For today’s episode, we’re going to dive into two things. Invictus Capital’s latest acquisition and we will be giving our thanks!
We’re going to discuss a property purchased earlier this week called Emerson Properties. Two buildings, twenty-three units, and then we’re going to do the quintessential cliché Thanksgiving episode where we list what three things each we’re thankful for.
We will talk about these things…and more in another episode of Multifamily Investing Made Simple in under 10 minutes.
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Tweetable Quotes:
“If you don’t see an immediate opportunity right away, sometimes it pays to dig a little bit deeper and look at something a few more times.” – Dan Kreuger
“The lesson, I think, is never write something off entirely and don’t burn bridges with sellers” – Anthony Vicino
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Our Latest Acquisition and Thanksgiving Special!
Anthony Vicino: [00:00:15] the Hello and welcome to multifamily investing made simple to the podcast, it’s all about taking the complexity out of real estate investing so that you can take action today. I’m your host. Anthony Vecino of Invictus Capital, joined as always by Dan Gobble. Gobble, Kruger Gobble, gobble.
Dan Krueger: [00:00:33] How are you doing, Dan? I’m good. Little post-Thanksgiving lull right now. I a little tired.
Anthony Vicino: [00:00:38] Mm-hmm. So this episode is going live on a Saturday, right after Thanksgiving. Today is Friday, right after Thanksgiving. And so we’re a little I a little stuffed, a little hazy, a little slow. But we’re going to try and bring the energy. We’re going to bring, some interesting insights. Well, maybe not interesting, but we’re going to bring something.
Dan Krueger: [00:00:59] Might not even be insightful.
Anthony Vicino: [00:01:00] I’m probably not going to be today on this under ten-minute episode. We’re going to dive into two things. We’re going to tackle two topics. One is we just closed on property earlier this week called Emerson Properties. Two buildings, twenty-three units. We’re going to talk about that because there is a cool, interesting story behind it that we want to share with you guys. And it was a deal that we never opened up publicly to our investors and didn’t broadcast wildly. So there’s not there’s no information out there and nobody knows anything about it. So that’s kind of interesting. And then we’re going to do the quintessential cliché Thanksgiving episode where we list what three things each we’re thankful for. Sure. Ok. I’m done. Now, is it. Ok, so let’s talk about Emerson, Dan, tell us.
Dan Krueger: [00:01:44] Sure. Sure. So yeah, twenty-three units, Minneapolis, and this one was interesting because it popped up on our radar how long it was that way earlier this year like really it was in
Anthony Vicino: [00:01:56] March or April.
Dan Krueger: [00:01:57] Maybe it’s pretty cold out and not the most recent cold, but the cold that came before the previous cold? Yes. So yeah, I think it came on our radar probably nine 10 months ago, almost, and it didn’t really work for us at the time for a couple of reasons. One we were looking at through the lens of Can we syndicate this deal and share it with all of our partners? And for a couple of reasons, it didn’t really work. One, because it was on the smaller side and the legal fees and all the costs associated with syndicating a deal would have been a little bit more dramatic. So a lot of those costs are kind of fixed and so on. The smaller deals, there are a larger proportion of the costs of the deal and so on a small deal, some of those costs will start to just kind of destroy the returns and to it just it wasn’t the most exciting thing at the time because it was in a great area. It’s been taken care of and there wasn’t a huge value-added component to it. But then things change. The second time came around looked at it through a different lens and made a lot more sense the second time around.
Anthony Vicino: [00:03:01] So the message here, the lesson, I think, is never write something off entirely and don’t burn bridges with sellers, oh, that we could do it episode. We had an interesting seller conversation recently of what not to do and not how to not
Dan Krueger: [00:03:14] Behave is very aggressive. I mean, we did well the
Anthony Vicino: [00:03:18] Well, I think so. He might disagree. But let’s maybe do a podcast episode on that because there’s a lot to unpack, but it’s fun on Emerson in particular. We like this one. It was. It’s there, interesting buildings, actually. They’re beautiful buildings and a really beautiful area, but sometimes it deals just don’t make sense for syndicating. And I think my message here for if you’re not if you’re an active investor and you’re listening to this is just recognizing that syndication is just another tool in the toolbox, another arrow in the quiver. Don’t define yourself as just a syndicator, and that’s the only way to get deals done with this one. You know, we had an investor who had some 10:31 money that they wanted to, you know, save. They didn’t want to pay the tax. So it was a pretty cool opportunity for us to do a take structure and save them some taxes. The thing I learned about the tic structure, though, is that and we’ve done a bunch of them, but this one, in particular, was a headache. So there they’re tricky, but that’s our newest deal. We got another one, mini. We can’t talk about that one. Never mind. Yeah, it that.
Dan Krueger: [00:04:22] So deals, we have to be kind of, you know, discreet about. Since we allow non-accredited investors, we have to keep them kind of hush-hush unless we get a pre-existing relationship. So if you want to start that relationship with us so that we can talk to you guys on a one-on-one basis about future deals, definitely reach out, reach out, get that ball rolling. Yeah. And if you’re
Anthony Vicino: [00:04:41] Interested, if you heard about Emerson and you got some ten-point thirty-one money and you’re like, I don’t know what to do with this, we might not be able to help you out, but we might be able to connect you with somebody who can sew
Dan Krueger: [00:04:47] Another thing on Emerson as well. I don’t even know if I’ve chatted with you about this yet, but it’s interesting because you don’t want to just brush things off quickly. At first, glance, if you don’t see an immediate opportunity right away, sometimes it pays to dig a little bit deeper and look at something a few more times. Because on this one, there’s actually an interesting dynamic. There’s a three-bedroom unit which you’ve walked through. It’s an awkward one. It’s weird. It’s weird. And one thing we could do there, which we haven’t built into the pro forma on the business model, but it’s definitely worth taking a look at is taking this kind of awkward large three-bedroom that because of the demographic in the area, would be a tough sell just because of who’s there. It’s a lot of one-bedroom, one-bedroom units in these properties. And so that means that you’ve got a lot of single residence in there, that kind of like like that dynamic. And so the ideal residence for this kind of three-bedroom unit would either be a college student with roommates, which in this area there’s not a ton of. And two would be families, which is a building of all one bedrooms and single people might not really fit the mold quite as well. So I think it might make a lot of sense. And this is a suggestion that actually came from the seller to take this awkward three-bedroom and turn it into a studio and one-bedroom, more rent per foot, better fit for the rest of the demographic in the building, and more rent per foot.
Anthony Vicino: [00:06:20] It’s never a bad thing.
Dan Krueger: [00:06:22] That’s the big thing.
Anthony Vicino: [00:06:23] Yeah, that’s it’s always about looking for the best and highest use of the property. And again, like when you said, don’t write things off, it’s interesting because a lot of times we’ll look at a property and then like seven, eight, nine months later, somebody will show it to us again. Like, I’ve already looked at that and I’m guilty of this where I’m just like, I’ve already looked at it. Don’t care to look at it again. But if we had taken that tact with this building, then we wouldn’t have it because the second time around, the dynamics had changed. Some things, some variables were different and now it looked good. So not that the deal itself had fundamentally changed all that much, but always we were looking to do with it changed.
Dan Krueger: [00:06:56] So yeah, it’s always been great buildings, great area. And we kind of looked at that initially on the front end. The first time we looked at is almost a negative like, no, no, no, we need something that we can go in and completely change. There’s not enough juice. Yeah, but yeah, anyway, it’s just a great little deal. Yeah.
Anthony Vicino: [00:07:12] So let’s do our Thanksgiving stick. Let’s do three things we’re grateful for. We’ll alternate. Yeah, the first one I’m going to say is my significant other Jamie. This has been a crazy year, with a lot of growth, and that means a lot of working hours. And she’s been very supportive and enabled me to focus as much as we do on what we do. So thank you, Jamie.
Dan Krueger: [00:07:38] Yeah, I got a double down on that. I was actually just telling Anthony to recognize, Think Jamie too? Yeah, Jamie, I can’t believe you put up with me seriously. No, but my significant other Liz has been very tolerant of. I mean, anybody who’s with an entrepreneur and a business owner, someone who’s self-employed knows that you’ve got to share that person with. This thing that they’re building and can be very time-consuming, and it was last night Thanksgiving, I came into the office from 7:00 until midnight and she was OK with that. Not many people would do that. Mm-hmm. How many people
Anthony Vicino: [00:08:13] Would do that wouldn’t put up with that on Thanksgiving to
Dan Krueger: [00:08:17] Miss Krueger for understanding and helping support the thing, even though that very often will take me away from her and the little one? Mm-hmm.
Anthony Vicino: [00:08:26] Yeah. Jamie put up with me yesterday, building our Invictus management website for our property management team. So on Thanksgiving said long things to do with that. Thank you, Jamie. Ok, number two on my list of things is Joe Gurney. I’m going to thank this guy. So Joe is a strategic partner that we have from DRG. He’s been instrumental in our growth this year and he’s taught us a lot of things. He’s also given us a lot of headaches. Joe, if you’re listening to this, we love you but just want you to know we appreciate you.
Dan Krueger: [00:08:54] Yeah, 100 percent. It’s very rare that you find partners that you can really continue to partner with over and over again. Most of the time, in most partnership situations, you do a deal or two, and you kind of realize that the dynamic is just there are too many differences, but he’s one of those few that we’ve been able to partner with quite a bit on. It’s been it’s been great. I’m going to have to say no. Two for me is a little one.
Anthony Vicino: [00:09:17] Cheers. I using your baby.
Dan Krueger: [00:09:21] How could I not be thinking of the child?
Anthony Vicino: [00:09:23] She’s about one now, almost a couple of
Dan Krueger: [00:09:25] Weeks coming up. Oh.
Anthony Vicino: [00:09:28] Ok, I guess nothing else needs to be said that would qualify that. All right. Well, fine, if you’re going to take that one, then I’m going to also cheat out. I’m thankful for you, Dan. Oh yes. And for this partnership and for the, you know, we’re almost at one hundred and fifty episodes of this podcast. And so I will also say thank you to all the listeners. We really appreciate you as well. So those are mine.
Dan Krueger: [00:09:48] Yes. Well, I got an I mean, I can’t follow that up with being thankful for you as well. Like I said before about the partnership thing, a little bit more of a big deal. What I said before about the partnership thing, it’s like really rare and specifically for me, like, I’m really picky about who I can be around. I get sick of people very quickly, and it’s very rare that I can find somebody that I really kind of work well with, communicate well with for long periods of time. And so the since we got together and start working together, the growth has just been exponential and it’s been amazing. And then one last little bonus, I’m thankful that I’m not. At a big mall holiday shopping today, so thankful
Anthony Vicino: [00:10:27] I’ve been getting hit with so many Black Friday sales in my emails, and I’m just so thankful none of them look interesting to me.
Dan Krueger: [00:10:34] Yeah, I mean, they’re not that it’s nothing special about anymore. If you look back in the day, Black Friday was something special. Now they’re just, I don’t know somebody.
Anthony Vicino: [00:10:43] Somebody has courses that I’ve been looking at recently, and they just sent me an email saying 70 percent off and I went and looked and I had written down the prices from before. They are now 70 percent off, but only because they raised the regular price. Hmm. So they were always like 30 percent discounted because you always got a discount. The thing I was like, that’s shady anyways. So that’s going to do it for us, guys. We appreciate you. Thank you. Thank you. Thank you for joining us this year and for listening to this episode. And if you get a chance, go leave a review. Tell us what you’re thankful for and we’ll see you next week.
