Building Long-Term Wealth With Just 3 Properties (Less = More!)

Summary

Real Estate Rookie Podcast Summary

Episode: Building Long-Term Wealth With Just 3 Properties (Less = More!)
Release Date: June 30, 2025
Host: Ashley Kehr and Tony J. Robinson
Guest: Matthew Morneau, Active Duty US Army Soldier and Real Estate Investor

---

Introduction

In this compelling episode of Real Estate Rookie, hosts Ashley Kehr and Tony J. Robinson welcome Matthew Morneau, an active-duty US Army soldier who embarked on his real estate investing journey at the young age of 21. Matthew's story is a testament to resilience and adaptability, showcasing how he transformed a challenging first property deal into a thriving real estate portfolio despite the frequent relocations inherent in military life.

---

Matthew's First Real Estate Deal in Oregon

[00:00 - 03:36]

Matthew begins by recounting his inaugural real estate investment—a one-and-a-half-bedroom house in Oregon purchased in 2006. Armed with only $20,000 from a settlement after a severe car accident, he took the plunge into homeownership despite being a college student unfamiliar with real estate intricacies.

• Challenges Faced:
  • Property Condition: The house had a poor foundation, partial structural damage from a fire, and numerous plumbing issues. Matthew had to personally repair the sewer lines, which were compromised in multiple locations.
  • Financing Woes: Acquired a subprime, interest-only mortgage using misleading student scholarship documentation, a common pitfall pre-2008 financial crash.
  • Realtor Advice: Poor guidance led to unexpected closing costs of $20,000 on a $72,000 purchase.

Notable Quote:
"I had a really terrible realtor... if you guys remember that. Interest only. And I gave him student, like scholarship documentation and he used that as income."
— Matthew Morneau [01:52]

---

Turning Challenges into Learning Opportunities

[03:54 - 05:21]

Tony acknowledges the immense challenges Matthew faced, prompting the question of what kept him from abandoning real estate altogether. Matthew attributes his perseverance to the invaluable lessons learned through adversity. His first deal taught him hands-on problem-solving and instilled confidence in handling complex issues, such as plumbing repairs and assessing property value.

Notable Quote:
"I believe, like if you face your fears, then you're not afraid of it anymore... there's nothing that can scare me."
— Matthew Morneau [03:54]

---

Progression to Subsequent Deals

[05:21 - 07:51]

Matthew discusses his journey beyond the first property. After military deployments and relocations, he purchased a brand-new house in North Carolina using a VA loan. Although the property burdened him financially for nine years without immediate profit, refinancing at a favorable 2.5% rate eventually yielded significant equity.

• Portfolio Growth:
  • Colorado: Long-term rental property.
  • Arizona: Primary residence transitioning to a midterm rental.
  • Maine: Five-unit short-term rental property comprising cabins and a lakeside cottage.

Notable Quote:
"At nine years I could sell that house because I had to move away from it for military orders with no capital gains tax."
— Matthew Morneau [06:58]

---

Financing Strategies and Use of VA Loans

[07:10 - 10:34]

Matthew delves into the strategic use of VA loans, which have allowed him to maintain multiple properties simultaneously without large down payments. He emphasizes leveraging the VA's benefits to maximize investment potential, including understanding the importance of funding fees and employing cost segregation to optimize tax benefits.

• Key Insights:
  • VA Loan Advantages: Zero down payment options and favorable interest rates.
  • Cost Segregation: A technique to front-load depreciation, reducing taxable income significantly.

Notable Quote:
"If you're putting 5% down, that'll reduce that fee to only one, one and a half percent."
— Matthew Morneau [25:06]

---

Building a Diverse Portfolio with Strategic Additions

[12:55 - 16:21]

Matthew explains his investment in Maine’s short-term rentals, including lakefront cabins and RV pads. His approach focuses on adding value through infrastructure improvements and diversifying income streams, such as introducing electric vehicle chargers to generate additional revenue.

• Deal Highlights:
  • Location: Portage Lake, a small community with limited commercial banking options.
  • Financing Tactics: Negotiated directly with local credit unions by presenting pro forma rent projections and leveraging BiggerPockets’ calculators.
  • Property Enhancements: Added RV pads and leveraged local grants for sustainable upgrades like EV chargers.

Notable Quote:
"We grossed $91,000 in revenue the first year despite all of those setbacks."
— Matthew Morneau [21:16]

---

Overcoming Challenges in Commercial Real Estate

[17:57 - 21:30]

Matthew reflects on the complexities of managing commercial properties compared to his first single-family home. He highlights the importance of thorough inspections and the pitfalls of neglecting due diligence, such as purchasing without a proper inspection leading to unforeseen repairs.

• Lessons Learned:
  • Inspection Importance: Avoiding deals without comprehensive property inspections to prevent costly surprises.
  • Market Fluctuations: Understanding how external factors, like weather patterns and pandemics, can significantly impact rental income.

Notable Quote:
"Buying a house without an inspection taught me so much... it gave me a lot of confidence."
— Matthew Morneau [36:16]

---

Wins and Successes

[21:30 - 23:19]

Despite initial losses, Matthew achieved notable successes, including substantial revenue from his Maine properties and creating a generational asset for his family. He leveraged local grants for sustainable enhancements, demonstrating innovative ways to increase property value and income streams.

Notable Quote:
"I have four children, so I really look at this as like a generational place we can go."
— Matthew Morneau [21:30]

---

Strategic Rental Management: Short, Mid, and Long-Term Rentals

[24:05 - 31:59]

Matthew discusses his diversified rental strategies, utilizing multiple platforms like Furnish Finder and Airbnb to maximize occupancy and revenue. He emphasizes the importance of a multi-pronged approach to reduce dependency on a single platform and capture varied tenant needs, from travel professionals to seasonal workers.

• Strategies Implemented:
  • Platform Diversification: Listing properties on multiple rental platforms to ensure consistent bookings.
  • Networking: Collaborating with local businesses and realtors to tap into niche markets.
  • Flexibility: Adjusting rental terms based on seasonal demand and local economic factors.

Notable Quote:
"I want to get connected to the local film bureau... cold call some people... Flexibility is key."
— Matthew Morneau [28:05]

---

Advice for Military Service Members and Aspiring Investors

[37:47 - 40:34]

Matthew offers invaluable advice to military personnel interested in real estate investing. He highlights the benefits of utilizing VA loans, seeking professional help to minimize stress, and the importance of perseverance despite setbacks. His journey underscores that with strategic planning and resourcefulness, military members can build a robust real estate portfolio.

• Key Recommendations:
  • Use of VA Loans: Take advantage of multiple VA loans to expand holdings without excessive down payments.
  • Seek Assistance: Hire professionals for tasks like moving to reduce personal stress and increase efficiency.
  • Stay Patient and Persistent: Understand that real estate success is a marathon, not a sprint, requiring long-term commitment.

Notable Quote:
"Don't be afraid... take action and you can learn from all those things you were afraid of."
— Matthew Morneau [38:01]

---

Conclusion and Final Thoughts

Matthew Morneau's journey from a novice homeowner facing significant challenges to a seasoned real estate investor managing a diversified portfolio exemplifies the potential rewards of perseverance, continuous learning, and strategic planning in real estate investing. His story serves as both an inspiration and a practical guide for rookies, especially those balancing demanding careers like military service.

Notable Quote:
"The path to success is not linear. There's a lot of bumps and hiccups and peaks and valleys, but the goal is that when you zoom out, you start to see that upward trend."
— Tony J. Robinson [38:57]

---

Connect with Matthew Morneau:
For more insights and to reach out to Matthew, listeners are encouraged to connect via LinkedIn or BiggerPockets, as he maintains a presence primarily on these platforms.

---

Podcast Resources Mentioned:

• Cost Segregation Guide: Available at BiggerPockets Resources
• Landlord Insurance: Steadily Landlord Insurance
• Turnkey Investment Strategies: Rent to Retirement

---

This episode of Real Estate Rookie underscores the importance of resilience, strategic planning, and continuous education in building a successful real estate portfolio. Matthew Morneau's experiences provide invaluable lessons for beginners eager to embark on their own investment journeys.

Transcript

[Ashley Kerr]

Today's guest is an active duty US army soldier who bought his first property at 21 and didn't even realize he was a real estate investor.

[Tony J. Robinson]

From a meth house disaster to a lake house short term rental portfolio, Matthew Morneau's story shows how to take a messy first deal and turn it into momentum, even while moving every two years for the Army.

[Ashley Kerr]

This is the Real Estate Rookie podcast and I'm Ashley Kerr.

[Tony J. Robinson]

And I'm Tony J. Robinson. And Matthew, welcome to the show, brother. Thanks so much for joining us today.

[Matthew Morneau]

Thank you. It's a, it's an honor to be here.

[Ashley Kerr]

So, Matthew, take us back to your first deal. And I'm specifically interested in what happened with that house in Oregon.

[Matthew Morneau]

Well, that was in 2006. So I was in a really bad car accident when I was 18 and I got a settlement and I paid my reconstructed surgeon to rebuild my face and I had about 20 grand left over. Those were the HGTV days before streaming. And I don't know, everybody was like, you need to buy, you know, everybody. It was like buying a house was the thing you're supposed to buy a house. And I was like 20 years old, I was in college and I was paying rent. So I'm a simple guy. It's like, yeah, paying rent seems bad. Buying a house seems good. Let's do it. I bought like a one and a half bedroom house that probably the other half of the house had burned down. The attic had been converted into a bedroom. Built in the 40s. I had a really terrible realtor. She, like, I think really gave me bad, bad advice all around. I had a really, I was a subprime mortgage holder, if you guys remember that. Interest only. And I, I, I gave him student, like scholarship documentation and he used that as income. Like, I never should have been able to get a mortgage. But in 2006, anybody could get a mortgage on anything.

[Ashley Kerr]

Hence 2008.

[Matthew Morneau]

Yeah, this house had a bad foundation. It had all kinds of problems. So I move in and I didn't have any money because I was in college. So I had to learn everything myself. So when the washing machine would back up into the bathtub, I had to go figure it out. And I realized that the sewer line had been crushed by the landscape company in three different places. And I dug it all out by hand, repaired it all by hand. I realized that the kind of, the meth thing that is mentioned, I think was from the owner trying to renovate it himself. All the water lines had been primed and put together. Pvc. But no glue applied, so anytime anything went under pressure, it would come apart. And we had a well. And so the well was erupting in the front yard. Now, I was young. You could sleep four hours a night back then. And I had all the energy in the world. Um, so anyway, so fixed everything and it was livable. Um, kept hearing birds chirping. That seemed really nice. And then eventually realized the birds were actually living in the wall. So got the birds out. 2009, I graduated college, commissioned the army. I was like, okay, it's time to go get a real job. And I've got this house. And it. The crawl space was so low, you couldn't get a conventional mortgage on it at that. Now at this time, everyone's learned, right? The crash came down. You know, I think I bought the house for $72,000. I put zero money down, but still ended up paying, like 20 grand in closing costs. So, like, again, totally bad, bad advice from everybody. And I actually ripped up the floor and with five gallon buckets, dug out the crawl space and carried it out bucket by bucket.

[Tony J. Robinson]

Matt, I just. I want to. I want to pause you, man, because, like, the. The level of insanity that's gone into this first deal is. Is, like, otherworldly to me. But I. I think my biggest question is, after going through all of those challenges, what stopped you from saying real estate has to be the dumbest thing that anyone has ever done?

[Matthew Morneau]

Well, I think, you know, I learned a lot of lessons, right? And I had. I had worked when I was 18 for a homebuilder, so I had seen new construction, and he wasn't a. He was a custom home builder, so he wasn't doing, you know, subdivision factory homes. And it just gave me, like, I believe, like, if you face your fears, then you're not afraid of it anymore, right? So I had all these bad experiences, but now I was like, there's nothing. There's nothing that can scare me. And now that I've experienced it, all that's value, right? That's value that no one else that other people don't have. A lot of people haven't dug up their own sewer line, right? So when I call a plumber, I'm pretty confident in how I talk to the plumber, even though I don't really know much about plumbing by education.

[Tony J. Robinson]

But, Matt, I appreciate you sharing that because Ash and I talk about that so often about the purpose of that first deal. And it's not to retire yourself from that first deal, but it's to Learn. Now you have one hell of an education because you went through, I think like every conceivable challenge from like a renovation perspective I've heard of, but I appreciate hearing that. But it's like when you go through those challenges, it makes the next deal even easier. Right. And I guess that does take us to your next deal, Matt, because obviously you kept going after that. But I think based on what I've heard, you actually took down a few deals before you even considered yourself a real estate investor. So I guess what was that shift that finally made you realize, okay, I'm doing this as an investor?

[Matthew Morneau]

Sure. Yeah. So we rented that house long term to, to try to pay the mortgage because it was 2009, right. The market hadn't recovered. I couldn't sell it. Then we moved to Fort Drum, New York. We lived on base. I went to Afghanistan, came back eventually in 2014. I got stationed in North Carolina and we bought new. And so I bought a brand new house with a one year home warranty. And I was like, that sounds like amazing. One year. In one year I can call the builder and he's going to come fix everything that's broken. I'm in now. The realtor was like, there's, you know, you've got to be a full price offer. And so we made a full price offer. We bought a brand new house and we owned that house for nine years. And I never made any money on it. Nine years, maybe it cost me 100 bucks a month, you know, needed a new microwave, I had to pay for a new microwave. What, whatever. I mean. And after nine years though, and refinancing, eventually we got down to a two and a half percent rate. We had zero money down because there was a VA loan, which we can talk more about later. All the VA lessons I've learned, but I had a hundred thousand dollars in appreciation, so about 30 appreciation over nine years. Plus my renters had paid down, you know, amortization. So I had about $150,000 in equity. And at nine years I could sell that house because I had to move away from it. For military orders with no capital gains tax, you have 10 years to sell your home with no capital gains. So I don't need to worry about 10, 31 exchange or anything and just sold it and took my money and then reinvested it in Maine.

[Ashley Kerr]

That's so interesting. I didn't know There was a 10 year, 10 year time period. If you're in the military and have orders to move that. That timeline extends to 10 years. That's pretty cool.

[Matthew Morneau]

Yeah, I think the IRS kind of looks at it as, you know, most active service members are not investors and you had to leave your primary residence for duty to the US government and so they give you 10 years to sell it and it's kind of like a grace period. So that's kind of my new model is, you know, every nine or ten years I'll sell.

[Ashley Kerr]

So how many properties do you have right now in your portfolio?

[Matthew Morneau]

I have a long term rental in Colorado. I have my primary residence in Arizona that we're turning into a midterm rental. And then we have the property in Maine. So really we only have three addresses, three properties. But in Maine we have five units, four cabins and a cottage on a lake. And they're all short term rentals. Was that five plus two? Seven.

[Ashley Kerr]

Yeah. Well, congratulations on that. And you've obviously sold some of your primary residence says too. So it's. You've done even more deals.

[Matthew Morneau]

Yeah, yeah, we owned a primary residence in Washington and owned it for only two and a half years and, and we had such good appreciation at the time and we had a renter need to move out for an emergency and it was just a good time to sell, so turned that appreciation into the down payment for the house we bought in Colorado. Also primary resident. They've all been VA primary residences other than my first purchase in Oregon when I was a college student with no money and the commercial property in Maine.

[Tony J. Robinson]

And Matt, it seems like you've, even with the properties you purchase, you've experienced different types of properties, different asset classes. But as you go from, you know, the first property in Oregon to the new construction in North Carolina to, you know, what you're buying now. How has your approach changed when it comes to what you're trying to buy? Like, are you, are you looking at certain things now that you weren't paying attention to on that first deal in Oregon? Like what's your filter look like? Day?

[Matthew Morneau]

Yeah, I mean big time. You know, I think Kiyosaki says like always get something extra. Right. So I'm not interested in any property if it doesn't have the ability for me to add value. If I can't add an ADU or I, I can't add, you know, in Maine I added three RV pads. Those rent for like 2,500 bucks a summer. People rent for the whole summer. Or some land you could sell off. You know, I got a buddy, he just bought a house with enough land that he could build another house and then Subdivide it. Right. So that is kind of my main thing right now. And also I don't ever want to do short, do a single family home long term rental. Like the cash flow to me is just not worth my time now. I did it for a long time. Right. And that was just when I didn't, I thought, I didn't think I was an investor. I was just trying to not go bankrupt and not have the, you know, the bank call me about the mortgage. I was like, if they can just cover the mortgage. Right. That's not an investor. So I prefer multiple doors at the same address I think is definitely something that's got to be just because it gives you more flexibility.

[Tony J. Robinson]

Yeah. More economies of scale. And I've, I've felt that same experience my portfolio as well, going from single family short term rentals to our first hotel and just the, the benefits that come along with having multiple units under one roof. Well, Matt, I want to talk about how you bought lakefront cabins in a town of 300 people and you were able to turn sweat equity into almost $100,000 in actual annual revenue with properties that don't have bathrooms. So we're going to get into that story right after a short word from today's show sponsors.

[D]

There's something surprising. A lot of investors don't realize landlords actually file more insurance claims than homeowners. But most of the big traditional insurance companies, they're just not set up to handle those claims quickly or easily. That's why so many real estate investors are switching to steadily they focus exclusively on landlords. So whether you got a single family rental, need a builder's risk policy for a brrrr or focusing on growing your portfolio, you get fast quotes, flexible coverage and protection for property damage, liability and loss of rental income. It's a good idea to review your rates and coverages every year on your rentals. So go get a quote in [e-mail] landlord insurance today steadily landlord insurance for the modern investor. Want to invest in real estate but don't have the time or know the best local markets? Rent to Retirement has got you covered. Here's the deal. They've helped thousands of investors just like you find turnkey homes across the best US Markets. And best of all, they do all the heavy lifting for you. With over 255 star ratings on bigger pockets, Rent to Retirement experts help you build strategies to retire early through real estate. And right now, Rent to Retirement offers some amazing incentives on turnkey new construction properties. Check Just for example, you can get up to 30% off new build prices or you can get 0% down loan options or interest rates available as low as 3.99%. So don't miss out. These deals will not last. Text REI to 33777 or visit biggerpockets.com retirement to start investing in top cash flow markets today, there's something surprising. A lot of investors don't realize landlords actually file more insurance claims than homeowners. But most of the big traditional insurance companies, they're just not set up to handle those claims quickly or easily. That's why so many real estate investors are switching to steadily. They focus exclusively on landlords. So whether you got a single family rental, need a builder's risk policy for a brrrr or focusing on growing your portfolio, you get fast quotes, flexible coverage and protection for property damage, liability and loss of rental income. It's a good idea to review your rates and coverages every year on your rentals. So go get a quote in [e-mail] landlordins today steadily landlord insurance for the modern investor.

[Ashley Kerr]

Okay, welcome back from our short break. We are here with Matthew. So, Matthew, you bought these cabins in Maine. Why this deal and how did you finance them?

[Matthew Morneau]

Sure. Yeah. So I grew up in Portage Lake, Maine, population 300. My sister still lives there. My mom recently moved back there. I have four children. So anytime I go visit my family, you can't just show up with six people and invade their home with little boys. And it's just, that's not a fun, that's not a vacation. So I'm kind of a type a aggressive person. And so I was like, all right, I'm gonna buy a place there. So I have a place. And then I started reading Rich Dad, Poor dad, why the Rich Get Richer, Bigger Pockets Buy Rehab, rent, refinance, repeat. Right? So I read all these books or I listen to them as I'm traveling and I'm like, okay, I'm going to buy something that's going to pay for itself and it's going to pay me to own it. And I had been watching this property on the lake where my sister lives and they started at 670,000 and they came down and they came down and now we're down below 500k. And it was the right time to sell my house in North Carolina. I had about $140,000 in equity and took that money and reinvested it there. But how we got it financed, the seller was really smart. It's really small community, right? So they went to the two local credit unions, there's only two. And they basically kind of got the, the board of directors of those credit unions on board with commercial lending on that property. So when I called the bank, they already knew about it, that you know, all lending decisions go to their board of directors. Right. It's a very like, you know, you're dealing straight to the top. And I basically had to pitch myself, right, Which I'd never done before. I'd never done a personal financial statement. And they had, they weren't used to seeing pro forma rent projections. They didn't know what air DNA was. And I was just like, hey, here's my bigger pockets calculator printout and here's my air DNA, you know, rent projections. And this is who I am, I work really hard, give me a loan. And they were like okay, you need 15% down. And I was like ah, I want 10. But okay, fine, and your medium risk because you've never done this before. And I was like medium risk, you know, and that made me upset. Right. 7.7% interest on a commercial loan. I've only ever, I, I just sold a house at a 2 1/2% interest rate and but the numbers still worked out. They let me finance in some of my closing costs. They let me take $10,000 back from the seller and which was a concession for repairs. So we got that property for 480 and I got $10,000 back for repairs. And we, we came away with five rentable short term rental units. Waterfront, 300ft of lake frontage, five acres. I added three RV pads. One of the cabins needed to be finished. But that's kind of how that deal came about in that community.

[Ashley Kerr]

There are so many things to touch on with this property. But the first thing is if you are selling a property, what a great idea, especially if it's a unique property to go to a local bank so that when you have buyers you already have done some of the legwork to make it more appetizing to the buyer because there's already sort of financing lined up for the property in a sense.

[Matthew Morneau]

Yeah, I didn't know what I didn't know, right. I'm a rookie and I was like what's a commercial loan? And so they educated me And I.

[Ashley Kerr]

Think 15% down too is pretty good. I mean most of the time you see 20 to 25% down for a commercial loan. But that's a great point with you know, the small lenders where it goes Just to the board of directors, there's so much more flexibility. And I did that same thing before I brought in my Bigger Pockets calculator report showed the commercial lender and like he was impressed also as to like, you know, I've never seen anything like this. And for that deal he offered me a 90 day unsecured loan to buy the property in cash and then as soon as I closed, go and refinance with the bank with a longer term mortgage. So those Bigger Pockets calculator reports, you never know what they're going to do for you.

[Tony J. Robinson]

And I was going to say, Ash, like, I wonder how many deals have been closed on the backs of these BP calculators. Like it's got to be thousands and thousands of deals that have been done because of those calculators. My first deal to the first partnership I did was on the back of a BP calculator. So. But Matt, so it sounds like an amazing deal, right? Like you go from you said one and a half bedrooms, which I'd never heard before, to, you know, multiple lakefront cabins, RV pads. So there's definite, some progression there. But I guess like what were maybe some of the biggest challenges or mistakes or learning lessons with this deal? Like was it, was it easier than that first property in Oregon or was it maybe more difficult because there were more moving pieces to it?

[Matthew Morneau]

I think it was. To get financing was similar as first property in Oregon, right? Because in Oregon I was a college student with no real income and I was like justifying to Countrywide. If you remember Countrywide, they went out of business for giving people mortgages they shouldn't. And then this was this commercial loan which required a little more legwork. But I definitely learned some lessons after purchasing the property. One, you, you just have more infrastructure, right? So more older infrastructure, you're going to have more repairs. And when you're doing short term rentals, you know, you gotta immediately repair things. But I also learned that I don't know why. I was in grad school during COVID and I took the air DNA data and I was like, this is great data. If I'm half wrong, I'm gonna make money. And I was half wrong. During COVID everybody went to the countryside, right? Everybody went and worked by the lake. Everybody went. Any waterfront property that had WI fi was booked. Occupancies were amazing. And then everybody went back to work and I didn't see that. And we also get a lot of revenue from snowmobilers. And that first winter was like. And I grew up there in the 90s, there was no snow, there were no snowmobilers. It was the worst winter that we've ever had. And so I lost a lot of revenue there also. Now we broke even that year. That first year we broke even. And I think people were saying it takes three years to really stabilize a short term rental. And so, yeah, air DNA data. I should have done a little more due diligence there. And then I had a friend who's also Biggerpockets member who's kind of, you know, really good friend of mine and kind of the guy that I go to when I have questions. He talked to me about cost segregation. And that's really where I've made money is. Oh, you're an active participant in this business. You can deduct this as an act of loss from all your other W2 income, and all you gotta do is pay an accountant some money upfront to basically front load your depreciation and take. I took about half the value and divided over five years and really reduced my adjusted gross income and got a lot of money back from my taxes.

[Ashley Kerr]

We actually just had somebody on the podcast who gave a nice breakdown of doing a cost segregation. And we have a guide. If you go to biggerpockets.com resources, you'll find the guide in there. You know, it's especially rookie friendly as to what does it cost Sag, what do you need to do? I'm actually in the middle of doing my first two, and I was completely unprepared as to what they would need from me, what they would want. And so it's been like, it's not anything difficult to do at all. It's just I was very completely unaware of what actually goes into doing a cost seg.

[Matthew Morneau]

Yeah, I was frustrated that appraisals that I had paid for recently didn't separate the land value, so I had to pay for another land appraisal because that original appraisal didn't do that. And so that was frustrating.

[Tony J. Robinson]

Well, Matt, those were some of the challenges, but I guess there, there had to be some wins along with this as well. So what do you think were some of the good things that came out of this big first commercial deal of yours?

[Matthew Morneau]

So, you know, we grossed $91,000 in revenue the first year despite all of those setbacks. So that, that's a big win. I'm able to take my, my kids there and get out of the suburbs.

[Ashley Kerr]

Yeah. And Matt, I guess real quick, like, how much do you actually get to stay there that you're making money and you get to stay there when you want to.

[Matthew Morneau]

Yeah, I take leave in the summer and, and go there and with my family usually around the 4th of July, so once a year, I would say. And then in the fall, in the winter, I'm sorry, in the fall and the spring I've started going because I have to pull the dock in and out now. I've kind of built a team now that I can pay people to do things like that for me. But I, I also go visit my mom and things like that. So that's a pretty big win. And I, I have, like I said, I have four kids. So I really look at this as like a generational place we can go. You know, I want a place where my kids can bring their kids and like we can all stay and be comfortable as opposed to. What I've learned in my life is like, well, we can go visit grandma, but after dinner we got to leave, you know. I've also been exploring additional revenue opportunities. I just got a, you know, a grant proved to put in some electric vehicle chargers, which will bring in revenue for me and my kids forever. Right, you just selling electricity, you just got to buy the chargers.

[Ashley Kerr]

And Matt, let me ask you that on the grant side of things, what did you do to actually find out about this grant?

[Matthew Morneau]

The state of Maine has efficiency. Maine. They're an energy department of the government. And I just looked, I was really looking at, can I get any rebates for my heat pumps? Right? Because I buy heat pumps for the cabins and sometimes they have rebates or if you buy new insulation, they have rebates. And randomly I saw this thing was like, hey, we'll pay 80% of your EV installation if you, you know, comply with these requirements. And you have to apply, you know, and show that, that you're going to come through.

[Tony J. Robinson]

I never even thought about checking for that. You know, like, like we just got, we launched our first hotel last year and I wonder if we could get some sort of like grant or rebate for installing EV chargers there. Because there's only one, I think two other hotels in that town that I'm aware of that have EV chargers. So, yeah, it might be, might be beneficial.

[Ashley Kerr]

You owe Matt a royalty. If that goes through, I'll give you.

[Tony J. Robinson]

I'll give you a free night at a, at the hotel in Zion.

[Matthew Morneau]

I could use a bpcon ticket going better.

[Tony J. Robinson]

Well, Matt, it sounds like that that deal learned. Learned a ton. Started dabbling in the short term rental space, but now you're in Arizona currently, and you've kind of transitioned or maybe added the midterm rental strategy to your portfolio as well. So why, why that strategy for the Arizona property?

[Matthew Morneau]

So like I said, I've moved 10 times for the army in 16 years. I've had four VA loans and I've always found myself having two at the same time. Typically, a lot of people don't know that you can have multiple VA loans. The VA just is like PMI basically, right? They guarantee the lack of down payment and they guarantee that your entitlement is up to the median home price of the nation, which right now is like $806,000. So I bought a 400,000, $415,000 house in Colorado and I got it was able to get another $415,000 house in Arizona. Now there's a funding fee. So I always tell people like, that funding fee puts you underwater immediately because you put zero down and now you're adding $14,000 on top of it. You're already above your appraisal value and the VA is like, that's okay because you're paying us. So if you put 5% down, that'll reduce that fee to only one, one and a half percent. So I always tell people, try to put 5% down.

[Ashley Kerr]

And let's explain that real quick why you would do it that way. Because that fee is going directly to the VA, where if you're putting that 5% down, that's taking that amount and putting it towards your purchase price that you're going to have to pay anyways. So over time, you're paying less by paying that money to your, your mortgage, your, your principal, your purchase of the property than to the VA for another fee. That's interesting. I didn't realize that.

[Matthew Morneau]

Yeah, exactly. And that that's something nobody told me, right? I had two VA loans before a broker ever told me that.

[Tony J. Robinson]

Interesting. Yeah, I'd never heard of that before either.

[Matthew Morneau]

So my buy box is very simple, right? The army says, hey, on this date you have to be there and you have to be at work. And I have four kids, so I have to buy a house that I can live in. And so that rapidly becomes like, you're never going to find the perfect deal, you're never going to find a slam dunk deal, but you're going to find something that works. And then I pick then two years later, when it's time to move again, I find a strategy that's going to work for that, you know, that property. And so I think in this area, I like the midterm strategy because it reduces the risk from, you know, compared to short term rentals. Because it's very seasonal here in Yuma, Arizona. It's 115 degrees today. Nobody wants to come here in the summer, but in the wintertime the population doubles. So not really, I don't really want to subject myself to that seasonal fluctuation as much. And I think we've got a pretty good opportunity to take advantage of the, the growth in Yuma and the, our proximity to the hospitals and things like that. This will be our first time doing a midterm rental. And what I've learned from that, I, I'm, you know, I was in an 8, like I said, 19 years old in a ditch digging a sewer line. So sewer lines, H VAC systems, you know, concrete, you like, that's fine. That doesn't bother me at all. I just hired an interior designer and she sent me all this stuff and like we ordered all this new furniture and like that's where my energy and my motivation to be real estate investor stopped.

[Ashley Kerr]

I think Tony has a, the same experience after watching a couple Instagram reels of him and his wife putting together furniture.

[Matthew Morneau]

Yeah, like, what do you mean I bought the wrong painting? It looks fine, but it looks amazing. Now we did exactly what she said and it looks amazing. And in fact we just had the photographer here yesterday. And if you want to talk about stress, one thing I'll never do again is try to get a home ready to be world class. Photographed for furnish Finder listing while living in that house with four children.

[Tony J. Robinson]

So Matt, just to make sure, I'm tracking. So is the, the plan is to midterm rent the property that you're currently in, that you're currently living in.

[Matthew Morneau]

Right. Once we move out. So come August, we're going to move out.

[Tony J. Robinson]

Gotcha, Gotcha.

[Ashley Kerr]

Okay, so they're just putting it up as a listing so they can start getting bookings already.

[Matthew Morneau]

Exactly right. Yeah. I don't want August 1st to roll around and then no bookings.

[Tony J. Robinson]

Yeah, and then. Which you mentioned furnished finder. So is that the platform you're planning to use or are using any other methods to try and get folks into the, into the property?

[Matthew Morneau]

So I was planning a multi pronged approach. To me, one is none, like no single points of failure. That's kind of a mantra. So furnish finder airbnb with a 30 night minimum. I want to get connected to the local film bureau. We have a Goodyear test track here. You know, Traveling professionals come to test things. We have a university and I want to get connected to the HR departments at both the hospitals. So I'm going to cold call some people. I've got some connections through networking that I can, you know, basically give our listing to like hey, here's our Furnish Finder ad. Check it out. Also it's a small town, there's only 100,000 people in Yuma. So we've met some travel nurses so we can send them the listing. And they love to share with their friends. Right. And I've heard that Facebook and Instagram is, is another way I think Facebook Marketplace will probably put on Facebook Marketplace.

[Ashley Kerr]

We have one property right now that we have it listed as a short term rental, as a midterm rental and as a long term rental. So we have on our property management website and sent out to like Zillow things like that as a long term rental. Then we have it on Furnish Finder as a midterm rental and then we have it on Airbnb for short term rental and then we just like update the dates. So like as a short term rental it does okay, but it's not like completely filled. So we'll say, okay, this is our last booking. Let's update our dates for, you know, the other websites on the state that we could have a longer term rental. But what we've had is the last three like midterm rentals were people who are moving to the area and didn't find a house yet and or they were building a house. So like I think it's next week. We have another guy that's coming to look at the property because they're moving back to the area and they want to find land and they want to build. So they're like it will at least be a year that we would be here. But they're willing to pay our Furnished Finder premium rather than what we would be charging as a long term rental with no furniture or anything in it too. So we've kind of like are picking and choosing. Like it's a little more work to navigate the calendars, but it's definitely helped us keep the property booked for sure.

[Matthew Morneau]

Yeah, we actually did that when we bought this property. We bought it in April, but we knew we weren't going to be here, you know, for a while and the, the seller wanted to stay for three months because they were building a house and so they immediately started renting their house from us.

[Tony J. Robinson]

Interesting how that works, huh Matt? We, we interviewed Jesse Vasquez A while ago and he's built a relatively good sized midterm portfolio. And one of the tactics that he shared that really stuck with me, I'd never heard it before, but he would drive for tenants. So like he would, he would drive around and say, say there's like a Holiday and Express or something in Yuma. And he would try and find like where are the construction crew trucks? Where it looks like there's a bunch of guys from this construction place that are staying at this hotel. And he would cold call those companies and say, hey, I just saw six of your trucks at the Holiday Inn Express. I can give you a five bedroom property, fully furnished for a fraction of the cost. You know, so there, there's maybe something to test out if you haven't tried that yet is just drive around town and see who might be a good fit for you.

[Matthew Morneau]

Yeah, that's a great idea. Right? And I have, we just put a solar system installed. Like we've had contractors out.

[Ashley Kerr]

That's a great idea also too, on the flip side, like go to builders too and say, hey, if you have people that are building a house and need somewhere to stay before their house is complete, like you know, set up something where they can recommend you as to oh, here's this place that you could stay too.

[Matthew Morneau]

Yeah. And I plan to do it with the realtors also for people that are waiting to close.

[Ashley Kerr]

Yeah. Oh yeah, that's a great idea. Okay, well, we have to take our last ad break, but when we come back, we're going to be talking a little more on the Gertie side of Matthew's portfolio. So we'll be right back.

[D]

If you want a short term rental, here's something worth knowing. Not all landlord insurance policies are built for your kind of property, but that's where Steadily comes in. Steadily offers insurance designed specifically for short term rentals. They cover things like property damage, liability, loss of rental income and even unexpected issues like bed bugs. Steadily only works with real estate investors so they understand the details that make short term rentals unique. And they've built coverages specifically for short term rentals. One investor pro tip I always like to give out is to review your rates and coverages every single year. So go get a quote in [e-mail] landlordinsurance today steadily rental property insurance for the modern investor.

[E]

Hey, Aaron, the ad guy here, you know when you've won as many commercial voiceover awards as I have, like the golden gutter for most dramatic read of a drain cleaner or the silver Sigh for most emotionally charged exhale in a mattress commercial, you start to worry. What if someone comes to steal my trophies? That's why I use Simplisafe. See, most home security systems are reactive. Someone breaks in, sirens blare, chaos ensues. Too little too late. But Simplisafe is proactive with their new Active Guard Outdoor Protection, their AI cameras and live monitoring agents actually stop crime before it starts. They see shady behavior, talk to the intruder in real time, flip on spotlights, whatever it takes to scare them off before they get their thieving hands on my Bronze Whispery Wow Award for Best Sultry Read of a Tax Code. I'm serious though. This stuff matters. And with no contracts, no hidden fees and monitoring plans starting around a buck a day, there's really no excuse. Get 50% off your new SimpliSafe system with professional monitoring plus your first month [e-mail] pockets that's simplisafe.com pockets there's no safe like Simplisafe. That platinum protection trophy's in the bag.

[D]

If you want a short term rental. Here's something worth knowing. Not all landlord insurance policies are built for your kind of property, but that's where Steadily comes in. Steadily offers insurance designed specifically for short term rentals. They cover things like property damage, liability, loss of rental income and even unexpected issues like bed bugs. Steadily only works with real estate investors so they understand the details that make short term rentals unique and they've built coverages specifically for short term rentals. One investor pro tip I always like to give out is to review your rates and coverages every single year. So go get a quote in [e-mail] landlordinsurance today steadily rental property insurance for the modern investor if you own a short term rental, here's something worth knowing. Not all landlord insurance policies are built for your kind of property, but that's where Steadily comes in. Steadily offers insurance designed specifically for short term rentals. They cover things like property damage, liability, loss of rental income, and even unexpected issues like bed bugs. Steadily only works with real estate investors so they understand the details that make short term rentals unique and they've built coverages specifically for short term rentals. One investor pro tip I always like to give out is to review your rates and coverages every single year. So go get a quote in [e-mail] landlordinsurance today steadily rental Property insurance for the modern Investor do you want to invest in cash flowing rentals but don't have the Time to manage the properties. Is your local market too competitive or expensive to invest in? Rent to Retirement offers new construction turnkey investment properties that you can buy with as little as 5% down and rates as low as 3.99%. Their team handles everything from financing, management, insurance and more so you can live where you want and invest in the markets that offer the best returns. Rent to Retirement has the best reputation in the industry with more five star reviews than any other company on the BiggerPockets website. To learn more, visit biggerpockets.com retirement or just text REI 233777 to start investing in the best markets today.

[Ashley Kerr]

Okay, so what do you think was probably one of the biggest failures you had but really taught you the most in the long run from your investing journey?

[Matthew Morneau]

Probably buying a house without an inspection. That taught me so much. You know, it's one of those things where you're like, that sucked but thank God it happened. Like I should never go back and get, and get that inspection. If I go back in time, think of all the value that I got from that horrible mistake. And it gave me a lot of confidence. You know, I think I learned if you take action and you, you can learn from all those things you were afraid of and then you can turn that into value later.

[Ashley Kerr]

Matt, did you ever back out of a deal because the inspection came back bad or renegotiate because of the inspection results?

[Matthew Morneau]

I definitely renegotiated in Maine, right on that property. There's a lot of, a lot of infrastructure there. There's two different septic systems. There's an artesian well that we actually draw water from for all the cabins. It's, it's drinking water, but so there's a lot going on. Metal roofing, everything's got metal. There's a lot of metal roofing, but the ice really beats up metal roofing. I would never recommend anybody in the northeast don't get metal roofing. The ice is going to put holes in your roof and that's not what you want. So we, we renegotiated a lot of those things. You know, the main house is built in the 50s, so it has some electrical issues. And yeah, so definitely when I bought my house in Colorado, Realtor recommended getting the sewer line scoped and cleaned. And so we went forward with that definitely value. Like I place a lot of value in that inspection now for sure.

[Tony J. Robinson]

Matt, now you've again, you've moved. You said 10 times as you, you've progressed in your career, military. What advice would you Give to other military service members who are thinking about investing in real estate.

[Matthew Morneau]

Yeah. One, if you can do the full do it yourself move, you can move all your stuff yourself. That's gives you, you know, it's a serious side hustle. You're looking, you're looking at 10 to, to 25, 000 that you can make in that move and take the stress out of it. You know, I was always so like, I gotta hustle and do everything myself. Pay two guys to come, two movers. Like, like literally their business card says big guy moving. And for 250 bucks they'll come and they'll load your moving truck with everything you boxed up. Right. So get some help. Don't try to do it all yourself. You're going to stress yourself out. You're going to stress out your family and then take that money after you get, you know, get paid and, and put that aside to your next investment. That's kind of been my, my biggest takeaway. And then don't be afraid. I, I had a seller back out on me at the closing table. I had to get an attorney to get my money back.

[Tony J. Robinson]

Yeah, I mean it's not without his challenges. And I, I think your story, if anything, Matt, is inspiration for the other folks who are listening. Or maybe not even inspiration. Maybe it's more so just. It's a really good reminder is maybe a better way to phrase it, that the path to success is not linear. There's a lot of bumps and hiccups and peaks and valleys, but the goal is that when you zoom out, you start to see that upward trend. And I think you've illustrated that so, so beautifully.

[Matthew Morneau]

Yeah. And be patient. Right. Like, like I said, you know, for nine years I probably lost 100 bucks a month. And that wasn't a great deal, but it paid off in the end. And I would also say, like, I didn't know the concept that every property has a price. So I always thought, man, I'm just. This world is stacked against me. The realtors are stacked against me. The builders are stacked against me. You just got to pay what they're going to ask for. Well, no, you don't have to. And any market, you can go to San Francisco and there is a price for that apartment that'll cash flow. Now maybe they won't sell it to you at that price, but then move on to the next one. Right. And learning that gives gave me a lot of confidence that you can really mitigate a lot of your risk if you just get the right purchase price.

[Ashley Kerr]

Well, Matt, thank you so much for coming on as our guest today. And also thank you for your service to our country. We really appreciated you coming on, sharing your story, giving great advice to rookie investors who want to get started. Where is the best place that they can reach out to you and find out more information?

[Matthew Morneau]

Yeah, probably contact me on LinkedIn or BiggerPockets. I'm not a big social media guy. I've been off social media since 2014. And those are the two places where you can get get a hold of me.

[Ashley Kerr]

Well, thank you everyone, for joining us today. I'm Ashley and he's Tony. And we'll see you guys on the next episode of Real Estate Rookie.