Making Money in Multifamily Real Estate Show

170 | Being A Market Expert and Overcoming Headwinds with Anthony Vicino

February 02, 2022 Dave Morgia Season 1
Making Money in Multifamily Real Estate Show
170 | Being A Market Expert and Overcoming Headwinds with Anthony Vicino
Show Notes Transcript Chapter Markers

Anthony's Background:

  • Anthony Vicino is a serial entrepreneur who has helped build multiple multi-million dollar companies from the ground up by creating efficient systems that scale, utilizing value-based content marketing strategies, and always focusing on providing exceptional end-user experiences.
  • He is a Best-Selling Author, Investor, and Small Business Owner who successfully managed his own personal portfolio of multifamily assets spread across the country before joining forces with Dan Krueger in 2019 to create Invictus Capital.

In this episode we cover:

  • 02:31 Confidence In The Operators
  • 05:53 Rent Control Legislation in the Twin Cities
  • 13:24 Outlook in Twin Cities the next couple years
  • 16:56 Continuing to do business in tough markets
  • 20:45 Investor sentiment on changing markets
  • 27:49 5KQ1
  • 29:41 5KQ2
  • 31:39 5KQ3
  • 32:45 5KQ4
  • 34:28 5KQ5

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Intro:

Welcome to the Making Money in Multifamily Show, where we discuss everything to do with multifamily real estate investing. We believe it's the best way to gain financial freedom and build lasting wealth. This is where you'll find it the best information and practices to help you succeed in your real estate business, whether you're already experienced or just starting out. Here's your host, Dave Morgia.

Dave Morgia:

Hello listener and welcome to the show. I'm your host, Dave Morgia. And with me today is Anthony. Anthony, welcome to the show.

Anthony Vicino:

Thanks for having me, man. It's good to be here.

Dave Morgia:

Yeah, appreciate you coming on and just wanted to give the listener a little bit more of your background before we begin. The listener Anthony is a serial entrepreneur. He has helped build multiple million dollar businesses from the ground up. He is a best selling author, investor and small business owner, and he has a great multifamily background before we partner recently with his partner Dan Krueger in 2019. They formed Invictus capital. Since then him and Dan have formed a podcast, they've authored a book, podcast as multifamily that's made simple the book is passive investing made simple. So there's a lot going on, Anthony. And you know, we kind of talked before the show, kind of a little more color in your neck of the woods lately, couple deals closed and quite a bit of, I guess, legislation going on. So you just want to kind of give us your background, maybe we'll kind of dig into that topic today.

Anthony Vicino:

Yeah, so just real high level, we are a vertically integrated multifamily acquisition firm in the Twin Cities. And it's funny, I always say Twin Cities. And it's been pointed out to me recently that people who are not from Minnesota do not necessarily know what I mean when I say Twin Cities, so. So for those that don't know, like, our baseball team is the twin. So I just kind of assumed everybody knew like, that's why, but Minneapolis and St. Paul, that those are the Twin Cities here. And that's where we invest. Like I said, we're vertically integrated. So we got property management company in house, we manage our assets, and we love our backyard. It's our home field advantage. But right now, in the last couple of weeks, you know, rent control has been a hot topic, and it got voted in in St. Paul. And it's, it's potentially going to go into effect in Minneapolis. And so what that's created is a little bit of a shifting of the rules of the game, so to speak. And so we're just adapting and pivoting and still thriving. So but it's interesting times for sure.

Dave Morgia:

Yeah, appreciate that, that color in the background. Um, and one thing that struck me as we kind of talked before a record was you mentioned, the confidence that you had with your investors going through these deals, even with these hurdles in your way. So let me kind of just maybe highlight that for a second what it takes to make those relationships, obviously, you know, the confidence ultimately ends up back to you and your partner, right? Is is are you guys going to perform so so maybe just kind of highlight how you strengthen those relationships to make sure that they know you're going to close and continue to perform on these deals, no matter what kind of comes your way?

Anthony Vicino:

Yeah, that's it. That's exactly it. Like for context. The the rent control measures here in the Twin Cities got passed last Tuesday. And that was that was poor timing, because we just started, we just opened up an investment opportunity to our investors this week later. So that was still like hot in everybody's minds. And we're like, Well, how are investors going to respond? Because it's one thing to say, oh, yeah, I'll invest in your next deal. But to actually put the money in is another thing entirely in that deal. It was like $2 million capital raise in less than 48 hours. So the investors came through in a big way and said, we have a, we have a lot of confidence. So we had investors reaching out personally and saying, listen, like, we think that there's a headwind here, it's going to be harder for you guys to operate, but we have confidence in you and your team. And I think that's from a couple of different things. One is, we're never afraid to point out what the issues are. So we don't sugarcoat things and pretend like multifamily is just going to go to the moon and is perfect sailings all the way. Like we acknowledge that to make money sometimes, like it's going to be difficult. And our job as operators is to solve problems. So it's not just to point out the problems and say, Woe is me, it's to say, Okay, here's the issue, here's what we're gonna do about it. And we've just built up enough of a track record at this point over the last seven years with our investors to be able to say, okay, when the times are good, these guys are exceptional. When times are bad, they're still exceptional. They don't put their head in the sand. They communicate openly with us about what's happening and what they plan to do about it. And it's the number one rule for passive investors is like, don't invest in the deal. Because the deal is just it's just spreadsheet numbers, right? And numbers don't lie, but I can make them say whatever I wanted to say. So if you can't trust me as the operator, my numbers are no good. So it all starts with the jockey like betting on the jockey, not the horse and at the end of the day, the reason that analogy is so important is because a championship level jockey isn't going to get on a lame horse, right? Tom Brady didn't leave whatever, I'm not a sports guy. So I'm probably gonna get this messed up. But he didn't leave whatever team he was on and go to a team that he didn't think he could win with, right? Like, he went to a team. And he's like, I can win with this team, right? And so when you bet on the jockey, they're not going to get on a lame deal. And that's really what our investors were saying to us is like, listen, we know that there's some steep competition out there. Now, there's other horses in this race, but we still believe in you and the horse that you're getting on. And so that was great. That was really good confirmation for us. And yeah, and now Now comes the fun part, which is actually going in there and doing the work. And like, you know, we have $30 million of assets spread across the Twin Cities. So we're very familiar with this market, and we're still confident in it. So it's not just blind faith, there's a little bit of a track record there. So that helps.

Dave Morgia:

Yeah, and I'd love to get into kind of the, you know, communication with investors, and how you're gonna look forward to operating this property. But just to take a step back for a second, can we just shed some light on, you know, the recent news in the Twin Cities and how, I guess, economically that may affect things looking forward? And I guess maybe we'll just kind of lean into how you're communicating with investors with with all these things gonna come at you.

Anthony Vicino:

Yeah, so. So there's two questions there. One is rent control generally. And then the other one is communication specifically. And so the communications is easy, like as soon as this legislation passed, and we've been communicating with our investors through our newsletter, and through phone calls, in the months leading up because this is this didn't come as a surprise anybody, we all knew that this was a potential like it had been in the news people have been talking about for a long time. And so as soon as it passed, we the two days, three days later, we held a live webinar for being the entire investing community, but specifically for our investors to come and hear from our mouths, what happened, exactly what the legislation was, and what we were going to do as a result of that. And we even went to the further step, which was, we went back to all the deals that we currently have in process. And we really looked at the numbers as in plugged in the new assumptions and said, Okay, here's what's happening with rent control. Let's say this, our entire business model is now in this new paradigm, what's this going to do for the returns? And so we were able to come to our investors and say, we've run the numbers with the new situation, here's what it looks like. And in the grand scheme of things, it didn't shift things in a meaningful way. Because there's always opportunity, right, there's always another way to, to find the value. And so that's just what this forced us to do was to find other ways outside of rent to find value. Rental is the easy one. That's not the only one. Now, rent control. Specifically, as like this macroeconomic concept. It's it's a bit of the boogeyman for multifamily investors, especially value add, because they look at it and they're like, Well, if I can't raise rents, what am I gonna do? But if you look at it across most markets, like San Francisco, Seattle and New York, usually, it's it's some kind of nominal increase pegged to CPI, which is inflation, let's say. So it's, I think, in San Francisco, it's 7% Plus CPI and Seattle. It's like 5% Plus CPI. So CPI, let's say inflation is three or 4%, and nine, that's a whole other boogeyman question, right? Like, I don't want to go too far down the rabbit hole for hours today. But let's just say it's like three or 4%? Well, you can in Seattle, it's 5%. So you can raise rents up to 8% per year. And in San Francisco, it's 7% Plus, so about 10%. And what we looked at is like, okay, historically, we're not, we have never projected north of 4% rent, organic rent increase per year anyway. So like, we're never going to be in jeopardy of that. Now, with the Value Add Component. That's where things get trickier. As you go in there, you do the work and like, sometimes you're raising the rent by 15 20%. And in those markets, there's a thing, there's this nuance of rent control, called vacancy control, which is when tenants leave, they can reset their rent to market, right. And so if you get the tenants to leave, and you go do the renovations, then you can raise the rent to whatever you want to to the new market standard. And then for that new tenant, it's going to be pegged. Now, I mentioned all that because in all cases of rent control, generally, it doesn't really affect good operators. What it does is it affects the people who want to gouge and just like drive up rents 15% without doing any value add like, realistically, though, it's not a big issue. Now in St. Paul, where they passed the legislation, it's interesting, because what they did was they looked back and said, Okay, over the last 20 years, what has been the average rent increase in St. Paul? And they said, Oh, it's 3%. So they pegged it to 3%. They didn't put it on top of inflation. So it's just 3% which doesn't necessarily keep pace with inflation. So it's a very problem. medic ordinance. On top of that there's vacancy control. So you can't raise the rents between tenants either. So what they did in St. Paul was they put a very draconian policy in the place that makes it incredibly difficult to operate. There's still ways but it's it's, it's difficult. In Minneapolis, they didn't actually pass rent control, what they actually did was they just gave the city council the ability to enact rent control in the future. But the city council is actually very moderate and very against rent control, generally in the mayor as well. So it's unlikely that it's going to get passed there in any kind of meaningful way. So all that's to say, rent control is like, generally, I think kind of misunderstood from both sides. But the investment side and saying like, actually, in most cases, it's not really going to hurt your investment. If anything, it puts more of a crunch on the supply side of things, which is usually good for cap rate compression, you can make up the value on the back end. And it's really definitely misunderstood by the general population who thinks it's the solution to price gouging or to nefarious landlords taking advantage of their residents, when, in fact, what it does is it puts more of a constraint on the supply issue, because what we do know is when rent control goes into effect, landowners generally convert their apartments to condos, so more supply goes off the market builders stop. And so there's just even more of this crunch. And so the people that are trying to be served and this is the unfortunate part is like I do agree, like there's there's people not being served in the question of affordable housing is a real concern, because you can't, you can't build affordable housing, brand new just doesn't really work without government subsidy. And but unfortunately, this doesn't really solve the issues. So we still have people who are not going to be well served. So that's a long answer.

Dave Morgia:

No, no, no, that's perfect. And it's yeah, it's interesting, you talk about that kind of slippery slope, right. And I don't think you can pair any market. So where I live, but here in New York City, is kind of people think right control, they think of a New Yorker, like in LA, where there's high rent, rent costs, and people are, their rent to income ratio was like totally skewed. And everything's about, you know, kind of getting the landlords and not really focusing on landlords, right, which is an entirely different conversation, and they're going to be talking about different conversations. But, um, yeah, it's just interesting to kind of see the first steps for a new kind of Metro, you know, taking that plunge in St. Paul, there, I think an advantage that you didn't really touch on, but having a kind of economical advantage where you guys are vertically leveraged, or someone with experience already in that market, there's a lot to be said there, because you talk about adding value while not focusing on right, you're talking about reducing expenses, and all these other kind of vertically integrated tools that you can use to kind of take advantage of something that might scare a lot of people away. And just kind of like you mentioned, supply might go down. But also investor interest might go down too. And that market, right? So you might actually find more opportunities here in the next couple years. Who knows. But for you, if you're going to stay plugged, it could actually end up in some form or fashion, we just kind of turning honestly into a bigger opportunity. So what do you kind of see for the next couple years for you guys in these two markets? I assume you're going to be there. Right? So So what is your kind of game plan going forward? Obviously a lot of communication with investors and continuing to look on money, what do you think is going to be happening there?

Anthony Vicino:

Well, you're you nailed it on the head is like the fact that we're local and this is our home field is that we have a unique edge, we we know the ordinances we know the locations we know all the people involved and, and more importantly, is that we're the active operators, so we can control a lot of the expenses. And so that gives us a unique advantage. And we're gonna lean into that. And we're seeing a lot more deals actually coming onto the market right now, because a lot of landlords and owners are like, I don't want to deal with this, they don't have the wherewithal or the energy, or they might have already made their money, they just want to cash out. So we're seeing a good buying opportunity, if nothing else right now. And one of the really interesting things is when you look at rent control, what it actually ends up doing, because it takes again, more supply off the market. And that's a good thing when it comes to owning assets, right? When there's less supply, but a lot of demand, as assets become more valuable. Now, we can't realize that value through cash flow, because there's the rent cap. So we're not going to be getting like crazy cash flowing assets. And that's why you don't invest your cash flow in New York or San Francisco, for instance. But you do get a compressed cap rate, which means on the back end, these things are selling for more. So kind of washes out in a lot of ways. Now. All that's to say for us like St. Paul, the ordinance there is so draconian that we're not going to purchase in that in that market until they get that sorted out. Because there's a couple other nuances of that protocol that that are really, really problematic and they're going to change it they're gonna they're already trying to walk it back. The mayor and the city council have already said it's not feasible, and it got put onto the ballot. This is really interesting. A unique quirk of St. Paul law is that any resident can propose A ballot referendum. That's what happened is like a group of residents, or like citizens got together put this referendum on there. And it wasn't like part of some think tank, economic advisors or anything like that. They like, they're like, let's do this, this, this, there's like, and then, you know, rent control for the general population, they looked at it like, yeah, that's a good thing. And they, you know, it got passed. And now everybody's looking at that. And it's like, just in the last three days, 3000 units of new development that are currently in process got pulled off the market. And so there's this crisis of development that's happening there now. So it's like, okay, this isn't gonna survive in its current paradigm, but we're not going to buy in that environment, the current assets that we own, they're well past that value add component, so we're not worried about them, they're gonna continue performing even at 3% rise. But we're gonna focus on Minneapolis, where people see the doom and gloom across the border, and they're like, oh, that's coming over here, let's get out while we can promote promotes an opportunity for us to go and buy. And even then what we're doing is looking into the first ring suburbs around the Twin Cities, right? Because what ends up happening is, well, if there's no development, so to speak, and there's limited supply in the cities where people are going to go, they just get pushed further and further out. So there's going to be more opportunity in the first ring suburbs. And so we're starting to turn our attention there, we've put a pause on St. Paul, but generally, like we still love the Twin Cities, because if you look at it from a macro economic perspective, and that's always the first and most important thing is like, what are the what's the job situation? What's the median income, maybe median household income, price of rent versus owning? We look at all those factors. And we're like, this is still a really strong market. It's the socio political angle that's causing some some kinks in the system. But it's still from a can there be money made here? Prospective? Yes, the answer is definitely yes.

Dave Morgia:

Yeah. And you mentioned putting a pause on St. Paul, which I think probably makes sense, right? If you're talking about return on effort, you're not going to really try to look for a market that is going to be pretty much challenging for at least next year, whatever they figure it out. But kind of a challenging question. And there's no really right answer. But what would if a deal fell in your lap kind of entice you to look there? Regardless of the hurdles that may be there? Like say, you know, a broker comes with an off market deal? Like, listen, I know, you're not looking but this one's kind of a thing or so what would that be to you?

Anthony Vicino:

That's a good question. We actually, we do a lot of deals with the old guard. So these guys and gals who've been in the business for 30 plus years, and they own a ton of inventory here. And so we do a lot of off market deals with those guys. And one in particular, he has about 250 units in St. Paul and Minneapolis that he's looking to offload. And we've been picking them off for him slowly but surely over the last year. And the conversation we've had with him is like, listen, it's all got to be on the purchase price. Like that's the only way that we can justify this is that we have to go in with a lot of baked in equity already, because we're not going to be able to realize it through the cash flows. And we're going to be needing something that's very stabilized already, right? Because the the incentives for going and doing heavy value add renovations, it's so low, especially in an environment where it's already hard to get labor, and materials. And so we would need something that, you know, has the value add in terms of like, Oh, we're buying this at a discount without actually having to do the value add?

Dave Morgia:

Yeah, that makes sense. I mean, you talk about how many units could you realistically turn, especially, you know, in a market where people are gonna start to learn if they sit tight, they're gonna have cheap rent forever. So the actual transaction between renters is probably going to change pretty quickly and probably shortened real quick and there won't be as many people moving just because they know if they stay, they can, you can sell at a lower rent. So well, yeah, I just figured that was kind of interesting, a little thought exercise to see where your head would be out there.

Anthony Vicino:

And another thing to think about is, you know, when something changes, you always have to have your head on a swivel and think, okay, and given this new environment, what would work. And generally with rent control, what ends up happening is it's usually capped to like Class B, class C assets of a certain age and vintage. So you end up seeing, like people just moving to new development, right? Because if there's no cap on luxury apartments, then let's just go build something, create value from nothing and sell that thing where the rent control is not gonna affect it. And so that's a plan that we were looking at, specifically in St. Paul was like, okay, worst case scenario, we have all these buildings are old, because that's the case in many in Minneapolis, St. Paul is like, we have old inventory. We'll just go knock those down and just build something new. And then it won't be an issue. We'll just have this new building. But, but one of the interesting consequences of this particular rent control ordinance and I said like they just kept like, digging it with every crazy thing possible. They actually applied the rent control across the board, to luxury units in new builds as well. And this is why the developers pulled 1000s of units. They're like, Well, wait a minute, like there's no Yeah, development

Dave Morgia:

trying to make big returns here. You know, there's risk. What's the point if we don't get a picker?

Anthony Vicino:

Yeah. And so the mayor even came out like, was publicly like, he's like for the life of me, I can't understand why we would put it rent control cap on luxury new builds. He's like, so this, this plan needs to be reworked. And so, you know, the, that's all the states, I think some things are gonna change in that plan. It's, it's not a well thought out one. But generally, even if they put something just more moderate into place like it, I think rent control gets such a bad rap in terms of like, oh, it's going to handcuff us and it's going to be impossible to operate. It does become harder. But there's there's still a lot of opportunity.

Dave Morgia:

Yeah, no, I just sounds like the by right is pretty much the only opportunity there like, like you're saying it's an interesting. And I guess let's flip it. Investors take on this whole thing. How has those conversations been? What are people saying? Obviously, the trust is still there with you guys. So what are the conversations that involved around the actual kind of market in the news evolved in there? Just take some two cities, I guess it was.

Anthony Vicino:

Yeah, you know, I think with the investors, one of the conversations that we had, the other day, which was interesting to me, was he's like, you know, I'm investing I'm going to invest in this deal. But just so you know, like, if you guys went to a market that didn't have the headwinds, he's like, we would put so much more into this, you know, and I was like, Oh, that's interesting. So there's definitely I think, why make things harder on yourself than necessary. Right? There's a there's a little bit of that angle. And that's a question that we have to resolve for ourselves right now in Minneapolis. It's, it's not any harder than necessary, because nothing's actually been passed there. St. Paul, we pump the brakes, because it's like, yeah, that's harder. So that's a question. And honestly, the problem though, is when you go chasing opportunities of like, what's easier, where there is enough tailwind, then you just end up doing what everybody else is doing? Which is like, playing outside of our unique advantage. And so maybe that's going out of the sunshine states of the smile cities, right? Like, okay, we're gonna go invest in Phoenix or Houston, Nashville, places that have a really strong tailwind. But as a result of having that really strong tailwind, they also have a lot of competition. Well, we can look to here, and I think this is what our investors are, are betting on with us in particular, is yes, there's more headwind, but as a result, there's less competition, so we have more room to play. And, and I think that's where our unique advantages will will really play out on a long on a long scale.

Dave Morgia:

Yeah. And if you're talking analogies, you're pretty much just building a more efficient airplane to get through that, right, like you guys are vertically integrating and just being able to cut through that window a little bit more cleaner than someone who isn't as familiar. That's like you said, the unique advantage there. So yeah, I guess already for both. Is that anything you guys actually ultimately consider? Are you guys just firmly in that market for the time being?

Anthony Vicino:

Well, like I said, we're expanding our reach into the first ring suburbs, which is new for us like and honestly, the way that the cities are laid out, it's, it's all arbitrary. Like they're all right next to each other. And so very close proximity. We've always just stayed in Minneapolis, St. Paul, because from an efficiency standpoint, for our property management team, it was just so much easier to have them hyper located in those areas. And so just even moving Oh, say, into Bloomington, which is just down south where the Mall of America and like we have more fortune 500 companies by per capita than any other city in the country. Like, that's why like they're all right there. It's only like 10 miles away, but 10 miles in rush hour can be really hard for property management. So we've always wanted to look into the suburbs, but it's got to be within enough initial scale to justify opening a property management hub down there, and, and having enough work for the maintenance and repair construction team to keep them busy for extended periods of time. And so we were playing a little bit slower roll, I think, and like how the timeline in which we thought we'd move into those those markets, but with everything changing now we're like, Okay, well, now's the now's the best time to actively pursue what what that transition would look like.

Dave Morgia:

No, and obviously, it sounds like pretty good timing right now, right? Cards have fallen in the right direction. So what about this whole process? Because through COVID, I think there's a lot of learning was a catalyst, a lot of investors and sponsors learned a ton about themselves about deals about each other. This is obviously a much smaller scale, but it is a catalyst in a certain market. So what was the kind of biggest learning not necessarily that you have to change your underwriting or XYZ but what was what was like the biggest learning through this whole thing that kind of made you guys move forward quicker than you expected?

Anthony Vicino:

It can you explain that a little bit better, but I'm thinking aren't we thinking COVID Or rank

Dave Morgia:

more than more the rank control? Yeah. Yeah. What? What was kind No more just like the short a lot of times with catalysts, there's a short little learning curve, right? So what would you pin that as further?

Anthony Vicino:

Um, I think with with rent control, we've had a really long runway, what to kind of, like, unpack it. And so we've we've been baking a lot of the assumptions of rent control into our underwriting for the last year anyhow, and saying like, Okay, if this does happen, what would what would it look like? So we're kind of prepared from that perspective, and really looking at, you know, what are the alternative ways that we can derive value from these assets. And I think, like I mentioned before, Renzo is the easiest one is the sexiest one. Because like, we always remember who scores the most points in a basketball game, we don't remember who blocked the most balls usually. So like defense doesn't get the love it deserves, even though defense defense wins championships. But like the most valuable lesson I ever, I had a mentor my very first business, you said, remember that $1 saved is worth more than $1 earned, because the dollar earned is always on a margin. Whereas the dollar saved always goes to the bottom line. And that was a really impactful lesson, because for every $1, that you raise rent, you only get to keep 50 cents of that to your bottom line, assuming you're on a 50% Expense Ratio, maybe it's 42, maybe it's 40. But it's still like you're not keeping the full dollar. But if you can cut $1 of expenses, you get to keep that full dollar. And so I think this time, especially with rent control in the last year of COVID, as we're like, well, maybe maybe raising rents isn't the humane thing to do to people right now. Like what are the other ways that we can improve operational efficiencies, not cutting corners so that our assets are like slowly deteriorating or becoming slumlords. But how can we run a more efficient operation with better systems that scale so that we can cut those expenses because at the end of the day, it's easy to say, we're going to cut expenses by this much, it's a whole thing to go in there and actually do it like you have asset management experience. And so you know, like, it's one thing to say this is the budget, the whole of the thing to actually hit the budget.

Dave Morgia:

Yeah, no, it's, it's interesting, I think, I think you nailed it pretty well. It's, like you said, kind of back of the game show, it's not just numbers on the paper, right. There's a lot more intricacies and, and kind of soft skills and everything that goes along with it to be able to kind of put the business plan in place. Sounds like there's a lot of moving parts. But you guys, I'm sure going to be navigating through this, I'm sure with some form of me. So appreciate you kind of bringing in your insights because Mark, which I don't really touch on personally. So it's interesting to hear someone who's in a deep their take on it. But I would love to get into these five questions, as long as you're ready. Yeah, let's do it. So the first one is, if you could only pick one trait that explains your success, what is that trait and why?

Anthony Vicino:

hyperfocus. So and I think when people say hyper focus or focus, that means a very specific thing to them. But for me, I have severe ADHD. And it was actually very problematic when I was young. And when I say young, I mean like all the way up until I was like 30, until I really figured out how to create systems and habits and routines around my life that would allow me to succeed. But one of the unique consequences of ADHD is that I think a lot of people think it means that we can't focus, but what it really means is that we can't always control what we're focused on. And so when we are focused on something, we go into what's known as a hyper focused state, and this is very similar to the flow state, but a bit a little bit different. And it's the reason why people with ADHD will literally sit in a burning house while playing video games, like they just won't notice they'll just lose themselves in it. And for me, the hyperfocus trait was very problematic when I was young, because I couldn't control it. And I would like play video games for 10 days straight. And but once I figured out how I could use it as a tool, it stopped being a weakness and it became a super tool because now I can I can get into the state and maximize my productivity, so to speak, like in a very short amount of time. So that's been very helpful.

Dave Morgia:

That's super interesting. Why don't hear about that a lot. Appreciate just the kind of transparency because sometimes I get good answers, but that's one of the ones where it's like, wow, that's like, that's like a real answer. So really appreciate. Yeah, sometimes I get, you know, like, I work too hard or where it's like, okay,

Anthony Vicino:

I'm a workaholic. I care too much. I interviewed a guy yesterday and I like What's your wish? I always say that don't say what's your weakness? I say what's your kryptonite? You guys I work too much. Yeah.

Dave Morgia:

Is that a job interviews? And then Anthony was was uncharacteristic thing you've done in your business, and why did you do it?

Anthony Vicino:

So, I don't know if it's uncharacteristic, but I believe two things one is that who's ever closest to the consumer wins. And this has been a guiding tenant in all the businesses that I've built which is let's cut out the middleman control as many aspects of the process as possible. And that's why we started building Property Management from day one. Now the thing with that is, there's only you can only ever hire at two points, you either do it too soon, or too late, like nobody's ever hired at the perfect time at the right moment. So you either paying too soon in the form of money, or you're paying too late in the form of opportunity costs. And we chose, I always choose pay money, never opportunity. And so we started building Property Management before it financially made sense. Like it was more expensive than if we had been outsourcing it for the first couple of years. But then it hits this inflection point. And it's so much better as a result.

Dave Morgia:

And that's interesting. I think with that you can gain a lot more control, like you said, over those two years, right, and kind of about the mistakes before they were bigger mistakes, if you had something on a 20 year property, you can fix it. And then if you're running a 200, it would be obviously a much, much bigger headache to fix those systems at that at that scale. So it's interesting to do that.

Anthony Vicino:

Yeah, and I get I get the question a lot from operators who already have a nice portfolio, they're like, Oh, we're thinking about bringing property management in house? What would you suggest? I'm like, I have nothing for you. I don't know. Like, because transitioning a portfolio into in house property management is very different than from day one building it. So different, different strokes,

Dave Morgia:

maybe buy the right company and hope for the best. You know,

Anthony Vicino:

acquisitions are a very real real avenue to grow.

Dave Morgia:

Yeah, absolutely. And then can you name a time where you felt like you weren't going to end up successful? And how do you overcome that fear?

Anthony Vicino:

Well, there was a time when I was $80,000. In Debt, my fiance had literally just left me kick me out of the house, and I was living in the back of a van and downtown Oakland. And it's interesting, because it had never really stopped to think like, My life isn't going how I thought it was gonna go until that moment. Like, that was a real wake up call to be like, Hmm, alright, maybe I'm doing something wrong. And that was a good thing, because then it gave me a perspective from which I could start moving forward. And saying, like, I need to have not just a goal for where I want to go in life, but I need to figure out how I want to get there. And up to that moment, I really hadn't been doing that I've been letting my ADHD just kind of own my life. And that was really the catalyst, the turning point where I said, Okay, it's enough, it's time to take control of my about my biology, and no longer let that be an excuse. It's time to use this to my advantage. And that was really the pivot point.

Dave Morgia:

Now, that's amazing. And then pretty much opposite to that one can at a time or something, your business went perfectly. What did you do to make that a reality?

Anthony Vicino:

Nothing ever goes perfectly?

Dave Morgia:

That's my popular answer right there.

Anthony Vicino:

Yeah. Yeah, I don't I don't want to cop out. So I will say I will say this. Um, it's not it doesn't go perfectly. But I am surprised how having a bias towards action almost always inevitably plays out favorably. Regardless of how half cocked the idea really is, like, just moving forward towards a goal and saying, Hey, this is a new product, we want to take it to market and just doing it before you really overthink it almost always plays out advantageously. And that has been a hard lesson for me because I'm not that type of guy. I like to be a little bit more planned and organized. And I've been blessed to have some really great business partners who are more the chaos to my order. And they pushed me to move faster towards things. I'm like, that's not gonna work. This is half cocked, like we're not ready. And it works. I'm like, Oh, well, that's cool. I know, let's learn.

Dave Morgia:

Yeah, I think honestly, one of the most popular answer my first question, or the one trait is kind of the action or failure to know stop moving is not fearing failure, and just keep moving. Right there. And right there is it man, it's like you can figure out systems until you're blue in the face right in the face. But you know, just keep going and you might not find the most efficient way. But eventually you're going to get what you want. If you just keep taking this step. So yeah, couldn't agree more. The last one, just wrap up the show. Oh, god. No, no, God, no. And then the last one, just to wrap up the show, Anthony, what do you been focusing on lately to improve yourself or your business?

Anthony Vicino:

I've been focused a lot, I would say in the last year on what I talk about as the psychology of presentation. So really thinking about so I believe that there's four spheres of influence that if you could just control those four things like you're gonna be doing pretty good and their mindset, health, wealth and communication, and communication always throws people off like wait, I understand mindset, health, wealth, but why that one, and communication is important to me, because it's like, we all want to be understood and we want to connect with the world and there's nothing more fresh having like greatness or an idea inside of you that you just can't get people to see or move towards, and you just feel like an idiot. And you're like, why don't you guys get this? And so that's a failure of communication, whether that's through writing or through spoken word, or through body language, or just through your ability to listen, like because that's a form of communication as well. Like I've been really fascinated this year with how do I improve as a communicator? And thinking about the psychology of presentation goes very, very deep for me from like, how do we phrase which words do we use? At what time? What tonality do we use? How do we show up physically with our body language, or how we dress like, I've been really fascinated with that. And I have a master's degree in psychology. So it's not like super out of the ordinary for me to like, be super fascinated with this. But that's the thing that's been really on top of my mind this year.

Dave Morgia:

Yeah, I was gonna say that lines up a lot with like psychology and a lot when you get some therapy or psychiatrist, kind of just like the intentional conversation, like intentional voice, like, you know, say what you mean, in the correct way and kind of get more dividends on the conversation. So, yeah, really interesting stuff.

Anthony Vicino:

So yeah, something to do. When you mentioned intention there. Yesterday, I made a post. This was like somebody said this, he said, his name is Patrick, I can't say his last name it Monty glue. He's a French tennis coach. And he's sitting there with his tennis athlete, and they're talking about intention is a muscle. And I was like, wow, that is actually a really profound concept. But it's true, like intention is a muscle. And so moving through life, and understanding what's your desired outcome, with every activity that you go into? is just, it's a really profound insight. So I just want to share that.

Dave Morgia:

No, I think that's true. It's like there's times in your life or situations or, you know, more on an easy mode, where the intention is easy to output, but then difficult conversations, situations, etc. It might be hard to stay intentional in those moments. So that's when like the training to get the muscles to do the things that they're supposed to do kicks in. Right So yeah, that's, that's really, really interesting. Anthony, really appreciate the time that takes on your market and how you're going to just navigate these waters, you know, good, bad or ugly, and it sounds like it's going to be good for you guys. So excited to hear how you guys do. They get in deep on the end here with all the kind of mindset stuff just really appreciate the time before we hop off, you want to just let the listener know how they can reach you

Anthony Vicino:

today. Yeah, I mean, if you want to invest with us up here, and then right after everything, everybody started, they're like, no, no. Come find us over at Invictus multifamily.com. So we just published a book back in what was August hit number one on Amazon. So that was really cool. So if you want to learn more about passive investing that book, you can go pick it up. For free, all you got to do is pay for shipping that's at the passive investing book.com. And otherwise, just find me Anthony vecina. If you Google my name, I will pop up. I'm pretty much the only Anthony Pacino in the world. So reach out I'd love to communicate and have a conversation.

Dave Morgia:

Thanks once again, I appreciate it.

Thank you for listening to the show. I don't take your time and attention for granted and appreciate that you would spend it with me. If you enjoyed this show or any of my previous shows, it would be a huge help if you would rate and review the show on Apple Podcasts or your favorite podcasting service, or even just share the episode with a friend. And if you'd like help from me or would like to talk about real estate investing further, feel free to visit the show notes for more information, or you can visit davidtravis.com.

Confidence In The Operators
Rent Control Legislation in the Twin Cities
Outlook in Twin Cities the next couple years
Continuing to do business in tough markets
Investor sentiment on changing markets
5KQ1 - If you could only pick one trait that explains your success, what is that trait and why?
5KQ2 - What is the most uncharacteristic thing you've done in your business and why did you do it?
5KQ3 - Can you name any time where you felt like you were not going to end up successful? How did you overcome that fear?
5KQ4 - Can you name a time where something in your business went perfectly and what did you do to make that a reality?
5KQ5 - What have you been focusing on lately to improve yourself or your business?