by | 22, Mar 2022

What’s More Fun Than Fund of Funds?

We’ve got a fun fund episode for you this week!

Fund of Funds!

A couple of weeks ago, Dan and I attended the Best Ever Conference in Colorado, and we heard Hunter Thompson discuss the Fund of Funds model. This is something I’ve always been interested in utilizing, but there were always some issues that I just couldn’t work out…

Well not anymore!

So we’re going to discuss the model itself, as well as how it might play a part in Invictus Capital’s growth over the next few years!

We discuss all of this, and more, on another episode of Multifamily Investing Made Simple.

Tweetable Quotes:

If you talk to 10 different billionaires about what’s the most important thing about building a business, they will tell you the 10 different things.”  – Anthony Vicino

Do your own work, do your own thinking, make your own decisions, take some inspiration from people, but don’t just follow what they say because they’re ridiculously successful.” – Dan Krueger

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The Five Rules of Investing

** Transcripts

Fund of Funds

[00:00:00] Anthony Vicino: Hello and welcome to multi-family. Investing made simple the 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 of Invictus capital joined. As always, bye Dan

[00:00:30] Dan Krueger: Bob, head Kruger. This is why you need to watch us on YouTube because you’re very confused.

[00:00:35] Anthony Vicino: If you’re just listening on iTunes right now, you did not get the full effect of Dan’s bobblehead. If you’re driving right now, I want you to pull over to the side of the road, put on the blinkers or the, the hazards hazard, pull open, uh, YouTube, go to multifamily, vesting made simple, and then pull up this episode.

As you can see, Dan’s Boby head it’s it’s, uh, it’ll make your day. and then when you’re ready, uh, put your phone away, focus back on the road, merge carefully back into [00:01:00] traffic and, uh, go

[00:01:01] Dan Krueger: about your day. I don’t think my Bob lean head was worth risking getting into an accident.

[00:01:06] Anthony Vicino: I don’t think that’s not for you to decide that’s for the listener who has pulled over to the side of the road.

I apologize if you, if you’ve watched this and you thought, Hey, Dan’s babbling head leaves a little bit. Um, to be desired, let us know, drop a review, leave a comment and say, Dan’s Boby head for, for improvement. If you loved it, give us a heart. Give us an emoji range. Like big bobs. That’s too much. That’s not a bobble.

That’s a, a juke. Maybe. I don’t know what that is. I don’t know either. Yeah. A bobble. I don’t know. The guy had that loose neck, you know, who does a good bobblehead your daughter?

[00:01:39] Dan Krueger: She .

[00:01:40] Anthony Vicino: She does. Yeah. Coco Coco’s got nothing but bobblehead, you know, where she got that probably you. Yep. We call, we call him Dan week, neck Kruger.

[00:01:48] Dan Krueger: That that’s always what I would do when she’d look at me. I’d Bob, she would laugh

[00:01:52] Anthony Vicino: and then she did it. Isn’t it. Isn’t it interesting. And I know for our listeners, they’re like, this has been such a tangential episode already. No real estate is been discussed. [00:02:00] Yeah. It is interesting. How, like, when we’re around infants, we’d revert to like full infant mode.

And communicating in the strangest ways with baby talk and bobble heads. Yeah. My mouth grows like 10 times when I’m was a baby. I’m just like,

[00:02:15] Dan Krueger: well, you’ve constantly so animated to get ’em to laugh. And that’s what you’re trying to do is you’re just trying to get a rise for the chuckles it’s

[00:02:22] Anthony Vicino: all for the, all for the goose.

All right. So guys and gals, here’s what we’re doing or a day besides just talking about Dan’s weak, weak trapezius.

[00:02:31] Dan Krueger: Is that I thought you were gonna say something about Collins.

[00:02:34] Anthony Vicino: his weak daughter. No, no. I mean, she is not very strong. Um, and like the spectrum of human strength. Yeah. These are my traps. If that’s what you were asking, maybe for a baby.

She, okay. Yeah. Yeah. Well, man, your traps don’t look terrible. Um, you can tell he does some shrugs. All right. So if you’re not watching the video by now, you’re really missing out, just so you know, anyway, today we’re gonna talk about, uh, something new, exciting sex. I said sex exciting, but that that’s not what we [00:03:00] about.

Um, we’re gonna be talking about the fund to funds model. Ooh. What exactly is that? We’ve talked about funds before. We’ve talked about single asset syndications, the fund to funds. It’s a little bit different. We’re gonna talk about it because. A couple weeks ago, we were at the best ever conference in Colorado.

And our boy hunter Thompson was talking on this particular topic and he said some things that illuminated the structure in a way where in the past I’ve thought, Hey, that’s a really cool structure. I’d love to be able to utilize it, but there were some issues I couldn’t work out. I didn’t understand it.

Um, And he changed that for me. I was like, I get it now. So we’re gonna talk about that. We’re gonna talk about also how the fund to fund is maybe going to play a part in Invictus’ growth over the next couple years. That’s exciting. So stay tuned. Like don’t, don’t tune out. Like that’s pretty exciting. But before all of that, before we get to the meat and the potatoes and the asparagus for.

You know, do you eat asparagus that no. Yeah. It’s I don’t. I will, if it’s, I don’t enjoy it for the after effects. I

[00:03:56] Dan Krueger: never ask it. I never ask for it.

[00:03:57] Anthony Vicino: Yeah. They, they just bring me asparagus. I’m like, [00:04:00] get this outta here anyways. Uh, before we get to that, let’s have some dessert. Let’s talk about Dan’s bad investing advice for this week.

Let’s

[00:04:06] Dan Krueger: let’s do that. Bad investing advice for the week. If you wanna be a successful investor, you should study those who are successful before you the great, the greatest of all time in following their footsteps. What do you think about that? If I

[00:04:23] Anthony Vicino: want to be successful following the footsteps of giants of the greats, um, okay.

Yeah. Generally I agree with this. I’m all about the fact that if you wanna get to the top of the mountain, go with somebody who’s been there before model their behaviors. Okay. So this can’t possibly be, be bad advice. Go ahead and try and change my change, my mind go. All

[00:04:43] Dan Krueger: right. That sounds great. Generally speaking, I’ve offered that advice to people.

a lot about predict yourself. Aren’t you know, I study the, the greats, I study the, the buffets and the Mungers and there’s a lot to be learned. However, you cannot [00:05:00] follow that blindly. You’ve gotta be able to do your own work because Charlie Munger has been calling consistently up until right now, still feels this way.

He calls Bitcoin rap boy. He does not like crypto. He does not like crypto Warren does not like crypto bill gates. They don’t like it. I’m surprised about bill gates actually. Um, and I might be wrong on that. I think bill might actually, I don’t know. I don’t know if he feels, but for sure.

[00:05:24] Anthony Vicino: Sorry, if we put you in that, if we put you in that whole bill, if you’re listening to this and you’re like, I like crypto, sorry about that.

He’s coming down. Go ahead and leave a comment and a review bill gates, if you did, uh, if you don’t agree with us here. Yeah. So

[00:05:33] Dan Krueger: basically this is all just kind of pointing at, you know, the monger. Bitcoin comments. Mm-hmm because what you’ll find is if you just follow these people blindly and just do whatever they say, like they might comment on something that’s out of their area of expertise.

Maybe they don’t evolve. I mean, the guys in his nineties, I wouldn’t expect him to wrap his head around blockchain very easily. They’ve never been guys who are really into tech, they’ve owned apple, but outside of that, they don’t, they’ve never really played in the tech space, but cuz they don’t understand it yet.

[00:05:58] Anthony Vicino: And they’ve always owned that [00:06:00] too. Right? Like they, they, except for the crypto stuff, they started a, it’s really interesting if you, if you rewind, uh, monk. Uh, buffet declined the, uh, um, the opportunity to invest in Microsoft, in bill Gates’s best buddy. And he’s like, no, I won’t do it because I don’t understand technology.

I stick to bubble cup. Yeah. So he sticks to what he knows. Right. So it’s interesting that they kind of like flipped the script a little bit. Yeah.

[00:06:21] Dan Krueger: And I, I respect them not investing in things they don’t understand, but what I have a problem with is when they try to speak on something that they don’t understand and make a judgment call on it.

I like ’em owning the fact. They don’t understand it, but I don’t like ’em making the rat poison call when they don’t even understand they haven’t done the

[00:06:38] Anthony Vicino: research. You know, what’s really interesting though, is that I do hold Munger in buffet in so high regard, I find it really interesting that throughout their life, they’ve done a really good job of not taking like hyperbolic stances typically on things.

Yeah. This one is like, because people look to them for their judgment and wisdom and insight. Right. And so they, I think are very cognizant that they [00:07:00] want to withhold that and not like sway people’s opinions to be responsible for that. So for them to come out and for Munger to take such a hard tack line against crypto, I, I do, I have found that.

Interesting. Yeah. I, I will

[00:07:11] Dan Krueger: say part of, it’s probably due to the fact that I think that, uh, the people asking those questions, the reporters are trying to get a sensational response. Yeah. And that’s, I mean, why else would you ask. A 95 year old guy, what they think about Bitcoin? I mean,

[00:07:24] Anthony Vicino: he’s not well besides the fact that he is one of the richest men and best investors of all time.

[00:07:27] Dan Krueger: Yeah. But it’s not his case. Right. You ask somebody who understands the technology. Not somebody who has, you know, no understanding about what they think about it. So I think they’re, they’re getting kind of, um, prompted for a sensational response. I

[00:07:39] Anthony Vicino: do think I would, I would, I do appreciate their insight on, on this topic.

I just find it really interesting that they even get it. Exactly beyond just saying, you know what guys like, we’re really not the experts on this. We don’t really know. Yeah. So that’s the response. I would’ve, I would’ve expected them to abstain a bit, but they took a hard tech line and maybe that’s cuz they see like great danger on the horizon.

They

[00:07:58] Dan Krueger: wanna protect people. Maybe they’re just trying to be [00:08:00] trending. I don’t know. That could

[00:08:00] Anthony Vicino: be too trying to like who knows, who knows, who knows what those two wily rabbits get up to at? Right. The bottom line

[00:08:06] Dan Krueger: is. You know, do your own research, make your own decisions. Don’t just follow people blindly, because you might get led down the wrong path if somebody’s talking and they don’t really know what they’re talking about.

[00:08:15] Anthony Vicino: Well, and I do, I do think that there’s an interesting thing to be observed here, which is that throughout time, and this has always been the case that people, whatever you make your money doing and hormo. Cause I can’t make it through a, an episode without talking about him. He was reflecting on this fact too.

Like if you talk to 10 different billionaires about what’s the most important thing about building a business, they will tell you the 10 different things that is unique to their super strength. So one guy who might be great at promotion or marketing will say, it’s all about promotion for another guy.

Who’s all about product like Elon Musk. Who’s gonna say it’s all about product, right? So you can get different and sorts. It doesn’t mean that one’s wrong or one’s right. It just means what worked for them. Work for them and it, and you gotta be, you gotta be aware that when it comes to investing things shift and they change.

And so what worked once [00:09:00] for these people might not still hold true for a variety of reasons. Yeah.

[00:09:04] Dan Krueger: Yeah, things change. So do your own work, do your own thinking, make your own decisions, take some inspiration from people, but don’t just follow what they say because they’re ridiculously successful. Like actually unpack it and make sure you agree with all the, uh, philosophies supporting

[00:09:19] Anthony Vicino: their thesis.

Yeah. Which actually is a good segue into the topic of today’s conversation because, you know, we’re, we’re gonna talk about the fund of funds, which is a different structure than we’ve talked about previously. Um, but then as we start talking about what’s in the future for Invictus capital, we’re gonna be talking about some things that are, you know, potentially gonna shift for us a little bit in terms of like how we’re focusing, how we’re growing and, and that’s not to say it’s always interesting.

I think one of the big fears that companies have when they like. They start to like bring in alternative strategies to what was their core before they’re afraid. Okay. When I’m perceived as wishy or washy and like, how will people respond to this? Mm-hmm and I think it was John Maynard. Kanes who said.[00:10:00]

Something to the effect of when the facts change. I change my mind. I love that. What do you do? Good, sir. That’s what he said. Um, and I, and I think it’s brilliant. And, and like, as we are growing and evolving, like our strategies are constantly evolving as well. And we’re in a unique position where we have a lot of opportunity and we wanna look at that and say, okay, how do we do the best by best as we can with the opportunities presented to us for our investors.

So let’s, let’s talk about fund to funds. Let’s do it. What is it? What, what is this? What is this crazy,

[00:10:29] Dan Krueger: crazy wild thing. Fund of funds. It’s not the most intuitive name. Isn’t, it’s a, we’ve talked about funds on this show before. Yeah. We’ve kind of described it as where typically we do what are called single asset syndications.

So we go and we find a property or a couple properties that are being sold as one portfolio. We put those under contract or that building under contract. Then we turn around to our investors and say, Hey guys, do you want to invest in this building 1, 2, 3 main street or this building over here, 3, 4, 6, [00:11:00] sixth street or whatever.

And it’s a very specific asset. It’s got a very specific business plan and it’s, it’s one thing. It’s one and done. That’s what we’ve been doing. It’s been great. Uh, we don’t wanna stop doing that, but, uh, what happens in that model is that there’s this mad rush for that one. Asset that’s only got so much room in it and it creates a bit of a, a bottleneck.

I’m not a bottleneck, but a bit of a, a stressful situation for both the investors and the operators, uh, because everybody’s trying to cram in and there’s more demand for deals than there are deals. And so it, it’s a little bit of a, a rush and it. Been getting worse lately. Um, good problem to have. That just means there’s a lot of people who like what we’re doing, but there’s only so many

[00:11:44] Anthony Vicino: deals real quickly on that.

Like, it’s been getting worse lately for context. It used to take us say like when we first started two weeks to raise capital yeah. For a deal and close it, and then it took about a week and then our last deal took two days, two days. Yeah. A very short period of time for people to get their [00:12:00] money into it, into a deal.

Very short, very

[00:12:02] Dan Krueger: short. So one of the things we’ve. Wanted to look at doing is starting a fund, which is, um, a collection of assets that are acquired over a period of time. And, uh, the nice part about that is, uh, gives the investors some diversification, but it also gives us the opportunity to raise the capital for those, uh, assets slower.

It gives the investors more time and it just takes the edge off basically. So there’s a more, uh, consistent, um, Uh, comfortable flow of capital coming into the fund and the assets are acquired, and there’s not this big volatile rush where people are sitting around waiting for a couple months for a deal.

And then all of a sudden they get the email and within 48 hours, they’ve gotta make the decision to get it done. And it’s, it’s, it’s stressful. And so the fund is a way, a way to kind of smooth that out. Um, and specifically with what we’re putting together, it’s also a way to diversify away from. Uh, the market that we focused on.

So not that we don’t like our market anymore. Mm-hmm but [00:13:00] there’s something to be said about, you know, broadening the, uh, the, the region that you invest in to get a little bit more exposure to different

[00:13:06] Anthony Vicino: areas. Yeah. And we’ve always talked that our long-term vision for Invictus capital is to diversify into new markets.

And for us though, you know, our. Our core, like unique propositions that we hold close to our vest and dear to our hearts is that we’re local experts. We’re vertically integrated and we’re impact driven. So local experts is the fact that we’re in our backyard. And so, um, when we think about moving into new markets, We have to have some kind of local presence, a partner in that market who is an expert who lives in it.

Like that’s, that’s super important to us. The vertical integration is important because we really don’t want outsource property management or our resident relations to a third party company, just for a fee. We want that to be in house so that we can, we can never guarantee, you know, any thing, but, you know, we can do, we can do better by our residents when we control that.

So those are two things that [00:14:00] for us to move into a new market, we have to have in place. We have to be able to vertically integrate and have a local expertise. And that’s hard to do until you reach a certain scale or, you know, you have that kind of reach and a way for us to breach that or to cover that gap.

In the meantime is to start working with partners in those markets that we really like those partners who are local experts and they have vertical integration, like, so that’s, that’s where the fund fund model comes in. And before we get to like talking specifically how it works for us and how, what we’re thinking about, cuz again, we haven’t done anything yet.

We’re just thinking about this and. Thinking. Okay. This is a direction that we like to go in 20, 22. What is the fund of funds? Cause that’s, every time I heard fund of funds, I would kind of like glaze over. Like my eyes would kind of go, oh, I don’t get this. This is too meta.

[00:14:49] Dan Krueger: Yeah. So fund of funds is, it’s kind of what it sounds like to be honest, it’s, uh, a fund that is, uh, put together for the purpose of investing in other funds.

Right. And so on the surface, [00:15:00] that sounds like it’s just a. Unnecessary layer. There’s there’s one too many funds there. Like why do you need a fund on top of fund? Well, in essence, what, what that enables us to do is instead of opening up a fund and then going and finding the assets, uh, that we wanna put in there, what we can do is we can invest in other operators deals.

We’ve got these really great relationships with people all over the, the country that we’ve formed over many years, being in the industry and going into events and forming really good relationships. And so we’ve got these really good relationships and. The everyone’s deals need capital, and we’ve got way more capital than we need up here.

And our investors have a desire to invest in other areas. So it makes a heck of a lot of sense to create a fund specifically, to go into other people’s other people’s deals. And so there’s, there’s kind of an extra layer there between, um, the investor and the actual will deal, they end up in, but that actually.

Opens up the door for more opportunity, because when we’re able to aggregate people’s capital and come into somebody’s deal with [00:16:00] a large check, um, we can actually. Uh, get them pretty good deal relative to what they would get had. They just showed up with $50,000 and wanted to invest as a single limited

[00:16:10] Anthony Vicino: partner.

Mm-hmm so let’s think about the, the distinction here with the fund, you know, we’re raising the capital, we’re saying we’re gonna go look in these markets for these types of deals that deliver these types of returns. And then we’re gonna go maybe find those deals. And maybe that requires partnering with somebody else, like co GP, right on that deal.

But in the fund, you know, we’re gonna be sitting in the GP seat. Right. That’s one of the things like we’re gonna be running this deal, but the fund to fund model, what’s interesting about it is we have a lot of investors coming to us and saying, you know, Hey, when’s your next deal coming like, oh, you know, don’t know because we only focus in this one market.

So the number of deals that we do in a year is probably a lot less than if we were looking in 10 different markets, but that doesn’t solve the problem. That those investors still wanna place their capital. Right. They, they, they trust us. They trust our judgment. They trust our relationships and they have the capital.

And so the fund to fund [00:17:00] what it allows is the opportunity for us to serve those investors by saying, well, we know these markets, these other markets, we know these operators in these markets really well. We’ve built these relationships over years. We understand the deals that they’re doing and. We can deploy capital into those deals as limited partners, rather than sitting in the GP seat.

And like we’re sitting there along for the ride as passive investors and saying we trust these guys. And so we’re really deploying our judgment to say, these are the people that we wanna work with. And now in this model with the fund to funds, what I do find interesting about it. Isn’t that you’re just putting your money into a blind pool fund and then saying, okay, Anthony, Dan, we trust you guys go deploy our capital.

What it is is actually saying, we find a deal. Let’s say we decide to partner with somebody out of Omaha and we have a deal. We come to the investors we say, here, here’s a deal. We’re gonna put together an SPV. So a special purpose vehicle where we’re gonna pool our funds. And we’re all gonna co-invest together as LPs.

And what we’ve done is we’ve negotiated a special rate with the operators. We’re gonna [00:18:00] get special treatment. We’re gonna get a better preferred return and better return overall than if we had just if individually gone and invested with that, that person. Um, and then you, as the investor, get to look at the deal, the marketing package and say, do I want to invest in this deal?

Cool. Yes, no. So you still get to do like your own due diligence on, on the deal, but by pooling the resources of limited partners and like saying, okay, we’re gonna bring a million dollars to this deal rather than all of us going and investing 50, we can. Drive better rates. Mm-hmm . And I find that really compelling because, you know, diversification both geographically through asset types and through operators is important.

And it’s one of the things that I talk about in the book quite frequently is that for us as operators in our market, it’s hard for us to get to that diversification, cuz we just keep re reinvesting back into our own stuff, but this cool way for us to start investing. in other areas.

[00:18:52] Dan Krueger: Yeah. And it’s a nice part about it is it’s win, win, win, because the operators whose deals we’re investing in, uh, get [00:19:00] to more efficiently raise capital for their deals.

By having one large check, come in through us, uh, the investors, uh, on our end get better terms than they normally would had. They just gone knocked on this operators door and tried to put 50 or a hundred thousand dollars in. And it’s win for us because we get to, uh, help serve our investors and, uh, do it in a, a more efficient and diverse way where typically when we’re acquiring more deals, we need to go out and hire more people and build up the infrastructure to support all the deals.

But as that takes time, And as our growth is, you know, our growth has to happen at a certain pace because we’re vertically integrated. So it’s kind of double edged sword. It’s, it’s great because we get the control, but we’ve gotta grow at a certain pace. So as our capital, um, uh, demand as, as the demand from our investors is increasing, we wanna still be able to serve them.

So being able to get them these great terms and these other markets that they wanna be in and also help those operators on the end. Um, by coming in with one check for a million dollars, instead of, uh, you know, 10 checks for a hundred thousand dollars from 10 [00:20:00] different individuals, it makes it, uh, more efficient and easier for everybody involved.

[00:20:05] Anthony Vicino: yeah. And thinking about, okay, you might have some questions here. Okay. How’s this work from a returns perspective? Is there anything changing? Do I get double fees? Like from a, like who’s managing the fund of funds. Are they charging a fee? Are the other people charging a fee? Am I getting double feed? Um, and then what happens with taxes?

Do I actually still get to benefit from the depreciation and all these things? And the answer is yes, all the above. So the. There you go. Hmm. No double feed. So let’s no, let’s talk about the fees. I think the fees are really interesting. Um, there’s a couple of different ways that you can do this, right. Um, so, but what we’re gonna talk about here is definitely not definitive by any means, but, um, you could charge a fund to fund.

You could charge a fund level fee for like managing the asset, which there’s still, you know, reporting and tax documentation that has to occur in there. But really what ends up happening with the fees is. the fee comes out of the arbitrage or the difference between, you know, the, the [00:21:00] stated return that the operator was going to offer on their deal and what we’re able to negotiate being, you know, a larger partner.

So net net, your return profile that you could get coming through the fund of funds should be. And if you’re, and if you’re looking at other operators, cuz a lot of operators are doing fun of funds these days, um, Your, your return should be better than what you could get. If you had just went straight to the operator, if it’s not, then why do it?

Right. Like, it doesn’t really make a lot of sense though. Yeah. So net net, even with the fees, you should still be making more than if you had gone directly to, to the operator. Yeah. It

should

[00:21:32] Dan Krueger: be the same or slightly better.

[00:21:34] Anthony Vicino: Yeah, honestly. So. On the taxes front, this gets interesting. So one big thing here is you will still benefit from all the depreciation, just like you own the on asset.

Like it’s you still get all that. It’s gonna be divvied up pro rat. Um, but the downside is that the K one that you’re gonna receive probably will not come in time to follow your taxes by March 15th or April 15th or whatever extend. So you’re gonna have to extend, honestly, that’s [00:22:00] extending is great. It’s way more time.

Yeah. You get until October you get it’s wonderful. I think it’s free, right? Like. Is there application fee? Maybe I it’s not, I dunno, it’s our CPA’s but we’ve been, yeah, we, yeah, it’s differing. That’s not, it’s not too uncommon actually to have to defer. And when you’re investing in syndications, cuz the K one sometimes do come in after that, that time period.

So, but all things said like you’re still gonna benefit just the same way that you would. The difference is. instead of you going out and having to vet operators in different markets and whatnot, really what you’re doing is you’re coming to the fund to fund manager. So in this case, if this is something that we do explore in the future, you’d be coming to us and saying, Hey, we trust your guys’ judgment to go out there and vet these operators, these deals, these markets.

And when you find something, bring it to us and we’ll take a look at the deal, right? So that’s really what it’s doing. It’s saving you a lot of time and energy of having to go and forge those relationships. We can do

[00:22:52] Dan Krueger: it for you. . Yeah. And you’ve heard our rant episode on the, what do we call, what do we rant on?

We ran on a lot. Uh, well, it was a big [00:23:00] acquisition fee. 5% acquisition fee. 5% AC fee. Yeah. Oh my God. So when it comes to vetting operators, we just reminded have that. No mercy. Yeah. Uh, we vet aggressively. Yeah. So that’s effectively what the, the benefit is to the past investors. You’ve got some pretty fine tuned eyes that are very pessimistic and well, well, here’s,

[00:23:20] Anthony Vicino: what’s interesting too is like, this is, this is something that we’ve been thinking about for a little bit, but honestly, like we’ve been in the industry for a long time and we’ve had relationships in operators and we’ve seen them over time.

Not from the investment perspective, cuz we haven’t invested with them necessarily, but we’ve seen how they operate in the space. Um, so coming into it now, it’s like we have a pretty good sense of who we wanna work with and who we don’t want to like, and we know who don’t. Exactly. So, um, so we’ve, we’ve actually been doing our due diligence unknowingly for a couple of years and just judging.

Yeah. And again, like, so this is, this is all, this is new, this is something that we’re exploring right now. We think there’s a lot of benefit. And so. If you’re one of our investors, or [00:24:00] if you’re thinking about investing with us and you think that this is interesting, like we would love some feedback and say like, is this something that you’re interested reach out and let us know?

Um, but this is, this is a structure, I think, regardless of, if you look at it with us, you’re gonna be seeing it more and more from operators, cuz it makes a lot of sense. Cuz who better knows who to trust in the industry, industry insiders. I think that’s one of the big. Hundred pluses for a fund to funds model.

Yeah.

[00:24:24] Dan Krueger: Yeah, no, I think it’s gonna be an exciting opportunity. We should, this will be this year. I don’t know when exactly things are gonna be coming together. We’re looking at also doing a, just a standard fund up here in our market, um, with, you know, Not a fund of funds. It’s just a fund of assets, you know, we’re coming down the pipeline.

That’s exciting. Um, but, uh, yeah, hopefully sometime this year, um, wanna get the ball rolling on this because I think it’s just a really great resource for our investors and also a great resource for the other operators out there. Mm-hmm

[00:24:52] Anthony Vicino: so, and for us too. Yeah. Like we get diversification as well, so yeah.

How’s ah, I. Winning. Okay guys. So that is [00:25:00] the fund to funds. And there’s obviously a lot more that we could go into on this. That was all the information. So maybe what we’ll do, if there’s interest is we’ll host a live webinar at some point, and, uh, you guys can come with your questions and get them answered.

Uh, if that’s something that would be interesting to make sure that you shoot us an email, go leave a review and say, Hey, I’d be interested in checking out a fund to fund and webinar. Learn more about that bad boy. Um, cause I think it is a cool tool to have in your toolbox as the passive investor. And uh, if you’re an operator and you’ve been thinking about it, like it could be a cool op a cool tool in your toolbox.

Mm-hmm so, all right, guys, before we get outta here, I got a book recommendation for you. All right. Dear listeners. Here’s the issue, Dan and I have tried to record this book recommendation like three times now. Mm-hmm and we keep hitting technical difficulties. So, uh, we are here are recording this book recommendation for this podcast episode.

Again. and hopefully it works this time. It’s gonna be amazing. This is really good book recommendation, so much, so much practice. Yep. So this book was something that, uh, was written a long [00:26:00] time ago, like 1940s, 1950s. It was, it got put onto my radar by Russell Brunson. It’s called psycho cybernetics by Maxwell Maltes mals malt Maxwell, max cyber, psycho cybernetics, and really what it is, is it this, um, And this guy who was a plastic surgeon, he was doing all this work, all his facial reconstruction surgery on or renovations, upgrades on people’s faces.

And sometimes people would come out of those surgeries and they would be completely different people, but sometimes people would come out and they still had all the same, like emotional hangups and same like. Uh, same mental image of themselves as they had before. So they might have gotten a nose job, but they still thought they had a hideous nose.

And so he got really curious about like, what is at the core of this? Like, why are some people like coming out? And they’re like, they’re fundamentally different people and others are coming in like, It, nothing matters. Like you could change everything. And they’re like, I still, I’m still the same hideous thing that I was before.

And that’s really the, the whole book is the [00:27:00] exploration of identity and what it means to like, change that. Mm-hmm

[00:27:04] Dan Krueger: yeah. It’s really crazy how much your, your, your brain, uh, can impact your reality. Just your perception of yourself is a lot stronger than what is actually there. Uh, cause I’ve seen this with myself.

I’ve seen this with, um, Because I grew up very, uh, insecure and, and that changed throughout life as I matured. But like, I still had a lot of these same insecurities that were left over from that period that, that are still there. And I saw it a lot when I was working in the, uh, nutrition coaching, uh, consulting business that I had with a lot of clients who would go through these, uh, really incredible physics trans, uh, transformations, but their, their, their feelings about themselves were exactly what you just said.

They still felt. Uh, ashamed and embarrassed about the way they looked, even though they turned into exactly what they wanted to be. The, they still didn’t wanna go to the beach. They still didn’t wanna, you know, uh, wear something that was more form fitting that showed off. It’s not always true, but [00:28:00] very common mm-hmm so it’s really fascinating.

[00:28:02] Anthony Vicino: Yeah. So if you’re interested in learning about like identity and beliefs and how to change those things, this book’s really an interesting approach to that psycho cybernetics. Um, because at the end of the day, like regardless of what you’re trying to do in life, it all starts with a requisite amount of belief in yourself and the type of person that you are to go and achieve that.

So if the, the classic example that we use is if you want to quit smoking, you don’t say, you know, I’m a smoker, who’s trying to quit. You say. , I’m not a smoker. I don’t smoke. Like I’m a healthy person that doesn’t smoke, you know? Like you change that identity, that belief that you have in yourself. So I think it’s a really important book.

It’s really quality. Um, it’s an old time classic.

[00:28:40] Dan Krueger: Yeah. I think that stuff might get like, and you probably know more about the, I do from actually studying psychology officially in school. Uh, cause I just do it casually, cuz it’s interesting for me, but um,

[00:28:51] Anthony Vicino: the best kind of education is self education.

Thank you. There

[00:28:55] Dan Krueger: you go. It makes me feel better. Mm-hmm um, so I, I think a lot of these types of [00:29:00] internal narratives are just kind of hanging out there in the subconscious, like you convince yourself of a thing, and it’s almost like this, this sound bites on, on repeat in the back of your head, but you can’t hear it, but it’s back there and it’s influencing how a have.

And so people’s beliefs about themselves are, are kind of like these, these audio loops that are going on in the back of their head. In that if you can reprogram that it takes a lot of, uh, forced. Active work of affirmations, writing things down, saying some things, but they, I think it’s, for some people, it should be possible to kind of rewire those sound bites back there and make them say whatever you want, which is exactly what you just said with like, saying I’m not a smoker instead of saying I’m quitting.

Um, it sounds kind of woo woo. Uh, when you hear these kind of self of gurus talking about affirmations, but there’s, I think a decent amount of science to actually support, um, some value

[00:29:53] Anthony Vicino: to it. Mm-hmm and this is the value of therapy. And accountability groups is a lot of times like in therapy [00:30:00] or just having an external source, uh, of validations for somebody to go, Hey, I hear you using the, this language.

I hear you like, your goal is this, but I hear you saying this, like, you don’t even realize it, but you’re saying this. And I think like there’s something there. And I think just getting that third person perspective sometimes of like, you’re so close to yourself and your, your identity and like those beliefs that you.

Hold so dear that you never even think to, to question those are the hardest ones to change. So a counselor friend, this I don’t, I don’t personally like things like alcoholics anonymous, just because again, going back to the identity thing like that, their whole thing is like saying I’m an alcoholic. Like, I don’t agree with that aspect of it, but I do think being around a group of people who can help hold accountable towards the objective, I think that’s huge too.

So that’s the book recommendation. Hopefully this time. We actually got it recorded if it did. Um, and you’re hearing this then do us a favor, go leave a review and say, Hey guys, we appreciate you trying so dang [00:31:00] hard to recommend that book. I’m gonna go read it now. It’s gonna change my life. Um, go leave that review and, uh, we’ll see, in the next episode.

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