- 30,000-foot view of who Ed Mathews is, and what got him into real estate investing. Discover how it became the Clark Street Capital.
- How to leave and retire from corporate America
- How Ed transformed from syndicator to operator.
- The actual definition of what truly an entrepreneur is.
- Real estate investing defined. What are the processes for getting started in real estate investing?
- How to give yourself a raise, and work smarter, not harder to add value to your clients?
- How does income directly correlate to the value that you provide to the consumer?
- Understanding and giving respect to both landlords, fellow residents, and property owners.
- How to create an environment that people want to live in, had a profound impact on the growth of your business.
- Phone: (860)675-5800
- Website: www.clarkst.com/
- Contact Number: 843-619-3005
- Instagram: https://www.instagram.com/exitstrategiesradioshow/
- FB Page: https://www.facebook.com/exitstrategiessc/
- Youtube: https://www.youtube.com/channel/UCxoSuynJd5c4qQ_eDXLJaZA
- Website: https://www.exitstrategiesradioshow.com
- Linkedin: https://www.linkedin.com/in/cmelette/
- Email @: corwyn@corwynmelette.com
Episode 72: Amplify Your Profits Through Real Estate Investing With Ed Mathews
CORWYN:
Good morning. Good morning, and good morning. Welcome to the Exit Strategies Radio Show family. Thank you so much for listening. So today, we are super duper excited. We have with us an amazing guest, who is going to drop some real jewels, some real nuggets, who is going to give you some insight on quote unquote, the other side if you will. So we have been on this amazing streak of having the best. And we are not breaking it today. So I’m super duper excited to introduce to you Ed Mathews with Clark Street Capital. Ed, how are you doing today?
ED:
I’m great Corwyn. How are you doing, sir? Good to see you.
CORWYN:
I am phenomenal. I’m phenomenal. Excellent. So for our listeners, just a little bit of prep. You know, Ed and I, have determined we are kindred spirits. I am involved with a beard. He has clean-shaven, you know with a lot of hair. And in turn, we believe what we believe and he’s going to share some of his beliefs with us today. So if you don’t mind Ed, give our listeners kind of the 30,000-foot view of who you are and who Clark Street Capital is.
ED:
Okay, cool. So Corwyn, thank you again for the opportunity to be with you today. It’s really good to see you, my friend. So, in terms of who I am, and why am I here, I spent about 25 years in Silicon Valley working for companies that pretty much none of the people in this audience have ever heard of other than DocuSign, which was my last company. Yeah, so that one, that one rings a bell, right? But for the rest, no one knows who Coupa and SAP Ariba, and all those others are. But that’s okay. The folks that bought the software know that there. And so, you know, I spent about 25 years there. I started investing in real estate back in 2010, late 2010, and early 2011 as a side hustle just to start to build up an extra stream of revenue. And so I bought a four family in here and I’m based in Connecticut and so I bought a four family Clark St. East Hartford and then I would flip a couple of houses and buy another one and start flipping up with a couple of houses and buy another multi. And throughout about seven, almost eight years, we built up a nice portfolio that replaced our monthly income, and needs. And so instead of traveling 150, 200 nights a year, I resigned from corporate America and decided to do this full time. And so I’ve been doing that since February of it’s actually coming up on the five-year anniversary, February of 2018. And so far so good. Well, congratulations. Thank you, thank you. It was a blessing and a curse, right? Because of my wife, I have a wife, Patricia, who I’m very fond of. And I like to think she’s very fond of me, she tells me that’s good. You know she is my person. And so I wanted to be around, especially our daughters, who were teenagers then. My oldest was just getting into high school and my youngest was just getting into middle school. And that’s when little girls need their dads around. So, the timing couldn’t have been better. And then I started falling, I was working from home, I started falling for my wife around the house, and she’s like, “You need to go get an office because you’re driving me crazy.” And so that’s how I got here. And so Clark Street Properties evolved into Clark Street Capital. So Clark Street Properties was my business focused on small multi as I said, and my friends from Silicon Valley and friends and family elsewhere, were all like, “Hey, we want to invest in you.” And I said, yeah, let me go, break stuff, and figure out business systems because it was just a side hustle. It wasn’t actually a business to invest at that point. And let me go break stuff and figure out how to actually build a business, build a team, build systems, put technology in place, and all that. And so I spent a couple of years doing that. And then as we started to kind of turn the page and get into larger projects. You know, that’s when I felt confident and could look somebody in the eye and tell them, they invest in our company. We actually have our act together and we can serve them well, homegrown there, in addition to ours. So that happened probably, probably about 18 months ago, and so we became Clark Street Capital. And now we’re a “syndicator,” and soon to be a Private Equity Fund Holder. We also are an operator, so, not only do we buy the buildings, but we operate the buildings under Clark Street management, our property management arm, and I’ve got a team of 7, 8 people now globally, and things are going well. And, you know, I get to, I get to go do my dream every morning when I wake up, which is really nice.
CORWYN:
That is awesome. That’s awesome. So congratulations on that growth. You know, sometimes we are. And you know, what makes this conversation very, very, very enlightening, is sometimes we have tunnel vision. I think you and I kind of talked about this before. But we have tunnel vision. So when we, our listeners, as they’re thinking about potentially real estate investing, they’re looking at it from that singular standpoint of, well, they just want to buy a rental or they just want to try to do a flip or what have you, where you’ve taken that singular concept. And you have amplified it to now be Clark Street Capital. That is amazing. I know, that was a heck of a journey. I know it was. It sounds exciting.
ED:
Yeah, I told him, my father told me, who’s now 80, when I told him that I was leaving, he said, “Are you out of your ever love” and actually, he didn’t say ever love and eat up. But this is a real show. So I’ll give it to you out of your mind. And, and I said, quite frankly, it’s either going to be a tremendous success or a cautionary tale that my descendants will tell about, great grandpa grandpappy, who blew the family fortune and led the entire family on fire, to be one of the two. So
CORWYN:
I love it. I love it. That’s interesting that you should put it in that. But you know what, that also goes to generational. You know, that’s the conversation. You know sometimes people are hindered by generational or traditions, normally. Exactly, it was normal that people to go and worked in this particular place for 20, 30, or 40 years. Right. And retired, they got a little retirement party, they got, they kind of got a little Timex watch, and that was it, and they were gone. But now, this has been normalized for people to step out of corporate America, and defined on their own on similar seemingly. I mean, granted, we know that you had to probably dance to some different beats, but that’s similarly walking over and essentially putting together your own band. So eventually, you could march to your own beat, so to speak.
ED:
Right, right on. You know, it’s so true that back in the 40s, 50s, 60s, even 70s, perhaps even the 80s, security meant I had a W2 job, I went to work, I worked 40 hours a week, I got my weekends. And on Monday morning, I went back at 8 am. And I worked until six and I got an hour for lunch, and, you know, 40 years of that. And then when you get to the end of 40 years, you get to go retire and hit a white golf ball or go fishing or whatever, however, you want to spend the last 10 15 20 years of your life. For me, security, the idea of being secure with someone else holding domain over my employment and thus my income was very scary for me, right? And yeah, I mean, I worked for some amazing people who I count on as mentors and friends today. But nevertheless, I was beholden to some power-up in some office in some corner of some office building, and they liked me and respected what I was doing and the value that I was bringing to the company. The second that didn’t happen, I was gone. Right? It was easy to get rid of a guy. And so where I saw security was, we were talking about earlier, eating what you kill, right? I’m highly confident that I can produce enough income on a day-to-day, month-to-month, year-to-year perspective, that I can feed my family and so that’s really important to me, and so I don’t need that boss in the office tower. It doesn’t matter if he or she likes me or not, because I no longer work for them. And so it’s a very different perspective. My dad’s generation, baby boomers, and mine being Gen Xers or I guess Gen X, right? Something like that
CORWYN:
I think that all messed up.
ED:
Yeah, the next-generation boomers, but whatever that is.
CORWYN:
Exactly, it is interesting. So Ed, if you had to, and what you just talked about, I mean, literally, you just define who an entrepreneur truly is. A lot of people like to fancy or call themselves or put a title on being an entrepreneur, but entrepreneurs are who you just described. They keep hitting the ceiling, and they’re uncomfortable. And a lot of people quote unquote, step out on entrepreneurship. When they’re okay, they’re like a ceiling. They’re okay with it. And they don’t endeavor to go beyond and, which is interesting. But if you had to say something, or give something to our listeners, as far as a thought process in endeavoring to get into real estate investing, what would you tell them to start with?
ED:
So I’m an avid reader, and I consume a lot of information on a daily basis. Because the Red Sox up here are terrible. So I don’t have any baseball books to read about so I decided to focus on getting smarter instead. And you know, I’m a big fan of a marketing guy, his name is Russell Brunson. He’s absolutely brilliant. And if you haven’t read his books, you should and I’m not friends with him or anything like that. It’s not a plug, I’m just telling you this work for me. One of the things that he said in one of his books, I think it was his first book Dotcom Secrets. It was that he woke up every Monday morning thinking, how can I give myself a raise this week? Think about that, right? So that tells me two things. One, he and now I because I manage myself this way as well. I’m not okay with satisfactory or status quo, right? So, because if I can give myself a 1% raise this week, and do it again next week, and do it again the week after that, and consistently give myself even 1/10 of 1% raise every day, for the 240 some odd days that I work during the year, at the end of the year, you’ve given yourself a gigantic raise, right? And that can be working harder, it can be working smarter, it can be giving, going the extra mile for a client, it can be coming up with a new product or a new service that is tangentially related to what you already do. And offering that to your clients and potentially getting new business. But it’s a process, right? And it’s a gradual process. If you read about these overnight successes, and when you really delve into a lot of these stories, it took them 10, or 15 years of hard work to become an overnight success, right? And so I don’t know any other way to do it than to work hard and work smart. And actually, now that I’m older, I’m in my early 50s, and I try really hard to work smarter than harder. Because oh my brain is still as crisp as it was when I was 20. And my body is still as healthy as it was when I was 20. But, I also, value my time differently than I did back in my 20s. In that, I look at the highest and best use, like where can I add the most value on Monday, to my business, to my residents, to my investors, to the brokers I work with? You know, in the partners that we work with, how can I add the most value? And that switch along with the idea of how I can get myself a raise this week has really pushed our business forward to simple concepts, right? But they’ve had a profound impact on the growth of our business. So,
CORWYN:
Essentially so you touch on that, as far as value. Oftentimes, people seek to, create income prior to providing value. And that doesn’t work. So, you want to move the needle, and it’s interesting, if you think about it, income directly relates to the value that you provide. I mean it’s really like the IV if you put the two letters together, you know that nourishment, healing, I mean, all kinds of things can kind of come from that. But it’s a similar formula. Again, income is in direct proportion to the value that you provide to the consumer. So if you’re helping people to establish themselves to build, create, and generate wealth, by investing money for them in your business in real estate, look here, you too, right, you provided a tremendous value to a potential consumer. That’s massive man, that’s massive. So, you work in the multifamily, a primarily multifamily, you got to start in residential. It’s interesting, and I’ll share this brief ad. I’ve had a few guests recently that operate in the self-storage space. And we jokingly had a conversation about you trade, you get rid of toilets, we’ll get rid of people, and you keep that stuff. But you’re still not the people. So you invest in primarily what type of asset, let’s talk about it.
ED:
So, small to medium-sized multifamily. And so I tell people that we buy, we buy, I’m trying to think of a clean way to say this, we buy dilapidated crappy apartment buildings from landlords who aren’t very good at their jobs. And so, and really, because I had gotten involved in the flipping business. So from a construction perspective, I’ve seen a lot. I can’t say I’ve seen it all, but I’ve seen a lot. And so very little, really freaks me out when we see a building that’s kind of broken down. What it does, though, actually makes me angry. And so because I think that if you look at the people that live in the buildings that we acquired, they’re good, hard-working people. They crank your wrench to fix your car, they pour your coffee at the diner, they check you out and target a Walmart. These are hardworking people. And that’s not their only job. They probably have two or three. And so the thing that really kind of focused me on it, in my vernacular, it’s called C Class buildings, is that I think, in fact, I know, I don’t even think about it anymore, I have the data to back me up. That if you create, if you acquire a building, you make it clean and safe, then you make it beautiful, so that people are proud to live there. They’ll stay. And on top of that, if you provide them with class A service in other words if Corwyn lives in a class A building, and I live in a class C building, my job as the property owner, asset manager and all that is to make sure that you get the same treatment I get. It doesn’t matter where you live, doesn’t matter who you are, what you look like, or whatever. And what I mean by that is, if you have a question you call the office, and there’s a human being on the other end that will answer your question. If you hop on our platform, our management platform, and say, I’ve got something that’s broken, can you come to fix it, you get a phone call that day, and in most cases my guys are out there that day, fixing it. And then the next day, you get a phone call back saying, “Hey, is everything okay? Did we fix it right?” You know, it’s just a matter of respect. And so, here’s what I know. The average tenant in the State of Connecticut, lives in the same apartment for about 16 months on average, Class C. Our residents, and note the difference, now don’t call them tenants, they’re tenants or residents they live with, they live in a home that we provide. They tend to live in our apartments, for a year or three-plus years. It’s actually 3.1 years, as a matter of fact. What that score, what that does for the resident is they have a place they can call home for a long, long time. And grow in their home. They know they can grow their families there and they can do, live their lives and live it well. And so what that does for us, me and our investors, is that vacancy and turnover are two of the most expensive things on my CapEx items. And I know that on average, if I have to go in and fix stuff and paint stuff, and over the course of like every year, it’s going to cost me anywhere from $700 to $2,500 just to fix the stuff and not that, that’s the lost revenue opportunity because no one’s living in the apartment while we’re throwing paint around. The cabinets or replacing a toilet or whatever. And so, not only do our residents treat our buildings well with respect, which tells us they stay longer as well. So even when they move out, let’s you know a lot of the folks that live in our places, either their families are growing or they run out of space. So they move into a bigger place or they go buy a house or whatever. But the fact is, it’s that not only have they stayed longer, but I’ve skipped over one, possibly two cost items in terms of having to turn that property or turn that unit over. But when they leave, all I’m doing is typically painting it. To fix a light fixture or something like that, but it’s not, it’s by no means wrecked. I mean, it’s just, if they leave it as well, as well as they found it. And, because there’s a mutual respect there, we respect that. We understand that. That’s their home. And our job is to provide a clean and safe place where they can be proud to make their home. And that, I’ll hop off my soapbox, but one of them, that’s one of the things that makes me really angry about this business is that most people don’t understand. I’ve had this debate with other property owners, and landlords who, I say, with derision, think that squeezing every penny out of every single tenant is the way to make money. And I couldn’t disagree more, and I’ve got the data to prove it.
CORWYN:
So I’m consulting for a client who is essentially what you’re talking about. On top of that, I have another that we’re engaged in, which is in pursuit of some properties that are going to be the same thing. And my conversation with them, and was exactly what you say. If you want to take it, you want to create an environment that people want to live in. And oftentimes what happens is they get disenfranchised by what has been happening. And then you have to go through this process, to get the ones who are willing to essentially raise their level of standard, if you will, of living to do so. And the ones who won’t, those are the ones you get rid of. So that you can improve the property. It’s necessary at times. If people aren’t keeping their units clean, if they are not keeping up the exterior of the property, if they throw trash on the ground, in the complex, those are the people that you need to get rid of, they need to go. So that way your property functions better. And in turn, what you will see with that is that the residents who do want a better standard of living, they will see that, they’ll recognize that they understand there’s change going on, and they will in turn, improve. They will take better care of the property for you. And then leaves you less to have to do as far as maintenance and all that stuff, because they’ll make an effort to better take care of the property.
ED:
I’m living proof of that exact model. Yea, 100% agreement. Yep. Sometimes the residents have such a bad relationship with the building, that it doesn’t matter, whether it’s me or the guy, the guy or gal that owned the building beforehand. We’re all thrown into the same bucket. And I understand why. I’m typical, and the only way I can prove I’m a typical is if you live in the building, and let me prove it. And some do, some don’t. I mean, in all honesty, when we acquire a building, we usually lose 25 to 50% of the residents over the first year or two. And part of it is its rules. Most of the buildings we own are older buildings, so we don’t allow smoking in the building because not everybody and if you smoke in Unit A, unit B gets your secondary secondhand smoke. So it’s not fair to them. It’s garbage stuff and we have a very simple relationship. We’re going to provide you with a clean and safe place where you can be proud to live, you got to pay and you got to treat the rest of your fellow residents with respect. And most people are great with that. Some people aren’t, they gotta go. That’s okay. That’s okay.
CORWYN:
Exactly, exactly. So you hit it. I mean, look, boom, boom, boom. Kindred spirits, man, kindred spirits. For real. For real. Alright. So Ed, tell our listeners where they can reach out to you. Yeah. Because inevitably if ever they’re gonna have questions about, “Hey, what is this?” That kind of thing. How can people get in contact with you?
ED:
Sure! I tell everybody, I’m a cheap date. And what that means is either virtually, or just ask my wife, she’ll tell you. I’m on a cheap date and I will spend 15, 20 minutes with anybody to answer any questions. In fact, I’m going to start doing Facebook Lives and things like that. So you can reach us at Clark St. Clark St Capital, pretty much everywhere. Instagram, Facebook, Twitter, LinkedIn, and YouTube. We just launched a YouTube channel about a month and a half ago. You can also listen to our podcast, the Real Estate Underground, which is on every Apple and Spotify and all that. And our job there is to kind of help you figure out where in the real estate world you might fit and give you a couple of golden nuggets to think about and help you kind of either take advantage of opportunities or hop over mistakes that me or one of our guests made. And help you avoid those. And as far as the cheap date thing goes, hit me up on any of those social media. If I don’t respond, you can also go to our website at clarkst.com And submit a form. I read every single one of them. I try to read every single comment on social media. And if I can help, if I can add value, fortunately, I’ve had several mentors who have been awfully good to me. And my way of paying them back is by doing the same thing for other folks that I meet along the way. So yeah, those are probably the best ways to reach me.
CORWYN:
Awesome. Awesome. Well Ed, thank you so much for being on the show. For our listeners, y’all got it. Y’all have had an amazing encounter today with Ed Mathews with Clark Street Capital. He is the guy and he has it together. So y’all please reach out to him. And let him provide you with some additional insight. Again, Ed thank you for being a part of the Exit Strategies Radio Show family, my man.
ED:
Truly, truly my pleasure, Corwyn. Thanks. Good to see you, buddy.
CORWYN:
Awesome. So, listeners as we close out today’s show, y’all know what I tell y’all. And I’m gonna say it and you know y’all gonna get it because y’all better listen to it. You better believe it. Because I know that I do. And that is number one, that I love you. Number two, I love you. Number three, I love you. And we’re gonna see you guys out there in those streets.
