Matt Paulson explains how he scaled a real estate portfolio to 2,000 apartment units and commercial properties by avoiding syndicator fees and partnering with Kevin Toobie. He locked in low interest rates in 2020-21 to accelerate growth while building community-focused investments in Sioux Falls.
Questions this video answers
About 1,300 Verizon stores.
Approximately 3.5% interest rate.
About 2,000 units.
About 10 Starbucks buildings.
At least $20 million in equity.
Chapters
Typically, when somebody like me wants to invest in real estate, you run into all sorts of syndicators, people that, you know, have a deal and they're looking for money, and then they want to do some kind of preferred return and split on top of that. I. I always kind of felt like that's a little bit of a sucker's game because, you know, it's all my money, and they're. They're making money off of it. I kind of. I ran into a guy, his name is Kevin Toobie. He was his claim to fame is he. He owns or still owns like, 1300 Verizon stores across the country. And he had a couple private equity exits. So he did really well, probably worth, let's say, a couple hundred million bucks. And he decided that, you know, after he got out of doing a Verizon stores, at least as an operator, he wanted to run his own family office because he thought it would be fun. And he started developing real estate. And our mutual friend said, hey, you two both make a lot of money. You're both really smart. You guys should talk to each other. So we had had lunch, and that led to another lunch. And it's like, hey, I'm doing an apartment project. You Want to buy 10% of it? It's like, what are the fees? And it's like, there's no fees here. GP I was like, oh, that sounds really interesting. And now here we are, like 30 projects later, at least, probably 20 million in equity, at least in my part on the deals.
How many doors did I see? I mean, it's going to be a bunch when it's done, right?
Yeah. Once everything, like, so. So we. 20, 20, 21, like, interest rates. You could finance an apartment project at three and a half percent. And like, we knew that, like, this is not going to stick around forever. So we figured that out and we, like, we're going to start as many projects at 3 1/2% as we can and just go hard and fast. And it's kind of what we did. And now I think when everything's done, we have about 2,000 units that we share. And then we have like 10 Starbucks buildings and just a bunch of different random strip malls that kind of stuff spread around town and in a few other places as well.
And when you guys are with your kind of your Sioux Falls, the local filter of everything that you're doing, are you applying that with real estate, too? Because, I mean, like, I. For some reason, Matt, like, I just. Every time I see the things that you're doing. I just. It just screams conscious capitalism. And you have a. You have very intentional with everything you're doing. It's not like things are just going off all over the place just for the growth. I mean, you're like, so is it locally? I mean, what's. What's kind of the spin to it?
Yeah, I mean, it's, you know, there's always kind of the invest in your hometown element that's. That's fun to drive by building and like, yeah, I own part of that. And, you know, there's definitely an element of investing in my community. But also, like, the returns are really good because you get tax benefits and you're paying off debts.
