by | 20, Jul 2022

Minneapolis Is Outgrowing Austin?!

Dan is back in this episode, and Anthony and he have A LOT to cover!

Most importantly… is Minneapolis outgrowing Austin?! How do we compare this growth, and how has that growth changed for each city over the last 10 years? And last… how does the supply chain affect this growth? Yes, those scary supply chain issues that everyone is talking about!

All of this and more on this week’s episode of Multifamily Investing Made Simple.

Tweetable Quotes:

“It’s gonna take money. It’s gonna take energy. It’s gonna cost the city a lot in terms of the opportunity cost like.” – Anthony Vicino

“Forgive me Texans. We’re about to lose Texas.” – Dan Krueger

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five rules of investing

The Five Rules of Investing

** Transcripts

Tx Vs MN

[00:00:00] Anthony: Hello, and welcome to family. Invest made simple the podcast. It’s all about taking the complex of the out of real estate investing so that you can take action today on your host, Anthony, up this capital joined as. Well, maybe not always, there was this one time. Um, if you didn’t catch that one episode, but every other single time, 240 ish times, dang Kruger.

[00:00:34] Dan: I ruined my streak. Oh, that’s true. What ha I mean, every time it’s been me, that was the hell of a run. I know Reid. I think Reid did awesome. Yeah. I dunno if you guys caught that last episode, but we should check it out. Yeah.

[00:00:44] Anthony: If you haven’t listened, uh, to this weekend’s episode, it was a 10 minute episode.

We had our marketing guru Reid Deutscher on the episode with us. Uh, well, Dan, Dan was, um, not with us. He was gone. But that’s okay. Cuz you’re back now. You maybe sound like

[00:00:58] Dan: I died

[00:00:59] Anthony: with [00:01:00] anymore. I mean, I I’m like a dog. I have no object permanence so like as soon as something is out of my field of vision, I assume it’s gone forever.

That’s fair.

[00:01:08] Dan: That’s fair. Well, I gotta say I caught some of it. Well, I caught the whole thing, not lie. um, you were over there at the corner. I was, I was, but um, I thought that was probably like the best first podcast episode I’ve ever seen somebody execute. Cause I know I saw our first episode and it was so awful.

We sucked, I know Reid just like stepped up and did it like a normal

[00:01:28] Anthony: person, like not even awkward about it? No, no, not even like a, a normal person. Cause I think most people would suck in that. Like honestly it. It’s funny to think back where we were, when we did our first podcast, we had this really flimsy tripod.

I put my phone on it and it was kind of like falling over. I had it on a chair underneath a box. It was really weird. And then you and I, we were just so uncomfortable. We were drinking ourselves into oblivion. Um, and so like incoherently rambling. And by the end of it, we had like an hour and a half of us just drinking whiskey, talking real estate.

[00:01:59] Dan: [00:02:00] Um, I mean, I had fun. It just was really bad content. So nothing,

[00:02:04] Anthony: nothing the world needs to see or hear. Uh, so here we are. Yeah. I think Reid did a fantastic job. Mm-hmm and it’s always cool, um, to bring on people, especially new people to the industry. Like Reed’s obviously has been with us for six ish months now and he’s killing it in his job and he is, he knows as much as anybody, any person could after six.

but it, to his, his point, like, it’s still kind of like, it’s initially it feels very overwhelming. It feels like there’s a lot. So mm-hmm, , it’s cool to get his perspective, but you know, who’s his perspective. I value even more your own. It’s like you’re in my head. um, as it’s true. Yeah. Okay. But I mean, I also, I also, at times value your opinion.

So what do you say? How about you? Give me your opinion on. Uh, this week’s bad investing advice. Mm.

[00:02:54] Dan: My opinion on this week’s advice. All right. Um, index funds all day,

[00:02:59] Anthony: all day, every day, [00:03:00] baby, all day, every day. That’s what uncle G uncle G uncle Warren says.

[00:03:04] Dan: Yeah, uncle G says entirely different things. Jesus says a lot of different things.

Uncle w says something to that effect. Um, but, uh, we’ve recently talked about, uh, sea tole. Um, which book do we do? We did antifragile, right? We did antifragile a little bit ago yet. Yeah. So I’m going to so good. God. I know if you guys haven’t read it. Uh, at least check out the sophisticated investor notes.

Yeah. Um, it’s like the, uh, layman’s version of Naim, because if you haven’t heard us talk about ’em before he likes to not simplify things at all. So if you want the simplified version, check it out, but I’m gonna, I didn’t get those notes by the way. Oh, uh, I think right now, people still to email

[00:03:42] Anthony: you, right?

Yeah. Is there, what get the old fashioned Neanderthal way? You gotta email me if you want those sophisticated investor notes, which do, because they’re awesome. Shoot me an email. Anthony Invictus, multifamily dot. .

[00:03:53] Dan: Um, but yeah, so I’m gonna lean into our buddy Naim here. Uh, uncle N maybe [00:04:00] I don’t want, I

[00:04:00] Anthony: don’t want to be blood related to, I love Naim.

I think he’s great, but I, I don’t want to be forced into family events with him. He’s

[00:04:06] Dan: probably not pleasant at Thanksgiving dinner. Can we call him like, he’s probably kind of a

[00:04:10] Anthony: buzz call. Strange. uncle.

[00:04:13] Dan: Yes. He’s the uncle that usually drinks too much and gets way too political way too fast.

[00:04:18] Anthony: Yes. Um, that’s definitely him.

just keep that man away from the eggnog at Christmas. That’s what I’m

[00:04:24] Dan: saying. I’m saying. Yeah. Uh, you can tell, he’ll get passionate about things and talk your ear off, but anyways, he, he does. Make some good points in his book. And one of which is the barbell strategy, which is like the complete opposite of just buying index funds.

Like, yeah, that sounds really easy. But, uh, per Naim tole, the barbell strategy, uh, is a better option. Not saying that it is, but per a seam, I wanna put this on everyone’s radar again, because it’s a really interesting take. It kind of flies in the face of the whole index fund investing thing. Yes. It’s incredibly simple.

You can be autopilot just in the market and not having to think about much, but at the same time, you’re almost guaranteed just [00:05:00] average results. So if you’re trying to get extra ordinary results, something that’s more than average or better, hopefully you can look into sea club’s barbell strategy, which is effectively putting 90% of your assets into something that’s like super safe and probably not gonna do anything amazing.

And then taking 10% and putting it in something. That’s quote, unquote, higher risk or more speculative. So it’s up to you decide what that is. Maybe that’s your Bitcoin play and the other 90%, isn’t something ridiculously safe, but it’s something to consider. Um, index funds are like the flavor of the decade, probably the last couple decades that, uh, the retail kind of home investor who doesn’t want to, you know, get a degree in finance, uh, will utilize to get exposure to the.

Uh, there is another way if you wanna deviate from the norm and try to get some extraordinary results without, um, you know, doing anything too complex, um, barbell strategy, 90% of your assets is something super safe, probably gonna underperform everybody with that piece. And then that 10% goes into something that’s gonna do extraordinarily well in those, uh, [00:06:00] Black Swan outlier events.

Mm-hmm

[00:06:03] Anthony: the thing with the barbell strategy is it’s all about capped, downside with unlimited upside mm-hmm . Whereas the 90% of your assets then are in things that have a capped upside, but also. Almost zero downside. Right. And, um, and, and I think that’s the interesting bit is generally when people think about their investment strategy, they, they think that they have unlimited upside, but in reality, it’s like you, you don’t, you’re, you’re inside of something that only has so much upside.

And you think your downside is capped, but in reality, it’s actually much wider on the risk side than you realize, and much smaller on the pro side than you realize. And that’s where index funds really come in is like, they really don’t have wild upside and you might think they have capped downside, but in reality, they do not.

They do not have cap downside. They, I mean, they do in the sense that you could lose everything. That’s your cap by guess, but yeah, zero, you can, you can legitimately go to zero on that. So, but [00:07:00] I do think it’s interesting. I cuz uncle Warren, he talks about in, uh, index funds and I do think it’s the right investment vehicle for most people, if you want average results and most people just.

Want average results. And they’re okay with that. If you’re listening to this podcast, the chances are, you’re not average. When it comes to investing, you’re listening to an investing podcast. You want to do better than average. So put some, put some genuine thought into like, what’s your barbell strategy.

Go pick up anti-fragile by NAEB or at least get the investor notes that you can. Brush up on the concepts.

[00:07:30] Dan: And to clarify that 10% nowhere does it say that that has to be 10% all in one thing it’s 10% in risky stuff. So still diversify a little bit in there, in my opinion, have several quote, unquote risky things in that 10% bucket, any who?

[00:07:45] Anthony: And here’s the other thing too, is if you, if you are an index funder, That’s okay. Let’s do me a favor though. Take a portion of your investible funds, whatever that is, depending on where you are in your journey. And again, this is not investing advice, so don’t actually do what I say, but, um, just listen [00:08:00] to me.

Um, take a portion, maybe 1%, 2%, whatever percent, whatever you feel comfortable losing, say, uh, if you’re worth a million dollars, maybe you just go and take $10,000 and you’re like, I’m okay if I lose. and go put it into something, speculative, something that has a crazy upside. Maybe go ahead, angel, invest in something like take that risk and you know, swing for the moon and do that every now and then, um, to rate that you’re comfortable losing, I assume it goes to zero because if you’re not in the game and you don’t have any chance to win.

I mean, my dad is a very smart man. My dad buys lottery tickets and I’m like, dad, why do you buy lottery tickets? He goes, well, if you don’t play, you can’t win. And I was like, alright, good enough. .

Has

[00:08:39] Anthony: he ever won I mean, um, it is really funny for like, uh, family events, birthdays and things like that. My parents will give us kids a stack of lottery tickets.

They’ll go buy ’em and like give us the games. Right. Um, and then we’ll play the games. And the, the last stack that I was given, um, uh, it was like $20 worth of tickets made [00:09:00] 30 bucks. But you didn’t buy him. I didn’t buy him all profit returns, baby. Oh yeah. Crazy. Yeah. So anyway, let’s talk about, let’s talk about the subject of today’s topic, which if the, if I remember, if, if I’m remembering the future correctly, the title of this episode is something to the effect that Minneapolis is outgrowing Austin.

What question mark. And this is not just click BA. Yes, it is. Yes, it is. So if you’ve been listening this long, uh, many, many apologies that you’ve come along for the, the ride you’ve been duped. However I do wanna make this is gonna be an interesting episode because Austin is one of the fastest growing cities in the us.

And for a lot of reasons, people love investing down there. Whenever I talk to a new passive investor. Austin is always on the, uh, tip of their tongue, whether that’s they want to invest in, in Austin, or they’re just like, I don’t want to invest in Austin cuz that’s where everybody’s going. It has hyper growth and I’m, I’m scared by that.

There’s always two sides to the story here. However, I got thinking about this a couple days ago, I [00:10:00] saw something on the social medias and and somebody said, um, something to the effect that every day 150 people move into Austin. Every single. and they said that as though that was just incredible feat. And I was, and I stopped and I was like, wait, is that impressive?

Because that’s a, I mean, when we start like extrapolating numbers, like how many people do you think live in Austin? Total numbers?

[00:10:24] Dan: I mean, I, I have no idea. Um, trying to think of what Minneapolis that’s like half, half a million Minneapolis.

[00:10:31] Anthony: So think of the Minneapolis twin cities, they, they tended to read it as Minneapolis St.

Paul Bloomington first string suburbs. Oh. So that whole metropolitan. oh, geez. Uh, and for context, what are we? This is crazy. Minneapolis is like the, I think it’s the ninth or 13th. Largest MSA. Yeah.

[00:10:49] Dan: I mean, we’re kind of changed. We got two cities a long time, but they’re, but they’re kind of like, yeah. I mean, it is one yeah.

Metropolitan

[00:10:55] Anthony: area, but compared to San Jose, San Jose sprawls, way more than, than the F cities. But so just for [00:11:00] context, the twin cities,

[00:11:01] Dan: I’m gonna say in Austin, I’m gonna say, and this is the whole MSA first ring suburbs around Austin.

[00:11:09] Anthony: 3 million. Okay, good. Good. Guess that was a really good guess. So, and, and the reason I’m I’m as having you guess is cuz like I don’t have a context for numbers. So if somebody was like, how many people live in Chicago, I’d be like, ah, a lot I’d struggle. I’d struggle for context. Um, You’re pretty close there.

So Minneapolis, uh, in twin cities has 2.9 million and Austin has 2.1. Haha. And you’re face Austin. So we’re bigger. We’re bigger than Austin. Now the reason I mention that is cuz like when somebody says 150 new people are moving in a day, it doesn’t really have context. It doesn’t really mean anything to me.

Right. Like I agree. Like what’s that really is that good? I actually hope give points. What’s that?

[00:11:46] Dan: Give it to me in points? Like what, by what percentage is the population increasing daily? That would mean something. There you go.

[00:11:52] Anthony: Or weekly or monthly. Now I can tell you what it is yearly. And so I went and pulled a bunch of numbers, um, to kind of compare the Austin growth with the twin cities growth.[00:12:00]

And I wanted to point out a couple things that I find really, really compelling. Love it. Okay. I love data. So, so number one is. That the Austin’s growth for the last year was 2.7, 9%.

[00:12:14] Dan: Okay. You mean that’s

[00:12:17] Anthony: good. Overly impressive, exactly. For context. The twin cities over the last 30 years has averaged growth around 1.4%.

So over the, over the last year, it is cold. Uh, yeah. So over the last year, Austin has had double the twin cities, historic growth rate. That’s actually kind of surprising when you think about how many people talk about Austin and how it’s this crazy thing. When in reality, their growth has only doubled our historic average.

That’s kind of

[00:12:47] Dan: interesting. So that was it 2.97 2.79 2.79 was their average over the last 30 years

[00:12:55] Anthony: last year, last year, or last year, I’m only pulling the last year cuz that’s kind of cherry pick [00:13:00] data. One like our number was the average from the last 30 years. Exactly. Okay. And that kind of interesting.

Yeah. So like we see explosive growth in Austin it’s and it is crazy. It’s crazy growth. Um, but it’s, it’s interesting. What was their

[00:13:11] Dan: historic growth? Did you get that? I didn’t,

[00:13:12] Anthony: I didn’t go that deep. Okay. Yeah, but that works out too. In the last year, 166 families are moving into, or 166. People are moving into Austin, every single, um, dang, which is it’s interesting as a context.

Okay. So now the twin cities in the last year, we actually have had a very rough. Um, I think the civil unrest of a couple years ago, COVID I think some things have helped hit our growth pretty hard. So our growth over the last year was only 0.7%, which is actually, we’ve had a number of periods over the last 30 years or so where we hit like 0.7 0.8.

So that’s actually not super uncommon, um, which equates to 58 people per day. So. That’s 166 versus 58 people. So in those numbers, Austin has about three times as [00:14:00] many people moving in per day than the twin cities.

[00:14:04] Dan: It’s interesting. I wanna say that the people moving here might be cooler, so maybe it’s like only 58 people, but they’re like really

[00:14:09] Anthony: cool for at least six months of the year.

They are. Yeah.

[00:14:12] Dan: Maybe that’s why. Cause it’s colder. oh geez. Dad jokes. I’m sure that’s got something to do with it, right? I mean, well, when you’re in Austin, right, you can move all year round. But in our area, you’re probably not moving in December. So we probably only have like six months where there’s people migrating here of the year.

That’s I

[00:14:31] Anthony: that’s a good question. I don’t know. Shoot from the hip. Yeah. Seasonal, um, moving patterns. That’s a good question actually, but, um, okay. So all that’s to say is Austin’s way outgrowing Minneapolis. There’s no way of, uh, I’m not, I’m not gonna pretend like that’s not the case. I’m what, what I find just interesting though, is that this fastest growing city, or one of the fastest growing markets in this, in the country, , it’s not that in a, in a macro sense.

It’s not that much faster. Now. Here’s the interesting thing. Do you know the most [00:15:00] supply constrained city in the us? Minneapolis. Minneapolis? You just told me that.

[00:15:04] Dan: Yeah. Yeah. That’s why I know that I was surprised to hear that though. I mean, I, then, I mean then when I think about it, I’m not like super surprised given yeah.

Some recent news developments, but, um,

[00:15:16] Anthony: I guess still, so I have a couple of things here to point to there. What’s so. Uh, for people that don’t know, um, Minneapolis had this very, very progressive plan that they’ve been rolling out for the last five years, six years called the 2040 plan, which was all designed around increasing density in the twin cities and making it easier for residential properties to get rezoned is commercial.

So we could build multi-family and we could add ADUs and just build more densely within the city. And this plan took years in the making it got passed. It was good to go and it was one of the most progressive. Development friendly pro programs that the country, the country has ever seen, and people were largely viewing this as like a pretty big win.

I, I

[00:15:58] Dan: think this was the first place [00:16:00] in the us that rezoned single families, uh, that, that took a single family zoned region and, and changed that mm-hmm like at this level, I don’t think this had been done anywhere else. So, so it was

[00:16:14] Anthony: very, very progressive in that way. And then just a month ago or so, um, some, there was some lawsuit, um, where a judge found that the 2040 plan can’t be enacted until some, some environmental planning is, is done effectively.

All this is say this very big government pro program that was proposed in passed, and all this stuff got hung up in the court because some environmentalists sued the city saying, this is you haven’t studied the environmental impact of. Of all this, what this new construction will do. So all that’s to say is Minneapolis was trying to be very proactive in combating this, this, um, supply shortage issue, which Minneapolis is one of the most is the most supply constrained, um, market, at least in the Midwest, if not in the country.

I don’t know if I can say that one for certainty. I [00:17:00] do know in the Midwest for certain, and it’s, it’s what I was reading is that we, over the next four years will be 40,000. 40,000 units, short of filling demand. Just a lot of, a lot of units. So all this to say is that with the 2040 plan now kind of being put in limbo, it kind of exacerbates the issue mm-hmm no.

What does that mean in terms of like, okay, we have good growth. We have this real supply demand disequilibrium. What’s that really mean for us as investors in this market versus, you know, if we were somewhere else, like Austin prices are going.

[00:17:37] Dan: Supply and demand. It’s pretty basic. Um, if you only have so much of a thing and the demand of the thing is increasing because there’s.

Not enough now. And there’s, I mean, we’re not growing like Austin, but there’s still more people coming that demand’s gonna be increasing and that supply is not increasing. Um, that should mean that prices go up values, go up, uh, rents, go up. Um, so for, [00:18:00] uh, renters and homeowners here, that’s probably not a great thing.

Mm-hmm price. Point’s gonna go up, uh, reach equilibrium, but for investors and people who own property it’s, um, it should shake out pretty well. It is frustrating because even though we Don. We do want some kind of supply and demand imbalance that’s in our favors investors like that 2040 plan was great. I mean, it was mm-hmm it’s still, I don’t think it’s gonna be completely.

I think it’s still, I think come back. I think it’s being delayed, but yeah, it just, it doesn’t and, and the arguments made for it. Uh, really don’t make a whole lot of sense to be honest. So it was frustrating to see that it happen. Because this was going to create a lot of great housing resources, uh, in urban areas where we do need more supply.

And we can’t just have prices going up on an already, you know, uh, budget stricken population, right in the space.

[00:18:50] Anthony: This is the thing that really annoys me with, with about like affordable housing advocate, uh, advocation and what a lot of people say is like, oh, rent control needs to go into effect. Rent [00:19:00] is, is spiking.

So astronomically, it’s getting out of hand and it’s like, well, that’s because this supply demand issue. If we could solve the, uh, the supply issue by building more, then, you know, we can naturally alleviate this, the pricing imbalance, but then you get this nimbyism where it’s like, not in my neighborhood or not in my backyard.

People saying, oh, we don’t, and this is why other, other cities have never put into effect this residential rezoning is because people who live in those neighborhoods. Yeah. They’re all for affordable housing. just not in my backyard. Like you go ahead and do it in that other person’s neighborhood, right?

Yep. And that’s exactly, I think it that’s, that’s what I see happening here. Mm-hmm is it’s the, the NIS who are like, uh, no, we don’t want this growth. They, they wanna be able to posture and get on their platform and say things like rent control, landlords are evil, but then when it comes down to doing the things that would actually benefit the people who need affordable housing, Building more affordable housing and just having more supply in general, it gets nuked.

And it’s like, is this [00:20:00] disappointing?

[00:20:00] Dan: Yeah, I think a lot of people just think. The government’s just gonna solve things like, yeah, we don’t need to build anything more. Just let the government give people money to subsidize this, that or the other. And it’s like that. That’s not how the world works. Like you can’t just pull money outta the sky.

I mean, we’ve been doing it for a while, but you can’t keep doing that. Like if there is a supply demanded balance driving prices up, you’ve gotta create more of the thing to solve for that. You can’t just artificially try to control these kind of economic forces. It just doesn’t, it doesn’t.

[00:20:28] Anthony: Yeah, I think it’s the, the free, what, what the invisible hand, the free hand of the market, the visible, uh, from what is it?

John. Adam, not John Adams Johnson. What was that?

[00:20:37] Dan: I think it’s Kane’s right. Uh,

[00:20:39] Anthony: no, the invisible hand was first referenced in a gram. Um, No, no, not Graham. Um, Adam Smith, Adam Smith. Yeah. The wealth of nations. Yeah. That was the first time that the invisible hand was referenced. But as much as we make that invisible hand of the market actually visible and it’s tied to a government arm or a, a organization, the worst off it is for people.

Yeah, because that hand is [00:21:00] fallible. Whereas at least the invisible hand of the market is. The collective will the collective conscience and tends to be smarter than any one entity. So that kind of got a little bit philosophical and esoteric, but all this to say is like, when I think about the twin cities, it’s always surprising to me that when I’m talking and I, we talk to a lot of investors, both passive and other operators, nobody else is really coming into our market, which is great for us.

It’s our backyard. Don’t don’t stay here. Like you can’t compete with us. We it’s it’s home core advantage, baby . Um, but it is surprising to me that people are. when we start talking about all the reasons, the twin cities. It’s so awesome. Uh, and that’s not even talking about any of the economic underlying, you know, the, the fortune 500 companies, the medical system, the education system, the quality of life, any of that stuff.

Um, people are always surprised and it surprises me that they’re surprised. And I want them to stop surprising me with they’re surprised

[00:21:50] Dan: it’s too much surprising things, too. Surprise, too much. Surprise. Yeah, no, I get the same response too. I think a lot of people, a lot of people ask me what the heck is the twin.

If I ever start [00:22:00] saying that, oh my gosh. I’m like, okay, it’s Minneapolis St. Paul. So I just stopped St. Twin cities. I say Minneapolis St. Paul. Did

[00:22:04] Anthony: I tell you my, the story the last weekend when I was in Kansas city, somebody, I was, I was standing in a group of people and somebody said, Hey, where are you from?

And I stopped and looked up at the sky for a second to think. And then I answered and somebody stopped me and said, Hey, why did you have to think about that? . And I was like, well, I always say twin cities, but it was recently pointed out that like, most people don’t know what that means.

[00:22:26] Dan: And you’re in the witness protection program.

Also. Also, I, I. It’s uh, yeah. Uh, no, I think it’s, it is, it’s a frustrating issue. Mm-hmm 2040 plan, to be honest. I mean, this was such a, a boon for the economy. It was great for residents. It was great for people who didn’t wanna spend more to live here. It was, it was great for everybody, honestly, and, and this, this environmental argument actually doesn’t really even make sense.

It’s like, uh, I was reading a stat that, uh, most of the population or most of the, the pollution in question with. Um, I guess it was [00:23:00] lawsuit. Is that what was filed? Yeah. Uh, it’s typically like those sparsely, it’s usually from, uh, lack of infrastructure that we see this, uh, this type of pollution that they’re talking about.

And surprisingly enough, it’s like sparsely populated areas that have poor infrastructure that are more detrimental to the economy than really well developed. Densely populated areas that have the proper infrastructure. So they reference like, um, uh, Tokyo, for example, very densely populated, none of the issues that are being described here.

So even the arguments that are being raised are kind of nonsensical. And I guess what we’re doing now is we’re just waiting for a study to be performed.

[00:23:40] Anthony: I think that’s, that’s the part that really upsets me is that like, this is just generally poor use of government spending. The government is now being forced into like spending money on a study and doing an environmental remediation analysis on something where when you look at it from the front, you’re like, this is, [00:24:00] this is a pretty straw man argument.

This is a pretty, this is a pretty flimsy. Yeah. But we have to go through the motions now, like, that’s gonna take time. It’s gonna take money. It’s gonna take energy. It’s gonna cost the city a lot in terms of, uh, the opportunity cost like. We can’t start building things, can’t start changing, um, at the level that we want them to.

So it’s just, it’s annoying.

[00:24:18] Dan: Yeah. And luckily, you know, it’s not really gonna impact us negatively, uh, as far as Invictus, because we’re not really, we don’t play in those waters. We don’t. Uh, but there’s probably a lot of people that are gonna be caught kind of mid project here. And I don’t know how that.

what happens to them, but anybody who was really leaning into the

[00:24:35] Anthony: 2040 plan, and I feel bad for somebody, anybody who had bought land yes. In the last year or two with in preparation and that, because you always know these things take longer. Oh, it could be another year. It could be another two. Wouldn’t be sorry.

It’s like five years until this gets gets probably take till 2040. So it’s like development always carries a lot of risk. So if you went out and bought land with the idea that this was going to. Be coming down the pipeline, like I feel for you truly, that, that [00:25:00] sucks. Yeah. That’s why I like preexisting assets.

It’s there. You can see it. Cash flow from day one, just cash flow from day one. You just gotta get some bodies in there. And like, everything that we’re talking about is, is bad for the city in general, in terms of like solving the affordable housing issues. Um, very, very good from us from a business perspective.

Um, I

[00:25:19] Dan: still don’t like it, even though it theoretically should increase our asset values and will make money from this incompetence. It’s still frustrating to see. My city that I love doing things that are not in it’s best

[00:25:31] Anthony: interest shooting itself in the foot. Exactly. Stop shooting yourself. it’s like, it’s like, you didn’t have a brother, right?

You didn’t have any siblings that. And a sister. Did she ever, I still have a sister. Did she ever like, take your hands and like stop hitting yourself. Stop hitting yourself. No, no. The

[00:25:44] Dan: age gap was large enough where we didn’t have that. Okay. She was six years older than me. So by the time, yeah, she didn’t mess.

You

[00:25:50] Anthony: missed out on some really good times.

[00:25:51] Dan: Let me talk. I mean, maybe she did that to me and I just blacked. That’s

[00:25:55] Anthony: could Soman. It’s kind of traumatizing to be hitting yourself and not be able to stop. I

[00:25:59] Dan: [00:26:00] want this I’m sure I had some annoying, well, like Dick friends that did that to me, but I, my sister didn’t stop hitting yourself.

[00:26:06] Anthony: Stop hitting Minneapolis. Stop hitting yourself.

[00:26:09] Dan: It’s so annoying to hear. So

[00:26:11] Anthony: brings you back all this is to say we, uh, we click baed into listening to today’s episode. Sorry about that. Uh, hopefully forgive us. And maybe you got something valuable out of this. Uh, just another way of thinking about things, because on the one hand, uh, while Austin’s growth is three times that of the twin cities it’s rent growth is like bonkers.

What is it? It’s like 20, 25. It’s like in the 20 to 25% range. That’s aggressive. It’s very aggressive. So it’s like. Um, and, and is also very supply constrained, actually given all its growth and everything like that, but there’s also a ton of development happening there. Yeah. So there could become this point where suddenly there’s all this supply comes on on online.

If that growth doesn’t continue indefinitely. And, and here’s the thing, here’s something I find interesting. If you’ve ever lived in Texas in the summer, it’s [00:27:00] not that great. It’s pretty hot, right. It’s pretty damn hot. And so a lot of people who are moving there from California, Just know you, you left a pretty good thing.

And so , um, I’m not confident that a lot of the people who left California to go to Austin will ultimately stay in Austin. I’m just saying, yeah, I’ve

[00:27:15] Dan: never been, I can’t speak to it. Have you been to Austin in particular?

[00:27:18] Anthony: Not to Austin in particular. So I’m judging it without having ever seen it. But as you do, it’s not a book, so I can do that.

but I do. I do think, um, honestly, I don’t know any, I, I, I’ve been to Texas in the summer to Dallas, Fort worth San Antonio. Love all those cities. You couldn’t pay me. Uh, you couldn’t pay me to live there. Hmm, um, cuz of the heat, not, not only because of the heat, but also because Texas kind of from a natural perspective, my experience with it.

Forgive me Texans. We’re about to lose Texas. We’re about to lose Texas. Uh, oh shoot. Re is from Texas. Ah, crap. Oh,

[00:27:53] Dan: podcast is over. He shut down.

[00:27:55] Anthony: He’s over here running the control board and we’re we’re okay. That’s this is awkward. I was [00:28:00] gonna do it for us, everybody. We appreciate you taking some time. Don’t leave or review read.

Um, Okay. So let’s, let’s segue

[00:28:07] Dan: and who, but I don’t do you have a book

[00:28:08] Anthony: recommendation? So, so Reid, so Reid, I wish we had a mic for you right now. This would be, this would actually be a lot of fun. Um, is Austin beautiful? Naturally speaking? Uh, it’s cool. He says it’s cool. I don’t know about beautiful. It is.

He says I don’t about beautiful. It’s a lot of fun. It’s a lot of fun, but not, I don’t know about beautiful. Yeah. But you got like Austin city limits, Austin city limits Southwest. Okay. So by Southwest, he hasn’t named a single, um, natural resource of like on the weekend. Let’s go over here and go to this beautiful place to the mountains.

Come with the blue hole. Or do you have an ocean? Uh, do you have a mountain though? No, we do. So those are the things that California has so I’m just, I mean, we’re in Minnesota. We don’t have those things. Yeah. We, we got, what do I here? We got a couple lakes. Yeah, we got lakes. We got to great lake, which has lake pads.

We have more shoreline. We have more beachfront property [00:29:00] in Minnesota than all of California. Yeah.

[00:29:03] Dan: But it’s different

[00:29:04] Anthony: beachfront. I’m not gonna argue on that one. That’s . Yep. That’s you can’t really compare. Yeah. You can’t

[00:29:13] Dan: compare Cedar lake to. Blue.

[00:29:16] Anthony: I don’t think that’s and yet I am . All right. So, Hey guys, and gals, uh, for the book recommendation, we’re gonna do something slightly different instead of giving you a new book that we’ve, uh, that you maybe never heard about before.

Um, we’re gonna recommend that you go and listen to last week’s episode if you haven’t already. So if you didn’t know on Wednesdays, we release a deep dive book review episode. And through that, what we’re doing is we’re spending 30, 40 minutes talking about a book. That’s meant a lot to us. We got a ton of value out of it.

We’re trying to break it down to 10 salient points that you can walk away from pretty quickly, because books, they take a lot of time and energy to read. We don’t want you to feel like you’re missing out on some of these awesome classics, just cuz you don’t have the time. So if you, what we do, then we take those, we put them into what we call [00:30:00] sophisticated investor notes.

So if you want a copy of those, just shoot me an email. Anthony Invictus multifamily. I’ll send you a copy, a a. But today’s book that I’m gonna recommend that we did last week that we talked about in, in depth is Howard Marx is the most important thing. So Dan gimme the 32nd pitch of Howard Marx is the most important thing and why our listeners should go and listen to last week’s episode,

[00:30:23] Dan: uh, first off, um, it’s like, what does it take us like 30 minutes to an

[00:30:27] Anthony: episode?

Yeah. And in fairness, this book is actually pretty short. So you might have been able to read it faster than we debrief. That’s

[00:30:33] Dan: a technicality. So uh, yeah, we do. We do. We’re long-winded sometimes, but, uh, so Howard marks. Uh, you want me to give the, the synopsis on? Yeah, yeah. Gimme yeah. Yeah. All right. So Howard marks he’s up there with Warren buffet, Charlie Munger, some of the greatest investors of all time.

He’s kind of he’s at that caliber. And it was actually Warren buffet that, uh, convinced him to write this book and, uh, He, uh, Howard res ran, still runs a fund is [00:31:00] Oak tree capital, I believe. Yep. And, uh, he’s got these, these letters he sends to his investors, I wanna say on a monthly basis or something like that.

Memos memos, I’m sorry. No letters. Buffet does a letter. Yep. Marks you

[00:31:13] Anthony: could call it letter it’s

[00:31:14] Dan: he writes, writes things and sends it to people. Um, but yeah, there, there are these memos that are just. Economic commentary so on and so forth, really valuable stuff. And they’re free honestly. So go to his website, uh, Oak tree capital.

You can get these things for free does not charge for ’em and they’re,

[00:31:30] Anthony: they’re fantastic. And they’re cool because he writes ’em in real time. Yeah. And, and knowing what we know now about like 2001, what happened there and when 2007 happened, what time you can read what he’s saying in 2004 or 5, 6, 7, leading up to that.

And it. Prescient. It’s pretty cool. All you

[00:31:44] Dan: need to do is listen to him, cuz yeah. To Anthony’s point, this guy has had some very timely observations, um, specifically around, uh, the.com bubble and the, um, uh, great financial crisis. Oh eight. Like this guy knows what [00:32:00] to look at and pays attention to the right kinds of stuff.

But in any case, the, the book is it. Encouraged by. He was encouraged to write it by, by Warren buffet because he was seeing these memos that he was sending on. He’s like, this is gold. He wasn’t gonna write a book until he retired, but buffet got him to do it cuz he’s buffet. And this is effectively a collection of his investing philosophies and the format of the book.

The most important thing is, you know, basically every chapter is the Mo most important thing is X. And then the next chapter, the most important thing is Y and there’s all these most important things. And the reason he formatted like this is because he’d have these conversations with his clients. In meetings and he’d be talking to ’em about their investment philosophy and why they were doing this, that, and the other.

And he kept saying, this is the most important thing. That’s the most important thing. And all these different things were all equally important in their own. Right. And so that’s what he, um, used this format for the book. So it’s, it’s really fantastic. Um, talks a lot about risk. Um, Market cycles, market cycles.

So, you know, just really good fundamental stuff. [00:33:00] It’s really not a book on how to invest and how to make money, if anything, uh, heard to say in an interview that this should be a book that illustrates how difficult it is to effectively invest. Execute. So, uh, it’s really interesting. It’s honestly not that long, maybe like a hundred

[00:33:15] Anthony: pages and it’s easily consuming, um, consumed Howard marks is a good writer.

Oh yeah. He writes it simply. He doesn’t write over your head. I think a lot of times investing books, people talk about finance. It’s like they just, they get, they get off on trying to sound smart and obtuse. Yeah.

[00:33:30] Dan: I’m, I’m always impressed when somebody is intelligent enough to take something Coplex and.

Incredibly simple. That’s like the ultimate sign of somebody who really is smart and knows what they’re talking about. So it’s like the complete opposite and they seem to love a lot of overlap in philosophies. They’re both brilliant guys, but Marx is infinitely more, um, uh, consumable mm-hmm

[00:33:52] Anthony: so that’s the book.

Go check it out. Go listen to last week’s episode, if you want the notes, shoot me an email. Um, that again is the most important thing by Howard Howard marks. [00:34:00] That’s it, everybody. That’s all. That’s all we got for you. Um, again, apologies for clickbaiting you into this episode with, um, the,

[00:34:09] Dan: who do I feel like we have to apologize to a lot of people, we have to apologize to the state of

[00:34:12] Anthony: Texas.

We definitely offended some Texas and they don’t like to be tread on, so that, that one that they, and they have guns. So truly sincere. Apologies, really? Sorry, Texas. Um, sorry. And. That’s it. I think those are the only people I feel the need to apologize to is the ones with guns, our audience.

[00:34:32] Dan: Sorry. We

[00:34:33] Anthony: offended you.

If you guys did get offended by this episode, I I’m sure nobody did, but um, if you did, I do truly apologize. Um, hopefully you guys got something outta this. You enjoyed it. If you did do us a favor, go drop a review. Seriously. It helps us a lot. Um, And it’s, um, a way for us to gauge, you know, what is working, what you guys like, what you dislike, if there’s things that you like to see or not see, um, Hey, Hey, stop painting on Texas so much.

And when are you when you gonna kick Wyoming? Um, well, [00:35:00] we can do that. Just let us know, go to the reviews, drop, drop some comments. So that’s gonna do it for us guys. We’ll see you in the next

[00:35:05] Dan: episode.

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