This week we are clearing our name!
Well… we weren’t actually accused of anything. But we did get a misinformed comment through one of our marketing campaigns. And that sparked this episode idea, what are slumlords and how to not become one.
All jokes aside, this is an important topic for us, and something we hold near and dear to our hearts. One of our core values is to Lead with Value.
Everything we do should be for the betterment of others without the expectation of anything in return. This applies to our residents just as much as our investors.
Your goal as a property owner or investor should be to better the community and provide a home.
So listen in to find out how to avoid being a slumlord… On another episode of Multifamily Investing Made Simple, in Under 10 Minutes.
“We try to add value, which is like lifting the tide and all the boats go up. So then the residents are getting more out of their living experience or getting a community they can call home, which is like the ultimate value.” – Anthony Vicino
“ I just want to be. I just want to be Larry David.” – Dan Krueger
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Anthony Vicino: [00:00:13] Hello and welcome to multifamily investing made simple, this is the podcast where we take the complexity out of real estate investing so that you can take action today. I’m your host, Anthony DNPR Vecino of Invictus Capital, joined by the one, the only R Dan in the field. Correspondent, Kruger. How are you doing, Dan?
Dan Krueger: [00:00:31] I think you’re almost a little too loud for NPR. We’ve got to bring this
Anthony Vicino: [00:00:35] Down a little bit more, a little bit breath here.
Dan Krueger: [00:00:36] Slower? All right. Lot slower.
Anthony Vicino: [00:00:37] Well, to all the listeners out there, I appreciate you taking a little bit of time out of your day to listen to the joint. So we were at a conference last weekend. This is very jarring, probably for people who have never listened to the podcast before.
Dan Krueger: [00:00:48] Everyone’s turning the volume way down right now because,
Anthony Vicino: [00:00:51] Yeah, they’re going out, they’re going down. And they’re also like, What do these guys do? I don’t want to listen to this anymore. But if you’re a tried and true life, then you guys probably, I think, appreciate our witty banter. At least you tolerate it.
Dan Krueger: [00:01:05] I think you’re still here.
Anthony Vicino: [00:01:06] Yeah, for some reason, I saw a review on iTunes the other day from one of you, dear listeners, that said that you enjoyed the witty banter. So we’re just trying to make it fun. We’re trying to make multifamily investing not so scary and overwhelming and trying to make it fun and accessible. So if you don’t like that, if you don’t like fun, you get on out of here talking about fun. Do you know what would be fun, Dan? Hmm. Let’s do a quick episode and address the gorilla. The gorilla in the corner, or is it an elephant? I can’t remember.
Dan Krueger: [00:01:35] Here’s the thing I think it’s an elephant.
Anthony Vicino: [00:01:37] We might have been called and I’m not saying that we have. I’m just saying we might have been called a slumlord or something somebody on social media. So we got to take this very seriously and near and dear to heart. He didn’t actually call us a slumlord, but I didn’t want to unpack this a little bit. So let me kind of give context, please. Ok, because you actually probably don’t know the guy I don’t. Yeah, very curious. Ok, so here’s what we do read who’s our marketing wizard? He goes, and he reaches out to people and like, we’re always trying to get book reviews because book reviews are important. So what we do is we send people, you know, Hey, if you would like a free copy of the book, we’ll send you in, you know, the digital copy and the audiobook, and you can listen to it. That’s a really good deal. And if you like it, leave a review. We’d love you to leave a review, right? It’s awesome. It’s really
Dan Krueger: [00:02:22] Simple. How much money are we losing on this one?
Anthony Vicino: [00:02:24] We are broke. We are out. We’re out of all the moneys. But in this offer goes to all of you that are listening to this. If you did not realize that you can get a free copy of the book. Email me at Anthony Invictus Multifamily. I’m going to send you the e-book in the audiobook for free. If you want the physical, you can get it. You just have to pay for shipping. That seems like a pretty fair deal, right?
Dan Krueger: [00:02:43] Yeah, I don’t agree with all these things because I’m trying to run a profit.
Anthony Vicino: [00:02:46] He’s trying to make money, and I’m just over here trying to give away books. All right, let’s do it. So so we tried to give away a book to Guy on Instagram, and the guy did not want the book because the book is called Passive Investing Made Simple. And he said something to the effect of passive investing is a myth. Anybody that believes that is a slumlord and those are the types of people that I buy like I buy the properties from them or something to that effect. So he took like the righteous.
Dan Krueger: [00:03:11] He was triggered by something he was triggered.
Anthony Vicino: [00:03:12] Well, and fairness, like there is a lot of conversation about passive income and passive investing on the interwebs, and a lot of it is absolute crap. Yeah. So I get it. But let’s just unpack this real quick. What are your initial thoughts to something like that?
Dan Krueger: [00:03:27] Well, first off, I think that his connection between passive investing and slumlord is I don’t get that. I don’t get it. I don’t get how a slumlord is associated with past.
Anthony Vicino: [00:03:37] I think I think his idea was people don’t have investors. Yeah, he wasn’t. I don’t think he was aware of the model of syndication, first of all. I think what he thought we were trying to say is that you go buy buildings, you don’t have to do anything and they’re just going to generate cash. So you don’t have to do any course or workshop.
Dan Krueger: [00:03:50] Like we’ll teach you how to do this, no
Anthony Vicino: [00:03:52] Work, no money, and you don’t have to do any work with the residents or anything. And like, if you guys have been listening to us more than this episode, you know that we take resident care very seriously and like that this is not something that we think is easy or there’s not work involved. So passive investing through this model of syndication is new to some people, especially somebody who’s in the industry. He’s buying stuff. So yeah, I can get it. I get it. But the thing that like initially that I took away from this is that it’s very easy to pooh pooh things that we’re not familiar with when we’re an expert. So it’s like that Alex Cuomo’s quote, I think that’s actually quoting somebody else, which is, Oh, this was actually Orson Scott card quote, which is we question all of our beliefs except for the ones that we truly believe and those we never think to question at all. It’s just for me as an expert in real estate or investing in general, like the question I ask myself is, OK, what are those things that I hold so clear or dear to my chest that I don’t even think to question when it comes to investing? Mm hmm.
Dan Krueger: [00:04:53] Yeah, that’s interesting. I think I mean, the slumlord thing is is is an interesting topic because it’s it’s very easy. And I think it’s honestly common for landlords and property owners to be perceived as these wealthy, greedy individuals that want to just extract money and resources from those poor renters who just can’t, who don’t know any better. So there’s this perception that the property owner, some sort of rich, greedy person who’s just trying to get rich, right? So that’s kind of a common theme that we run up against is real estate investors, especially this day and age and depending on the political environment that you operate in. This may be more exaggerated or less, typically in more tenant-friendly states, there’s probably going to be a little bit more animosity towards landlords. But at the end of the day, there’s a big difference between being a slumlord and doing what we do. So I think would probably be beneficial for people if we define, OK, what is a slumlord, actually? And you’ll see that there’s actually a very stark difference between a slumlord once we define it and what we’re actually doing.
Anthony Vicino: [00:05:56] Yeah, I think a lord, the way I think about it and you might disagree is somebody that goes in, buys a building and they have no intention on actually making it better. Not actually they don’t add value, they just take the thing and they just try to squeeze all the juice out of it. And they’re like, I’m going to get all that juice out of these poor renters, and I’m not going to make the property better. I’m just going to jack up prices to the level of price gouging, which we’ve done an episode on. What’s the difference between price gouging versus like acceptable rent increases? And I think it’s somebody just trying to take rather than give. Leading with value and as a result, then also getting it’s like the rising tide lifts all boats, that’s the way I look at what we do. We try to add value, which is like lifting the tide and all the boats go up. So then the tenants are getting there or residents are getting more out of their living experience or getting a community they can call home, which is like the ultimate value.
Dan Krueger: [00:06:50] Yeah, yeah. It’s not just an apartment that someone’s letting you use for x dollars a month. It’s a place where they raise a family. So I think it’s for me, the slumlord thing can be kind of defined by, you know, basically two kinds of possible attributes you could have both or one or the other, but it’s either excessive price gouging like Anthony mentioned and or complete lack of disregard for the well-being of the residents and the quality of the building. Like so you might be a slumlord where you don’t really jack rent some people, but you do absolutely nothing to provide a quality, safe living experience for your residents where you just don’t fix things. There are leaks forever. There’s mold like that’s kind of the first thing I picture when I hear slumlord is just a really rundown. Not at all maintained property. And we definitely don’t chuck check that box. No, we don’t check that one. Even if you’re not, you know, letting the place run to the ground, maybe you’re just jacking the rent up excessively, you know, 10, 15, 20 percent on an existing resident when you haven’t provided any value to them. Right. So it’s either one of those or both of them. I think that’s in my mind, actually.
Anthony Vicino: [00:07:55] Which one do you think is more prevalent? I have my
Dan Krueger: [00:07:57] Theory. I want to say the latter. Price gouging is more prevalent.
Anthony Vicino: [00:08:01] Oh, really? Yeah, I forgot what ladder means. Ok, I
Dan Krueger: [00:08:03] Disagree. I might have said that one first. I don’t even remember what happened ten seconds. But, but I would guess that the price gouging honestly was is probably more prevalent because that’s kind of sneaky where it’s like, not necessarily. It’s not a clearly defined line where it’s slumlord behavior, right? So it’s kind of a slippery slope. Maybe someone’s bumping rents five percent when they come in all seven the next year or 10, they just get a little bit more aggressive until the point pricing eases in there, where I think the complete lack of care for the property, I think, probably resolves itself fairly quickly and
Anthony Vicino: [00:08:32] People will buy this. I think I disagree.
Dan Krueger: [00:08:35] Might you’re not on this? No, we have no
Anthony Vicino: [00:08:37] Data, but this is just totally subjective, just from the gut. We have no idea. But I think I disagree because I think it’s really easy to what ends up happening. The longer you hold a property, you can really easily become entitled and start to think like, that’s not my problem. That’s the resident’s fault the resident did that. They should fix it. It’s their responsibility. And sometimes when things aren’t clearly laid out in the lease, that’s when you really start getting these issues of like, Hey, this is your job. No, it’s your job and you get back and forth. And I think the longer you stay in the game, the easier it becomes to become disenchanted with residents and be like, It’s your problem. You fix it.
Dan Krueger: [00:09:11] Yeah, yeah. And I think naturally, people tend to transition to more of a curmudgeon as they get older anyway.
Anthony Vicino: [00:09:18] I am already there, so good luck
Dan Krueger: [00:09:20] Getting, but not in business, just general. I just want to be. I just want to be Larry David.
Anthony Vicino: [00:09:25] That’s funny. I didn’t even know who that is. What I just offended you. I apologize. I did not know. No, actually, I’m very, very like on the outside, if I might, as far outside of the sphere, like, I’m like peeking in, I can kind of see who that person is the world, the sphere of the world, I guess, or like popular culture.
Dan Krueger: [00:09:51] I mean, Seinfeld, who’s that kind of big deal? I don’t know,
Anthony Vicino: [00:09:54] Like 30 years and it was anyway.
Dan Krueger: [00:09:56] Curb Your Enthusiasm is on right now. This there is. Check it out.
Anthony Vicino: [00:10:00] All right, guys. You guys, you all can see that we’ve clearly run out of content here to add value to your day. We’re at the point where we’re just evolving. I think it’s good. Hopefully, you got something out of this. I don’t know. Dear listener, what it was. If you got something, please go to leave a review and let us know. Like, Hey, that thing about the thing that was a thing. Bottom line. Appreciate slumlords. Well, some people might disagree. It’s one guy. It’s one guy. So one guy is off the internet. So take that for what you will. So hopefully it’s probably good. Leave a review. Share it with somebody that you think was. Get some value out of it. Share with somebody you think is a slumlord. Yeah, we’re calling you out. Hopefully, hopefully you don’t know too many of those people and we’ll see you in the next episode piece.