Passive Real Estate Investing 101, with Matt Picheny

Let’s dig into passive real estate investing! Our guest is Matt Picheny, a real estate investor with thousands of doors and author of the best-selling book: Backstage Guide to Real Estate. In this episode, we talk about what to look out for in a sponsor, how to find the right market, and how to evaluate a good deal.

If you want to be a passive investor and learn more about underwriting, then we guarantee that this episode will help you!

Learn more about Matt and his journey at!

“You should invest in things that you know and love.”


Matt is an investor with a huge portfolio. He’s passively invested in about 6000 doors and an active investor in 2300. According to him, real estate is relatively low risk with a potential of high reward. The key to mitigating the risk is to properly underwrite the property.

Matt believes that people should invest in things that they know. He was an actor for 5 years so he also invests in Broadway. 

“Never put more than 5% of your net worth into any single deal.”


Matt wrote a book called Backstage Guide to Real Estate where he shares his tips and tricks on passively investing in real estate.

He explains the 3 key aspects of a deal that should be evaluated and underwritten.

  1. The sponsor 
    1. Look into the sponsor’s track record in real estate and business in general. If this is your first passive investing deal, then choose an experienced sponsor.
    2. Learn about the exit strategies. If there’s only one, that can be a potential red flag.
    3. Be aware of the sponsor’s involvement in the deal. You want them to be involved in the deal and not just raise money. 
  1. The market
    Location is key when it comes to a good deal. Find different submarkets within an area. Look for data about employment history, population growth, educational demographics, and household income in the 10, 5, and 1-mile radius of the property.
  2. The deal itself
    The main things to look out for in the deal:
    1. Exit cap rate. Look for a higher cap rate when you’re buying the property and a lower exit cap rate. A little shift in that cap rate can greatly affect the valuation of the property.
    2. Projected rent growth.
    3. Projected insurance.
    4. Projected taxes.

Mentioned in the show:

  2. Matt Picheny – Backstage Guide to Real Estate
  3. His LinkedIn

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Special thanks to Matt Picheny for taking the time to share so many great insights with us

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