5 Things to Look For In A Partner

by | 02, Nov 2021

For today’s episode, we will be diving into the 5 traits to look for when vetting an operator.

We will be going over why you shouldn’t just go straight to the numbers first on a new deal.

The audible version Passive Investing Made Simple: How to Create Wealth and Passive Income through Apartment Syndications coming soon!

[00:01 – 08:08] Bad Investing Tip Of The Day: “Invest In Something That Has The Highest Risk-Adjusted Return”

[08:09 – 14:22] Reason #1: Personality

[14:23 – 16:48} Reason #2: Track Record Success

[16:49 – 19:57] Reason #3: The Team

[19:57 – 27:15} Reason #4: Education, Resourcefulness, and Experience

[27:16 – 32:04} Reason #5: Trustworthiness

[32:03 – 35:01] Closing Segment

Book Recommendation

Shut Up and Listen!: Hard Business Truths that Will Help You Succeed

“I think step one is to be cognizant. Just awareness goes so far as self-awareness, investing, awareness, just understanding what are the implications Anthony Vicino

“Personality is more about finding an alignment of communication styles. We all communicate differently.” – Anthony Vicino

“You just need to spend a lot of time interacting and engaging with somebody and see. Right. Time will tell if somebody is trustworthy” – Dan Krueger

LEAVE A REVIEW if you liked this episode!!

Keep up with the podcast! Follow us on Apple, Stitcher, Google, and other podcast streaming platforms.

To learn more, visit us at https://invictusmultifamily.com/

**Want to learn more about investing with us?**

We’d love to learn more about you and your investment goals. Please fill out this form and let’s schedule a call: https://invictusmultifamily.com/contact/

**Let’s Connect On Social Media!**

LinkedIn: https://www.linkedin.com/company/11681388/admin/

Facebook: https://www.facebook.com/invictuscapitalventures/

YouTube: https://bit.ly/2Lc0ctX

Anthony Vicino and Dan Krueger
Passive Investing Made Simple – Available NOW!

5 Things to Look For In A Partner

Anthony Vicino: [00:00:15] Hello and welcome to multifamily investing made simple podcast that’s all about taking the complexity out of real estate investing so that you can take action today. I’m your host, Anthony Vecino of Invictus Capital, joined by Dan. I’m not so sure what his bad investing advice is going to be today, Kruger. It’s going to be good, though I will be really good. I don’t like flying into the dark without love, without radar doing it. I don’t. I don’t have Radar Goose. We’re going down. So get a co-pilot. You know, we don’t really prepare and plan a lot for these. This podcast we kind of come in at and just kind of start talking real estate. So sometimes I’m in real estate. Sometimes we just talked about cats and stuff, but today I’m really flying without any guidelines because Dan looked at me right before we pushed record and he said. I don’t have bad investing advice.

Dan Krueger: [00:01:03] I’m alone. Yeah, he’s all giving it all out. I got more, though I drummed up a little bit.

Anthony Vicino: [00:01:06] So here comes the moment of truth to see if Dan can generate bad investing advice on a dime. What is your big day today?

Dan Krueger: [00:01:16] My bad investing tip of the week is the week. Whoa. Oh yeah. Or the day of the week right now. The worst investing advice I can give is to invest in something that has the highest risk-adjusted returns. Sounds pretty good, though, right?

Anthony Vicino: [00:01:35] Sounds like a good piece of solid, the highest risk-adjusted returns. Yeah. That means adjusting for risk. Our returns are really good. Yeah. So all I did is restate the term by changing up the order of the words. If you didn’t notice that, yeah,

Dan Krueger: [00:01:49] Which probably provided no value to our audience. Ok, so

Anthony Vicino: [00:01:52] Usually like high risk-adjusted returns are good because it means we’re taking ideally we’re getting a high amount of return in exchange for a commensurate amount of risk or a lower amount of risk, right? So so you’re saying that sounds, I want to take on more risk and get worse returns.

Dan Krueger: [00:02:07] I was necessarily saying that that is not the most important thing to be looking at. It is a good thing to look at, but you also have to look at taxes, and this goes along with an episode that we just did, which you probably just listen to.

Anthony Vicino: [00:02:20] It actually comes

Dan Krueger: [00:02:20] Out. It’s coming. It’s coming.

Anthony Vicino: [00:02:22] You’re listening to this episode on a Tuesday preview, which comes out on a Saturday.

Dan Krueger: [00:02:25] It’s a preview. You’ll notice in that episode that we’re going to talk a lot about keeping. More of the money that you make, right, so making high returns is fantastic. However, if you’re getting taxed to death, it’s not worth it, right? You don’t want Uncle Sam to take half your paycheck. So me, bro. Yeah, exactly.

Anthony Vicino: [00:02:44] Do you remember that as a couple of years back? Don’t tase me, bro. Meme, yes, I do. Don’t tax me, bro.

Dan Krueger: [00:02:49] Yeah, don’t do any of those things. But yeah, you want to make sure that you’re actually keeping what you’ve earned because you are taking risks to make money in any investment. That’s what you’re getting paid for. And Uncle Sam isn’t taking any risk in these investments. So you’ve got to be looking at investments that do have a good risk-adjusted return and have a good advantageous, a good tax situation as well because you want to be able to keep as much of that as possible because you took the risk to get it.

Anthony Vicino: [00:03:14] So that seems good. I mean, I just wrote down risk-adjusted return and I realized the acronym for this is RA. So you want to make sure that you got a good RA and I would kind of put tax returns is or the tax treatment of your investment as part of the return and risk that you’re taking on. But I think a lot of people don’t calculate it because it’s not invisible. You definitely pay for it. But for a lot of people, if you’re running it up in the stock market, maybe you only pay it once when you go to cash out at the end, like, so maybe you don’t really notice it. It’s kind of like inflation in that way. That’s kind of it’s a sneaky expense. It gets you and then you’re like, Yeah, there’s nothing I can do about it now might as well pay it, but you never really stopped to calculate what would of my return have been had I mitigated that tax liability in the first place.

Dan Krueger: [00:04:00] What’s really fascinating is when you extrapolate out what the returns look like and what your principal turns into over a very long time period when you even just reduce the tax liability just a little bit. If you look over 30 40 years, those numbers like you’re adding commas and digits, like it’s substantial. So even if you’re just getting a little bit more efficient from the tax perspective over a long time period, it makes a huge difference.

Anthony Vicino: [00:04:26] Now here’s an interesting idea I’m going to stay on this for just a second is to what links should we go to try and mitigate our tax exposure? Because I was listening to somebody the other day, I’m not going to name his name because we don’t talk about him here on this podcast. You’re going to be able to infer pretty quickly who I’m talking about, but he’s talking about the fact that, like, really high net worth individuals, sometimes you’ll hear people talking about like going to live in Puerto Rico, right, so that you can avoid the taxes here in the U.S. But one of the things that he pointed out was he makes money so that he can be free, not so that he can become a prisoner to try and save more in taxes. So what are your thoughts on like what’s the? To the extreme, when are we going too far to protect our protect ourselves against taxes? And when are we like it? Yeah, we’re being a little too loosey-goosey. What do you

Dan Krueger: [00:05:15] Think? Yeah, I mean, I think that’s a really good point. I would say I’d have to agree. I think for the vast majority of people, it probably doesn’t make sense to uproot your life and change everything to pay a little bit less in taxes. I mean, maybe you just love Puerto Rico and have family there, and just happens to be a great place. I mean, great. But yeah, I mean, I’m not getting up and moving and we’re not in like the best tax state right now. And so I’m prioritizing quality of life over taxes. But yeah, I mean, I think it really kind of depends on the individual right. You don’t want to just completely change your life to save money on taxes because I think what happens to a lot of people, turns into a game, especially people that get wealthy and into the really, really, really high net worth echelons. At a certain point, the money doesn’t matter. It’s kind of a game about trying to be as efficient as possible, which I get. But yeah, it doesn’t really matter. At the end of the day. I mean, you obviously don’t want to screw yourself over by paying too much in taxes, but at the same time, you don’t want to completely disrupt your lifestyle either. So you’ve got to find a balance where you’re being efficient, but you’re also not jumping through so many hoops that your life sucks, right?

Anthony Vicino: [00:06:15] It’s like Minesweeper. Do you remember that game back on like you never, never played mind? I mean, I’ve played

Dan Krueger: [00:06:20] Just crazy, like I played those.

Anthony Vicino: [00:06:22] But it’s like learning how to play Minesweeper and you learn you win and you’re like, I can win on command at Minesweeper more or less. Once you know how to how to play the game, you can win all the time more or less. And then that’s like the money game. Like, once you learn how the rules go, you can more or less always win it. Then you get the people who are like doing speed runs at Minesweeper and you’re like, How fast can I do this? And those are the people who are then are like, How can I maximize every last penny so that I can win this money game? And like, there’s a certain point of obsession when I’m like, You’ve gone too far?

Dan Krueger: [00:06:52] Yeah, it’s kind of the same thing as that fire movement, right? Like the people that go to extremes and they just sit around eating ramen noodles so that they can be financially free and financially free.

Anthony Vicino: [00:07:01] But your life sucks.

Dan Krueger: [00:07:02] Yeah, it sucks. Like I wouldn’t. I’d rather have a job and eat some good food than sit there and eat ramen noodles and say, I’m free, like and more power to you if you’re happy. Yeah, obviously, if you’re happy, go for it. I know I wouldn’t be happy doing that. Yeah. Got to find that nice little Goldilocks zone in the middle where you’re kind of you’re being a fish with these things, but you’re happy.

Anthony Vicino: [00:07:23] And I think step one is to be cognizant. Just awareness goes so far as self-awareness, investing, awareness, just understanding what are the implications of. The vehicles that you’re in go a really long way and having a little bit of proactive thought with your tax advisor or even like your investment adviser, whoever you’re working with to say like, is there? Are there, is there any low-hanging fruit? Because honestly, go after the low-hanging fruit, don’t scale that dang tree. You don’t need to go to the very top and get the coconut. There’s plenty on the bottom. Just go get those. And once you’ve got the ones that ladder height. I don’t know, like unless you’re really like climbing trees, you don’t eat all the coconuts, good. So, all right, I don’t know, that’s a weird diversion. Hopefully, it made sense to somebody out there like, you know what? I got stopped climbing for the coconuts.

Dan Krueger: [00:08:05] I kind of want to go on vacation now. You got me picturing coconuts and kind of want to

Anthony Vicino: [00:08:09] Climb a coconut tree. I’ll be honest, that sounds kind of cool. Anyway, so today let’s talk about something that we spent a lot of time in the book. Passive investing is made simple. It is the most important job that the passive investor has, and quite often, and I’m guilty of this, Dan, you’re probably guilty of this, too when we’re presented with a new deal. We go straight to the numbers. It’s tempting to go look at the spreadsheets, but the problem with numbers is that numbers do not lie. But I can make them say whatever I want. And if you can’t trust me, you can’t trust my numbers. So your number one job is to vet. Operator, which we talk about all the time. But today we’re going to dive into the five traits, in particular, we are looking to vet when it comes to working with a potential operator. So which got,

Dan Krueger: [00:08:59] Oh, I was just going to say it. I mean,

Anthony Vicino: [00:09:02] It’s natural if you’re prepared to dive

Dan Krueger: [00:09:03] In, I was ready. I know it was a louder smack and I tried these. I heard it in my ear and I was like, That was a lot of I am sorry, listeners. I apologize for the lips and Mac. But I was going to say that on our end, you know, we veteran investors too. We make sure that they are a good fit for us. And so we’ve got a little bit different criteria, right? It doesn’t match up completely, but I think it’s really important that both sides, both parties, make sure that each one is a good fit for one another.

Anthony Vicino: [00:09:27] Oh, this is interesting, actually, as I’m looking at these five things, these are the five things that we look for in passive investors to like. And as we go through them, I’m going to point out how we do. I’m going to point out how we do so. So let’s dive into number one, which is personality and personality is a very, very difficult one, I think, to there is no metric and it’s not like that guy has a good personality. That guy has a bad one because you don’t want to just go into a deal with a guy who is really smooth-talking and silver-tongued right like personality is more about finding an alignment of communication styles, so we all communicate differently. We all have different love languages. Some of us are very word. Some of us are very Bodley, and some of us are very numbers-driven when it comes to how we communicate. And if you’re going into a conversation with your operator and you’re always walking away, kind of confused and not really sure if you got your questions answered. Because for whatever reason, what they say sounds smart and it sounds good, but it just doesn’t register. It might be that you just aren’t communicating on the same wavelength. And so I think that’s the first thing to be looking for is find somebody who when you talk to them, you leave feeling heard and understood and you’re not confused.

Dan Krueger: [00:10:40] Mm-hmm. Yeah, I can tell you from an operator’s perspective talking to investors, we’ve got to be able to try to figure out if the individual that we’re talking to is the type of person that wants to be hearing a story, or if they want to hear if they would just want a massive amount of data or they just want the bullet points, right? There are different types of people who want to receive information in different ways. And so we’ve got to kind of play detective and figure out, OK, who am I talking to and what is this person? How do they like to receive their information? And honestly, as an LP would be beneficial if you just tell us,

Anthony Vicino: [00:11:09] Yeah, come in right

Dan Krueger: [00:11:10] Out of the bat, because we could do it, you know, any, anyway, it’s all possible. Typically, people will default towards whatever their style is, right? So that’s usually what’s going to happen is if you get into a room with somebody and they are just giving you the song and dance and telling you all this stuff and you’re sitting there like, just give me the bottom line, give me, give me like three bullet points. It can be very frustrating. So typically, people will just kind of default to their natural style. But obviously, you know, a good operator will be able to pick up on what type of person they’re talking to and make sure they curate the message in a way that makes sense for that person because otherwise, it’s just it’s frustrating for the person on the other end.

Anthony Vicino: [00:11:45] Yeah, and tied into this is the idea of the like cadence of communication. I can get by with very little information in the grand scheme if I know just one or two or three bullet point very important levers. I don’t really get into the weeds. I don’t need a lot of hand-holding. I don’t need daily or weekly or monthly communications on a lot of things, but that’s very different for other people. Some people like to understand and be in the know on all the details and the weeds and like, if you are the type who likes to be over-communicated with, well, just based off on what you know about me, what I just said to you that that’s not my natural skill. All right. And so we might not be the perfect people to be working together, whether that’s as LPs and GPPs, or just as partners in general or friends or like whatever like understanding. Are we speaking on the same wavelength and are we speaking at the same cadence? Or are we communicating too infrequently or too much? Because that’s another side of it too, right? Like, don’t over overcommunicate.

Dan Krueger: [00:12:39] Yeah, yeah. And honestly, you just you kind of have to like who you’re working with, right? Yeah. Just from a really high level, you’ve got to like the partners that you have, whether it’s the limited partners on our site or on the LP side. You got to like the operator. If you don’t like the person, it’s probably not going to be a good experience. So, you know, in the same kind of vein, you just got to have a good feeling when you’re talking to someone, you just kind of feel like, OK, this guy or this gal, they communicate the way I like them. They listen to me. They understand what I’m trying to do. They actually care about me like somebody really basic kind of fundamental things that people tend to forget. And they just go in and they look at the proforma numbers, right? Or they look at some of this other stuff that I can’t. They said, You know, if you’re dealing with a shady individual like those numbers could look amazing, but it doesn’t mean that it’s going to work out well if you’re with the wrong type of person.

Anthony Vicino: [00:13:30] My life hacks for this, it took me a long time to figure it out because I’ve had a lot of partnerships that didn’t work out well. You know, in business, you know, it’s a crapshoot. Most businesses fail, and I’ve had plenty of failed partnerships fail. Those partnerships fail. One of the things one of the life hacks that I discovered was when you have a meeting with your partner or you see the text you or you see them calling you on the phone if your immediate reaction is one of a partnership is not going to work. Go ahead, flash. I’ll just tell you right now if you’re not excited or energized after talking with your partners, your operators, or if you’re an active investor and you’re thinking about partnering with some other people on the GP to do a deal if you’re not excited to talk to them, it’s not going to work out. Just save the trouble right now. So that’s number one. That’s the number one thing that we’re looking for in his personality. Number two is track record success does not happen in a vacuum. It leaves a trail.

Dan Krueger: [00:14:23] It’s true, I mean, honestly, this one, for those of you that aren’t aware, you know, the track record is referring to the experience of the resume of the operator, and this is important for a lot of reasons. One, because you want to see some proof of concept, see that OK, this individual or this team can actually do what they say they’re going to do because if this is the first time they’ve ever done the thing, there’s no. I mean, they might pull it off. They might not. But it’s important to also note that the track record doesn’t need to come from just one of the general partners, right? You can have some newer individuals in the mix as long as the team as an aggregate has a track record that speaks to the business model or the business plan that they’re going to be executing right. You don’t want somebody trying something for the first time with your money. Let them try it with their money first. At the very least,

Anthony Vicino: [00:15:08] Don’t improve it. Don’t pay for somebody else to go to the school of hard knocks. Yeah, no. That’s the tuition you pay for yourself, and they should be paying for themselves. Now, I’m not against new operators. New syndicators maybe have never done a deal before. We even knew what we knew once. Exactly. And but the point is like we built a resume, a track record with our own properties before we started taking other money. And both Dan and I actually came from different tangential careers in industries that actually had a lot of skills that were the same. Like, I have experience building businesses and real estate is really just a business. And Dan had a lot of experience with financial underwriting, which I mean, that’s 80 percent of real estate. Besides, the operation side is like, do you know that this is actually a good deal or not? But if we had been coming from like if we were both kindergarten teachers, we might have some experience dealing with difficult social situations that you might get when you deal with a resident, but might not have a lot of experience managing a project or a pro forma.

Dan Krueger: [00:16:07] Yeah, no. I think that’s a good point, that the track record doesn’t necessarily need to be all from real estate, right? There’s a bunch of applicable industries and professions that lend themselves to this industry. So if you see somebody coming in from a finance background, from a business building background, or from a construction background or something, that’s, you know, related in some way to real estate, that’s usually a pretty good transition. So, you know, take that into consideration as well. When you’re looking at some of these track records, maybe they’re a little bit newer to real estate, but five or 10 years prior to that venture into real estate, they were doing something that was definitely beneficial to the new real estate thing. So definitely worth keeping in mind.

Anthony Vicino: [00:16:49] Absolutely. So that’s number two. Number three is the team because real estate is not my game. It’s a weird game. And so as you’re looking at partners specifically when you’re looking at dealing with operators, is who’s on this team, not just as who’s all in the GP, but who else is around this individual as like a support network, who is their lawyer, who is their CPA, who are their vendors? Because a lot of what operators should be bringing to the table as GP’s is this network of professionals that they can lean on to do an awesome job. If they don’t have that, then you got to ask yourself, what’s the value of having them on the team? Like, what’s this person doing here? If they’re not, they don’t have connections. If they don’t have broker relationships or lender relationships or maintenance and construction relationships, what are you doing here?

Dan Krueger: [00:17:40] Yeah, it’s actually surprising, I think, for, for a lot of people who aren’t really in this business when they find out exactly how many people are involved and how many moving pieces there are with just one deal, there’s multiple multiple lawyers, usually at least one, if not a couple of CPAs weighing and weighing in on these things. You’ve got the brokers, you’ve got the insurance agent to sell you insurance, you’ve got the property management. Maybe it’s in-house like it is with us. Maybe it’s a third party, but that’s a really big piece of the puzzle right there. And then you’ve got, you know, the operators on the team who are running the property overseeing property management. You’ve got the marketing side of things, the investor communication side of things, you’ve got the lenders right, another big one. So if you just go down this list like there are so many different key players that you need to have a good relationship with to ensure that things are going to go off without a hitch. And it’s really tough to develop those really quickly. So it usually takes a decent amount of time to build that. That team-up

Anthony Vicino: [00:18:39] And something I wanted to point to here is like we’re focused exclusively on the Twin Cities and it’s really funny. I’ve been saying the Twin Cities a lot recently at these conferences and people are like, Where is that again? I’m like, Oh yeah, Minneapolis and St. Paul, we have the Minnesota twins. The reason the team has named the twins is that the Twin Cities, OK, is the way. So we are professionals in this market. We have great relationships with all the people that you could possibly want to have a relationship with or the issue if we want to ever expand out of the Twin Cities is we have to start from scratch. We have no relationships with the brokers are some of our lenders might lend in that area, but typically you’re going to get the best lending from local banks. And we don’t have that necessarily. We don’t know who the local vendors are that you should or shouldn’t be working with. And so you take us out of our, you know, our fishbowl here in the Twin Cities where we’re a big, big Guppy and you put us into somebody else’s market and like, we lose a lot of our competitive advantage. And so even us people who are very expensive, we could get those networks really quickly because we know people, we can say, Hey, can you can. I guess we could do it. But right now, if we were just going to say, Hey, we’re going to go invest in Nashville, we’re no better to invest within Nashville than the next guy. Like, we don’t know. We don’t have any relationships there. Don’t invest in Nashville.

Dan Krueger: [00:19:54] Yeah, we like our home-court advantage. It feels really good.

Anthony Vicino: [00:19:57] So we’re just going to try this. Yeah, it’s nice when you know everybody. But I digress. Ok? Number four thing number four thing. The fourth trait that you’re looking for when you’re evaluating potential operators to work with is education, resourcefulness, and experience that goes kind of with a track record. But again, it’s a little bit different.

Dan Krueger: [00:20:21] It’s like life experience, more so right? Not it’s like,

Anthony Vicino: [00:20:24] Well, what I’m what I mean by experience, in this case, is like local market experience and knowledge, like education is like, how much do they really know about this market or how intelligence isn’t a great marker for success, but it is a little bit correlated. But resourcefulness like these is these are some intangibles that are hard to know. But when you sit down to talk to somebody about their market, like you can tell pretty quickly, are they the expert in their market? Are they like, super sharp on that? And when it comes to resourcefulness, this is I bucket these together, but resourcefulness is really the ability to thrive despite chaotic environments, and like, what’s that look like?

Dan Krueger: [00:21:02] Yeah, I’d argue that that’s probably one of the most important things in real estate because I don’t know if you guys know this is LPs or in the audience here, but the business of real estate is just constantly putting out fires. That’s pretty much what you’re doing if you are you’ve got a business plan for a certain thing. And if anyone’s ever remodeled their house or done any kind of project, you always know that it doesn’t go as easily as you think it’s going to go every single time. And that’s just the business of the real estate. So you’ve always got to be pivoting and solving problems. So I’d say resourcefulness is probably

Anthony Vicino: [00:21:34] One of the biggest ones. Yeah, in the end, I can’t remember who said it, but this was brilliant, they said. I think it might be Tony Robbins, probably always Tony Robbins. You don’t lack resources. You lack resourcefulness. It’s not about having more resources. It’s about knowing what to do with what you have. And that’s a trait that is very, very difficult to suss out in an operator. It’s not something you can just ask them a question, and they’re going to give you an answer that you’re like, Yep. Check the resourcefulness box. But it comes with establishing the relationship over time and seeing how they function and operate and. At a certain point, really resourceful people like that, it’s hard to hide. It becomes almost transparent where you’re like, Wow, they saw an opportunity there and they did. They got it done with very little in the way of resources. So this is one of the harder ones to vet for. Good luck. But just know it’s one of the most important things to look for.

Dan Krueger: [00:22:34] Yeah, and it should. There should be evidence in the track record, I think, because something that resourcefulness leads to is a lack of extreme failure, right? Resourceful people tend to find their way out of situations that other people really struggle to find the way out of. So I think a strong track record over a very long period of time and time is probably a pretty good indicator of resourcefulness, especially if you get some recessions and things in the mix there. If you’ve seen them consistently performing well even through tough times and maybe even asking about times, that operator has struggled or when there have been things that haven’t gone to plan, like learning about what happens when you know things get tough, right? That’s a good way to uncover resourcefulness. But as Anthony said, it’s one of those things that is going to become apparent with time. And this is a long game. It’s a slow process of getting to know people. It’s you’re never going to know someone really quickly. It’s something that that that just takes time. And so we always suggest that people take this process slowly. Don’t jump in and throw all your money into the first deal that you do with a new operator. You know, take your time. There’s always going to be more deals and more opportunities.

Anthony Vicino: [00:23:42] So, yeah, somebody was telling me the other day that a family office had approached them, somebody, that was managing like a couple of billion dollars for a family office. And the guy said, Hey, I’m really interested in what you’re doing, and it seems like you’re you’re doing some really interesting things. I’ve been paying attention to you. I want to put you on the shortlist of potential partners that we want to work with. Put me on your email list. Send me all the data from your last two years of deals, and I’m going to keep tabs on you for the next two years. That literally is like for the next two years, I’m going to keep track of all the deals that you send my way. I’m going to like, be looking over them. So their due diligence process is two years before they’re going to hop into bed with an investor. So just realize like this, this is not like a one month to month. I got to get in really quickly. If you’re just starting your real estate investing journey as a potential LP, just know like you need to give yourself a long amount of time to get comfortable. And if you’re not there yet, that’s OK. Just keep pushing the ball down the road. You don’t have to jump yet.

Dan Krueger: [00:24:42] And for us, it’s, you know, that’s one of the many benefits of having a platform like this. This podcast is because it helps people get to know us better. In addition to the conversations that we have with them and in all the information we send them about our deals, they get to sit back and just, you know, effectively be in the room with us for as long as they want. And so it’s not uncommon for people who have been watching or listening to us for a very long time. You know, pop up six-eight months or so after they found us and after they decided that they want to do something right, they just kind of sat back and consumed our stuff for a long time. And it’s a really good way to help expedite the process of vetting an operator because you really do get to know people through this type of content.

Anthony Vicino: [00:25:25] And this is for the potential for the active investors out there who are listening to this and they’re building up their company or their profile like this is the number one reason for building up a thought leadership platform and having a brand like a public persona that people see. It’s not for touting and like tooting your own horn and getting up on a soapbox, which is not the best reason to do anything ever. It’s so that people can gain familiarity with you, and they can see you and say, I like you, I want to work with you, or they can conversely say, I hate you, I don’t want to work with you. That’s great for both of us because I don’t want to work with you if you hate me.

Dan Krueger: [00:26:01] Yeah, the person sounds lame.

Anthony Vicino: [00:26:03] Yeah. Don’t be afraid to fire your customers. Yeah, like if they suck and it’s not working out for you guys, fire them.

Dan Krueger: [00:26:09] Yeah, I look at this as you know, this platform is a million different benefits to it. But really, we’re just kind of letting people window shop, right? We’re providing transparency is out there. I’m sorry. What was it?

Anthony Vicino: [00:26:19] The voyeurs? All your voyeurs, everybody listening to us right now? Yeah, Dan just called you a voyeur.

Dan Krueger: [00:26:23] Hey, it is what it is, right? It’s like, you know, having a window in your storefront, right? You want people to be able to see in. You want them to kind of see your operation and try to, you know, get a sense of who you are. And for those people who aren’t local and can’t just swing by our office and hang out with us. This is kind of the equivalent of our big window in the front of our store, and people can kind of peek in and see if they like what they see and if not, keep walking. And you don’t know if you do, like, come on in.

Anthony Vicino: [00:26:46] But if you are in town, if you are in the Minneapolis Twin Cities region, stop by the shop.

Dan Krueger: [00:26:50] Come say hi.

Anthony Vicino: [00:26:51] One city where it does. Yeah, I don’t know. Anyways, the reason number five trait thing characteristic that we’re looking for when we’re vetting operators is maybe the most important one, but it’s also probably the most unmeasurable one. It’s super ambiguous. It’s trustworthy trustworthiness. What’s it even mean to be trustworthy? How do you even vet for that? Honestly, like, I don’t know,

Dan Krueger: [00:27:16] You can’t, honestly. I would argue that this is one of those things that is hugely important, but there’s no way to vet for it. You just need to spend a lot of time interacting and engaging with somebody and see. Right. Time will tell if somebody is trustworthy and obviously their track record helps and trying to get some insight from other investors and just gather some, some data from the market. If you know people are genuinely happy with this operator and people say they’re trustworthy. That helps. But I mean, you know, you never really know you just got to put in the time.

Anthony Vicino: [00:27:48] And because at the end of the day, you’re not trustworthy because of what you say, you’re trustworthy because of what you do. Yeah. And so this isn’t something that we can just sit down and have a conversation and you go, You know what? That Anthony, he’s trustworthy because I could just be really good at blowing smoke. You don’t know. Right? And so at the end of the day, it doesn’t matter what I say, it’s what I do. And for us, that’s one of our core values actually is that we show up and we do what we say that those are actually two core values. We show up and we do what we say and that we do what we say is so important to us because that is the integrity value for us because it’s not about just saying words and saying and throwing out high falutin concepts and ideals that we would like to live up to. If we can’t execute against what we say, then we are no good. And at the end of the day, it’s like your word is your bond or your word is your honor. Like for us, that’s a real thing because we realize. If we’re not in alignment between our words and our actions, then there’s a disconnect, both internally for us not feel good, but then also for everybody around us, it’s like, I don’t know if I can trust you guys. And that’s the death knell when people don’t know if they can trust you or when they start to doubt whether they can trust you. It’s game over. You can’t get it back.

Dan Krueger: [00:29:03] You really can’t. And words are easy, right? You can say anything you want. It takes almost no effort. You take a breath, you move your mouth and words come out. That’s so easy. And people really take advantage of that these days, with social media providing a platform to everybody to effectively present themselves as whatever they want to present themselves at. There’s a lot of people out there blowing smoke and presenting themselves as something other than they are. So I think you hit me on the head. Actions speak louder than words. And so it’s all about what somebody actually does and what they deliver and what they do and not what they say. And that’s why when we’re talking to investors, we’re really talking a lot about our historical track record and what have you actually done like? We can show you pro formats and what we’re projecting in the future. And that’s great. But what have we actually delivered, right? That’s really what matters.

Anthony Vicino: [00:29:54] There’s a poet. I don’t know who could be Emerson. It could be Mark Twain, somebody very brilliant who said, I think it might have been Emerson. Actually, what you do speaks so loudly that I cannot hear what you say. Hmm. It’s so good, right? What you do speaks so loudly. I can’t hear what you say. Keep that at the forefront of your mind as you’re going out there, whether you’re not an active investor or you’re looking to operators. If you live in alignment with that right there and realize that your actions, as you said, speak so much louder than your words, then focus on the actions lead with that, but figure out a way to vet for trustworthiness because like I said at the beginning, numbers don’t lie, but I can make them say whatever I want. And if you can’t trust me, you can’t trust my numbers. So at the end of the day, that’s what this business is all about. There’s a high degree of trust involved. I don’t know how you vet for it. Good luck.

Dan Krueger: [00:30:51] Human interaction and a lot of it, that’s a good start.

Anthony Vicino: [00:30:55] All right. So those are the five characteristics five traits that you’re looking for as you’re vetting an operator, its personality, its track record. It’s the team, it’s the resourcefulness, and it’s the trustworthiness. Figure out how to vet for those things. And again, you don’t have to go really broad. You don’t need to do business with 20 30 different operators. Find like three. Start with three. Find three that you’re really like working with. Go deep with them. You can do damage with three operators. So yeah,

Dan Krueger: [00:31:22] I’d much rather see somebody spend a long time vetting three operators than talking to 50. Yeah, and giving it like 15 minutes per and be like, Yep, that guy feels good. That guy feels good.

Anthony Vicino: [00:31:34] No, no. Because probably what you’re getting drawn to is like, maybe fancy marketing, or maybe it’s just something that resonates with you. That is superficial. It could be like, Oh, he has a Southern drawl and I have a Southern drawl, or he used this phrase my grandma used once like something superficial, right? Like if you could be convinced to do business with somebody in 15 minutes, like was not a thorough vetting process. Probably. Anyways, that’s going to do it for us, guys. Before we let you out of here, let’s go get that book review from Mr. Kruger. Mr. Kruger,

Dan Krueger: [00:32:03] I got you. You got. Yeah, I do. Actually, this one is I just started. I’m not done with it yet, but I like it. So far, it’s entertaining. There’s nothing earth-shattering or profound about it, but I enjoy it because of the personality of the guy who wrote it. And he’s a bit it might be a little binary, right? It might be kind of like the last one that I recommended, which was greenlighted by McConaughey. Where if you like McConaughey, great. If you don’t, you’re not going to like it. This one is tillmann for Tita. Am I pronouncing his name correctly? The restaurateur?

Anthony Vicino: [00:32:34] I have never heard of this person ever in my life.

Dan Krueger: [00:32:37] Like Bubblegum Shrimp Rainforest Cafe. He’s got this huge restaurant empire and he’s gotten into some other stuff as well. But he wrote a book called Shut Up and Listen. And first off, the title, it’s great, but it’s really just kind of his core values, his core philosophies from business, and growing his really impressive empire. And I like it. I mean, he’s got kind of a strong personality and his personality could be a little abrasive. Shut up and listen. But I like it. I kind of like those old guys who just are kind of their old school, their kind of gruff. You like Sam Zell, don’t you? Oh my god. Sam Zell does anyone who just says what a crock of shit to a politician on live TV is my hero. Have I shown you that clip?

Anthony Vicino: [00:33:18] I haven’t.

Dan Krueger: [00:33:18] But oh, it’s fantastic because it was a crock of shit. And he called it out on live TV, and it was so good. Anyways, yeah, check out. Shut up and listen. By Tilman Fertitta. Oh God, I hope I’m not bothering his name, so it’s a good book. Check it out. Do you like it? All right,

Anthony Vicino: [00:33:33] I’m going to. I have never heard of this book, so this is completely new to me.

Dan Krueger: [00:33:36] I’ll check your board on the weekend.

Anthony Vicino: [00:33:37] I’m always bored. I’m bored right now, so I guess that should be. We should wrap up. I should probably do it for us here. The investing made simple, we appreciate you taking some time out of your day to be bored with us, know if you if you’ve stuck around this long on this episode and you’re the bored one what’s wrong with you?

Dan Krueger: [00:33:54] Thank you.

Anthony Vicino: [00:33:54] We love you. But go, go do something that ignites your soul with passion. Go on now. If you stayed and you listen, you’re like, This was dope. Keep it up, guys. We like. We like what you’re doing. Then do us a favor. Go drop a review over on iTunes that would be real, real cool, as the kids would say. Or they would say Ratchet. That’s so ratcheting.

Dan Krueger: [00:34:11] No, I think that’s at least 15 years out of date. I don’t know what the kids say. So but it’s so little. That’s still it. No, I

Anthony Vicino: [00:34:17] Am so out of time. Anyways, go leave us a review. I’m old and tired and I need something to live for. The review will do it, please. He needs this. All right. Well, we’ll see you next week if I’m still around. It’s.

Share this post

More blog articles

Is It Return OF or ON Capital?

For today’s episode, we're going to be talking about an interesting, nuanced topic that came up recently in a chat with an investor. This going to be a conversation that is helpful for both active and passive investors. We're going to discuss the very subtle...

read more

Why Real Estate Investing Is Evil

Today’s episode is going to be a really emotionally charged episode as we dive in to talk about why real estate investing is evil. We invest in real estate and We are evil as a result. We are going to unpack what all that means. The audible version Passive Investing...

read more

When Debt Goes Bad

For today’s episode, we're going to give you the pure nuts and bolts that you need to know. The difference between good versus bad debt. If you're buying a thing that sits there and loses value and produces no kind of cash flow on credit, Is it good or bad debt? We...

read more

Unlock Exclusive Access To Institutional-Grade Investment Opportunities Today