Push the Boundaries of Your Portfolio… Diversify!

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By Dasha Zolota

You can learn a lot about a person over the span of a conversation. In fact, sometimes, first impressions really tell you more about someone in one go than any other situation.

Real Estate Investment Network (REIN) member Robert Di Matteo definitely leaves you thinking. He’s an open guy, has an arsenal of phrases pocketed with investment-type lingo, and he has his recipe for success down to a science.

“Real estate, to me, is a three course meal,” says Di Matteo. That is, all investments have to be chock full of positive cash-flow, mortgage pay-down and appreciation. He doesn’t invest otherwise, and this is coming from someone who now invoices over a million dollars a year in gross annual rent.

The 51-year-old Norman Hill Realty agent attributes his success to the combination of organizational tools and dialogue between like-minded thinkers that REIN has provided him over the years. His current portfolio boasts a 23-unit apartment in Hamilton, several other apartments in Barrie and surrounding area, several six-plexes in York region and the GTA, and over 20 multi-family houses and condominiums throughout the rest of the province.

“You wouldn’t want to [start investing] the way I did it,” says Di Matteo. “I went gangbusters, I was probably over-the-top aggressive.”

Di Matteo began investing back in 2003, starting with the purchase of 11 Rowntree Ave. (a little house with two self-contained suites located in The Junction), followed by at least 14 other properties within a year’s time. He had worked as a key account manager for OfficeMax Grand & Toy for over 25 years and wanted to supplement his income with a proven and reliable medium.

“At that point, with the corporate world changing, I decided I didn’t want to work for a [corporate] company again,” Di Matteo recalls. “I wanted to be self-employed and I decided I wanted to be a real estate investor and landlord.”

So, for a while he balanced both – enjoying the benefits of real estate investing and his day job. Di Matteo had an insatiable appetite for knowledge as this career transition was taking place, so he took several courses and also obtained his real estate license along the way.

His first sale as a real estate broker also just happened to be his first investment property, which he wishes was still in his portfolio. Interestingly enough, Di Matteo holds most of the properties he bought in his early investment years.

“I probably hold over 90 percent of what I bought,” he says. Of course, not every property flourished and those were sold off. But after joining REIN in 2007, he diversified his portfolio extensively.

Outside of real estate, Di Matteo dabbles with land development deals through syndicated mortgages, limited partnerships, and second mortgages.

“These are what I call shelves,” Di Matteo says. “It lets me put some of my investment dollars on a shelf while I continue to look for real estate opportunities.”

One of the companies he’s been working with, Fortress Real Capital, gives him an array of investment options that he picks and chooses from. The returns are conservative, says Di Matteo, but they’re a compelling investment alternative for a seasoned investor.

“It’s a little tougher for an investor, like myself, to obtain financing these days,” he says. “Banks have made a lot of changes. Rather than just having the money sit in the bank doing nothing, companies like Fortress have been able to present some opportunities where I can put my money to work while I continue to look for others in real estate.”

To actually get started in real estate investing, he recommends starting off simple.

“For a beginner, I would stick to buying that single family home, that has two or more suites or that can easily be converted. That’s the foundation to make other decisions down the road,” he advises. “Find yourself a really good real estate agent, first and foremost. Identify where it is you want to invest and explore how much you can afford to invest.” He adds that you should know the neighborhood that you want to invest in inside and out and make sure that all the economic fundamentals are in play. Furthermore, you also need to build your team that includes a mortgage broker, lawyer, home inspector and accountant.

Di Matteo himself had such faith in his realtor that when he first began investing he put down offers on properties he hadn’t even seen. He says many people are wary about initially investing in real estate because they don’t necessarily have a good understanding of what it entails.

“My neighbor said, ‘What are you doing? What, are you nuts? The market’s gonna crash. Why’re you buying so much real estate? Why are you doing this?’”, he recounts.

But, for Di Matteo, it was a pretty simple formula that he kept going back to. He initially specialized in properties in a very specific area – around The Junction (where he grew up) and Newmarket, around Yonge St. and Davis Dr., as both presented opportunities for growth and great cash flow.

He did his analysis – down to running fake ads on properties to see what the market was like and what rents would typically go for. Despite being of a generally assertive nature, Di Matteo always took what was, to him, a sure route. He’d purchase a property and hold onto it for a number of years and reap the benefits.

Even to this day, fixing and flipping homes is not something of particular interest to Di Matteo. He likens it to gambling and trying to double your winnings, then losing everything. The buy-and-hold method is “no smoke and mirrors,” and REIN helped him go to levels he’d never even imagined.

If it wasn’t for the tools and confidence joining the network afforded him, Di Matteo says he would have likely stopped expanding his investments past a $10,000 – $15,000 per month profit. That was his magic number, and chances are if he hadn’t come across REIN in one of Don Campbell’s books he wouldn’t be involved in some of his larger land deals and extracurricular portfolio activities.

“It’s funny,” he says. “Because once you join REIN and you become much more knowledgeable, you start attracting money.” People who became his business partners originally were just curious people inquiring about this “real estate thing” and now they are partners for the long haul.

Di Matteo joined REIN before even going to his first meeting and he was eager to immerse himself with similar thinkers. After all, real estate investing is not a gamble if there is a wealth of knowledge behind the action.

He spent hours conversing through forums and learning about all the ins and outs from past problems ranging from tenant issues, repairs, by-laws satisfying lenders, taxes and more. REIN meetings would be spent scrabbling novels worth of notes, only to be reviewed for countless hours afterwards while nursing a cramped writing hand.

It was not long after that Di Matteo was awarded 2007 REIN Rookie of the Year.

And that success is something that he has passed along to his clients and family. Now, he focuses on streamlining his business processes through meticulous organization and regular review of all his affairs.

“If you’re going to invest in real estate,” says Di Matteo, “you can’t afford to not join a sophisticated real estate group like REIN.”

Di Matteo makes it clear that he loves what he does. It’s a passion, an addiction and a hobby. It’s a great way to make money in your sleep and it’s something that definitely should be shared with those around you. The key to exponentially growing that love was simply finding a community of individuals who were looking for the same thing.

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