Anthony Vicino is a serial entrepreneur who’s built multiple successful companies from the ground up. He’s also an author and investor who managed a personal portfolio of multifamily assets before launching Invictus Capital with his partner Dan Kreuger in 2019, jumping into apartment syndication.

For Anthony, finding success in life has been about creating systems around his daily routines that maximize his likelihood of hyper-focusing on tasks that are really important, rather than really meaningless. 

Anthony’s views on actionable goals, mindset, and turning a perceived weakness into a strength are lessons many of us need a refresher in.

What You’ll Learn In Today’s Episode:

  • Don’t play to lose just for the experience. The number one rule is to never lose money, and starting off with a loss can set you back years. Take action, but be patient and picky. Starting off with a win and build some momentum.

  • Have action-based goals, rather than focusing on results. It’s better to fall in love with the process, which is something you have control over, than the product.

  • Strategy is knowing what to do when there is nothing to do. Tactics is knowing what to do when there is something to do. Right now, we are in a very strategic time, and the perfect chance to position yourself to benefit from the deals to come.

  • Keep things simple, real estate investing doesn’t have to be overwhelming. It can be complex in moments, but the overall concepts are easy to grasp. 

Ideas Worth Sharing:

“Right now we’re in a very strategic time which is, maneuver your pieces to the best place possible so when opportunities do present, you can take advantage of those tactics.” – Anthony Vicino

“Mindset is the lens through which we see the world.” – Anthony Vicino

“Finding success in life has been about creating systems around my daily routine that I can maximize my likelihood of hyper-focusing on tasks that are really important, rather than really meaningless.” – Anthony Vicino

Resources In Today’s Episode:

Books Mentioned In Today’s Podcast

  • Meditations by Marcus Aurelius (Gregory Hays Version)

 

Enjoy the show? Use the Links Below to Subscribe:

 

Transcript

 

Mark:              He’s also an author and investor who managed a personal portfolio of multifamily assets before launching Invictus Capital with his partner, Dan Krueger in 2019, jumping into apartment syndication. I’d like to welcome Anthony Vicino.

Anthony:       Hey Mark. Thanks for having me, man.

Mark:              Of course. Thanks for joining us. The first thing I learned about you is that you were a writer and not just an investor who cranked out a book to add it to your resume. You’ve been writing for a long time and you’re prolific. What do you write?

Anthony:       I started in science fiction and fantasy about 2013 or so. And did that full time for a while and then learned some interesting things about myself through that process, which is I don’t do well when the only person I’m accountable to is myself and sitting in a room all day and writing and kind of fantasizing about robots and lasers and things like that.

                        I branched out, got into some business opportunities with some friends and started working on building up those operations and discovered that I really, really like building businesses like building systems and really thinking about how to build systems at scale.

Mark:              You and I were talking before we started about sitting in a room by yourself for a couple of weeks working on a writing deadline. My experience is when I go down that hole, I don’t talk for a week or two and I come away try to re-enter the real world. And I got mush mouth and I have to re-learn how to speak.

Anthony:       Yeah, it is the same for me where I would go the entire day, not speaking to a single other human. And then I would see my girlfriend in the evening. She would be like; you’re a little off right now. Like your conversation skills aren’t there. I’m like; I’m not sure how to be in society at the moment. I’m sorry.

Mark:              Coming out of a cave.

Anthony:       Yep.

Mark:              And I do like shifting to the opposite side of your brain to do business and investing in the numbers. That’s all fun and stimulating and it’s a break it’s hard to try to be creative all the time.

Anthony:       It is. It definitely is. And when it’s your career, it’s become slightly different than just, I don’t know like when your passion becomes your job, if you’re not careful, it can rob a little bit of the passion if you don’t find the balance.

Mark:              Yeah. That was one of the things that I loved about real estate as a break from writing is that it’s concrete. ‘Cause you’re just in the world of abstract ideas and you’re inside your own head all the time as a writer, but real estate is real. You can touch it, feel it it’s concrete, palpable,

Anthony:       And it’s simple. Once you kind of understand the fundamentals of it, it’s fairly straight forward. Whereas contrasting that with trying to tell a creative story, that’s opening a whole can of worms. And so you can really get lost in the well of your subconscious trying to pull out stories and make them fit together and make sense. Whereas I really liked how concrete real estate is where it’s like, okay, if we do this, that if we do A and then follow that with B, we can expect the result of C

Mark:              And oh, over complicate real estate sometimes like when you’re listening to certain pundits or something, they try to make it more esoteric than it actually is. I found entering the real estate investing world that it’s very simple and I liked how simple it was. And I think that’s a virtue of writing too, is you got to keep things pretty simple in moments you can get complex, but the basics of it are fairly straightforward.

Anthony:       I definitely agree with the notion that there’s a movement, not just within real estate, but I would say within financial services in general, that push towards complexity. And I think, you know, so my partner, Dan and I, we have a podcast that’s called Multifamily Investing Made Simple. It’s all about taking the complexity out of real estate and showing people, hey, this is actually really simple and you can do it too. Because what ends up happening in those financial services is, or like the gurus and the pundits kind of dressing things up as being more complicated than they really are. Then it makes you go, well, maybe I don’t have the time and the energy to learn this as deeply as I should. And so I’ll pass and abdicate the responsibility to this guru.

Mark:              As somebody who knows what they’re doing. Yeah.

Anthony:       Exactly. Because it feels so overwhelming. And when we’re overwhelmed, we kind of take a step back and look for the expert and just say, oh, you take care of it. And I think that’s the wrong approach. I think definitely if you want to be passive, that’s great. And you should find some awesome operators to work with. But I think you have to know enough about the business to understand when you have a good deal when you have good operators or when you’re not treading too close to that line of going off the rails. So I think education is super key there, and it’s an easy education by and large.

Mark:              I’ve never thought of this, but I almost think it’s as hard to be a passive investor. At least in my experience, I just jumped in on my first investment property that I bought and figured it out as I went along. But if you’re investing with a syndicator who you don’t know, you really need to know how they’re underwriting the deal. And you need to probe beyond the surface and understand because they’ve got to pay themselves, they’ve got fees that make an average deal that you could buy yourself. It’s more challenging to make a syndication work. And so you’ve got to be able to discern how that operator is underwriting and are they being too aggressive or unrealistic on their projections?

Anthony:       Absolutely. Some of the most sophisticated real estate investors I know are passive and they have a deep knowledge and they know what they’re doing and they treat it like it’s a very serious business because it is which I think when people hear passive investor, passive income, the first thing that maybe comes to mind is, Oh, this is easy. And there’s not a lot of work involved, which isn’t really true. There is a lot of work and it’s usually on the front end for the passive investors, which is understanding how deals work, finding the operators and vetting those operators.

And once you have a good relationship, if you have a great relationship with an operator that you’ve done 10 deals with and they bring you another deal. Yeah. Maybe the amount of work that you’re putting into vetting that particular deal is going to be less than it was in the beginning. But that’s only because there was a lot of work that went up to getting that level of competence and trust.

Mark:              I think you’re absolutely right. So you started out writing. How did you meander into real estate?

Anthony:       My very first real estate experience was in college. I had a roommate that I lived with him and his dad were buying and flipping single family houses. And I was living with them and doing a little bit of work around the house to kind of live for cheap.

Mark:              And where was this?

Anthony:       This would have been, we did a one flip in Sioux Falls, South Dakota, and then one in Minneapolis, Minnesota. And all I remember from that time was I hate construction. I’m really bad at it. Like I can swing a hammer, but I can’t hit the nail. So from very beginning, I was like, I don’t like this. And so it kind of turned me off to real estate. Didn’t really even think about it as a viable track. And so about 2014, I was living in Oakland, California, and I met a guy who was a good friend at the time and he was buying up little triplexes and quads in that area. And he’s like, Hey, why don’t you just put some money? We go into this together, I’ll operate it. And I was like, yeah, that sounds great.

                        And so that was my first passive experience. And to this day, don’t do anything with those properties. And then fast forward to 2017, I’m living back in Minneapolis. And I don’t remember exactly what the impetus was that got me thinking about real estate. I think it was driving along the freeway one day and looking up at the city skyline at the skyscrapers, at least this is a story that I tell people and seeing the skyscrapers and thinking like, what would it take to acquire a skyscraper? And at that point, I had no context for what that even look like, could an individual even do that, but it seemed like a really intriguing question to try and answer.

                        And so I like to take these big audacious goals and then try to work backwards from them and say, how do we bring that to where I currently am as a complete idiot who knows nothing about real estate, what would be the very first step that I would need to take? And that was okay, go and educate yourself, go read some books, go listen to podcasts, go to some networking events and start to learn what it is that you don’t even know. So you can start asking the right questions. And so I did that for about a year. It got to the point where I was like, okay, now I understand the trajectory that I want to follow to get there.

                        Now it’s time to start executing. And I did that by just going and house hacking a triplex and did an FHA loan put like $7,000 into it. And right now, actually today, it went on the market. And so that property that was a really interesting experience because I always knew that I wanted to scale into the larger multifamily, but I wanted to start small and prove out the concepts and learn the systems, how to work with tenants, how to work with the city and then how to operate a functional business. Because that’s really at the end of the day, what these little properties are, they’re little mini businesses.

Mark:              Right.

Anthony:       And so I wanted to go and learn how to do that. Well, in the process, we experienced some really insane appreciation on this property within a very short period of time. So like within nine months it had appreciated 125,000. We refinanced it and pulled some money out. And you might hear that and think, oh, that’s pretty good for nine months. But what it did for me was reinforced the fact that I had no control or say over how that property was valued, because it was just off a comparables.

                        It just happened to be that some other houses in the area sold for more. And that generally the area got more desirable, but at the end of the day, it wasn’t based off of my work. I didn’t improve the property overly such. I didn’t run it really efficiently. And so I was like, okay, well, I don’t want to be in these small multi-families because there’s this aspect of lack and control and being rewarded for the merit of the work that I’m putting in. And so that was the point where I was like, okay, now we need to go a little bit larger.

                        And so I started to go to more networking events, met up with my eventual partner, Dan Krueger, we formed Invictus Capital and he had maybe 35 units under management at that point. So he was about two steps, three steps further along the path than I was which I think is maybe the best kind of partner to have or best kind of mentor. And so then we joined up late last year and we syndicated our first apartment complex and closed on that this January.

Mark:              So you started with a couple smaller deals, and then you recently jumped into syndication. What was your first syndication?

Anthony:       So that one’s in St. Paul. Right now.

Mark:              St. Paul?

Anthony:       Yeah. A lot of our properties are in St. Paul just happens to be where the numbers are penciling out at the moment. And that was a 32 unit in an area that we had a couple other properties in already. We handle our own property management in house.

Mark:              You do? Okay.

Anthony:       So it’s really nice to be able to have all these properties within close proximity so that our maintenance crew and our leasing agent, they can just, stay within a particular radius.

Mark:              Do you divide and conquer does one of the two of you handle property management and the other one do real estate?

Anthony:       At the moment, Dan is handling the property management and he’s overseeing that crew.

Mark:              Okay. And how did you guys come up with the money?

Anthony:       Yep. So we syndicated that we put in. I think we raised about a million dollars. We put it in 200 of our own and then raised the other 800. And that was, a good first learning opportunity for us because it was achievable. It was a nice first step. It wasn’t too ambitious, like a $10 million raise.

Mark:              Sure.

Anthony:       Or anything crazy like that. It was something we were like, okay, we’re reasonably confident we can do this. We can bring in some of our closest investors who will maybe give us a little bit of slack as we’re learning the ropes here because we want to be as forthright with them and saying, hey, this is our first indication. We’re going to make some mistakes here, but here’s how we’re going to fix that when we do make those mistakes. And here’s how we’re going to operate generally moving forward.

Mark:              That’s great. So you bought it a very interesting time in January. How are you fairing? How are things going? You went right into, you know, Armageddon.

Anthony:       Yeah. It was right into the jaws of the beast. Can’t predict that, but actually things have been working out really well. So the first couple months we were ticking along on the unit renovations cranking through, and we were planning on like, we don’t underwrite for refinance because we like to be as conservative as possible. But we were planning on a refinance in year two or three; we were actually ticking through the unit upgrades so quickly. We’re like, okay, actually, we’re going to be finished with this by June, July way ahead of schedule.

So we might be able to accelerate this timeline and then, you know, the world kind of ended. And that was fine. ‘Cause we actually raised all the CapEx funds beforehand. So we have that sitting in reserves we’re well capitalized and prepared to like sit on our hands and do nothing. I think Warren Buffet has a saying, he’s like, “The hardest thing to do is sitting on your hands and doing nothing.”

Mark:              This has been a strange, obviously. The understatement of the century. A strange economic shift it’s almost like, one of those supersonic planes that just zoom by overhead. And then you knew something that happened and you just wait for the after effects of it, the boom and the rumble that something very shocking just happened to our whole economy. And everyone just seems to be waiting to see, alright, well.

Anthony:       Are we okay?

Mark:              Are we okay? Or is the ground starts shaking?

Anthony:       It is such a strange situation. You can’t really predict we don’t have any case studies to kind of like point to and say like, last time this happened; this is how it affected everything. And so we had another deal that was just about to go under contract in March for a 92 unit portfolio here in the cities and COVID happened. And then everybody pumped the brakes simultaneously, both us and the seller. We said, let’s kind of wait and see what happens here, which was the right choice because the bank started to tighten up. The requirements started getting quite a bit more conservative.

                        And so the deal wouldn’t have made much sense at those rates. And so it was good to kind of pump the brakes, see what happens now that deals kind of come back onto our table in the last week or so as the banks are starting to maybe get their feet underneath them and feel maybe a little bit more confident moving forward, but there’s just still so much gray area. Anybody that has a strong opinion one way or the other about how any of this plays out.

Mark:              Is most likely wrong.

Anthony:       Most likely wrong. But it’s like Darwin, Darwin’s falsely attributed with a quote, which is something like, “It’s not the strong that survive. It’s not the fittest that survive. It’s the species that’s most able to adapt.

Mark:              Adapt.

Anthony:       And I think that’s pertinent in this situation and business in general is like, you have to be able to pivot and you have to be able to adapt to whatever comes down the pipeline.

Mark:              Now, if you’re enjoying the show, please do us an easy favor and hit the subscribe button. And if you liked the show, please give us a five star review. As a listener I always wondered why podcast hosts are always begging me to subscribe and rate them. Well, now that I’m on the other side, I see why it allows other listeners to find you.

So here I go. If you liked the show, please subscribe and give us a five star review. I like doing it. And more importantly, in an era of unprecedented hype over real estate investing, my goal is to be a truth teller. Real estate is not as easy as it’s made out to be, but you can do it. If you can get past the hype and get to the truth. My aim is for this show to help with that. Anyway, let’s get back to the show.

Mark:              Similarly, we were in escrow on a similar size building, a 90 unit, right as COVID hit. And yeah, like you’re describing, we had a loan lined up and then none of the lenders knew how to react to this. And a lot of them just kind of froze up and they wanted principal and interest for six months and then it became 12 months. And then some lenders just for canceling loans because they were fearful of the future. So we backed out similar to you. And we parted ways with the seller and thinking that we’ll come back to this if things settle down a bit and now we’re doing the same thing that you’re doing.

Anthony:       It’s super hard because I think if you’re in real estate investing, you probably have a little bit of an entrepreneurial streak. And by and large destiny favors the bold where having a bias to action can be really advantageous. One of the hardest things to do is just to take a step back and do nothing.

Mark:              The whole investment community is having that struggle right now is how to restrain yourself. And should you restrain yourself? I’ve told this story on a couple occasions, but when I went through 2008, the mistake that I made was when I saw prices slide by 15% in a market like LA that had just been going up charging upwards for as long as I could remember, I was elated. And I thought now is the time to jump in. And I jumped in.

Anthony:       And you caught the falling knife.

Mark:              I caught the falling knife. Yeah. They called it, I think a dead cat bounce is what economists call this phenomenon that happens in every recession is that there’s a bunch of people who are well capitalized. They’re waiting for an adjustment. And when it goes down by like 15%, they jump in and that causes the trends to go back upwards. And then that causes a whole other group of investors to see that it’s going up and they think a recession is over and they jump in, but the economy hasn’t worked through all its problems and it’s catching that falling knife, like you’re saying.

Anthony:       Humans have a bias towards optimism. It’s going to be okay.

Mark:              Especially investors and entrepreneurs are optimistic.

Anthony:       Definitely. Definitely I think as humans, we don’t think that bad times are going to last, like we always think the future is going to be a little bit better than it currently is. And I think that’s the best way to live life in general.

Mark:              I always think like at times, like these it’s really important to take away all emotion. And I think I hear emotion in every investor. Most of the investors I’ve talked to, especially newer ones, kind of justifying that now is the time to get in because if they don’t get in now they’ll lose their momentum in my thought, when I hear that as well, that’s emotion and emotion is not your friend. So you got to like, yeah. Reign yourself to step back from this and analyze it.

Anthony:       We had a conversation the other day with a potential passive investor who reached out and was expressing, I think, I missed out on 2008 and I don’t want to miss it again. And I am, well-capitalized I’m ready to move right now. I don’t want to miss out on this opportunity like, Hey, just pump the brakes. It’s not like a once in a lifetime, if 2008, any indication it’s once every decade or so. And so it’s not going to be the last time there’s going to be an opportunity. And this is going to stretch a little bit longer than we think it’s going to.

                        And so my partner, Dan, he’s a bit more of a machine and he looks at investing from a very pragmatic numbers basis. And it’s like; you have to remove the emotion. You have to have your rules of engagement that you’ve set up before you ideally got into an investment, which says like, these are my parameters. These are the situations under which I would sell or which I would keep. But also recognizing that right now that playbook’s maybe been thrown out the window a little bit. So you have to just kind of pivot and try to look at it as objectively as possible.

Mark:              The last five or six years, it seemed to be the sort of ethic that investors, especially newer investors embraced was the idea of like go big or go home, like 10 X, like go scale up as fast as you can. And I always thought like, no, it’s not a macho thing. It’s a chess game. You’ve got to not be emotional. You know, it’s not a testosterone driven practice investing. It’s calculated. You got to be you’re playing chess and trying to read that market

Anthony:       In chess there’s strategy. And there’s tactics. Anatoly Karpov was a former world champion back in the eighties and nineties, one of the best chess players of all time. And when people asked him like, what’s the difference between strategy and tactics? Because he was well renowned as a very strategic player. Whereas his primary rival at the time was Gary Kasparov, who was a very tactical player. And his response was, “Being strategic is knowing what to do when there is nothing to do. And tactics is knowing what to do when there is something to do.” Like how to take advantage of the opportunity. But right now we’re in a very strategic time, which is maneuver your pieces to the best place possible so that when opportunities do present, you can take advantage of those tactics. And so again, it’s hard to sit on your hands and do nothing, but right now the situation kind of calls for, take a step back and look at the long-term.

Mark:              That’s a great distinction. I’ve never heard that. Yeah. Keep thinking of that truth that during recessions there’s massive shifts of wealth. And basically what that means is that, some people make a fortune during a recession and other people lose a fortune. And so there’s a massive exchange of, who are the wealthy by who plays it accurately plays it correctly.

Anthony:       Yeah. And I think if you keep that long-term horizon and I’m by nature, fairly conservative. And I subscribed to the school of investing where rule number one is don’t lose money. And rule number two is don’t forget rule number one, principle preservation is everything. Because if you can make it through an investing career, never having lost your principal, like you’re probably doing pretty well. So you want to make sure that when you are taking risks and opportunities, that it’s like a risk one to make five scenarios, but you’re not overstepping your bounds at all.

Mark:              Right. That’s another pet peeve of mine. I don’t want to just be a cranky person. I’ll go for it. But the notion that, just jump into real estate, even if it goes terribly, the education will have been worth it. And I don’t know, just to be a smart ass. No, I don’t think the education is going to be worth it. Yeah. This is investing. Listen to your rule. Rule number one; don’t lose money because if you lose, if you start off with a loss, you’re going to spend 10 years trying to recover that loss. So start off with a win.

Anthony:       Definitely. And I would say so like new investors, how you make your money really matters. And that’s kind of like a multifaceted statement and that, one don’t make money by doing shady things, but then, two making your money and really stressful ways where you’re losing huge chunks of money and hoping for the black Swan event like Nassim Taleb, and then you make millions, that’s an ulcer, inducing, stressful place to live.

And you have to be kind of a freak of human nature to be able to function in that way. And for me, that’s not how I want to make my money. I don’t want to live my life and stress and like gambling big and winning big. I want to win consistently and measurably day after day. And I don’t need to get rich quickly. Like it’s a slow process. And if you can find enjoyment in that process then even the better

Mark:              It’s just a practice; it’s devotion, something you do every day.

Anthony:       Yeah.

Mark:              And don’t necessarily watch for the results. Just the practice itself is the reason to do it.

Anthony:       Yeah. And this is something that we talk about a lot with in our businesses is focus on the process, not the outcome because the outcome you only ever get to measure at the end and it’s either it’s binary. You either accomplished it or you didn’t, it’s a one off thing, but in the moment that’s nothing to re-adjust your sales based off of. It’s just, did we do it or did we not do it? So if you want to lose weight, that’s saying, I want to lose 10 pounds. Isn’t a great goal. Because at the end of the year, let’s say you got to weigh yourself.

You either did it, or you didn’t. But if you focus on the process and say like, my goal is every day to go run for 10 minutes. Well, that’s something that you can every single day go in and get a win, and so you can get 365 wins and maybe you don’t hit that goal of the weight at the end, but that’s okay because you’re focused on that process. And you know, if you do those lead measures long enough, they’re going to lead you to the desired location.

Mark:              I heard a great commentary interview about that principle on a podcast called Finding Mastery with Michael Gervais. I don’t know. It’s not huge, but it’s a great podcast. If anybody wants to listen to it. So Michael Gervais is the psychologist for the Seattle Seahawks.

Anthony:       Sounds good.

Mark:              He had on the coach of the Seattle Seahawks. He’s not currently, but he was back maybe 10 years ago. And he said that his number one thing for his team, his players was to focus on the process, not the outcome. And he said, the reason was if they were focused on outcomes and they had a loss, what he found in his career is that that loss would rattle them for like the next two or three games. And when they shifted their total focus to just the process and forget the outcome, it becomes do each play correctly. And who cares if we won or who cares if we lost and their team improved. And I think they went to a Super Bowl with that philosophy.

Anthony:       This is something that Charlie Munger, Warren Buffett’s partner talks about a lot, which is, the universe is a really complex place and you can’t predict what’s going to happen in a really complicated system like we live in. And so you might make all the right decisions and have the best judgment in the world, but the cookie might just crumble the other way and you might lose.

And so measuring based off of that outcome of did we win or did we lose is actually the wrong thing because you might win based entirely off of luck. The other team might just have played poorly. So really the meaningful question there is, was our decision making process sound, did we play well? Did we fundamentally play as well as we could have? And then regardless of whether or not you won or you lost, you’ve controlled the thing that’s within your control and that’s your performance.

Mark:              That’s an amazing illustration of that. So back to your syndication that was like a workforce housing, did you say?

Anthony:       Yeah, so that was, I would say a class-C property in a class-B neighborhood. I would say it’s the ugly pig on the street. It’s the last little bit on that street. That’s holding that neighborhood back from being really, really great. And that building was in really good shape. It’s just more a rough tenant base. So a lot of the work that we’ve had to do is just going in there and cycling out a lot of those troublemakers, then doing the unit upgrades and bringing the units up to market standard, and then just adding a higher level of quality overall to that neighborhood.

Mark:              Sure. So you did a value add with that.

Anthony:       Yep. And that’s everything that we look for is how can we add value to this? And we try to go in to these properties and we do, I’d say light value, add we’re not looking for really heavy repositions. We don’t want to re-gut the plumbing and electrical. Like we don’t want to spend money on invisible fixes that you don’t get credit for.

Mark:              Yeah. Similar to me, I try to do the light renovations and become more fixated on not just to increase the income, but even more importantly, the expenses focus on the expenses and how to reduce them. The recent podcast guest was talking about that. And when you reduce expenses that are pure profit. When you increase the income that’s taxable. And so you’re only getting part of that. Your best value add is reducing expenses.

Anthony:       That’s the single best piece of business advice I ever got. And this was before I ever even got into real estate, because on the light manufacturing side, there are so many expenses. And if you can reduce those expenses and your margins just increase through the roof, and it makes a lot of sense when somebody finally says it to you, but until you actively think about it, like every dollar earned, you’re earning on a margin.

So if you’re operating a business on a 50% margin, let’s say then for every dollar you earn, you only get to keep 50 cents, but every dollar saved you get that full dollar. And so you really got to be tactical and go in there and look surgically at the expenses and say, where can we cut these expenses, not cut corners because you cut enough corners and you get buried under an avalanche of sawdust, but you go in there and you say, where can we improve efficiencies and build systems that scale ultimately, so that we can run this as a well tuned engine.

Mark:              It’s almost like there’s a bias, a natural bias towards increasing the income. It’s almost sexier. It’s more glamorous.

Anthony:       It’s sexy. Yeah.

Mark:              To raise the income from nothing instead of like, Oh, I got to reduce our utility bills.

Anthony:       And it’s the same in every aspect of our life. If you think about your general income people who are like, Oh, I made a million dollars last year. Like that sounds really good. So you ask them like, how much of that did you keep? And they’re like, Oh, I spent 950. So I kept 50,000. You’re like, that’s not so good, but its way less sexy to be like, I made a hundred thousand last year, but I kept 80 of it. It was like, well, one of those is demonstrably better, but the other is way sexier.

Mark:              So that kind of wrap up your syndication deal, which is exciting. And it’s kind of interesting that you jumped in when you jumped in, what are your thoughts on the market? What are you planning to do?

Anthony:       I think there’s going to be a lot of opportunities. I think everybody realizes that whenever there’s a lot of turmoil and things change from the status quo, there’s always a lot of opportunity. And so it’s just about being well, poised and well positioned to take advantage of those opportunities. But then I think the real important thing is to be able to recognize the opportunity when it does present itself. Because to your point back in 2008, when you bought, after the 15% drop, you saw you were able to take advantage of it, but you didn’t quite have the full picture. Right. And if you had that full picture, you might’ve been able to wait until it dropped even further. Actually I don’t remember. I wasn’t involved in real estate back in 2008. So I don’t know like, did it drop further for you?

Mark:              It did. It went down; I think a total of about 25%, maybe 30%. And then it kind of snapped back and we ultimately did, well, I had maybe six investors with me, but we waited until 2015 and did really well, at least by comparison to the stock market. But yeah, I got in too soon and if I had to do it again, I would be more patient, you know, it seems like, yeah, we haven’t seen the end of this thing yet. And it’s just trying to understand it. A lot of people are trying to understand it.

Anthony:       Yes.

Mark:              Now is the time to learn how to read the economy and understand how recessions work, how they play out, what triggers the next thing to fall.

Anthony:       Definitely. And I would say reading the economy is one of those fundamental skills that can serve you in any business. But in the last, however many years, it hasn’t been a fundamentally necessary skill to have because the markets have been doing really well. And so it didn’t matter.

Mark:              Yeah. We had one economy.

Anthony:       But moving forward, it’s like, well, this is a really actually important skill to have. And so now’s the time to, if you don’t have it to start brushing up and start looking at it because to tell you, like, you think you’ll recognize the opportunity when it presents itself. But by and large, my experience in life has been that we tend to gloss right over the obvious opportunities until it’s too late. And then we see it in hindsight, we go, Oh yeah, I kicked myself because I got in too soon. I should have waited a little bit longer. So for me, its education, stay apprised and starts to let go. Maybe of some of your old firmly held beliefs and strategies and recognize those might not be effective moving forward. Like the man with a hammer sees every problem, like a nail.

Mark:              I feel like we were in a boom market paradigm for the last 10 years. And that’s largely what most new investors, that’s all they know. And now we’ve shifted into a recession paradigm and it’s completely different. And people are going to have to adjust and try to start learning what the rules of that paradigm are.

Anthony:       And I’ll be completely honest. I was getting out of college at the time that 2008 was really happening. And so I didn’t live through it in a personally meaningful way. Like I was a poor college student who went off to rock climb professionally. I traveled the world and live in a tent. So yeah, from 2008 to 2012, like it all kind of flew over my head. Didn’t really matter.

Mark:              Now I want to do a podcast about your rock climbing. That sounds cool.

Anthony:       It was a good time, but you know, like it didn’t really give me a lot of meaningful data points to point to during that period of time. And so like for me, this is all very new to, this is like my first legitimate recession. And so I think one of the things to really keep in mind is if you have been living through this really boom time period, and you’ve never experienced the rough times is to be honest with yourself about that and saying, and just owning that and be like, okay, I don’t know. Let me go and talk to some other people maybe who know more who’ve been there before and like try to take a level of humility towards the monumental seismic shifts that are occurring and recognize, like my perspective might be skewed because I’ve been spoiled in the previous whatever 10 years.

Mark:              It’s a great time to sit back for a moment. You’ve got a front row seat for one of the great learning opportunities of your investing life is to watch recession and see how it plays out.

Anthony:       Yeah, definitely. And, and to that, like again, it goes back to Darwin, just try and adapt and find those opportunities. Don’t be too rigid.

Mark:              Right. Well, great. There’s this something I call multifamily psychotherapy. What’s a trait you possess that has served you best both in real estate and in life.

Anthony:       So I have ADHD, which is attention deficit hyperactivity disorder. And I think everybody’s generally familiar with ADD and ADHD, but they maybe not familiar with how it actually works. And so most people think that I can’t focus or that I don’t have any focus. What actually occurs is I go into hyper-focused states where I can’t control what I’m focused on, but when I’m in that focus state, I’m very, very focused.

                        So if I’m watching the paint dry, I’m really focused on that paint dry. If I’m focused on writing a book, I’m really focused on writing that book. So for me, like finding success in life has been about creating systems around my daily routine that I can maximize my likelihood of hyper focusing on tasks that are really important rather than really meaningless. And as I get older, I get better and better at that because I’m just kind of a creature of habit and routine as much as possible because if I’m too spontaneous, then my flight of attention just kind of goes wherever.

Mark:              Sure. Is there a trait that holds you back that you’d like to work on?

Anthony:       Ooh, that’s a good one. So every couple of years I’d like to ask my closest friends just kind of audit and ask them like, Hey, what do you see as my biggest strengths and my biggest weaknesses. And a couple of years ago, my friend Christina told me that the only person who can convince me to do something is myself. And I think that’s both a good thing and a bad thing in the sense that I’m very self reliant. And I had a lot of confidence in my own judgment, but at the same time, it can get in my way of like really listening and being open to other people’s opinions and allowing that to affect me and allowing it to change, maybe my opinions. So that’s something I’m trying actively to try to disassociate myself with.

Mark:              That’s good. Yeah. You’re like a closed system that debate will go on, but it’ll all go on in your head.

Anthony:       Yeah. And that’s the interesting thing is like a lot of times I will ultimately have my decision swayed but it wasn’t in the moment of the conversation. It’s very much after I’ve had time to really digest it and go through it, which is good. But it’s also bad in the moment to the friends who maybe don’t feel like they’ve been heard in that moment.

Mark:              Sure. How important is mindset to your success?

Anthony:       Mindset is everything. I have a blog called The Hyper Focused Mind that’s 90% about mindset. I think it’s the lens through which we see the world. And if your lens is mucky has some insects kind of smeared across it, then it’s going to affect how you see the world. And so I think, step one is getting your mind crystal clear and right. And pointed in the right direction. Because until you do that, it doesn’t matter what your actions are. They’re going to be misaligned with your deepest sense of purpose. So yeah. Mindsets everything.

Mark:              In tune with your thoughts, start listening to the way your subconscious mind is thinking and what are those thoughts? And if they’re negative, you have to train yourself to change those.

Anthony:       Yeah. Just taking that time, like the observer position, I’m a big fan of meditation these days. I meditate every morning, but it’s less meditation these days as it is just sitting in silence and having a conversation in my mind with myself, just kind of seeing what comes up. And I find just like observing my thoughts and saying, well, why is that thing keep recurring? What do I need to work through there? And if it’s a negative thought, negativity is infectious. It spreads to other people it’s going to spiral in your own mind. So really trying to operate from a position of positivity as much as possible.

Mark:              I agree. Well, great. Well, this has been awesome. Are you ready for our question round?

Anthony:       Oh yeah. I’m super ready.

Mark:              Alright. Let’s jump in.

Anthony:       Let’s do it.

Mark:              And now our question round.

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