Ep181: Mathew Frederick – Learn to Say No to Investment Opportunities that Don’t Feel Right

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Guest profile

With 28 years of experience in real estate investing, there is not a strategy that Mathew Frederick has not executed, which includes residential, commercial, new development, raising capital, offshore, and coaching. Mathew started in residential income property then expanded to buy-fix-sell, lease option, commercial buildings, and new development projects.

Mathew has had the lead on renovating 50 plus properties, has experience with building 240 houses, and 3 low-rise condo buildings. He now focuses on teaching people how to manage commercial portfolios, including plazas and multi-family buildings, plus coaching investors in real estate and business acquisition.

Mathew’s mindset is one of always learning. This has resulted in him being able to develop alternative and creative approaches while mentoring investors.

 

“Sometimes, you have to learn to say no. I knew that it was not the right deal. I knew I couldn’t oversee it. It was not the right time. I knew he was not the right person. But I did it to try to rescue him.”

Mathew Frederick

 

Worst investment ever

An investment to save a friend

Mathew bought five properties as his friend who needed capital promised him that he would do the necessary renovations to resell these properties for a larger amount in the market. The friend ensured Mathew that he had the resources to make these renovations and that they would make good money from it.

Unfortunately, once things started, Mathew immediately realized that his friend lied about the resources he had, and things got a little out of hand. In the end, when there was no money in it for his friend, he walked away.

A mistake made by an expert

Mathew’s intuition was telling him that there was something off with this investment, but abandoning the basics of investment, he still went through with it. True enough, when the US markets fell, and the economy collapsed, Mathew’s properties were greatly affected. This included the five properties he invested in with his friend.

Fortunately, he was able to sell three properties out of the five. The two remaining were being rented out because he couldn’t sell them at that time. All the greatest renovations for resale ended up being tarnished because he didn’t harden them for rental. So, by the time he did sell the properties, all that extra value was not there anymore.

Lessons learned

Surround yourself with people who are responsible

If you are a responsible person and you circle yourself with people who are not, they will pull you down.

Always monitor if your people are doing their jobs

If you know already that there are jobs not done right or not done on time, do not waste time and correct it immediately.

Do not compensate for people’s shortfalls just because you have lots of experience

Even though you are an expert in that field or industry, do not forget to go back to the basics.

Andrew’s takeaways

Remember all the elements in investing with other people

The first element is that if you don’t trust the person, walk away. The second element is that the idea must be something that excites you. The third element is that the person you trusted must be able to execute such an idea. Lastly, always avoid being the only money provider.

Experts diversify

One of the biggest mistakes amateur investors commit is that they put all their money into one basket. If you’re experienced enough in the business, you know the importance of diversification.

Always keep your cool

When you are in a mess, try to keep a peaceful mind before making a decision.

Actionable advice

Sometimes you have to learn to say no. If your intuition is telling you that it’s not the right deal and it’s not the right person to oversee such a project, you can always politely decline.

No. 1 goal for the next 12 months

Mathew wants to spend time educating people. His number one goal is to help people to forgive themselves for their failures, learn to appreciate their successes without feeling guilty, and guide them to move to the next level.

Parting words

 

“Learning is great. If you’re planning to read 10 books, read the first four books and apply what you have learned before moving to the next four.”

Mathew Frederick

 

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About the author, Andrew

Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company that provides institutional and high net worth investors with ready-to-invest stock portfolios that aim to beat the benchmark through superior stock selection.

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