by | 30, Jul 2022

Is Real Estate Investing Too Much Work For You?!

Today, Dan and Anthony’s friendship was rocked to its core! Anthony discovered that Dan uses gas station bathrooms… will they recover their friendship?!

Also discussed in this episode… real estate is the investment medium that has made more millionaires than any other medium in the investing world. Many of you already know this. But that fact can get people so excited that they jump right into real estate investing without realizing they’re building themselves a business, or at least a job.

You can’t just go out and accumulate properties and then hire a 3rd party property management, and expect all of the work to be out of your hands. So, what should you expect?

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:

“There’s gonna come a point where you’re gonna hit the glass ceiling. And as soon as you hit that, everything becomes more difficult. And it’s not one of those things that you can suddenly undo.” -Anthony Vicino

“Even if you have third-party management, there is still a full body of work that needs to happen on behalf of the owner to make sure that the business plan is actually executed and all the operations are actually running smoothly.” – Dan Krueger

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five rules of investing

The Five Rules of Investing

** Transcripts

7-30-22

[00:00:00] Anthony: Hello,

[00:00:13] Dan: welcome to, uh,

[00:00:15] Anthony: multifamily investing made simple. This is podcast where we take 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 by Dan where’s. My parachute Criger.

[00:00:29] Dan: You say pair of shoes, pair, shoot. Where’s my parachute.

No, I’m the guy

[00:00:33] Anthony: who’s wondering. Where’s my pair of shoes. I’m barefoot you’re but you, I got

[00:00:37] Dan: shoes on. If you were watching on YouTube, you’d already know all these things. So you,

[00:00:39] Anthony: however, I’ve noticed our parachute list, I do not have a

[00:00:43] Dan: pair of shoot. So where is it? I don’t know. I’m following a, a mad man.

Out of an airplane right now. Yeah. We said, let’s just go, we’ll figure it out on the way down. We,

[00:00:51] Anthony: we we’re coming into this podcast episode and there’s a good high probability chance that you, the listener know more about it than we do at this point. Just based off of, I don’t even know what the title is.

We [00:01:00] don’t know what the title is. We don’t know we’re about to talk about, well, at least Dan doesn’t

[00:01:04] Dan: I’m here, cuz someone told me there would be food and there’s no food I’ve been lied to.

[00:01:07] Anthony: Um, you were, you were very excited about your very bougie gas station coffee that you’ve been, you’ve been sipping on over.

I’ve never heard of anybody referred to, to gas station coffee as bougie, but you you’re a, you’re

[00:01:22] Dan: a, as far as gas stations go, holidays is one of the better ones. Is it? It

[00:01:25] Anthony: is. I’m a Speedway man, myself. It’s

[00:01:28] Dan: all about the bathroom. How clean the

[00:01:29] Anthony: bathrooms? Why on earth? are you going into a gas station bathroom?

Some people drive from point a

[00:01:35] Dan: to point B

[00:01:36] Anthony: in the twin cities. why would, if you’re on a road trip? Oh my God. I think we found our topic. If you’re on a road trip. Yes, you can stop at the gas station because you’re a prisoner to the road. It’s just a life you’ve chosen for yourself. But if you are in your home city driving from point a to point B mm-hmm

I almost guarantee you, there were bathrooms at point a and point B. Mm. You didn’t need to stop at point C the gas station. what are you doing [00:02:00] with, when did you get this coffee? Was this after closing? did you leave the title? It was before you were AMA I, okay. Here’s the thing I don’t love. I love you less than I did at the start of this episode now.

So we just need to move on, um, otherwise gonna keep dwelling on it. So here here’s, here’s the topics that I thought would be good to talk about today. Um, We’ve talked about it before. So if you’re listening to this and you’re like, ah, these guys again, I think it’s a really important concept is, and it’s one of the questions.

It’s like the first question I ask of new students when they join, um, Jake’s coaching thing, which is, do you want to invest in real estate or do you want to build a business that invests in real. because those are very different things. Mm-hmm so let’s UN let’s just in this 10 minutes, unpack that because I think a lot of listen, like maybe you’re a brand new listener.

You’ve never heard it framed that way. And you’ve thought, oh, real, estate’s really great. I wanna be involved in it. This investment vehicle has made more millionaires than any other in the world. You’ve heard all that, that stuff. And so you think you want to get into it and you’re driving in [00:03:00] not realizing that what you are in fact doing.

If you’re not doing it correctly, is you’re building a business for yourself or in most people’s cases. Not even that they’re, they’re just building themselves a job. Mm-hmm so let’s unpack. .

[00:03:12] Dan: Yeah, I think honestly the, uh, even if you are, oh yeah. Okay. Let’s define first. A lot of people think they can just go out and start accumulating properties, start buying them and hire management company.

And then all of a sudden, boom, it’s a hundred percent pass it. That’s not the case. Even if you have third party management, there is still a full. Uh, body of work that needs to happen on behalf of the owner to make sure that the business plan is actually executed and all the operations are actually running smoothly.

Um, and so I think that if you want to invest in real estate, you can do it passively, but there’s gotta be somebody at the helm. Who’s actually building a business. And I think that, uh, The first step on the way to building that business is building a job for yourself. That’s how I started. Anthony started.

We were the guys doing all the [00:04:00] things and we’ve slowly turned it into a business with infrastructure and other people to help us do it. But I think the first step, unless you’re coming in with a lot of capital is, uh, you, you’re gonna start by building yourself a job. That’s fun. I, I liked it. Um, I learned a lot and it’s still a, still a job still in it.

A hundred percent of the time. It’s different than it was on day one, but. It’s it’s a necessary step. You cannot do it passively just by getting a management

[00:04:25] Anthony: company. Yeah. And I would, I would even go so far as to say, unless your goal, your intention is to leave your w two and devote maybe not all your time, but a significant portion of your time to this new endeavor.

Um, it’s probably, it’s probably the wrong path for you to go being the active side and like building the business. Cause there’s gonna be a lot of things, um, that are gonna get in the way it’s gonna be stressful. It’s gonna be very difficult to scale. It might be possible if you’re a doctor or lawyer right now to go and like acquire one or two little properties, maybe even three, but there comes, there’s gonna come a point where you’re gonna, you’re gonna.

Hit the, the glass ceiling. And as soon as you hit that, everything [00:05:00] becomes more difficult. And it’s not one of those things that you can suddenly undo. You can’t push the, you know, control Z and be like, undo. Like you’ve reached this new level of complexity and you can only move forward. And I think that’s.

Unless you’re planning on like trying to replace your W2, your job income, then that’s really not the path you should go, but most people don’t realize it cuz they don’t realize that like there’s other ways of doing this. Mm-hmm where you can invest in real estate and still maintain your time and your energy elsewhere.

Now, if you’re cool building the business, giving yourself a job awesome. You know, real, estate’s a fantastic vehicle for you. Highly recommend it. But if you want to invest in real estate, what are some better ways?

[00:05:39] Dan: Doing it in a syndication or funds with guys like us, right. Finding the guy who, or the guys or gals or whoever the operators.

Who have decided, yes. I wanna build the business. That’s going to support this real estate portfolio. Like, cause like I said before, someone’s gotta do it. So one of the best ways is through operators like us, whether it be us or somebody else out there [00:06:00] doing the same thing, uh, the private. Placement market.

So not a re, but the private investment space for real estate, I think is the best way to get the, the, the mix of, of a passive investment and still get all the benefits of actually owning, uh, a building, uh, because a re you don’t really get

[00:06:18] Anthony: those. Yeah. You mentioning the Reid is a really good point because a lot of investors that we’ve talked to, they’ll say, oh, I already have.

Exposure to real estate, uh, through my res uh, real estate investment trust, and the that’s a problematic way of looking at it for a lot of reasons. One being that REITs. Um, it’s not really, when you own a piece of a re you, you own really stock in a company. Whose underlying product is real estate, but you do not actually own the real estate.

And you aren’t really getting all the benefits associated with real estate ownership in, in the, in the form of the really big one being depreciation tax benefits. That’s a huge, huge aspect of it. The way I’ve phrased this. And I think about it is. A syndication or a fund or a private placement where you’re, you know, co-investing [00:07:00] alongside GPS who are operating the deal and you’re, you are actually an owner of that piece of real estate and getting all the benefits.

That’s like the difference between owning a 1967 Ford Mustang or investing and buying stock and Ford. Right. Like one, you actually have a physical asset and everything that comes along with that collectible, right? The other is you’re investing in the company that makes that thing. And that’s really what the read is.

It’s the company whose product is the cars versus the private placement is we’re just going out there and getting the cars and that’s the, the investment. So whether you’re invest with us or into it, a different fund, just understanding that difference. I think. really illuminating for a lot of people because when you’re new and you don’t realize that syndications and funds are, uh, avenue open to you, you’re probably thinking, oh, I’m gonna go do a fix and flip I’ll maybe buy this, um, this turnkey, single family home, and even turnkey still has a lot of time and energy.

It’s, it’s really interesting how many investors they start with theirs, turnkey, single family [00:08:00] homes. They get to about three, and then they come to us years later and they’re like, I wish I had known about this. Because that turned out to not be as passive as I thought the returns weren’t as great. And I ended up doing a lot more work.

[00:08:11] Dan: So yeah, it’s also tricky because it’s it like, yeah, they just said, that’s how most people start. It’s kind of like a, a little side gig, right? They, they get one property and you don’t really notice the, the quote unquote work on that first property. Right. Because it’s probably new and fun and saw me in some of those issues early on.

It’s like, Ooh, this is okay. Life of landlords. Little fun little thing. But once you get to that two or three point after the first few years, um, the volume of those things, those phone calls, those, those things you have to deal with is gonna be increasing the point where it’s gonna start to get detrimental.

So that’s, I think where most people notice early on, I, I don’t even think they notice it’s a thing until they start to accumulate a couple, a couple properties, and then they, uh, stumble upon the concept of us. And they’re like, great. Get all the benefits. Don’t have to do the work. Yes. I’d make a little bit more money doing it all myself.

At the end of the day, people just wanna value. They value their time higher and they say, [00:09:00] okay, I like my job. I don’t want to stop spending time with my family. Let me get my real estate exposure through some active partners like you and call a day mm-hmm .

[00:09:08] Anthony: Yeah. And so if you guys are interested, a lot of our listeners are current investors or other operators, and you guys know all this stuff.

So like, but if you’re new to this world, and this is the first time that you’re hearing about any of this stuff, we did write a book on the topic. Passive investing made simple, um, Happy to give you guys a free copy of the book in exchange. All you gotta do to earn you gotta earn your keep. I can’t just give it away for free.

Otherwise you’re not gonna value it. So you gotta go leave a review on iTunes or, um, Spotify or wherever you’re listening to this YouTube, leave a review and then shoot me an email. Anthony Invictus, multifamily.com say, Hey, enjoy the podcast episode. Even if you didn’t, you gotta lie to me and say, I enjoyed the podcast episode and I’ll gimme my book and I’ll send you a.

[00:09:46] Dan: So he’s very insecure. He needs that, that ego stroke to, to get up in the morning, give me

[00:09:51] Anthony: that positive reinforcement. I need it. Gimme the dopa. We all

[00:09:53] Dan: know the podcast is rough. Just lighting.

[00:09:56] Anthony: We get it. Listen. Um, I’m going through a really hard time right now [00:10:00] because I don’t know if you guys remember this, um, from like six or seven minutes ago.

Um, but I just found, I just learned some really disturbing things about my, my business partner and his going to the bathroom in public gas stations. I’m struggling, still small bladder. What can I say? That’s that’s my cross to bear. So um, I’m just kidding. I, I, I have the bladder, the size of a hamster, so I find myself in many, many public gas station restrooms.

Um, but that’s gonna do it for us guys. Uh, we appreciate you taking some time to be with us. We’ll see you in the next episode.

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