Producing Passive Income for Financial Independence with Matt Picheny – EP 297

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When you’re new to the world of real estate, things can feel very overwhelming. Accessing information that’s both good and easy to understand can be a major challenge–and a bad deal can have serious consequences.

 Today’s guest has helped a lot of people get their feet wet and find great first deals. Matt Picheny is an investor in 10,000 units of apartments as both a sponsor and general partner and as a limited partner. He has a real passion for the arts, and he even invests in Broadway shows. He’s also the author of Backstage Guide to Real Estate: Produce Passive Income, Write Your Own Story, and Direct Your Dollars Toward Positive Change. In it, he gives his reader the “backstage tour” of the real estate business, sharing trustworthy advice from his unique perspective.

In this conversation, you’ll learn all about the investing meetups that inspired Matt’s book, the concepts he shares with anyone looking to start creating passive income, and how to find your ‘why’ on your journey to financial independence.

Key Takeaways with Matt Picheny

  • How the concept behind Matt’s book started as a meet-up.
  • What Matt did to invest in over 10,000 apartment units and achieve financial independence.
  • The 18 keystone concepts that drive Matt’s investing decisions.
  • Why you’ll never lose money–unless you have to sell.
  • The specific concepts–or “backstage toolboxes”–Matt uses when underwriting deals.
  • Matt’s four fungible factors for underwriting.

Matt Picheny Tweetables

“You can always make more money but you can't make more time.” – Matt Picheny


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Josh Cantwell: So, hey, guys. Welcome back to Accelerated Real Estate Investor. I’m your host, Josh Cantwell. And today I am interviewing Matt Picheny. He is the author of a book called Backstage Guide to Real Estate. I think you’re going to love this interview. Matt is an investor in 10,000 units of apartments, about one-third of that as a sponsor and a general partner and the other two-thirds as a limited partner. Matt is financially independent. He has a passion for the theater and the arts, and he’s actually an investor in Broadway shows. And here’s what you’re going to learn during this interview with Matt. First of all, you’ve got to buy his book, The Backstage Guide to Real Estate: Produce Passive Income, Write Your Own Story, and Direct Your Dollars Toward Positive Change. You can go there and get that at And today we’re going to talk about, number one, how the book actually started as a meet-up. He started the meet-up and had about 100 to 200 attendees. And that’s what turned into this amazing book. Number two, we’re going to talk about how Matt was able to invest in over 10,000 apartment units and become financially independent.


Number three, we’re going to dig into the book and we’re going to talk about the 18 keystone concepts that drive Matt’s investing decisions. Number four, you’re going to learn, listen to this, that you’ll never lose money unless you have to sell. This is a lesson he learned from his father. Number five, you’re going to hear about what Matt calls his backstage toolboxes. In the book, we’re going to talk about specific underwriting concepts. He calls them his backstage toolboxes. And you’re also going to learn about, number six, his four fungible factors for underwriting. This is a really great interview and an even better book which you’ve got to check out. Here we go with our interview on Accelerated Investor with Matt Picheny.




Josh Cantwell: So, hey, Matt. Welcome to Accelerated Real Estate Investor. Matt, so excited to have you on. I’m so excited to talk about your book, The Backstage Guide to Real Estate. Welcome to the show.


Matt Picheny: Hey, Josh. Thanks for having me on. It’s a real pleasure.


Josh Cantwell: So, Matt, when you wrote the book, The Backstage Guide to Real Estate, tell me about the title. Why did you pick the title? What kind of meaning does it have? I’m sure it has some special meaning.


Matt Picheny: Yeah. You know, I wrote the book and decided to come up with the title later, so I didn’t really have a title until the very end. And I was sitting back and really trying to take a look at what it is that I do and who I am. And someone equated it to like they said, “You know, you’re kind of like the car mechanic, like the honest car mechanic, like there’s all these car mechanics and like you don’t know if you could trust them. Like, they tell you, “You blew a gasket or this fan belt or whatever.” And unless you know cars, you don’t really know if what they’re telling you is true or not. And I kind of feel like you’re like that. You’re like that guy who I know I can trust who can kind of look under the hood and I trust your advice. And so, someone told me that. And then I started talking with other people and just getting, you know, a lot of people like the fact that I’m sort of approachable. A lot of my investors are friends and family or have become friends over the years. And that’s sort of the response I was getting and I have a background which we may get into in the theater, right?


And so, giving people like a backstage tour, like becoming a guide to sort of the backstage of real estate, that’s sort of where it came from. And at that time, I actually rebranded my company and put a tagline called Picheny, Your Backstage Guide to Passive Investing. But this book isn’t as broad as passive investing. It’s really specific on real estate. So, that’s why the book has a little bit more of a real estate-focused title.


Josh Cantwell: Got it. I had a feeling you would say you were in theater or music. You were a rock star in your former type of life. That’s fantastic stuff. So, you decided to write the book. Why? Like, tell me a little bit about who you were trying to impact. What kind of influence were you trying to have? What were you trying to help people do with the book?


Matt Picheny: So, I was running a meetup group and it was growing over time. And the purpose of the meetup group was to get people who have been investing in real estate to open their horizons. A lot of the people that were coming to the meetup were more on the smaller residential side of things. So, they might own a duplex, they might own a triplex. And the single-family homes, which is the kind of investing that I used to do as well. And what I found through my journey is that the power of coming together with other people and getting involved in syndications where I could invest out-of-state in larger apartment complexes. And so, that was really the impetus behind this meetup. And as the meetup grew, more people would start feeling more interested in doing that kind of investment. And will come to me, I think, because they know… So, just a little bit about me, two-thirds of my portfolio are deals that I’m a passive investor in. And then one-third of my portfolio or deals that I’m active in, I’m the sponsor on those deals. And I’m invested in over 10,000 units across the country.


And so, they would come to me and say, “Hey, Matt, I know you do this a lot from both an active and passive side. You run the meetup like I’m thinking about doing my first deal. I’m thinking of investing.” You know. Josh, I know you do these deals all the time, so maybe they’re like, “Hey, I met this guy named Josh and he’s got this deal going on. Matt, do you think I should do this? Will you give me some impartial advice?” And I said, “Yeah, I’d be happy to. I love talking about real estate.” So, I would meet with people and go through deals with them and say, “Hey, listen, I’m not going to tell you to do it or not do it but here are some things that I don’t understand why they underwrote this. This seems a little different to me. You might want to ask them about this thing or that thing.” As the meetup grew and grew and grew and it got pretty big, just before COVID, we would have about 100 to 200 people at any given session, more and more people were asking me to meet with them. And just quite frankly, I was running out of time. I mean, I had to get in a car, drive to meet them. You know, we’d have lunch or coffee, spend an hour or two going over the underwriting. Then I’d have to go back to my office.


It was like 3 hours out of my day shot and I had a lot of other things going on. So, I wanted to still be able to help people but how could I do that at scale? And I wrote a little kind of like a white paper like a handbook and ended up being about 70 to 80 pages long. And it was really just the nuts and bolts on like how to look at underwriting. And it was probably the most boring thing you’ve ever read in your entire life. It was like chewing on cardboard. I mean, it was just really dry. I mean, for you and I, Josh, we would probably be into it because we’re so in the business and it was so inside baseball but it was really boring for the people that I was hoping to affect with this. You know, the people who were coming to my meetup on a monthly basis, those people weren’t that ingrained in it. So, what I did was I said, “You know, I’m going to take the story of my life and put in there these different what I call keystone concepts that I’ve learned along the way.” So, in the book, there’s 18 different keystone concepts that I think were all very important to me getting to where I am today, and I share those with the reader.


I also have 60 different real estate terms that I define in the book, and then I have a glossary at the end that sort of puts them all together. But through telling this story, through telling this narrative, I think hopefully it’s interesting and entertaining and I try to interject humor in there because real estate can be a really boring topic at times. So, try to make it interesting and palatable for readers, but also educational. And so, that they learn and they can see concrete examples of not just something theoretically but then like, “Hey, this is how I found out about it and this is how it affected me on this particular deal or at this moment in my life.”


Josh Cantwell: I love it. I love it. Let’s peel back the onion a little bit around these 18 keystone concepts, right? Because I think all of our listeners who jump in and grab the book, you can go to Matt’s website which is just Get the book there. But 60 keystone concepts that have impacted your life and part of that kind of subline here in the book is Produce Passive Income, write your own story, and direct your dollars towards positive change. That’s one of the reasons why I was interested in having you on. When I heard write your own story, positive change, like that’s what you do with the passive income. Once you have it, you can write your own story. You can do whatever the hell you want. People talk about this idea of financial independence. Retire early. Sure. I’m financially independent, retire early, but what do I do now that I have the free time? I’m going to write my own story. And that was on the front cover of your book. So, the keystone concepts probably lead to people writing their own story, probably lead to people creating positive change. So, let’s peel back the onion a couple of these concepts. Obviously, we don’t have time for all 18 but what are some of your favorites? What are a couple that you want to tell us about in this interview that could impact our audience?


Matt Picheny: Yeah. I mean, I think you totally hit the nail on the head talking about the subtitle of the book, right? And also, it’s a little play on words because it’s produce, write, and direct, which is all under that theatrical theme.


Josh Cantwell: I didn’t get that. I love it.


Matt Picheny: Yeah. I mean, that’s really what it is about. It’s like, okay, so what is your story going to be now that you’ll be able to create this income? And I’m really hoping that people would use it to do positive things in the world. I think most people are, meanwhile, I have a friend who is a real estate syndicator investor who’s gotten to a point now where he’s financially free and he is really into animals. And I’m not into animals. I’m in the theater. But he’s into animals so he spends a lot of time. He’ll donate to causes and also donate his time to be involved in different causes that are about animals. And I think that’s great and it’s wonderful and it’s what he’s passionate about. So, I really want people to find something that they’re passionate about that once they’ve created this financial freedom, they can do that. So, you were asking about the keystone concepts. And so, there’s 18 different keystone concepts throughout the book. Keystone concept number one was a big lightbulb moment but they were all lightbulb moments for me.


Keystone concept number one was really a big, big shift for me. And keystone concept number one is don’t trade your time for money. You can always make more money but you can’t make more time. You can’t generate time, right? There’s a finite amount of time. So, instead of working really hard and trading your time for dollars and working in a W2 type of situation, being trapped in there. If there’s a way that you can take your money and have your money start producing your income, that passive income, then you don’t have to trade your time for dollars anymore. And so, that’s the first keystone concept.


Josh Cantwell: That’s a great one, too, because you have a lot of investors, 10,000 units. You’ve been a GP/LP. How many really successful guys have you met who are doctors, lawyers, high-level CPAs, partners in firms making $750,000 a year and they’re like, “God, I want to be like you, Josh,” or, “I want to be like you, Matt. I’d rather be doing that?” Because even though they make a big income, they’re trading time for dollars still, and they might really love what they do, but they’re still trading time for dollars. And ultimately, it’s probably something else they’d rather do, can see another patient or talk to another client working and trading time for money. So, that concept is not just somebody making $15 an hour or $50 an hour but you and I have both seen it with guys making tremendous, big income, seven-figure incomes that are like, “God, I want to slow down at some point. I want to stop going to the office.” So, that permeates throughout every income level, every demographic. It doesn’t matter. That’s a massive one. What’s another one that stands out for you?


Matt Picheny: Yeah. And the other thing is from a tax perspective, right? So, they don’t want to necessarily pay a large amount in taxes and invest in syndications or can be very tax efficient. Another one of the keystone concepts, another big one is keystone concept number five is cash flow is king. And so, that really talks about how we want to make sure that when we’re investing in real estate, we’re investing in properties that produce cash flow. That cash flow will give us resilience because we know for a fact that the real estate market is going to go up. We also know for a fact that the real estate market is going to go down. And what we don’t know is like how far up it’s going to go or how far down it’s going to go and for how long. But we know it’s cyclical. It’s going to move in cycles. Right? So, if we buy real estate that is producing passive income, sorry, extra cash flow, that gives us resilience to ride out those dips, which are inevitable. There’s inevitably going to be dips in the market, and that’s what we really need to be concerned with, is making sure that we’re going to be able to pay our debt service at those times and hopefully, have a profitable business. And so, that gives us that cushion that we need. And so, that was keystone concept number five.


Josh Cantwell: I love it. I love it. And, Matt, one of the things I think that is kind of in the more of the dirt to what you talk about is the only time you really get in trouble in this business is if you’re bleeding so much cash because you don’t have cash flow, bleeding so much cash that you’re forced to sell or you have a balloon payment on your debt and you’re forced to sell a refi at the wrong time, right?


Matt Picheny: Yeah. When I talk about that keystone concepts in the book, I quote my dad, who told me, “You never lose money in real estate if you never have to sell,” which is exactly what you’re talking about.


Josh Cantwell: I love that. I love that. I’m going to probably steal that one. Matt, what’s another keystone concept? Another one you’d like to share?


Matt Picheny: Oh, gosh. You know, I have one about – I have a couple, actually, that are related to the building of a team. So, whether you’re looking to be an investor who is active and sponsoring these deals or you’re looking to just be somebody who’s passively investing and I think both are important, that’s why I do both, it’s important to have the right team around you. And that team can mean a property manager. That team can mean an attorney. One of those team members should be a really good CPA who can help you from a tax perspective. And so, there’s a couple of different keystone concepts that talk about teams and how teamwork and networking are very important to do and how surrounding yourself with experts can really help you propel you and go faster and set up some guardrails to make sure what you’re doing isn’t crazy. So, when I have passive investors who work with me, I hope that I’m a part of their team and someone who’s bringing them opportunities.


But I always tell them too, you know, they should have legal people to review everything for them and make sure that they’ve set up their entities in proper manners and have a CPA to make sure that you’re doing everything in a tax-efficient manner because everybody’s tax situation is different. But that is really important is creating that team and having people on your team who are above you like they’re above you, but more experienced than you. I love to have people. I never want to be the smartest guy in the room because if I am, then I’m not learning anything. I’m very seldom the smartest guy in the room anyhow. But I always want to be learning but in turn, I also always want to be helping. And that is something that I also talk about in there is as you continue to grow as an investor, being there and being available and be able to help other people, I mean, like honestly, Josh, the book, it was a lot of time to write it and it costs a lot of money to print the darn thing. And I’ve spent some marketing dollars to just get the word out around it. I’m not going to make my money back on the book.


You know, hopefully, I’ll break even in a few years but it’s not like, “Oh, now I’m going to make 100K a year off of book sales.” I mean, the book sale royalties are pretty laughable, right? But it was about, you know, trying to get information out there and help other people learn how to do things. You know, the book goes through, like I said, the keystone concepts and those different real estate terms. And that’s, you know, 85% of the book. But the last section of the book, the last 50 pages of the book is called The Backstage Toolbox and it’s for people who are interested in investing in deals, gives them questions that they might want to ask a sponsor. And then there’s a part where it gets really into the nitty-gritty nuts and bolts of deals. And the thing that I call the four fungible factors, which are things that levers that, people are putting deals together, can kind of adjust to make deals maybe look more attractive than they necessarily are. So, just trying to get the word out there. And so, me maybe being a little more experienced than some people could read my book and hopefully, they’re learning from that.


Josh Cantwell: Yeah, I love it. That’s fantastic stuff. Guys, listen, these 18 keystone concepts, we just covered three or four. There’s so much else you could learn. Get a copy of the book. Matt, I was curious to hear a little bit more about what you meant in the book about writing your own story. Passive income. I’m very passionate about it. Continuing to build it both as a limited partner to general partner. I do both. You know, we’re a GP, we’ve done 18 syndications, 4,300 units, but limited partner, a number of deals as well. And I firmly believe that you should mix your passive cash flow, your limited partner investment with your GP investment. People ask me all the time, “Josh, do you invest in your own deals?” The answer is no. I actually don’t. I actually put my limited partner dollars in other people’s deals because that LP is truly passive. Like, I don’t have to do anything but write the freaking check to get paid. That’s what passive income is. If I mixed them together, my limited partner dollars with my general partner dollars, I’m actually having to earn to the sweat equity of the operations. I’m having to do that in order to pay myself and my limited partner dollars.


So, I’ve mashed the two together, and then I’ve actually limited my return. But regardless of how you structure it, the end of the day is to create the passive income to do whatever the hell you want, right? Writing your own story. So, what did you mean by that? About writing your own story, creating the lifestyle that you want? And how can you help people kind of get a little bit more clear about that early? I have so many people that I talk to that are like, “Well, I just want to get rich.” It doesn’t really work that way, right? How in the book can they learn about like getting a little bit more clear about the story they want to write before they can even write it? Like, they don’t have the money yet to write it but how can they get more clear about defining what it is? Because the more clear they are about what they want to accomplish, the more likely it is to happen.


Matt Picheny: Yeah. That is a really important point that you’re bringing up, Josh. I mean, it is really important for people to understand where they’re going. You know, people talk about what’s your why and I think that that’s sort of what this is, right? It’s like, what’s your why? What is this story that you’re wanting to write? And I actually wrote an article that was published in Fast Company specifically about that. It’s called Seven Simple Steps to Write Your Own Financial Story. But it talks about looking out what you care about, what’s important to you, and what are your values. And then doing some soul searching and figuring that out and figuring out where it is that you want to go. What can you do? What can you invest in that’s going to make an impact in the world? And it aligns with your values and what your passions are. So, I mentioned earlier about a friend of mine who’s very much interested in animals, and he does that. Me, I have a background in the theater, right? And I used to be a professional actor. And my wife, actually, we didn’t meet this way, but she’s actually involved in the theater on the business side of things.


And so, Erika, that’s my wife and I sometimes we’ll combine forces and produce shows for Broadway. So, we have some Broadway shows we produce and we invest in a lot of shows on Broadway, too. It’s something that we’re passionate about. And when you look at the shows that we invest in and that we’re co-producers on, they all have a message behind them. You know, they’re not just, at least for the most part, they’re not just fluff pieces. There are pieces that have a meaning and a story and a thought behind them. And that’s important to us because we both feel strongly about the power of performance and live arts to bolster social change. And what I mean by that is, you know, I’ve had a number of experiences where I’ve seen a movie or a TV show or live theater, preferably live theater, right, that’s made me see something in a different way. It’s, “Wow. You know, I never thought of it that way before. That’s eye-opening.” And over time, that might change and it might also make me double down on my existing opinion before I walked in. Now, I really believe in what I said, you know, whatever.


But to get you to provoke thought and that’s something that we both feel very passionately about. So, now that I’m at a point where I have some financial freedom, I’m trying to direct my dollars in that way. And that’s my story because I have a passion for the arts and the theater. I used to be a performer. And, Josh, that might not be your story. It’s not my friend’s story who’s into animals, right? He’s got that story. So, you need to find your own passion and see how maybe you can help that out but it can also be profitable. I mean, we invest in these shows. Broadway can be very risky but it can also be rewarding if it’s a success. So, trying to sort of thread that needle of something that you’re passionate about but maybe also can generate additional passive income is important.


Josh Cantwell: When I think of the word values, I always think of the word reasons like these are my reasons for doing this, the word why, values. One of the things I think a lot of people don’t use is the reasons like, “This is the reason why I want to do this. This is the reason why I’m doing it this way.” Like, whether it’s investing in Broadway or investing in real estate or donating time for animals or donating time to other nonprofits, these are my reasons. And you could find motivation in anything, in anything. Like, I watched that movie Hustle last night, the new basketball movie by LeBron James and Adam Sandler.


Matt Picheny: It’s great. I saw it, too.


Josh Cantwell: Yeah. The guy has his reasons, right? Like, his daughter in the beginning like she’s hustling basketball in the street just to make some extra money for his daughter. It’s like so many, but reasons, so if you’re having trouble thinking about how you’re going to direct your own story, and I’m kind of talking to our audience here right now. Think about what are the reasons why you want to do what you’re doing? What are the reasons why you want to be successful? You know, I’m a pancreatic cancer survivor, Matt. So, ten years ago, I almost died. Crazy diagnosis, 7% survival rate. Ten years later, I’m one of the lucky seven. 93 people out of 100 who were diagnosed at the same time as me are dead. So, I have a different type of reason because I feel like I’ve got all this talent and all of this opportunity and this big network and money and all these resources. But I see so many people in my near nuclear family and my nuclear friends that I feel like a big passion to help them because I’ve almost been given too much.


And then to be able to survive like so my reasons behind that are different because I feel like I have enough to give to take care of all of these people, to help them financially, help them with their education, get them to a place where they need to go because, you go back to your keystone, they’re still trading time for dollars. How do I get them out of that? With my second half, with my next chance, with the second half of my life that I almost didn’t have, how do I help them with this message of, “Don’t trade time for dollars. Find a way to get passive income?” Because then they can pass it forward and help somebody else create their next story. It’s fantastic stuff, Matt. This has been a fantastic interview. I’ve had a great time having you on the show. There’s so much more that we could be talking about but we’re limited for time. So, again, Guys, go grab the book. Go network and become friends with Matt. I have a feeling Matt’s got so much more to share. I wish we had more time. Matt, thanks for joining me today on Accelerated Investor.


Matt Picheny: Josh, it was a pleasure. Thanks for having me.




Josh Cantwell: Well, guys, there you have it. I hope you enjoyed that interview. Man, I really think there’s a lot to learn from Matt. I’m going to get the book. I’m going to download it and read it. I think there’s a lot to learn from Matt that we haven’t even had a chance to get to. If you enjoyed the interview, which I certainly did, please share it all over social media, Instagram, LinkedIn, Facebook. Let me know if you enjoyed it. Leave us a rating and a review, you know, comments, question, Spotify, iTunes, YouTube. Let us know how we’re doing. Let us know if you enjoyed the interview. Leave us a rating and a review and definitely don’t forget to grab Matt’s book at Thanks for being here today and we’ll see you next time.

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