Post-COVID Opportunities in Commercial Real Estate


Sarah Larbi: Welcome REITE Club Nation. I'm Sarah Larbi. I'm here with my co-host Alfonso Salemi joining me, and we are going to be interviewing Matthew Frederick, probably, I don't know how many times he's been on the podcast, probably four or five. But we are digging into commercial real estate investing and current trends. So really exciting stuff. 

Alfonso Salemi: We get into a lot of different things on the podcast. Mat is a great friend and an amazing asset that we have at the REITE club community, and he's helped so many of the REITE club nation get closer to their goals, and that's what we're all about. So we really hope you enjoy this podcast and yeah, let's get to it.

Sarah Larbi: All right, let's do it.

Alfonso Salemi: Hey, and welcome to the podcast again, Mr. Matthew Frederick. It's a pleasure to have you back on the podcast. Thanks so much for joining us today.

Mat Frederick: Great to be here. Alfonso, great to be here.

Alfonso Salemi: That's awesome. If the REITE Club Nation, if you guys haven't heard of Matthew Frederick, thanks. This must be your first day on the internet or or anything to do with real estate. I'm just kidding. We actually, we love Matt. He is one of the most well renowned realtor real estate investors. That we know and have done all different types of strategies. So for his bio and his info, you can check out previous podcasts or he's on the REITE club community as well too.

You can find him there. But we wanna get right into it. So we brought him out on, we wanna talk a little bit about commercial real estate, right? And that's a huge topic now, what the changes are to all the things that are going on with commercials. But let's start off with even maybe defining that a little bit of, what is commercial real estate? Because some people may not even know.

Mat Frederick: Commercial real estate has a few spaces, I think everybody knows about multi-family, which is, six units 24 units, six units. Today we'll talk more about maybe retail space commercials. Also office space. It's warehousing, and to a certain degree it's self storage. But the buzz more today is like what's happening with retail, what's happening with commercials. And again there's also street level and highrise towers. So those are the, let's say five categories.

Sarah Larbi: Okay. Awesome. So in general, before we get into, what's happening right now, what are some of the benefits of investing in this commercial realm of things rather than residential for, you've been doing it for 30 plus years, what are some of the biggest benefits that you see being a commercial real estate investor?

Mat Frederick: If I'm into retail or I'm into office, even warehousing. I don't have a fri stove wash of dryer kids or pets to deal with, or a lot of complaints. This tenant is playing music too loud. That one is smoking, crazy types of cigarettes. So it's more of a business environment, number one.

Number two, I like the fact that people technically pay a dollar per square foot rent, so the way it should be done and they pay a dollar per square foot for all the taxes I have to pay for the maintenance. And insurance and maintenance is anything from pest control to repairs and property management.

If that's taken care of, then all of a sudden I don't have to take money out of my pocket as much to actually fix things. And at the end of the year, if things are broken, I can pass that back onto my tenant. So I find it's a great way to make more money with, let's say less hassle. I've always enjoyed that about commercials, and we don't really have a landlord or a tenant board.

It's based on your lease. So if someone does not pay their rent, technically you can lock 'em out in 15 days and that's it. So again, today you have to be more passionate about or more empathetic about what's going on. But again, I always like getting away from the landlord board. They're great. But I like commercials cause we don't have one.

Alfonso Salemi: You're being too kind.

Mat Frederick: They're gonna be nice. Gonna be nice.

Sarah Larbi: In Ontario. For landlords out there, just looking at and reading the Residential Tenancies Act. And just looking at what's happening with the LTB, that commercial piece definitely feels appealing. Of course there's pros and cons to every single strategy, are you able to share some of the downsides of investing in commercials?

Mat Frederick: If I have a retail plaza, a strip plaza, and I have maybe a location to rent that's 3000 square feet, it might take six months to eight months to rent that space. And whereas if you got an apartment, a two bedroom apartment, you can rent that much faster. Sometimes it's harder to finance, especially if I have, let's say a strip plaza with some restaurants in there.

Banks are not crazy about financing restaurants because they have, they go to business faster. So those situations that arise that they become harder to finance and sometimes harder to fill those spaces. Now a thousand square feet is a lot easier than 10,000 square feet. I've had an office building where 10,000 square feet became available and it took me about nine months to fill it.

Again, it depends on where you are because some places have a waiting list. But generally it's about the leasing, how long it takes to lease it, how long it takes to get a great tenant. Obviously the great part is you can set your own rates and the market will keep you within reason. There is no landlord board to tell me exactly what I'm going to give as a rent, so that's great. And I get longer leases, five year, 10 year leases, but at the same time, when somebody walks away, yes, you're gonna sit empty for a while and that can hurt.

Alfonso Salemi: Obviously selecting the types of properties, the locations of them. We always get down to the fundamentals of where do you want these properties? And we talk about the climate now, right? The climate's changed and there's, you mentioned restaurants, right? And now if I had a commercial strip plaza and maybe two or three restaurants in there, I don't have any more hair to lose, but I'm getting more worried.
When you're identifying them, we're trying to acquire these properties, it might be a little bit easier. Maybe give us a little bit of insight of the pre covid, post covid during covid on acquiring them, like the fundamentals and adapting to the new world out there now.

Mat Frederick: I always say that most things in the world are people problems. Even when I was a systems analyst for IBM, 90% of the time it was not a computer problem, it was a people problem. What information they put in, what maintenance they apply to the system. It's the same thing with real estate location's, great. But it's about who do you have in there as your tenant, and is that business survivable?

Will it survive the internet? Will it survive depression or recession will survive a pandemic? So it's all about who is in there, and that's critical. And then secondly, of course, a great location. Now, when it comes to retail space and even office space, pre covid, pretty much it was hard to get inventory.

I have a wellness clinic in Toronto and I wanted to set up a second one, and it was so difficult just to get space. Pre covid it was hard to get space at the same time. It was expensive. The prices were pretty high and the lease negotiation was pretty intense. Post covid, I find now that the larger companies, the more institutionalized companies, they actually are paying their rent.

Government's pay their rent. The banks are paying their rent. It's the smaller to medium size businesses that they're, like 55% of them are having a problem. And then the street level stores, they're having a problem. So right now inventory is gonna open up and if inventory opens up, prices should come down a bit.

At the same time, it should open the market up for us. And this will happen I think over the next year. It all depends on how many let's say properties, how many businesses fail. But there are large companies now who are, instead of buying or renting in one large block, let's say downtown Toronto, they may then expand out to the suburbs.

Instead of just urban everybody, they may have a satellite office in the suburbs. So it's not as though they're renting less space, they're renting the same chunk of space. But less in Toronto. Let's say 60% in Toronto, maybe 10% in Vancouver, 10% in Mississauga, 10% in Ajax or something. So it's a dispersion of space. That's what I'm really seeing, because in Canada there's about 530 million square feet of office retail space, and that has to be filled.

Sarah Larbi: Do you think that's happening in other cities? I know you mentioned Toronto, you know this is likely somebody listening in Vancouver or Edmonton, Calgary. Do you think this is going to be in major cities across the country?

Mat Frederick: I think the major cities, the Torontos and Calgary, Vancouvers are gonna take a bit of a hit. And again, I don't think it's gonna be as bad as people think. It's gonna be bad, but not as bad as people think, because a lot of people have to realize something. Businesses are about talent. That's the key thing about business talent. Now, why am I talking about business, not about real estate.

Because as a landlord, where I make money is when I have great tenants. And great tenants are businesses with great talent. In order to bring talent to a business, the business has to have a great culture. To have a great culture, you must have a great environment. But to have a great environment, you must have a great office space.

To get good talent, you must have a good culture. To get a good culture, you must have a good environment. To get a good environment, you have to have great office space. For instance, if I have a basketball team, I can build a great arena. That's a great location. But if I bring somebody who's not a key player, we're not gonna get great results in that business.

You have to bring a LeBron James, or you have to bring, let's say, a Michael Jordan talent to the business. Which then draws means that each person at the business is gonna have to bring their game up. At the same time that talent brings in more business. At the same time, that talent teaches younger people to be better, and there's more leadership.

That's the business I'm focusing on. And these large businesses, they need space because talent is not gonna show up to a little dinky office or a virtual office. Now, maybe in 10 years they will, because the only thing that's happened with Covid is where we are in 2021. Now, ultimately by 2029 we would have to be more decentralized.

Covid forced us to be there sooner, but big talent, they wanted to see that big sign. Ice Waterhouse Coopers, they wanna see Bank of Montreal. They wanna see that big company stuff. So all that consider you big companies are still gonna need space. They're not gonna just disappear and run away from Toronto because we rent space because of talent. We need to bring talent when you look the part.

Alfonso Salemi: I think as the, obviously the virtual and the work from home, that type of, that office space, everybody does seem, it's like it was almost like a mass exodus or a forced exodus from it. And companies and businesses were really pushed in that situation of how do they adapt into that virtual world?

Now you are seeing it now people still coming in, getting together in smaller groups and safe social distance need that area. But maybe what are some of the industries that you know are resilient? Like I think of medicine, right? And doctors and pharmacies and things like that where you can't go, maybe in some cases there are virtual doctors.

I don't know if they are out there. That'd be really weird. I don't know. But what are some of the industries that when you're buying a building or you're looking at a building to potentially buy, you're saying, okay, these are the types of industries that I want to attract so that I can make sure that it can withstand those issues.

Mat Frederick: When it comes to offices, I do like the accounting firms, I do like the law firms because even though these things can be done with workers at home, the fact is there's a certain amount of security that's required. There's a certain amount of talent that has to come together to share knowledge back and forth.

If it's legal accounting, if it's medical, retail, innate way, shape, or form, even though let's say cosmetics and hair and beauty and gyms have not done well in this pandemic. It's still gonna be required, and it's still needed because you have to go to the gym here and where you live. You can't just send your muscles to China, have them fixed and then sent back.

You literally have to be here to do it. So any business that requires you to be here, it's gonna be something that's needed. But, I made a few notes. If you're into businesses that do airflow, like that, it's looking at a building and improving its airflow, those are businesses that are gonna do really good.

Cleaning systems, businesses that clean, businesses do really good. Any sort of touchless system. So if I have a company right now who's renting for me and they invent touchless systems for buildings, so now they're, they have expanded tremendously. So really, you even look at all the one businesses that have worked very well in Covid and those are the ones you wanna start with, and then you wanna fall off to most likely the ones that can survive the recession. \And then maybe the internet after.

Sarah Larbi: Awesome. So There's a lot of investors thinking maybe I should get into commercial real estate. It seems really interesting. And, I could reach out to some of those businesses or try to track some of those businesses that you just mentioned that are, quote unquote recession proof.

In all crises or in this case a pandemic and there's likely gonna be some kind of economic turmoil. I don't know to what extent. There's wealth that gets created, right? The opportunity could be extremely great, like great for people that take advantage of it. So what are some things that people can start doing now?

Whether it's door knocking, starting to talk to the owners, looking at certain plazas. I'm just giving you examples. You don't have to use those, but what are some things that people could do so that they don't miss the opportunity? To be able to get some potentially discounted opportunity, discounted commercial real estate.

Mat Frederick: This year so far with my mentees, we found about 14. Now we're up to 16 off market deals. And you know what? That's in the pandemic year. So it means that people, and by the way, most of the people that we spoke to did not plan to sell their property until after we spoke to them. And of course we went through a process.

People right now are on the fence, and if you present to them, you create that connection and you plant the seed about perhaps selling. Some people wanna move on to that next level. And I find that it's really getting out there and speaking to property owners or plaza owners, multi-family business owners, or even office building orders and to see if they're ready to move on.

If I talk to 12 business 12 property orders, I find that one says, Hey, you know what? It's a miracle that you showed up. We were just thinking about selling. Another one says, I'm not selling, but make me an offer. And once that settles in and that boils down, now they really want to sell.

Six of the 12 will say, not selling, still growing. To those, we figure out what they want and we assign properties to them. So the one who's selling, I may not even buy. I might assign that property to that person. When you assign a $2 million building, getting a hundred thousand dollars assignment fee, you and then the other four who are not looking at moving or doing anything.

Sometimes they have equity and you can convince maybe one of them to invest with you in another joint venture where you're the arms and legs because they're too tired and maybe another one, it has their property, for retirement.
They still want to be in the game. So you're the arms and legs. So quickly, you talk to 12 people. If you talk to them the correct way, two will sell, six will want to take over a deal that you can assign to them. Two of the other four will end up probably allowing you to do some kind of JV with them or financing you with their equity.

I think you said it Sarah. You have to get out there and do something about it. Not just sit back and say, wow, scary times. I should sit home. I don't wanna go out there and I might get eaten by a wolf.

Sarah Larbi: Absolutely. Before Alfonso, I'll ask you questions like, is there a specific type of commercial real estate that somebody out there could be looking for? Any for lease signs or is there like any signs that get that, maybe say, Hey, this person could be interested in potentially selling like any telltale things.

Mat Frederick: Right now multi-family is selling more than strip plazas and office buildings only because the banks are still financing multi-family. What would normally take 30 days, might now take 45 days. If you use CMHC, it would take four months, but you can still get plazas and strip plaza and office finance, but sometimes the big banks aren't doing it. Sometimes you have to go to a secondary bank, pay a little bit of a higher interest rate, maybe 5%, 4.99% or maybe a year or two, and then you jump out.

You can do both, but again, it's a bit more difficult to find finance plazas. There's no real telltale signs of which building. It's pretty much you have to contact the owner, and there are ways to do that by speaking to tenants or speaking to the property managers. And once you contact the owner, it's having that question, Hey, I'm here.

I wanna buy your building. And they're like, what? I'm like, yeah, I'm calling. I'm in front of your place. I like it. I wanna buy it. They're like, you wanna buy my building? I go, I wanna buy it. What's not for sale? I know it's not for sale, but I love it. And you know what? I'd love to make an offer. Can we talk about it?

All they can say is yes. They can say no. They can say maybe if they say no, I'll say, Hey, you have something else. I'd love to do business with you on that other property. I'm an investor. I have some donkeys in my portfolio. Maybe you have a donkey or too you wanna sell, maybe not this building.

I'll take a donkey's, just a ugly property, right? And at the same time, if they don't wanna sell, maybe they're still growing. I'll tell them, if you're still growing, if I find something great, can I bring it to you for your review and selection? And if you want it, we'll do business and go from there.
You know what? In the end, that's it. And when you do that enough times, do it the right way with a certain amount of confidence, people respond. So I don't look for clues. I just talk to every owner I can. So my job is to find that owner.

Alfonso Salemi: I love that advice. And the way that you're doing it too is so systematically you, first of all, you're saying how many out of 12 first of all, you have to talk to at least 12 to get those numbers right and many more. Then how you're categorizing each one of the Yes no, or maybe. Those maybes or nos? Then you're saying the ones that say yes to me, maybe I can wholesale them or sell them to the nos. And it's the recycling way. And it's a systematic way of not just showing up to a building and saying, okay, I'm gonna buy it.

Then, oh wait, hold on. Now I have to finance it. I have to find a partner. It's setting up that business. It's just not by accident. And that's what's, that's what's important whether no matter what strategy or investment that you're doing, you have to look at it as a systematic approach in a business that can be recession proof and say, okay, now this is where we need to shift.

I love how you do that. And it's great because you're turning those maybes or nos into also a positive yes. On another question. So that's really great. I guess a lot of people have been, I myself have been reading, okay, now all these office spaces, in major Metropolis, we say Toronto cause we're close, but Vancouver, Calgary, all these places that have these office spaces that they're saying, oh, we're gonna convert them now into residential.

Maybe that's one change that people are making to survive, or the possibilities, first of all, none. You need how many toilets, like you said in all those buildings now, and that wasn't set up for all that plumbing. But what other changes now in those spaces if maybe you have those properties or looking to the properties that you can adapt to make sure that we can't survive the, to make sure that we are pivoting in the right way?

Mat Frederick: I wrote a few down for you guys what I'll do, I'm just gonna read 'em off in a sense, just so that if someone's watching, they can just take a note. And you're right, an office building is not that easy to convert into living space because it was not designed to have toilets and plumbing on every single floor, every single area.

The building has to have a few changes. Just let me rattle off a few to you. As I said before, you have to have touchless systems in those buildings. You may have to have an elevator. Obviously you're gonna have a lot of lineups, so you have to deal with that, which means.

As a business itself, you're gonna have to work on when people start the job, when they take their breaks, when they go for lunch, when they end the day. So from the business aspect, someone's gonna have to reshuffle that. The building itself may have wider hallways, temperature checks obviously no visitors coming into the building.

More security, a whole lot less community shared spaces than they do today. A lot of businesses over the last 40 years have taken away square footage. People used to have separate offices in cubicles, but now they have to bring those cubicles, little cubicles back again.

Another thing that, as I mentioned, is airflow systems in buildings. Now the business itself is gonna have to do more things, like I said, staggered start times, alternative days, probably less social perch when we get together. Less paper devices where you're going into certain areas. What I've found is that buildings today need to offer more, because in the past they just had to offer square footage.

Now a building has to offer a great digital component that they can actually run, all the digital stuff you're doing today, they have to have more green space, a more natural light because, and you might even see rooftop parks because people want a bit more now. I made a note that people want more of a flexible workspace.

They want more, I'll say fun. In other words, a reason to come in because they're literally at home. Okay. So your space has to be more dynamic, more based on people as opposed to you should squeeze them all in and get much square footage. Rental as can be. Like, I have one building right now, and I'll keep this short.

It's 10,000 square feet on one floor. And I had three businesses taking up that 10,000 square feet. Now what I'm doing is four businesses taking up 8,000 square feet, and I have a shared area for 2000 square feet. But we're focusing on cleaning that shared area. So these businesses are sharing the printing area, sharing the boardrooms.

It's four completely different businesses that had their own board groups, had their own reception area. But now we bring 'em all together and we clean the common area better. So 99.9999%, bacteria kill. So again, it's just working your space better than how we used to work it before. And that draws people in.

Sarah Larbi: That's interesting. So as an investor, how much of this is going to be your money spent to do this versus more of a consultants basis consulting these companies to change up their layouts a little bit so that people can be more distanced? Cause I'm listening to this and I'm thinking, wow, if I have to start doing this as a commercial landlord, things can get expensive very quickly.

Mat Frederick: That was, that's a very smart comment you made because ultimately that's a whole new industry where somebody has to now come in and be that expert, almost like a wardrobe consultant. Now you have to have consultants come in and look at that office space. Because just because you can manage a property or you can buy a great building and negotiate it doesn't mean you know how to use that space wiser, smarter.

That's really important. Now a lot of people think because people are staying at home and they say one third of the employees may end up staying at home, one of the five believes they should stay at home. But here's a people problem that I think is gonna reverse that. I don't think it's gonna be a mass excess from the office because after two years nothing's gonna happen.

The people who actually show up to office, they get promotions because when you're outta sight, you're kinda out of mind. And when you're on a screen with 20 other people and you're just a little box, like a little square, It's kinda hard to get that promotion after two years. You're like, man, I'm not getting promoted.

Jenny's going into the office and she's getting promoted because she's doing water cooler talk and she's there. You know what? I need to get outta my house and start going back to work. So ultimately, yes, people will migrate away from the office space, but when they realize that they're not gonna get those promotions, cause you have to be there in someone's sight for them to see that you're a leader.

Harder to do on the internet. People will start trickling back. And after all, the twin Towers got knocked down years and years ago, and people thought, no more office space. No one's gonna go to the office anymore. Hey, people forget. I know these things will keep happening. There'll be more and more of these diseases, but people forget and they forget within three years.

Alfonso Salemi: Yes, it's that human condition, right? If you rewind back 9 months, 10 months ago, right at the beginning of the year, people would probably be like, I hate going to the office to commute. It's horrible, right? And now it seems, it's like, it's almost like a shift where I gotta get out of the house. I can't wait to get back to the office.

Like you said, those water cooler talks are in the break room. Those conversations that you can't have, it seems like every conversation I was scheduled. And okay, this time, from that time, okay, we have to go on zoom, like you said, all a bunch of squares altogether. We are humans.
We're supposed to be together, we're supposed to be, interacting with each other, obviously in a safe way. But these are the things to consider so that if you are going back in that space or offering or have those, you're taken out. Go, sorry, go ahead Matt.

Mat Frederick: Those internal politics make a difference. My brother is in Belize, my sister is in the US. My other sister is in Lancaster. I'm in a different city. My parents are in a different city. So we still talk to each other on WhatsApp, but you know what? It's not the same when you're there because when we're together, just being together, there's a something called the bond, a collaboration that happens when you're with great people.

I think one of the biggest problems is gonna be number one, productivity will fall. We have to learn. So really, we're supposed to learn over the next three or four years how to be productive, still being at home, dealing with your dog, and having to walk in 10 times now. Your kids, the fact that the refrigerator is right there, it's a problem I have.

On top of it all, you have your spouse and everything else to deal with as you're talking like, oh sorry. You know what? That's the ambulance. Or are you hearing stuff? That's kinda hard. The second thing is mental health. The fact is people do need some kind of getting together with people.
I think people will migrate from the offices, but they will come back again. Because I've seen a report where it said working at the office is not the greatest and working at home only is not the greatest. But here's the beauty. A hybrid of both is the most healthy for people because it creates a better work-life balance.

Things are not gonna go back to the way they work. They're gonna change through a hybrid system. And one of the biggest businesses that you can get into is how do you balance measuring productivity with people who are working at home and working at the office.

Trying to keep that up there and at the same time, balancing out mental health, tying it together, where with, you're losing all that, the ability to get promoted because you're losing that water cooler and I know this is all about people, not about property, but people drive property, people drive what type of rentals are available And I've always focused on people first. Not location people first, and then property second. And I've always been right using that system.

Sarah Larbi: Just goes back to when you were talking about how culture and environment, the office space creates a lot of that, right? And that, picking a company, I don't have a job anymore, but when I had a job like culture and environment was actually like first before how much money I get, right?

I mean it was all similar give or take, but the culture and environment will also keep somebody there. A couple years ago I was offered 50k more by the competitor to switch over, and I'm like, it's not worth it because I don't know that culture and the environment. It's, they say it's a certain way, but I don't know for sure.

I'd rather stay in a culture and environment like I've quit on jobs before and companies before that didn't have that. And it goes back to office space and it goes back to just being together. So I do agree with you that I think the best combo is going to be a hybrid of being at home and just like having a little bit of autonomy when you can schedule it in.

Like for me, I started scheduling days with Laurel and Catherine at our REITE club office so that I can at least have a real live person in front of me, cause I'll tell you, the Zoom calls get really annoying and really tiring to do over and over all day long. So it's definitely important to be out there.
What's next for you? Like in terms of acquisitions? What are you looking for to add to your portfolio or what are you doing? Today even not necessarily to add, but also to mitigate potential downside.

Mat Frederick: I do believe that people will tend to, a portion will tend to move away from, let's say, the urban area and they will move more to the suburbs. I believe that. So I think the suburbs will need more smaller satellite offices. And when I say a smaller office, somebody might need 600 square feet. Or someone might need an office where it's closer to home so there's less transition, there's less car time.

They're closer to home. They come into the main office to do the major things that have to be done for team building, but then they go away to the satellite office and they end up doing certain things and then moving to their homes.

Again, I'm probably gonna look to build probably three story buildings where I'm having one level retail, but smart retail, so medical retail. Hey, pizza works all the time and a variety store. Convenience stores work all the time. And the second, third level would be, again, more of a satellite type of business.

Another thing about the building. You have to really now focus on what I am offering. When someone goes to work, can they do three things at that building? Can they get some medical, can they get their pharmacy stuff? Can they get their dry cleaning? I wouldn't dry clean on the spot.
That's an environmental issue. Ship it away. And can they actually have four things done at that building. Because in the past people would just rent, have my space. Now it's like you have to make that space wiser and smarter to help somebody complete their day's activity, right? So that's what I'm looking to build, probably three story, put in the right combination of people or businesses to help somebody complete a thought.

Like when I go to the store, if I'm gonna buy a suit, I need to buy a tie. I need to buy socks, I need to buy a shirt with the Pants I hate to go to four different stores to do that, right? So it's having smarter combinations of businesses in your business, and that's important.

Alfonso Salemi: Those complimenting things. And I'll go to all the stores to buy all the ties and suits and and pans and stuff like that. But you're right. But you have to find the right one. But you're right. If it's closer to that shirt or that blazer, then yeah, it is more convenient.

Sarah Larbi: Stop shopping every day. I feel like, okay, anyways, it is what it is. But guys, Alfonso has A hundred times more pairs of shoes than me just saying.

Alfonso Salemi: I got nowhere to wear them. Now that's the worst thing about this covid. So now I'm back to just the comfortable shoes in the house. But you're definitely right. You have to have those complimenting businesses that are convenient and making it easier for people.

That is differentiating. But people are normal and used to, because it's not even that people, that's a human condition. People will get used to that and just get bored. But now they're forced to get away from what was usual and normal because of the health reasons, of everything that's been going on. Having and being prepared for that is key.

Mat Frederick: It's true. People want more, they don't just want the rent anymore, they want more, they want more convenience. So that's where we're going. You have to have smarter rental systems.

Sarah Larbi: Awesome. I mean, we can keep asking you tons of questions about commercial real estate. We'll have you back at some point. I feel like you've been on these podcasts, I don't know, maybe four or five times already.

Mat Frederick: Every single time.

Sarah Larbi: The next part of the podcast is a lightning round. So you may know these questions or you may not, but Alfonso and I are willing to ask you a series of four questions. You're gonna give us the first answer that comes to mind. Are you ready?

Mat Frederick: Okay, let's go.

Sarah Larbi: All right, so here's the first one. What is the best advice that you have ever received from another investor or at a networking event?

Mat Frederick: I'd probably say that you really wanna be able to find properties off market. I heard this a long time ago, and if you can find properties off market, then you do better at buy a fixel. You do better at where you do better at rent to own, you do better at commercial and different things.

It's really learning to find properties off market, which is the hardest thing to do because there is a certain amount of, let's say, negativity that you might receive, or even rejection. You're asking someone to do something they were not planning to do, but with the hardest thing comes the most reward. Finding off market deals. Skill safety you got us focus on. I'll keep these answers shorter.

Alfonso Salemi: I love that. That's, you gotta do something different, right? Be unique. So question number two, what is your favorite resource for real estate investing? So that could be anything like a book, training a person, a certain event, something like that.

Mat Frederick: What's your favorite resource? Yeah, it's a show called Star Trek, the Next Generation, and I watch it. That's number one.

Sarah Larbi: Sorry, this is not a joke. This is for real. Okay. I'm interested.

Mat Frederick: For real. I watch it because it's not really about space, it's about the social condition situations that people go through, and I'm forced to look at it from the outside because it's in space as opposed to look at it from the inside.

It helps me to deal with real people every day. And the second thing I do is I look at the military. What is the military doing right now to improve its ability? Like a fighter jet can talk to a fighter, jet can talk to an artillery guy, can talk to a soldier. How is that combined arms working and how can I do that same sort of interaction with all the people on my power team.

I see how the military does it. I try to do it too. I look at Star Trek, the human condition. I look at the military or the system's condition. Why reinvent the wheel? It's already there, right?

Sarah Larbi: That's true. Were you in the military? I think you were in the military.

Mat Frederick: Yes, I was a soldier. I was in the Reserves for maybe nine years. And I was also on a peacekeeping force out in Africa and also in

Cyprus. I was a peacekeeping force in Cyprus, so it was a good experience and not so good experience.

Sarah Larbi: Okay, awesome. Next question. What is the one attribute in your opinion that has made you most successful?

Mat Frederick: I think fortune favors the bold. Which means I literally will try something. Even if I think I'm gonna fail, I'm gonna try it. And if I do fail, I'm gonna learn from it. So I think that's really important. I don't really have that fear of going out there and try new things. And also taking a leadership role.

I remember maybe like when I was a college teacher, I was out one evening and there was a fight happening and all these guys around, one guy and this big guy there who's beating up a little guy, and I went to. I wanted to drive home because I was tired, but my friend said, let's go save that guy.

I ended up saving the real guy, but the big guy wanted to fight me, and in the end, all the people circling around were his friends. They all jumped on me and I'm like, man, I'm getting beaten up here. I'm another soldier. I'm getting beaten up by civilians. But you know what? I took leadership and I saved that kid, and at some point I got pretty mad and I turned into a beast.

I started throwing people left, right in the center. But again, all that can say is my best ability is I'll take leadership. It's not given, it's taken. So I got beaten up, went to school the next day with a bloody high and some little guy kicked me in the back. That's all I remember. The littles guy, welcome to me, kicked me in the back and I saw him inside of my eye. But again, leadership and being hopeful. I'm just saying it.

Alfonso Salemi: Awesome, and yeah. And if that guy's listening, we all are gonna get you back, don't worry. Just awesome. Alright, so last question of the lightning round. On a typical Sunday morning, what are you up to? What are you doing?

Mat Frederick: You know what, my dad's 87 years old. My mom's 85. So for the last three weeks I've been going up to the cottage with my dad. I drive up, I've heard the stories. A thousand times. I said to my dad; dad, you're like my best friend. He goes, you're my only friend because when you're 87 years old, mostly friends then. And I spent all my time with him because I know one day he won't be there and I do not let my wealth or the, let's say desire for wealth blindly.

To what's real and what money cannot buy again, so I make sure I appreciate that. Number two, I just helped one of my students get a six unit building and he's okay, what's next? I go, no, cool it. Go home, relax, enjoy it. What I forgot to do with a lot of my first 15 properties is to enjoy it, sit back and watch it, and realize you did it, you planned it, and you got it done.

Enjoy it. Forget about trying to get the next one. Enjoy it, then get the next one. So those two things, what is really valuable? What money can't replace, and also enjoy what you've done because even both of you, if I look at what you guys have achieved, hell, it's crazy. Hopefully you spend the time sitting back saying, you know what I enjoyed. You guys are enjoying it. Correct?

Sarah Larbi: I am now that I don't have the nine to five job anymore.

Mat Frederick: That's good.

Alfonso Salemi: Absolutely. Yeah. I see more teeth and Sarah's smile these days. That's definitely for sure. So it's bigger, it's a much bigger smile, that's for sure. And that's so true. And I think that's great advice as we wrap up the podcast here, is that.

You have to be in love and enjoy the pursuit of all the goals that we want to achieve. Once, once you get that goal and you have that yeah, it's great, but you always wanna get onto that next one. That pursuit and enjoying it along the way is so key. For the members of the REITE Club Nation that don't already know you, that don't already love you and have been introduced to you on this amazing podcast, how can they get in touch with you?

Mat Frederick: They can hit my website. It's six letters, Even my email Matthew. Drop me a line and say hi. Mention the REITE club. Obviously I give the REITE club preferential treatment. You're like an amazing family and what you guys do, just again I find just amazing. You're there for other people, not just yourself and for me. Like that service above self. I love that. I respect that.

Sarah Larbi: Thank you. That's awesome. And we always ask this at the end. Any final last words of advice for the REITE club nation?

Mat Frederick: You know what to keep at it. Keep at it. And take one step at a time. Don't get that on yourself when things don't work out. And just know that every step you take will move in a different direction. The important thing is moving in a direction. You don't wanna be still water. You're still water. So ultimately you wanna be running water. Okay? So be running water.

Sarah Larbi: Awesome. Thank you so much, Mat, for being on the show, and I'm sure we'll have you back again because you are only the most recurring guest we've had.

Alfonso Salemi: One of the favorites for sure. Thanks, Matt.

Mat Frederick: My pleasure guys.

Alfonso Salemi: What a great chat. Always lovely talking with Mr. Frederick and he's got so much experience from different aspects and different things that he's gone through over 30 years of investing, seeing different things, how to adapt, how to change. We are talking specifically about the commercial space and people we think are eventually gonna get back together and they want to get together with all the dynamics and a safe way to do it. But always good talking to Mat. What were some of your takeaways, Sarah?

Sarah Larbi: I think it's just a great opportunity, I think overall just to be able to look into this asset class and, I think the commercial sector will be hit maybe a little bit harder than even the residential sector and it's just figuring out how to make it work. He gave us some great tips in there and what types of businesses are gonna work well and how to find some different opportunities. So I think all of that was great insight. What about you?

Alfonso Salemi: Absolutely. I really like that. We were talking about the different types of real estate and we always, not we, but a lot of people get stuck in the idea of the actual building and the structure and, oh, it's a five unit, or it's this, or it's that type of property. But what Mat really focuses on the people that are actually gonna be renting or living, or the businesses that are gonna be working in those units, right? And focusing on that problem, right? It's like the side effects or the people don't look at the cause. They look at the side effects, right?

What happens from it. So going deeper and looking at those things, I think really makes him dynamic. It makes him unique. And it's a good testament to all of us and some tips. For us to take that look at it. So I really love that and there's gonna be a lot more of that kind of stuff on the REITE club community on

So much information, useful stuff, mindset, things. We have the calendar with all of our events on there, our forums, the chat. I want to personally thank all of the REITE Club Nation I sent out. I have, I don't know, a bunch of connections on the REITE club website and I sent out a happy Thanksgiving.

I would say over a hundred people. And now, I've started conversations with each one of them and it's been really great connecting with new people with old names, faces. That's the way that I've been getting my networking fill in the meantime before we can get back in person and together. Definitely, if you haven't already, get on I know Sarah's there. She's got a bunch of information that she's gonna be putting up there soon and it's gonna be awesome.

Sarah Larbi: Absolutely. And don't forget to rate the podcast. If you are an avid listener and you've been binge watching, we'd love to hear your feedback and REITE Club Nation. Thank you for tuning in. Alfonso, what do we say?

Alfonso Salemi: Till next time, come grow with us.