by | 07, Jun 2022

6 Real Estate Investing Skills You Didn’t Know You NEED!

In this week’s episode, Dan and Anthony are going to list 6 skills that you need as a real estate investor… that you didn’t know you need!

We also have a special treat for you, a new podcast segment! Dan is going to hang up the ol’ “Bad Investing Advice” hat for now, and Anthony is going to take the reins, with his new segment… Freak or Neat.

So, how is using google maps a must-have skill?

Find out on this week’s episode of Multifamily Investing Made Simple.

Tweetable Quotes:

“What I’ve discovered in real estate is that ballpark math is 90% of the time.” – Anthony Vicino

“You gotta be long-term minded.” – Dan Krueger

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five rules of investing

The Five Rules of Investing

** Transcripts

Real Estate Investor Skills

[00:00:00] Anthony: hello and welcome to multi-family investment made simple the podcast. It’s all about taking the complexity out of real estate investing so that you can take action today. I’m your host, Anthony Racino of Invictus capital joined as always by Dan’s

[00:00:27] Dan: dumped me. Just a stump. Me stumped

[00:00:30] Anthony: me. Oh, No, it didn’t

[00:00:32] Dan: work.

Did I do it? I haven’t a little confused, cause I didn’t understand it. That’s been actually happening for like the last 30, 45 minutes or so since, since his birthday

[00:00:42] Anthony: last week, Dan has been getting confused far more frequently than in the past. I

[00:00:46] Dan: mean I’m over the hill. So he has

[00:00:48] Anthony: aged at an exponential rate in the last seven days.

So send your best wishes. He’s not long for this life.

[00:00:54] Dan: Spiraling, spiraling out of control actually. So

[00:00:57] Anthony: I noticed today more grays up in [00:01:00] the Bush. And no one’s saying nothing,

[00:01:02] Dan: but that’s, you know, here. Yeah. I mean, just I’m causing that. I sit next to you. I do have that effect on BA and here we are like more grace than

[00:01:11] Anthony: count down the minutes of their lives.

So what’s new what’s happening. How’s it. How’s it feel to be on the other side of whatever hill you’re over.

[00:01:19] Dan: Mid thirties when you’re 36, it’s like a little, uh, it’s like a bluff.

[00:01:25] Anthony: Okay. Okay. You know, Hey, I’m starting like a 38 and probably by the time this episode goes live, actually

[00:01:30] Dan: I might get 38, almost 39, which is right before 40.

So you’re basically,

[00:01:34] Anthony: you know what that means. You know, what it is is I’m officially late thirties.

[00:01:39] Dan: Yeah. I’ve I think I have one, one and a half years of Midland.

[00:01:43] Anthony: I, yeah, I I’m, I’m leaving the mids goodbye. They were great to me, 30 sailing into the late thirties, which means I’m just a stone throw away from 40 and hence dead.

And you’re in your forties.

[00:01:56] Dan: I mean, don’t want it socially. You’re dead. Yeah. You’re going to be alive

[00:01:58] Anthony: and emotionally dead for a long [00:02:00] time. Speaking of emotional depth. All right, so guys and gals, thanks for being with us here today. We’ve got a pretty fun little episode here. I think cooked up, baked up for you, or it just could be half baked.

I don’t know. Um, we’re going to talk about, I think six. Top skills that you need to have to succeed as a real estate investor. Um, but these skills are probably skills. You’ve never thought that you needed. So, but before we do that, we’re gonna do something different. I think we’ve done how many episodes that we’ve done read 210

[00:02:30] Dan: 17.

Holy crap.

[00:02:31] Anthony: That heck flying 217 episodes for 217 episodes. Dan has brought you his bad investing advice, episode after episode, but he’s he’s plumbed. He’s out. I gave

[00:02:42] Dan: it all away. Just gotten, I need some of those back if you guys could just send them back though. Okay. So here’s what

[00:02:46] Anthony: we need. Um, two things, one, go leave a review on iTunes with your bad investing advice.

And if we really like your bad investing advice, then it could air on this, on this show. Yeah. We will give full accreditation and we [00:03:00] will shout

[00:03:00] Dan: you out if you want. I mean, this is bad advice, so maybe you don’t want credit. Maybe you don’t want the

[00:03:04] Anthony: credit. Um, in which case we’ll give. Um, but in the meantime, what we’re going to do is we’re going to employ, we’re going to introduce a new segment onto the show called freak or neat.

Say fast, frequent eat. It’s fun. Um, maybe it’s not fun, but it’s fun for me. Um, we’ll

[00:03:19] Dan: like a

[00:03:19] Anthony: game show. So I’m excited. Yeah. This is a half-baked concocted idea. It, what it stems from is the fact that there are a lot of in the real estate world, people doing some incredible things, incredibly. And incredibly not cool.

So at this, segment’s going to be a values. I’m going to tell you a brief little story about somebody. And then Dan, you’re going to tell us, is that person a freak or is that person neat? Are we going to, or are they freaking

[00:03:43] Dan: me or they remain anonymous. I’m going

[00:03:45] Anthony: to, I’m going to tell you who the person is at the end.

Okay. Well, sometimes I’ll know, sometimes I won’t in this case because we have baked this idea as we were literally sitting here and I just I’m pretty much coming off the cuff, uh, I had to go with the person that I knew, because I recently read [00:04:00] this book. And I honestly, I already told you this story earlier this week.

Cause it was so crazy to me. So pretend to be surprised as you’re hearing this. And you’re

[00:04:07] Dan: like, oh man. Yeah. I don’t typically try to put people or things into frequent neat buckets. So yeah. And it’d be a D

[00:04:13] Anthony: and I do not want anybody to misconstrue. Freak is not a pejorative, like free could be like a good thing in this case like that.

Awesome. That’s freaky. That’s amazing. That could, it could be that neat. It could be like neat could be the lame one. Like that’s neat. It’s a freak is actually, it’s a choose your own adventure. You get to decide if it’s cool freak. Okay,

[00:04:36] Dan: cool. Neat. I’ll let you know. I’ll qualify the freak or the need with some additional

[00:04:42] Anthony: information.

Here we go. There’s this guy back in the late nineties. And he had been buying real estate in New York, through the sixties and seventies, and even a little bit earlier, actually in the fifties. And he was known as the condo or the co-op king. He was buying all these [00:05:00] apartment buildings and then turning them into co-ops and selling them back to the, the residents.

And it was really interesting at the time because. He was not just doing this with like high-end luxury penthouses, but he was doing it to like class C and class B residents. And for the first time giving them the opportunity to own their apartment building. So he made his fortune doing this. And in the late nineties, he picked up this plot of land in New York and this like, Hmm, tasty little, little area.

You got it for $2 million, which is like, uh, that’s that’s, that’s a pretty good, that’s not a New York

[00:05:32] Dan: number. That’s not a

[00:05:33] Anthony: New York number. That’s a pretty. And so he’s like, I’m going to build this remarkable skyscraper here. It’s going to be like 60 stories, maybe 40. I might be exaggerating stick with me.

Um, it gets this world-class designer design design. I showed you the building actually. And it’s, it’s frigging. It’s so cool. Um, but what ends up happening is he spends millions and millions and millions and millions of dollars, like upwards of like half a billion dollars, uh, and getting loans and everything arranged and [00:06:00] construction financing, all this stuff.

And then 2007. And all the dries up. It has a hole in the ground. He doesn’t have a building yet. He just has a hole in the ground and a big mortgage that he is paying $250,000 towards every month. So every year he was coming out of pocket, $3 million, no building. And he. This could have bankrupted him.

This could have done him in, but he decided he’s going to stay the course. He’s going to do that. He’s going to ride it out from 2007 when the world is ending and he’s like, I’m just going. I had this dream, I’m going to make this happen. And in 2011 they finally start building. So for four years he was coming out of pocket 3 million.

$12 million total just gone towards this mortgage and taxes and insurance, all that stuff. Right. So they finally build the thing. I think it opens in 2016 [00:07:00] and the land itself, by the time they finish it is worth 90 million alone. Right. So even if you hadn’t built the building, if you just turned around and sold it, he would’ve made a pretty good profit, but as.

Selling and pre-selling these 200 condo units. The cheapest one is 1.7 million. The most expensive one is 80 million. And this is three years before the opening of the building. They sell 30% of them. And just like that, this building that had been like bleeding him dry and potentially going to bankrupt his entire organization, which had like $7 billion of assets at this point, it turns into this mega win.

So what do think. Is this guy a freak or is

[00:07:44] Dan: this just neat? They sold 30%, three years out. Three years out. Three

[00:07:48] Anthony: years in a and like in like a month.

[00:07:51] Dan: Yeah. And it was so fast for people that don’t understand that type of business where you’re building, you’re developing and building a building and then starting [00:08:00] to sell units.

Usually start early before things are completed. Three years out is early and usually these buildings are lucky to say, what was his. What was his feedback when you told him the story originally, like normally it’s, you’re, you’re making 30% once you’re open. So

[00:08:16] Anthony: this guy, he is, he is amazing. He goes, um, I was ex he’s, like if we had sold 30% in the first year after opening, I would have been ecstatic.

[00:08:26] Dan: So that’s the context I think people need. Cause like we get it. Cause we’ve looked at enough things, even though we’re not developers, we’re, we’re aware enough to know that someone 30%, for years before you’re even open, uh, to let someone in the door. Pretty freaking crazy. So, so he spent 2 million, the land, he spent 12 million over the course of four years, just holding it, doing nothing, nothing.

Just owning the land. And nothing happening in costume 12 million over four

[00:08:52] Anthony: years. And not just that, but you know, if, if for whatever reason, cause this is the financial crisis, right? Like if he can’t make his mortgage and [00:09:00] everything, the bank is going to come knocking and they’re going to knock down all his dominoes banks

[00:09:03] Dan: went knocking on everybody’s door.

They knocked hard, uh, even the big boys because they needed to. Yeah. Yeah. Without going down that rabbit hole, it’s weird that they weren’t knocking, I guess what I’m saying. Yeah, they did. And there’s

[00:09:15] Anthony: a lot of story around what happened there, but it’s.

[00:09:18] Dan: And so it was worth 90 by the time it was done. But instead he was selling them one off, two on his own.

So he probably got hell of a lot more than 90 for this thing right. Far more, far more.

[00:09:29] Anthony: And I think their whole structure is, are like selling the individual units. He also bought some of them within it. And you think like it’s 200 plus units in this thing and each one is selling on the cheap end for a million.

So that’s 200, probably more like 400 if he sells them all. But then he also owns, he’s still collecting like the management and everything for his.

[00:09:48] Dan: That’s amazing. I would say he is like freak, but in the Michael Jordan, LeBron James tiger woods, like holy crap performance kind of freak. [00:10:00] That’s that’s what I’d say.

[00:10:01] Anthony: The, the ability to like, not develop just debilitating ultra. And not be able to get out of bed. Yeah. I

[00:10:09] Dan: mean, I think it’s a perfect example of why we’re always talking about like the long time horizon is essential because you don’t know, especially with development. I mean, you’re starting things.

Projects is years, years before even, you

[00:10:21] Anthony: know, 25 years before it finally. Yeah. Think about that. So you can

[00:10:26] Dan: try and the whole time. Yeah. So you’ve got to have a really long time horizon. So if he was in some sort of like situation where he needed this thing to happen on a very specific timeline, you would have been screwed.

And so that’s why we really harp on this all the time. Like the risk profile changes dramatically when you up the timeline and you need to be looking out, you know, years and decades and making sure that you’ve got the runway. To weather a storm. So this guy did everything right? I feel like you, you, you, he hedged the risk off in the sense that he knew that he could tackle this.

Even if it got delayed for years and years and years, obviously that’s that’s sucks. No one likes to [00:11:00] pay 3 million a year for just holding a piece of dirt. But, you know, he got into a deal that he could handle. And so those,

[00:11:08] Anthony: but for those who are curious, his name is Francis Greenburger. He has a book called risk game.

It’s a. Biography of his life. And it’s fantastic. It’s really interesting story. It

[00:11:17] Dan: hasn’t showed up yet. So, yeah, that’s right.

[00:11:19] Anthony: So that’s our, that’s our new segment freak or neat. Um, if you guys like it, let us know if not, then it’ll do well. We’ll, we’ll access it, but we’ll probably try it for the next couple of weeks.

See how it evolves. Um, but if nothing else, pretty interesting story about, if, whether you just think it’s neat or you think that guys like freakishly cool. I personally land in the camp. That guy is a freak, like human nature. Like how, how do you function? Yeah, I can’t,

[00:11:45] Dan: I can’t overemphasize how strong of a stomach you need to have to do that.

Literally. I mean, four years, that’s like a thousand nights of having to go to bed. No. I mean, what does that 250 grand a month? What does that every day? [00:12:00]

[00:12:00] Anthony: for context here, like he has this business, his employees, and he had to go to them during the financial crisis and be like, I don’t want to lay you guys off.

So would you guys all be willing to reduce your salaries? Would you all be willing to take home less so that we don’t have to lay anybody off and he not only lost like two people, two people were like, nah, But like, he, he was not in what I would consider, like the strongest financial position of all time to be like

[00:12:23] Dan: that situation.

Right. But even he made it work. Yeah. I like it. All right. So let’s

[00:12:28] Anthony: get to the, the topic. Does your let’s talk about six unlikely skills that you probably haven’t considered that you need, you need, if you want to be a successful real estate. Okay, maybe you don’t need them, but they’d be helpful. Uh, do you want to go first or do you want me go first?

[00:12:43] Dan: Sure. I’ll go first. Um, I gotta say for me these feel obvious having been in the business. So I think if we’re going to go the route of saying you might not know about these, that, um, if you haven’t invested yet, this might be new to you, at least for mine. [00:13:00] Um, so first one for me is networking and interpersonal skills because it is just, it’s a relationship business.

Like through and through like you, if you don’t have a network of people, not just on the deal flow side, but in every aspect of the business, when it comes to the banks, the insurance companies, all the vendors, whatever angle you take in real estate, if you’re going to do well, it is a hundred percent going to be based on your quality of your network and the depth of those relationships.

And so you’ve got to have that piece figured out. I’m a pretty quiet, introverted guy. You’ve heard us talk about this a million times. And the first year of this business for me was very introverted and operating a little silo and I did one deal. It wasn’t until I leveraged the network aspect or not leverage it, but leaned into it that I actually started having more success in this business.

But that first year, I mean, I got a lot of practicing, but did one deal again? I have a good network and you got to have a good rapport with [00:14:00] people because you’re going to need a lot of people. On your team, not like employees or partners per se, but just people in, in your, in your courts, in your what’s the word I’m looking for near, um, your quiver, your backpack,

[00:14:12] Anthony: your bag, your barrel kind of device.

Are we carrying them? The nerd is.

[00:14:21] Dan: Uh, network and network. Yeah.

[00:14:25] Anthony: So now I totally agree. A hundred percent. I got nothing to add there. I think that’s a super good one. And, um, it occurs to me now that you and I have gone completely different directions with this.

[00:14:36] Dan: I could tell when you said might not have thought of it, you used the word cheat before.

So I think yours might be

[00:14:41] Anthony: born under no. Well, mine might be entertaining, but these are like, these are a hundred percent. Th these are like actually incredibly important skills that nobody’s telling you that you need to go master, but I’m telling you they will serve you so well, number one is the most tactical [00:15:00] one and somebody shouted it out earlier, as we were sitting here writing these down and they said it, I think kind of telling cheek chicken.

I was like, no, that’s actually a really good one. It’s Google maps, like learning how to use Google maps effectively is one of the most powerful tools for going and serving and neighbors. And understanding it, even if you live in the backyard, like you don’t know every single building. And so your ability to navigate through Google maps and get a very good understanding of what’s happening on that block, but not just going and seeing it in real time, but understanding the timeline.

Um, ver, um, aspect of Google maps allows you to go back and see, okay, how did this building look in 2017 and 2016 and 2014 going back and seeing how this looks ever since Google maps has been going around and taking pictures of these buildings, it helps you understand the development of that neighborhood and that property in particular.

Ton about it. For instance, let’s say you go back in time and you, you know, that the owner of the building right now has owned it since 2015. You’re like, well, let’s see what the car, the owners [00:16:00] back in 2012 were doing with it. If you go back in time and you see that it was. Rough. Like they weren’t taking care of it, slum Lords type.

And then in 2015, the next people come in and they make it prettier. And you know, the sellers and you’ve had conversations, but they haven’t necessarily done a lot to like the plumbing or the infrastructure you might start to go. Hmm. What, what else is hiding here? Is there something more that I need to know about this area?

So Google maps is actually like super valuable. It’s one of the first, it’s actually the first thing. When somebody sends me a building, I’m like, let’s pull it up on the

[00:16:30] Dan: map. Let’s take a look a hundred percent. I mean, it saves before Google maps. Specifically street view. Um, you’d have to go drive by things.

Assuming you’re local. You’d have to actually physically go there to see it in person. Uh, maybe you could find some pictures somewhere, but, um, you’d have to actually go and make the trip. And with that type feature, if you’ve got a seller that’s selling you that he replaced the roof at a certain time, like you can pull up that satellite and show.

Yeah. Does the color change when he says it [00:17:00] did, did it happen? You can get a decade earlier than he said it did, and you can get a ton of

[00:17:04] Anthony: chicken. You can get a ton of information about the quality of the neighborhood too. Like one of the

[00:17:08] Dan: first things I do, I saw a really funny picture of a street view, uh, from Chicago.

It’s just like a dude with a gun.

[00:17:16] Anthony: You might not see something, not obvious, but even just going and going down the street and looking at the quality of the cars parked on the sidewalk. Is there trash, is it trash or the cars dented or they’re a bunch of Honda civics that have bumpers holding on with bungee cords or they’re like BMWs.

Like if you’re a passive investor investing. Like this is the most powerful tool.

[00:17:37] Dan: Hopefully you don’t see any chocolate lines of bodies do that in cartoon. Okay. All right. What’s your number two. Uh, you gotta be long-term minded and I don’t know some of these I came up with, I don’t know if they’re like personality attributes or if they’re skills, but if you have the ability to take a long-term perspective on things, and this ties in nicely with the.[00:18:00]

Uh, segment this week, um, you’ve got to have a long-term horizon in real estate. This is not a quick business by any means. And so you’ve got to have optionality with respect to how long your business plan takes, how much capital you’ve got. You’ve got to give things a long time to play out because long-term real estate is going to be amazing given enough time, but over any one to three, are you in five years?

Uh, time, horizon, like things could change pretty dramatically. So if you’re looking at anything less than five years, I think in real estate that that’s short, that’d be a very short-term hold. So you’ve gotta be able to play the long game, play the slow game and be able to wait and sit on your hands. Do absolutely nothing, uh, to do well in real estate.

If you’ve gotta be transacting all the time, then real estate is probably going to drive you nuts because it’s slow. It takes a long time. It’s a lot of doing nothing and sitting and waiting lists. For a few good opportunities. If you want a lot of volume, a lot of transactions, like, okay, maybe try flipping homes.

That’s not my thing. Uh, what we’re doing [00:19:00] here, slow, methodical, and strategic investing, farthest thing from day trading, you could feel. Patients. Yes. Patients is the skill a hundred percent. So yeah, that’s the skill of patience. All right.

[00:19:12] Anthony: All right. Um, okay. Here’s another one that you probably have not really stopped to consider, but this one came to mind because we were having a conversation based on a podcast episode.

We did a couple of weeks ago where we were trying to talk about how big is this unit that we’re in right now. And so the skill is spatial aware. I think it’s actually really, really beneficial when you can walk into a building and you’re like touring units to get a really good sense. Is this a big unit?

Is this a big one bedroom for the neighborhood or is this a little one bedroom? Is this a big building? Is this a little building? Like spatial awareness? Is it it’s weird. Some people have it inherently. Um, you can develop it by seeing a lot of properties and like filing away and like making mental notes.

Okay. This is a small, this might say 600 square foot studio, but this field. [00:20:00] And that’s what matters. That’s what matters to the resident. They don’t walk in and they go, how many square feet is it? A 600 knots above average. Cool. Uh, feels like 400. No, you go by feel. So you walk in and you’re like, all right, this, they say it’s big, but it feels small.

That matters because that’s going to directly impact what you can rent it for because people aren’t going to pay for the square footage. They’re going to pay for what it feels like.

[00:20:21] Dan: Yeah, a hundred percent. I got to say, this is something that I’ve, I’ve got some experience in from not this exactly, but this similar concept, I worked in a kitchen for a long time and I developed a very, very good and mental clock just from the practice of working ovens was a pizza place.

So when you’re on ovens, you’ve got. You’ve got timers, but no one sets timers. It’s not cool. You got do it in your head, right? It’s not cool. No, I want my pizza. Perfect man is perfect. No timer. That’s that’s what’s cool. I know I can, without any timers, I can have a re I could put something in an oven and know exactly when we’re hitting 20 minutes, 15 minutes, whatever it is.

And so it comes from just getting reps in, and it’s the same thing with spatial awareness. You [00:21:00] walk enough units, you see enough properties. You looked at enough things, you could walk into an apartment and be like, yeah, this is 500, 550 square feet. Right. That’s a very good skill because that’s what I mean.

We just got done doing this on some we’re working on now. Um, a lot of these older properties, a lot of the historic properties that they don’t have really robust measurements out there. So it’s. You know, sometimes you’ll get measurements, but by and large, you get information from a seller, just whatever you come up with your own figures and do the measurements yourself.

But until then, you’ve got to be able to walk in and be like, this feels like it’s about 500. And if we’re looking at this on a price per foot basis, which you should to make sure you’re in line with the market, then that’s how you get some accurate numbers because you could have a studio or one bedroom, whatever, have a pretty wide range.

And it all comes down to how big it is. It has a feel how functional. If it’s a big one and it’s awkward, we set up, it might as well be small, right? So there’s all these other little nuances there that you’ve just got to know, like what’s the market gonna pay for this? This is another

[00:21:55] Anthony: interesting aspect of spatial awareness is a, when you’re looking at the neighborhood and [00:22:00] understanding what’s his proximity to different things, it’s one thing to look and be like, oh, that’s only four blocks away from these grocery stores and these other things.

But if you don’t have the spatial awareness to understand. There’s a freeway between the two. So it might be four blocks, but those are four very hard blocks to get across. Right? Like understanding a size and distances. Like whether it’s the city or the neighborhood or the, the unit level, these.

[00:22:23] Dan: Yeah.

Pressingly important. Yeah. And I mean, four blocks is relative to where you’re at. Cause I mean, we were, we were in Vegas for a conference like last year and like four blocks in Vegas. That’s a cab ride. Oh my God. Like four blocks down.

[00:22:34] Anthony: We can physically see the Walgreens across the street. And it took you like

[00:22:37] Dan: across the street with 20 minutes, right.

Four blocks in Minneapolis is really it’s four blocks. But I mean, for me, it’s four blocks

[00:22:46] Anthony: generally pretty quickly. But understanding like what are those four blocks taking you through and around. It’s just a it’s, uh, nobody’s ever told me like, Hey, hone your spatial awareness skill, but I’ve just noticed like malleable it’s [00:23:00] happened over time.

And I would say, if you can find a way to try and develop it for yourself, you do pretty well with it. Just getting

[00:23:05] Dan: reps in. Honestly, I feel like that’s all it is. And being intentional,

[00:23:08] Anthony: like looking at something and asking yourself, what

[00:23:10] Dan: is this? Yeah. And then try to figure out, okay, what is it actually like confirm and figure out if you’re accurate or not.

Dial it in dial it. All right. What’s your number three. All right. You got a resourcefulness. I feel like it’s sounds cheesy to say it, but honestly, all you’re doing in real estate is solving problems all day, right? There’s always a problem. That’s what you’re getting paid for. So if you are good at solving problems and looking at them and finding the solutions and not getting bogged down by, oh my God, this is the end of the world.

Um, that’s all day, every day in real estate. So you need to be able to look at a problem and immediately start to find solutions and be creative because a lot of people, they see problems. They just shut down. They turn off the Y. So you’ve got to be the opposite of that. A lot of people aren’t honestly, I just got to tell you, most people are going to struggle with that piece mentally.

It’s going to feel really stressful, [00:24:00] but if you happen to like puzzles, if you like solving things, if you get joy and taking something, that’s a mess and cleaning it up, then you might, you might do well in real estate.

[00:24:09] Anthony: Yeah. The only only guarantee I have for you is that things are going to go poorly.

They’re

[00:24:15] Dan: not going to go how you think they’re going to go. I’d say that. Poorly is it’s and how

[00:24:22] Anthony: poorly things are going to go poorly at

[00:24:24] Dan: some point. How was it, how was a roof caving in and the building flooding how’s that poor?

And that’s the kind of stuff. I mean, it’s usually not that kind of thing. It’s issues with a seller in a transaction that’s often it’s

[00:24:40] Anthony: really small things daily, just like little paper cuts. Really

[00:24:45] Dan: where you down. Yeah. That’s a hundred percent. It’s it’s yeah. It’s death by a thousand cuts really is what it is.

It’s every once in a while you get some big behemoth of an issue and that usually kind of makes your year as far as like your stories and what you talk about. But usually it’s every day, it’s [00:25:00] just, this resident has this issue and you’ve got to make the call on how to resolve it and yeah, it’s all day, every day.

So yeah. All right,

[00:25:10] Anthony: my number three, sorry, this is our last one. Number six. This one is actually probably the most important one of all mine. And um, if you can develop this skill, you were going to pay, it’s going to pay massive dividends. It’s a mental math, not just like, don’t get just good at math. Don’t get good at spreadsheets and Excel.

Like those are important things, but mental math, the ability to in the moment, calculus. Just doing simple addition, subtraction, multiplication, division. Like you don’t have to do anything more sophisticated than that. A lot of cases, just to quickly proforma a deal in your mind, or if you’re in a negotiation understanding, like how is this, this little tweak, this 1% difference, you know, and this can be hard when we’re talking about tens of millions of dollars at play, but like understanding what’s the percent, what’s 2%.

What’s that look like when [00:26:00] we multiply that? Like just being able to do that without pulling out your calculator and doing, doing spreadsheet calculations gives you a ton of confidence to enter into any conversation. And I think that’s really important when we’re dealing with really large commercial buildings is like feeling up for whatever comes.

So go, go sharpen up. One of the things I did when I first started getting into real estate in particular, because, um, I am not like a math freak. I don’t, I don’t dream about math at night. Um, I went in, I don’t, I don’t, I don’t. Um, but I went and actually read a couple of books on math called um, one was called math.

Explain the other one, I think is calculus explained. And then I got a subscription to this app called. Which is just basic maths puzzles. It’s super fun. But math is just one of those things that you got to sharpen the skill. You got to use it a bunch and mental math in particular, not allowing yourself to use a calculator and just kind of trying to ballpark things.

I love, I don’t know if you’ve noticed this, but I love when we’re in a conversations to then I just hear numbers to try and ballpark it and see how close I can get. [00:27:00] And like, just by doing it and being intentional, like you’re going to

[00:27:03] Dan: get better at it. Yeah. And that’s just it again, it’s reps. Cause I’m the same way, but the.

The, like the basic kind of arithmetic, the basic math you learned first, never been great at it, but I’ve got so many reps in at underwriting deals and changing little variables and tweaking things over and over and over again, that in most, any negotiation, whether it be with a seller or a lender, They can throw something out and I can be like, okay, I can, I could wrap my head around roughly what that means.

Right? So in the deck conversations I was having with the lender yesterday, actually, um, obviously interest rates are changing. We’re filming this. And, um, because it’s June now, June, 2022, um, interest rates are changing. So we had our underwriting at one number I’m on the phone with the banker. He tells me it’s this new number.

And I, my head know what that impact is going to be on the returns or investors without having to go and update all the spreadsheets. I don’t know exactly. But within a percent, I know what the IRR is going to do. I have a pretty good idea of what the cash on cash is going to do. [00:28:00] And, you know, pretty much all the returns that people think about.

I know that, okay. What he just said means about a percent for, uh, our investor numbers. And so I can respond immediately. Keep that conversation going and not have to say, oh, let me get back to you. Have to go update eight models. Like, no, I can just respond, keep the conversation going and keep the deal going.

So

[00:28:17] Anthony: surprisingly, what I’ve discovered in real estate is that ballpark math is. 90% of the time. Good enough. Like it’s that last 10% of like really dialing in and getting specific on numbers. Yeah. Like you don’t want to go full force into anything until you have that. But like generally to understand, is this deal worth doing or not doing, how is this, how is this going to play out?

Macro ballpark? Math is all you need to do to all you need to like really make a decision. 100%.

[00:28:43] Dan: It’s all you need. The only reason we go that extra 10% is because we haven’t had. If we were just using our own money, like it would be mostly just, okay, let’s get it 90% of the way there. We don’t need to get everything down to the granular level.

We do that because we have investors, but I mean, the amount of guys we see in this business who just used their own money and they do, they do, they, they [00:29:00] figure out if they’re going to do a deal, uh, sometimes literally on the back of a napkin, but other times it’s a yellow, legal pad with some addition and subtraction and there’s no Excel, there’s no proforma.

They do a couple of simple math problems. And then. If it’s going to be a good deal. And these guys have been doing that for 30 plus years and it works. But when you’ve got investors, you’ve got that fiduciary responsibility where you’ve got to go the extra mile, because if you miss something. It’s not just your bud, it’s other people.

So you got to that’s why? Yeah.

[00:29:29] Anthony: Ballpark math is good for individuals or for partners, small teams, not good for organizations where your goal is to bring another eyeballs, to double check your math and say like, are my assumptions good? Like what, what am I overlooking? You can’t stress test ballpark numbers.

[00:29:45] Dan: If you’re using other people’s money is you don’t cut corners. You do every step, even if it feels inefficient and unnecessary, you gotta do your own. It’s your own money to do whatever the hell you want. Don’t do any math.[00:30:00]

[00:30:00] Anthony: Um, so those are six skills that maybe you didn’t consider. That will serve you really well. I think as an, as a real estate investor, honestly, I, um, every, every one of these that we talked about, you’ll probably use on a

[00:30:15] Dan: daily basis, even if it’s not real estate. They’re all good. Good, good, good.

[00:30:20] Anthony: Yeah. Start with Google maps.

That’d be your number one skill for life.

[00:30:23] Dan: I know what you’re trying to do. Google maps. You need to go anywhere ever. You should not use that networking. I can’t get it wrong term.

[00:30:32] Anthony: Oh, my God, I’m useless.

[00:30:33] Dan: I don’t even know how to go home anymore. I don’t know where I live people. It’s kind of scary. Russia attacks our internet.

That all goes away. Like I I’m, I’m just gonna, I don’t know what I’m gonna do.

[00:30:46] Anthony: I’m aware yesterday of how vulnerable I am to my map, because I was going to my jujitsu gym and I always drive the same exact way. And then two roads were closed, a block away from the gym and I was. [00:31:00] I didn’t, I didn’t try to navigate it and figure it out for myself.

I didn’t pull up in my phone. I just parked, I just parked. And I walked. I was like, where are you worried? I was like, screw it. I’m just going to walk there. And it was, it was like a mile away, but I was like, so that’s my world. Instead of trying to. Navigate this just shut down. I doesn’t walk that I’m

[00:31:26] Dan: picturing your car, like in the middle of the street.

[00:31:27] Anthony: As I walked there, I, I, as I walked, I walked past the path I should’ve driven and I was like, oh, that would have been super easy, but you already committed as committed. Yup. It was a beautiful day. So. All right. How about we do a book recommendation and get out of here? Alrighty. I got one. My book recommendation from the beginning of the day is, uh, Game by Francis Greenburger.

[00:31:49] Dan: Yeah, I’ll recommend that later. Don’t officially recommend it. Cause I want to use that and it’s not officially

[00:31:54] Anthony: recommended

[00:31:55] Dan: people. Take it off your list in the future. I just need it to arrive, uh, that I can read it. Um, but I got [00:32:00] this one, uh, for you to watching on YouTube nerds. Thank you. Because I brought a visual for you today.

Uh, it’s called finance your own business by Garrett Sutton. He’s one of those rich Deb. Guys who’s in that whole crew. Uh, Robert Kiyosaki’s obviously the one, but the Tom wheel. Right. And, uh, Tommy will, right. Does the CPA, Garrett Sutton’s kind of like the business. Um, uh, he D he, his other book was like, uh, on like structures.

I think I entity

[00:32:26] Anthony: structure. Yeah. I know this guy I’ve read his other book, but that was actually rich dad, poor dad series.

[00:32:32] Dan: Yeah. This is just his own thing. It’s outside of that brand. Um, and I got it kind of knowing. I probably personally wasn’t gonna pull a ton from it, but I thought it would be good for a lot of our listeners and viewers, because it’s really, uh, the book I wish I would have found, like in the first two years of starting my own business for the first time, we’ve already gotten past a lot of this stuff, but it’s pretty much everything you need to know about how to finance your business, whether it be SBA loans, credit [00:33:00] cards, seller financing, equipment, leasing, crowdfunding, and securities law.

Private placements going Publix now? No, I’m just reading like all the sections of like all the things it’s not just like business credit cards. There’s a lot of stuff on that, but it takes you all the way up to, you know, your PPM template for raising capital from investors. So it starts really basic just talking about real estate Izzy.

None of this is about real estate. It’s just business financing. So if you need capital for your business, I know we got a lot of entrepreneurs and self-employed individuals in our, um, uh, The family of listeners, whatever we call our crew, we should probably come up with the name for it. What do you guys want to, what

[00:33:38] Anthony: do you guys want to be called?

Um, or geeks Menzies that Mitt Mims there’s multi-family investing made simple. The

[00:33:48] Dan: simpletons, our crew, the simpletons. That doesn’t sound good. All your sound.

[00:33:55] Anthony: it’s a good thing.

[00:33:56] Dan: Derogatory simpleton, NA. And proud [00:34:00] of it. Yeah, you can, you can say that about yourself. If

[00:34:02] Anthony: you. Have you got to give yourself as a simpleton, go leave a review, let us know in the comments, say, Hey, I’m a simpleton and proud to

[00:34:09] Dan: be wearing, and you can refer to yourself as that.

But if you call someone else a simpleton, it’s like, Hey,

[00:34:14] Anthony: I’m not calling like a individual. I’m calling a group of people, simpletons,

[00:34:18] Dan: all sorts of listeners. Great. Uh, I got to give Jerry Wheeler some, some credit here. I’m sorry. There’s two authors on this. Sorry, Jerry. There’s two. Garrett is the one that people probably recognize, but check it out.

If you’ve got a business, you want to know how to find it. Just threw that fuck

[00:34:32] Anthony: on the ground. It’s a good

[00:34:33] Dan: book. Don’t check it out.

[00:34:36] Anthony: All right guys, gals, that’s going to do it for us all you simpletons. We appreciate you taking some time out of your day to try and be just a little bit less simple or maybe even more simple.

They’ve dying inside. Uh, we appreciate you as always, uh, loves love and kisses. Go. You have your mom high-five we’ll see you next week.

[00:34:54] Dan: Bye.[00:35:00]

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