right. That’s the using a Fannie Mae version of the loans, the homestyle loan, but they all kind of have their pluses and minuses. But ultimately, yeah, at the end of the day, like, when you think about the 203k loan, you think about what they’re giving you.

Yeah, there’s additional hurdles to jump through. The reality is, is that they’re really not too bad when you actually get down to the nitty gritty and again, that’s why I started my community. That’s why I started talking about this so much was because as I got through it, and I realized it and did it and gave it the patience and attention that it deserved, I realized that it’s actually not that difficult, right? It’s very similar to using hard money or something like that, right? It’s, it’s kind of the same scenario. And, you know, I’ve thought about this a lot recently and it’s like, when you look at all the different types of bank loans out there and forms of leverage that you can use to buy real estate, right? The 203 k loan is hands down the most aggressive form of leverage you can use, right?

And in my opinion, for the average, you know, it’s an FHA loan, so the average Joe that has a job and a modest savings is able to use this loan, right? So when you think about how much leverage you’re getting, and how much power comes with it, I tell people all the time, with great power comes great responsibility, right? Like this is a loan where they’re, you know, they’re basically giving you the opportunity to, you know, I have a guy in my community, and he bought a million-dollar asset with $35,000. Right, it’s a million-dollar triplex, that’s going to cashflow him upwards of $4,000 a month, right and he’s doing that using just 35 grand, right? It’s a very, very heavy form of leverage. So, a couple of the pitfalls are this.

Number one is getting the right lender that actually understands these things. Obviously, as you said, there’s it’s not a common thing, right, there’s conventional loans and you know, similar way the that Realtors work 99% of realtors are just doing arm’s length transactions right for retail buyers, but you have the 1% that do the you know the do the very unique stuff or you know, the small percentage that do the unique stuff or work with investors or whatever, right? Same rules apply with lenders, right? There is a small subset of lenders out there that specialize in these loans and the biggest key point one of the main things that I screwed up on was that At, if you use a lender that’s familiar with these loans, they have everything point blank ready to go and they’ll make it very step by step for you to do, right. Again, you’re taking out a lot with the bank, so they’re going to ask you to check off some extra boxes and do some extra legwork up front. But again, when you look at what the what the what the payoff is, and, and what you could do for such a low amount out of pocket, especially being able to build equity into it instantly on the renovation, you start to piece together, and you realize it’s actually not that bad, especially when the lender knows what they’re doing. So, that’s the first thing.

The second thing is that, you know, if you look at it through the eyes of an investor, and you and you treat the loan with respect, like I say, like you look at it, and you and you really make sure that you’re not over leveraging yourself, and you’re and you’re getting something where you’re going to often build equity into your deal instead of lose it. You’re not over renovating or under renovating, you’re hiring the right contractors, you’re not trying to do things for cheap, you’re just trying to do things the right way. That’s going to be a key point on this, right. So, it’s just treating the loan and the process with the attention that it deserves. You know, another thing is just making sure that all your team members are good, right?

So very similar to the way a hard money loan works, or different types of loan products out there, where, you know, we’re even insurance companies, when you get insurance work done. When construction is happening on a house, they have, you know, these people called like draw specialists, right, these people are people that come out and make sure that the project is happening in the FHA 203 K world, that they’re called a HUD consultant, right, and they get a special, you know, they get, you know, they get certified with HUD, and essentially, they come out and they act as a draw specialist, right, they’re helping you build the scope of work, create the scope of work, and they’re also helping you, you know, make sure that the that the work is getting done as you go, they’re keeping Ted they’re basically like a referee on the project.

So, it’s great, because you have a neutral third party, between you and your contractor that are making, you know, the right calls as you go. So, making sure you have a really good two or 3k consultant that understands this process, and also very experienced with it, there’s, you know, like anything else 8020 rule, there’s a couple guys and gals in each market that are doing these actively, and then there’s a couple that just have the certification, but really don’t know this process. So, it’s seeking out and finding those people. So, again, those are the top three things, I think like having the right lender is really going to quarterback a lot of the things a lot of a lot of the process there because they’re gonna give you good, they’re gonna give you good recommendations on good on good two or three consultants who can ultimately help you get connected with the right realtors that understand this process, the whole nine, they stay connected, and you want to stay in those renovation loan worlds and that’s going to make your life a lot easier in the long run.

Jason Lee  17:39

Awesome. How did you find your first deal? Tell us sorry about that.

Matt Porcaro  17:46

So even with you know, I had a decent paying job at the time, I don’t really remember exactly what it was. But you know, for being 23-24 years old, I was making 70 80,000 a year, you know, which is a decent enough salary, right? But in New York, it just really wasn’t enough still. So, I got pre-approved initially for somewhere around like 260,000 or 270,000, which in New York, you know, even a couple years, but this was back in 2016 was like, you know, damn near impossible, right. But the whole idea was like I had, you know, when there’s a will there’s a way, right and ideally what I did was I just started making offers, right? I started getting out there and I was I was looking at the I was brushing up from the absolute bottom of the barrel, right?

Because that was the only stuff that I could afford. So, made several offers. I don’t remember how many exactly. But there was a lot and I was getting laughed at left and right and blah, blah, blah. Finally, one on one property came up and it was on something called a the first look period. I don’t know if you’ve heard of this before, but basically, there’s some Foreclosure Listings that get listed and they’re part of Fannie Mae’s program with homes HomePath.

So, if you go on homepath.com, you’ll see properties that are foreclosure properties and basically what happens is on these foreclosure properties, they’re more they’re federally they’re federally owned foreclosures. What ends up happening is they want it to go they don’t want it to just keep going to investors and keep adding to the same issue that they’re probably there in the first place. They want it to go to first time homebuyers and owner occupants and stuff like that. So, HomePath has a program where you’re able to get owner occupants are able to get first dibs on a property for the first 10 days. So, for the first 10 days they only field owner occupant offers so one of those properties came up. I noticed that and I went after it and you know I gave them a pretty decent offer. It was also already listed pretty low.

The property was in complete shambles. It was really really bad. It was a it was a it was a It was like a trap house, they were dealing drugs out of the front of it. It was condemned multiple times prior, the town hated it, it was, you know, it was in front of a row of bars next door to a church. Again, in retrospect, it was funny looking back, like, I just hated this thing. But I felt like this is maybe the only thing I can afford, and you know, 9500 bucks, like, we’ll see what happens. Because the numbers kind of made sense. But ultimately, what ended up happening was, you know, I placed the offer. And, you know, I, you know, I came, I came pretty close to asking, and they asked back at asking, and I said, okay, I’ll take asking, but you can give me, give me 6%, covered in closing costs back. So, that enabled me actually to close with, not without paying any closing costs, I was still able to purchase it for the same price, and I got it.

So, again, I was just everything, they actually gave me enough at closing where I got a credit back at closing, I got money back in my pocket. Because on FHA loans, you’re allowed to get a 6% concession back at closing from the seller. Now, you know, in a lot of different markets, you see that here and again, but there’s people in my community that have been getting those seller club credits left and right, even through this crazy seller’s market, we’ve been having, just the way you structure it and the way you could come in, you know, being able to purchase as is with no appraisal contingency? No, no, and no inspection contingency allows you to bring a lot more to the table, and it makes your offer more effective. So, that’s, that’s exactly what I did. So, it took me it took me a while to find something. But at the end of the day, kind of scraping the bottom of the barrel ended up being the best thing for this low and that’s really where this shines, right is being able to do that value add, right I, at the end of the day, this is value add investing, right, no matter how you look at it.

Jason Lee  21:46

Definitely great advice. Anything that, you know, the potential listener that’s looking to get into real estate should look out for when they’re buying their first property?

Matt Porcaro  21:59

Yeah, I mean, I think again, when you’re starting out, right, there’s a lot of different, there’s a lot of different ways to get started, right and one of the one of the things I like to tell people getting started is just what we just said, when you’re just starting out, you need to put in the work, right, you need to put in the elbow grease, you need to do the work, ultimately, turnkey, yeah, there’s some turnkey opportunities out there, especially if you get maybe lucky or anything like that. But when you’re just starting out, you want to accelerate, you know, they talked about the velocity of money and just accelerating how quickly you get stuff done. One of the beautiful things I like about the 203k loan is it allows you to build, you know, seemingly unlimited equity, it’s like, it’s like a huge return on investment compared to what you’re doing.

You know, I say, if you put three and a half percent down, and you get 10% equity, which is very easy to do on a renovation, you’re tripling your money, right? 10% is easy on the low end, you know, when I did it, I made 25% equity. So, you know, I 10x my money, right? And I was able to do that because I was able to force equity into the property using a value at you look buying distressed.

So when I, in my opinion, when you’re starting out, do that, do that extra legwork. Look for those value, add opportunities, look for distress, they’re not as common and you know, it may might not be the easiest way to do it. But you know, until you start really getting rolling, especially if ultimately you want to get into multifamily long term, you know, that stuff is going to that stuff is going to require more capital, it’s going to require more experience and stuff like that and just having some of that nest egg to start you off, is going to make it a lot easier down the road, rather than trying to scratch pennies like you know, I tell people all the time, like there’s the house hacking community, right?

So house hacking for any everybody listening is, you know, when you live in, you know, you live in your house and you rent out portions of your house, right? It’s kind of like getting started as a landlord light, right? It’s like multifamily light when you’re just starting out, you know, but ultimately, it’s a way for you to kind of start understanding what passive income looks like and starting everything like that. But you know, people use just the vanilla FHA loan, the FHA loan by itself to try to find these multifamily properties.

But what they run into is that they’re barely covering their mortgage, and they’re still renting out three other units in the house and they’re barely covering versus if you find a distressed property, a distressed multifamily property, you’re able to build in that equity plus, you’re able to come in at a lower value. So, when you get the higher value, you’re able to rent it higher, you’re able to build that equity, and that’s gonna allow it to be a better deal rather than you making $100 per door. In my case, I make $1,000 a door. Right and I was able to do that because I got it for such a low price.

Jason Lee  24:45

Yeah, that’s huge. I mean, the biggest thing people need to realize is that if you want to grow your portfolio fast, it’s how I grew my portfolio fastest you got to buy distressed Real Estate if you buy turnkey real estate with no upside. It’s gonna be very hard for you to grow equity fast. So, that is fantastic advice right there, Matt. Got one more question for you. What is one mistake that you made during your real estate investing journey and how did you learn from it?

Matt Porcaro  25:16

Man, it’s hard to pick a mistake, right? I am sure, I mean, maybe you have your top one or one that you I’m gonna, I’m going to try to squeeze into one was, the one mistake I made was thinking that there was going to be a book, or a podcast, or a video or a website, or some secret, when you’re starting out, you think that there’s a secret that everybody else has that you don’t have, right? You think that you’re part of it, that there’s a club and there’s like a super-secret website, that that people have, or deal feed that they get access to that nobody else is allowed into? Right? I didn’t realize that, that the best thing I could have done is just start earlier and I know that’s a cliche thing to say, and when people are starting out, it’s like I almost grown it that a lot when I was starting out. But I realized after doing it that what it meant, right? You know, you learn, you learn so much more through experience, then through then then through then through learning, right? I have a big belief that our, our us as a society right now with the internet, were more educated than ever, but we’re least we’re less experienced than ever. Right?

And what I mean by that is like, you go on, like, you know, you go on different social media and people seem to be an expert at everything, right, because they read it, they read an article or they read a book or whatever, but they have no real-world experience doing it. One of the one of the good things that about this 203 K process and like not knowing much about it going into it was that it forced me to learn on my feet and by learning on my feet, I was just getting things done, rather than over analyzing every little thing that I had been doing years prior. Right? Again, being an engineer by trade. I’m an analytical guy, like analysis, paralysis is my biggest downfall. Right? I overanalyze everything I still do. I still fight it all the time. But having the Edit ability to just kind of dive in headfirst, as scary as it is, I learned so much more in that six month’s time than I had learned in the four months, four years of trying to read books and stuff.

So, I mean, that’s really the first thing. The second thing is I mentioned, you know, I got into flipping and there’s a reason behind that. My you know, my dad’s in the construction industry. I came from the construction world. My other regret is I there’s a couple there’s a couple flips, man I should have held and you know, I think at the end of the day, wholesaling. Right. You know, we talked about wholesaling about, you know, finding deals for people and making that money, making that quick cash, flipping, making the quick cash. It’s cool, it’s enticing quick cash is great, right? Anybody invested in crypto? You know, maybe not recently, but over the last two years you got in that quick, that quick crash is nice. We realized very quickly that you know, I realized very quickly that the faster money comes in, the faster goes out and one thing I wish I would have, you know, really, really bid down on and there’s a couple of reasons why it would have been really tough to hold on some of these properties.

But looking back, I really, really wish that I held on to hold on to some of those things because at the end of the day flipping wholesaling, you know, they call it real estate investing, but it’s not investing, right, buying multifamily properties is investing, right, getting the getting the tax benefits, getting the cash flow, building equity through, invest through value, add opportunities, that’s true investing, flipping the job, you know, I told you flipping slowed down for me in the pandemic, right, my focus is have changed a little bit. But, you know, the second I saw it flipping is the second I stopped making money, right, versus you have a multifamily portfolio. That’s not gonna go anywhere and I wish I knew that earlier.

Jason Lee  28:58

Amazing. Couldn’t agree more. Yeah, I mean, you said it best if you’re flipping properties or wholesaling, you’re being a broker, or whatever it is, you’re trading money for time, right? You’re trading time for money. Whereas if you own property that’s making money while you sleep and giving you the tax benefits, billing equity. So, all great information that if the listener wants to go learn more about you, how can they do so?

Matt Porcaro  29:20

Sure. So, you know, when I started this whole thing, and it was funny, I was asking my wife one day I was like on the couch, you know, I got to the idea because I was just answering the same questions over and over again in like Facebook groups and Bigger Pockets forums and stuff like that. So, I said to my wife, we’re literally sitting on the couch I remember clear as day I’m like, hey, do you think if I like made an Instagram account and by the way I got started real quick in the 203k with real estate you think people be interested? She’s like, Yeah, try it.

So, I created an Instagram account and really my whole my whole goal with that was just to give every piece of information that I didn’t have when I got started, specifically obviously through this process and doing and using leveraging the 203 k loan to get started buying a small multi. So, Long story short is its Instagram. So, I continue to be my main place where I post everything. So, it’s at the 203 K way at the 203k way is my Instagram handle and you know and from there I got a link tree got my Facebook group where you can join in there and stuff like that my YouTube channel, but Instagram is the best place to find me, man. It’s where I hang out the most.

Jason Lee  30:21

Awesome. Well Matt, thanks for coming on. It was a pleasure talking to you and thanks for all the lessons and stories it was great to get to know you.

Matt Porcaro  30:27

Thanks for inviting me on man. Appreciate it.

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