by | 16, Jul 2022

A Fresh Perspective On Real Estate Investing

In today’s episode we have a fresh new perspective on real estate investing!

Anthony and Dan discuss… wait a second, Dan’s not here?! That’s right! Today, Anthony and READ discuss real estate investing.

So, what does the real estate investing world look like to someone who had NO prior knowledge or experience in it? How much can one learn in just 6 months of exposure? And, what is the best tool for someone who wants to learn?!

Find out on this week’s episode of Multifamily Investing Made Simple, In Under 1o Minutes.

LEAVE A REVIEW if you liked this episode!!

Tweetable Quotes:

“It depends on where you are in your life because the fixed of flipping is very time intensive. It can be experience intensive, but you can learn it pretty quickly.” -Anthony Vicino

“Is it better to do value add flipping on single-family? Or maybe go out and try and get a Tri-Plex or a duplex even? How should you start in this industry?” – Read Deutscher

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** Transcripts

A Fresh Perspective

[00:00:00] Anthony: Hello, and welcome to multifamily investing made simple to 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 Vino of Invictus capital joined as always. Wait a minute. That’s you’re not yeah. Who you

[00:00:28] Read: I’m Reid. This is, oh God.

What, what happened to Dan? Not as always not it’s debut. First time ever inauguration. This is, is,

[00:00:36] Anthony: this is, this is the first time that we’re flying without Dan today. It’s scary. It’s a little bit, a little bit scary. Yeah. Um, dunno how this is gonna go. This could be an epic failure, but for the listeners at home, why don’t you, why don’t you, why don’t you introduce yourself?

Tell ’em, tell ’em who. who is this person who dares to replace Dan on this? Well, I don’t think I could

[00:00:55] Read: replace Dan. Uh, I’m Reid. I’m the marketing manager here at [00:01:00] Invictus. And, uh, usually I sit right over there behind the computer pressing buttons and. Cutting angles like that. So that, that would not have happened if I was, I was back

[00:01:10] Anthony: there.

If you guys are luck, uh, watching the videos on YouTube, which I highly recommend go to multi-family investing made simple and check out the videos, uh, because we got a cool snazzy new podcast studio, which Reid was interim instrumental in setting up. You will see that, um, I, I have this little control panel thing here that allows me to push buttons and it change.

Cameras. And usually Reid’s doing that. So ,

[00:01:32] Read: it’s hard, it’s hard kind of, uh, figuring out which camera to look at you guys. Uh, there’s a lot more work on this side of the camera than I thought there would

[00:01:41] Anthony: be. It’s and I can tell already it’s very difficult

[00:01:44] Read: not to look down. Oh, a hundred percent. That’s yeah, your eyes drawn to it.

So the

[00:01:48] Anthony: listeners at home, you guys have no idea what we have to endure when we record these podcasts for you. It is, is grueling and is difficult grueling. Okay. So let’s, let’s cut to the chase here. Why, why are you here? What are we, what are we talking about

[00:01:59] Read: [00:02:00] today? Uh, new perspective, fresh BR that fresh perspective.

[00:02:04] Anthony: Fresh eyes, baby. Yeah. So, yeah. So what we’re gonna do is something slightly different today. This is gonna be a short episode under 10 minutes. We’re gonna keep it CRE brief, but, uh, Reid is fairly new to real estate investing. He joined us almost six months. That’s gotta be like seven months now, right?

December? Or did you start in January? January. Okay. January. Yeah. Okay. Seven months, six months ish. And you didn’t really know anything about real estate?

[00:02:26] Read: No, no, not really at all, actually. Uh, certainly not. Multi-family I had just bought my first single family home in April. So how was that experience? Uh, rough, um, one, I didn’t know anything about it going into it.

Um, and then it was. kind of that point of where the market was crazy. Yeah. Yeah. So like getting your first home and that crazy market was a different experience for sure.

[00:02:54] Anthony: And this wasn’t, this wasn’t an investment. No, no. This was just your home home. Yeah. This is my home home, which is a completely [00:03:00] different game, right?

Yeah. Yeah. I was on a call today with a, with a coaching client and we were talking, he was, he was saying, um, And you’ve asked this too, maybe at one point, um, is real estate overpriced or how do you know when it’s overpriced? Like that conversation? That, that question comes up a lot. Yeah. It’s a pretty frequent one.

And uh, a lot of times people are like, oh, I should just wait until the prices come back down before I start buying. And my rebuttal is always, how do you know it’s overpriced? Cuz if there’s somebody out there willing to pay that price, is it really overpriced? Yeah.

[00:03:28] Read: It’s like stocks. It’s like it’s real estate like stock where you just wait for, wait for the dip, buy the dip and, and then, uh, But again, that’s, if you’re going to be investing, not for, if it’s, you know, your actual home.

Exactly.

[00:03:40] Anthony: And that’s totally different game. It’s exactly it. So I think that’s what makes, uh, if you wanna be a single family home or duplex investor, um, it it’s, you’re competing against a buyer pool that has fundamentally different goals than you do. Um, I remember this when I, when I sold my trifl, one of my, my excess contingencies was like, I don’t plan on selling this thing to an [00:04:00] investor.

I plan on selling this to somebody like a young couple who wants a place to live, to offset their cost of living. They’ve they’ve consumed the bigger pockets, burring house hacking strategy, and they think I’m going to use that. And so I was like, I’m gonna be able to sell this at a pretty good premium because the buyer pool’s different, but in commercial real estate, like clearly doesn’t happen that way.

[00:04:20] Read: Yeah. It’s uh, it’s something that’s still, I’m wrapping my, my head around just the difference between like single family and multi-family real estate. And. One thing. I mean, I like those house flipping shows and like HGTV and that kind of stuff. And I do a lot of value add stuff to our home now. Um, but is there, is there kind of that flipping aspect in multifamily versus single family?

Cause I feel like it seems so much simpler and. Single family. You go in, you add some value and then you flip it real quick.

[00:04:52] Anthony: Yeah, I think when we talk about the, the value add business model and what we do in commercial real estate, it’s pretty much the same thing. Right. But instead of [00:05:00] like going in and renovating one single family home, one living room, one kitchen, one bathroom is you’re gonna do it into like 20, 30, 40 kitchens, 40 bathrooms.

So the complexity or like the magnitude is. But fundamentally it’s, it’s the same business

[00:05:11] Read: plan, but is the end game the same. Cause in single family, you sell, you make your money when you sell it. And then with multi-family, you’re just, you can raise the rent because the there’s more value

[00:05:20] Anthony: in the, in the building.

It, it definitely can be. So like in the single family, when you go to sell it, then that’s where you’re gonna get most of your money. Cause if you put a renter in there, you’re maybe only gonna get a couple hundred dollars per month in cash flow. And this is the issue. I think a lot of people run into when they first get started in single family duplexes.

They’re like, this is great. I’m I’m cash flowing like 300 bucks a month. This is fantastic. I’m not paying. But then you like do the math on that. And you’re like, oh, I made $3,000 this year. Okay. That’s not meaningful life changing sums of money for most people. And so then it’s like, okay, what am I gonna do?

You can sell the building and that’s then a big equity bump, but then you also have the taxes and then you have no building. So multifamily it’s nice because the cash flow tends to be a bit more meaningful because if you have like $300 per month of. Cash [00:06:00] flow across a hundred units. Sure. That’s $3,000.

That’s $30,000 a year. That’s like, that’s pretty good. Yeah. Almost 40,000 actually. And then we have more means for, you know, refinancing that and keeping the asset. And I think that’s the, the really cool part. Cuz when you talk to the old school investors, the thing they always say they regret is selling.

So if we can like buy assets at cash flow and pull that like add equity and then get that value out without selling the asset, like it’s almost cheat.

[00:06:26] Read: So, is it better to get to get into this industry? Is it better to do value, add flipping on single family or maybe go out and try and get a Plex or a duplex even, and it

[00:06:37] Anthony: holds it, there depends on where you are.

I think in your life, because the fixed of flipping is very time intensive. It can be experience intensive, but you can learn it pretty quickly. Yeah. It can be capital intensive. If you don’t have money, that can be really problematic for me. You know, I started with the house hack bur on the triplex because I, for, for two years before that, I lived with my best friend’s.

I dunno if anybody, like, I don’t talk about that ton, but yeah, I lived in like this tiny little bedroom [00:07:00] for $400 a month and just saved up pennies and stacked them until then I could get into that. And that was a great way of accelerating everything. So it just depends on where you are in the journey because multifamily you, it requires experience for sure.

And it requires capital for sure. And there’s not a good way to fast track either one of those. Yeah. Short of partnerships, I guess.

[00:07:21] Read: Did you do any of the Val, did you do value add in that your first Plex or did you. I know that the, like the property itself appreciated,

[00:07:29] Anthony: but did you, so I did. I didn’t do a lot of renovations.

I did some, I put in new flooring, um, some new appliances, new paint, all in that stuff. Like putting lipstick on a pig, like literally PI put pips lipstick on a pig. Um, the value was going in there and making these mild improvements because then I could justify increase in the rents mm-hmm and the tenants had been there for a long time.

One of them was very problematic. That was the bounty hunter story. Yeah. Oh yeah. They had to. Um, but the others, you know, we brought them up to market rent. That was, that was the real value add was that the [00:08:00] rents were like a solid $200 below where they should be mm-hmm and that was because the property wasn’t in great care, the landlords really weren’t fantastic.

And so just by doing that little bit went a really long way. Um, and so I felt as though I had added value, so the a hundred, like the, the amount it appreciated, I was like, cool. That’s a reflection of doing the work in reality. It was. Not that. Yeah. And I was like, oh man, this could have gone the other way that would’ve sucked.

[00:08:27] Read: Yeah. I mean, I, I do like, um, I do like putting value into the place that I’m living. Mm-hmm I feel like that for me has enough payoff cuz it’s like, I get to enjoy the, in the short work.

[00:08:39] Anthony: Yeah. Yeah. Worst case scenario. You like

[00:08:41] Read: it. Exactly. Exactly. So I think like going in and doing value, add for something that you don’t get to directly benefit from is.

more difficult for me to be motivated to do . Yeah. Um, I mean, I guess obviously, you know, you get it, you get your returns back

[00:08:59] Anthony: from [00:09:00] it, but it’s like this stuff where it’s like going and putting that on a new roof and, um, new electrical it’s like, cool. Yeah, you

[00:09:07] Read: don’t really see it. It doesn’t like, look a new roof doesn’t look cool or like a new that’s that we just got a new water heater and it’s like, I was actually really excited about it.

Like, it doesn’t look cool, but like we have guests over and like, come, come down to the basement, look at our, come look at it.

[00:09:21] Anthony: Like, uh, yeah. You’re you’re a crazy day homeowner. Yeah. It’s what would you say is like, so in the last six months that you’ve been here, you’ve learned a lot. Mm-hmm like if you had your hands, you have your hands on a lot of stuff.

You listen to a ton of the podcasts. You’re always here with us. Um, what’s been surprising to you, whether that’s about Invictus and how we operate, or just the market real estate investors. because you, you get to see a

[00:09:42] Read: lot. Uh, okay. I think honestly, the coming into it, it is kind of an intimidating process.

Um, and not knowing really anything. I certainly didn’t have any traditional education on real estate mm-hmm . Um, but [00:10:00] after being here for just six months, I feel like I have a much better grasp on certainly from when I started, you would hope, but. It’s not as intimidating as you think, or as I had thought at first, it’s, uh, if you, if you read the book, it’s a, uh, it’s a great come on marketing guy.

You gotta, you gotta that past investing made some , um, it’s a great introduction to it. And of course, I’ve, I feel like I’ve read this book. I don’t know how many times from this point a ton at this point, quotes and, but you don’t need to read it more than once. That’s true. So it’s a, it’s a great. Source. I think this it’s,

[00:10:34] Anthony: this is interesting.

Cause I think a lot of people don’t believe it. Like in the beginning of the book, it actually, we started by saying, um, the number one thing you have to know about this is that, um, this is all really simple. Mm-hmm it does not seem that way in the beginning, cuz you’re drinking from a fire hose and there’s just so much and you’re like, this is there’s so much.

I’ll never understand. But seriously just plugging away at it for just a, uh, a couple hours a [00:11:00] day. For a couple of weeks, you start to realize, you start to see the full landscape and you’re like, okay, this isn’t so bad. Yeah. And with it, I, I think anybody within a year, whether they wanna be an active operator or a passive operator or a passive investor within a year of like concerted studying and, and time in the industry, you can get to a place where you, you can be dangerous.

You could go out there and take action. All right. So in the next six months, what are you most excited about? Uh, I

[00:11:27] Read: am most excited about the passive investing academy. Ooh, what’s that the URL’s not live yet, but it’s the passive investing academy.com emphasis on the, the passive investing academy. It’s gonna be a home, uh, an arc, if you will, for all of our media, everything.

Videos blog posts, uh, podcast episodes, the sophisticated investor notes for the deep dives on the books. Um, really anything and everything that we do. And it’s not just going to be related to [00:12:00] multi-family real estate. It could be different asset classes. .

[00:12:03] Anthony: Yeah, I think that’s the part that’s gonna be really exciting is not just talking about multi-family.

We’re gonna talk about other asset classes, whether that’s retail storage or mobile home parks, things that they’re not our domain of experience, but they, for you, a passive investor, you might be interested in them gonna be talking about things from like a tax perspective or legal perspective. If you have, um, inheritance plans or tax, um, strategies, just things that are on the top of your mind as an investor of like, how could I do this investing thing even better?

And so I think that’s gonna be a really. Fun project actually, it’s not live yet and it’s probably not gonna be live for, for a hot minute yet. So stay tuned. Um, we’ll, we’ll keep coming back and, and put it on your radar once it is closer to being live. Yeah,

[00:12:43] Read: no, I’m excited about that. All right, so that’s it, dude.

That’s it. You did it. I did it first episode. I

[00:12:49] Anthony: feel good. I’m curious. How do you think it went? I think it went really well. Yeah. Yeah. Like it’s time to.

[00:12:56] Read: Like probably it’ll be our most downloaded episode. Sure. [00:13:00] Hundred percent hundred, a hundred degree doubt. Even if that means me going on my phone and just downloading it a

[00:13:05] Anthony: bunch of times.

That’s fine. I, I, I’m all about if you’re not cheating, you’re not trying. Yeah. Right. So, but I, I do, I am curious to hear what the audience thanks. Cuz at the end of the day we do this for you. It’s not for us. I mean, It’s not fun for us. This is a, it’s a labor of love, but it’s all for you, the listener. So I’m curious.

Go to, go to I apple, uh, to iTunes, to Google Spotify, wherever you’re listening to this and, uh, drop a review. Let us know how did redo, where you’re like re was the best. He’s awesome. No more, Dan, Dan’s gotta go down with the beard, um, down with, again, uh, for those that don’t know, Dan has a beard and he’s the only one in the office with a beard.

Yeah. Not for a lack of trying. Probably the ability

[00:13:45] Read: to grow

[00:13:45] Anthony: on. Yeah. So if you think, if you think Reid did great, uh, let him know, because literally, uh, just a minute before we went live, uh, and started recording, I was like, Hey Reid, you’re stepping up onto the big stage. And he is like, oh, okay. I was ready.

Yeah. So put me in coach. It’s [00:14:00] stressful. Yeah. Especially with all these lights and cameras and everything. So go give Reid a little bit of love. Go drop a review because I’m not joking. When I say that his, uh, performance reviews are tied to how many reviews, the book and the podcast get. His livelihood is in your hands.

So if you want Reed to get a raise, go leave a review. Um, and if you don’t then ouch

[00:14:22] Read: please help me.

[00:14:23] Anthony: you just bought a house, people on help him out. You just got a new water heater. He’s got pay for that. Thing’s probably on a payment plan. I don’t know. All right guys and gal, so that’s gonna do it for us.

We appreciate you taking some time to join us and, uh, join us in the next episode where Dan. I be back. If you guys vote for him to come back and we’ll be here. All right.

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