by | 28, Jun 2022

Why Was Closing This Deal SO Complicated?!

We have some exciting news! We just closed on another property! Dan and Anthony recorded this episode last week, a few days before we officially closed on this deal. And now that we’re allowed to talk about it… WHY WAS IT SO COMPLICATED?!

Dan and Anthony break down the difference between a Joint Venture (JV) and Tennant In Common (TIC), and how these 2 structures compare. While TIC structured deals are not new to us, there’s typically only one 1031 exchange partner… what happens when there are two?

Find out on this week’s episode of Multifamily Investing Made Simple.

Tweetable Quotes:

“I think generally you can tell when a partnership’s not gonna work out, whether that’s with the bank or just another general partner, when they’re not really trying to problem solve and find the solution.” – Anthony Vicino

“Yes, the bank’s a big partner in there, but what you really need is a good attorney on your end to make sure that your butt’s covered.” – Dan Krueger

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The Five Rules of Investing

** Transcripts

Why Was Closing This Deal SO Complicated?

[00:00:00] Dan: Hey, what’s up guys.

[00:00:13] Anthony: 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 some action and do it hopefully, maybe even today. So, uh I’m your host, Anthony Vino. I’ve Invictus capital joined today by. So many balls in the air Kruger,

[00:00:31] Dan: lot of balls in the air, that was the most casual intro.

I think we’ve ever done. I’m trying to bring it down. I’m trying to like trying something new. Maybe start today if you want, or tomorrow I wanna be

[00:00:38] Anthony: like, like a, like a Joe RO getting kind of like, Hey, what’s up guys? Like, uh, here we go. Uh, listen, if you want and hopefully helps some bring some value, whatever.

Yeah. I’m gonna smoke it here.

[00:00:48] Dan: Talking to the president of the United States. No big deal hanging out. Yeah. Yeah. Hey,

[00:00:53] Anthony: did you want some whiskey? Cause I got some

[00:00:54] Dan: that’s the ticket. I think he’s got whiskey and cigars. That’s why. It ultra

[00:00:58] Anthony: chill. It’s super chill. Yeah. [00:01:00] You, yeah, you can feel, I can feel my blood pressure just dropping the moment you step through that door.

Depends on who’s on, but no, no, no, no. I, I mean, if I was like on Joe Rogan, I think the moment you step into his studio, you just kind of feel, it’s probably like the smell of Petly and like incense and, and, and weed. And you’re just like,

[00:01:20] Dan: oh, he, I think he sticks you in a, a deprivation before you even go on the show to ensure that you.

[00:01:26] Anthony: As maximally relaxed or maximally freaked out. Yeah, one of the two. Okay.

[00:01:31] Dan: they both make for good episodes. So,

[00:01:33] Anthony: so Dan, what are we doing? So I don’t know what we’re doing. Today’s actually an interesting episode because, um, we’re recording this in the past. Um, when you, whenever you’re listening to this by implication, you are in the future because we’re not live.

So just we’re sit on that for a minute. Chew on this. Yeah. We’re.

[00:01:50] Dan: this

[00:01:50] Anthony: is time trial. We’re, we’re gone. The Anthony and Dan that you’re listening to right now, we no longer exist. That’s deep. We, uh, we are projecting tomorrow in our time, [00:02:00] um, tomorrow closing a property and there’s actually nothing precluding us from even talking about this property.

It’s not a syndication or anything like that, but, um, just for not wanting to jinx it, I think generally it’s, it’s good practice to not talk about things before they are officially closed and buttoned up. But I think we’re close. maybe there’s still a couple of balls in the air maybe. And I think this will be a good, a good story for any aspiring investors, but then also just, uh, any, any operators out there you’ll you guys.

Um, hopefully commiserate and be like, yeah. Yeah. Things always kind of happened at the

[00:02:34] Dan: last minute. Yeah. And it sets us up nicely for a second. Uh, addition, if we don’t close the, if, talk about

[00:02:41] Anthony: why. Yeah. Well, it’s, we’ll do a take back episode. It’s like take back. kinda like our initial

[00:02:46] Dan: brand launch. Yeah.

This

[00:02:47] Anthony: is very toss capital. Um, coming back from the dead, this zombie brand that just won’t die. But, uh, we

[00:02:53] Dan: can’t say that actually we will get another cease desist. Yeah. So,

[00:02:56] Anthony: but this is gonna be a cool episode. We’ll talk about this deal that we’re about to close tomorrow. [00:03:00] Um, presumably you’re listening to this in the future, so we’ll technically already closed it.

That’s really cool. If not, then we’ll come back on and tell you the story about Hudson close. And, uh,

[00:03:08] Dan: it’s actually pretty interesting either tomorrow or the day after. It’s very

[00:03:11] Anthony: soon. That’s very soon. So, but before we do that, let’s just, let’s do that bit, that we do the part that people like. Um, yeah.

Talk about some bad investing advice. What do you think? Sounds good.

[00:03:21] Dan: Okay. Sounds good. What you got so. You’ll hear frequently. Ooh, here we go. Close up, close up. You’ll hear frequently in the real estate circles that your most important partner and your biggest partner is the bank. That sounds pretty good because they’re usually bringing a bulk of the capital in our case will usually get a 75% loan when we get a property.

So they’re bringing 75% of the capital. They’re pretty big partner. Uh, but I think one of the more important partners to have on your court is actually. Legal counsel, um, this deal that we’re gonna talk about today, actually, uh, at first glance, um, when we were getting things worked put together with the bank, seemed like we would have to go [00:04:00] back and jump through several hoops, uh, to satisfy all the parties involved and thanks, uh, in large part to the council on, on the bank side, in this case, Um, they came up with a really nice solution for us to make one well simple modification to our operating agreement and that, uh, saved us all, you know, probably multiple days of, of redrafting loan docs and, and all that stuff.

So, um, the point of this is to say that, yes, the bank’s a big partner in there, but what you really need is a good attorney on your end to make sure, uh, your butt’s covered. You’re not exposed to any excessive risk and that, um, somebody’s not trying to strong arm you into a position that you’re not comfortable with.

Like I mentioned in most situations that might be the bank trying to get more guarantees or more, um, more guarantees basically, uh, trying to push more liability under your side of the plate, but having a good lawyer in your court, uh, is a good way to make sure that things stay balanced and that you’re not exposed to much risk.

So this is kind of a real estate specific one, I think, but probably applicable to most, [00:05:00] most self-employed entrepreneurs out there have a good lawyer and good CPA for that matter.

[00:05:06] Anthony: So. It’s ironic. Don’t you think that in this particular example, um, and I agree that good legal counsel is like super invaluable.

They’re gonna save you more money than they cost you in the long run and probably in the short run too. Um, but the what’s really interesting is that the initial stance of like the bank being your most important partner, actually the, the lawyer, I believe that found the solution was. The bank’s lawyer mm-hmm so he wants to get a done too in, in a weird way.

And this goes back to like, when you have a good relationship with the bank and the bank being a good partner and wants to get the deal done, you know, they, they can they’ll work with you to try and find a solution. I think generally you can tell when a partnership’s not good, not gonna work out, whether that’s with the bank or just, you know, another general partner is when, um, they’re not really trying to problem solve and find the solution.

Mm-hmm , they’re just telling you why it’s not gonna. And then [00:06:00] saying, you know, balls in your cart. Good luck. Yeah. Like that’s not, that’s not fun to be current. That’s not productive. Yeah. It’s not gonna, it’s not gonna go very far. So, uh, avoid those relationships. Yeah. People find yourself a good

[00:06:10] Dan: lawyer.

Yeah. I mean, it kind of comes back to, you know, something, we talk about a lot involve, Racon play long term games with long term people, you know, play with people that have long term game in mind. And you should be finding yourself at a table with people who are interested in finding solutions, not trying to throw up walls and barriers.

We like to do that, we make sure that everybody that we transact with is on that same page. So luckily we haven’t had any real snafus with partners. We’ve had some, you know, some misalignment in the past, but never anything that’s, that’s really blown anything up

[00:06:43] Anthony: where where’s snafu fall in relation to misalignment, like, and scale in the spectrum of like full on shenanigans.

Or like, uh, malarkey, like where would you say snafu ranks? So I’d

[00:06:55] Dan: say snafu is, is, uh, a little bit better than [00:07:00] misalignment. Okay. Okay. Because if snafu could just be, what about ordeal ordeal? That’s that’s probably beyond misalignment. I think. I don’t

[00:07:08] Anthony: know. Do you think that’s like even beyond shenanigan?

[00:07:11] Dan: shenanigans are just, I think that’s a laughable ordeal. , it’s, it’s a, it’s an ordeal that’s beyond solving, but it’s actually kind

[00:07:18] Anthony: of funny. Okay. So nobody’s, nobody’s hurting that equation. Just kind of giggling and like, ah, what can you do? Yeah, I think attacked by Leco.

[00:07:25] Dan: Didn’t see that one coming, just making this up.

so no real logic behind this just sounds good in the morning. All right.

[00:07:31] Anthony: All right. Well, let’s, let’s, uh, let’s segue then into the, the topic of today’s episode, which is just kind of doing a little, not even a deal deep dive, I would say just a deal light dive, shallow dive. Yeah. And, uh, it’s, it’s interesting when, um, When we describe what we do a lot of times, we’re, you know, we’re multifamily operators, we buy properties, we invest in them and we work a lot with retail investors.

And you could just say we’re syndicators, but that’s kind of selling it short in, in my [00:08:00] estimation because actually the majority of deals, maybe not the majority, but like 50% of the deals that we did last year. So half were not syndications. And this year we’re gonna do, let’s see there’s many. Haha.

There’s four JVs. And there’s one, one fund. We wanna talk about the fund, but the four don’t tell anybody. Um, okay. We’ll talk about the JVs. So we actually do a lot of JVs mm-hmm which joint ventures, if you don’t know what that is, and we tend to do them in kind of a. Listen, joint ventures are great. They can be awesome.

They’re very simple. Especially if you find like a good alignment of interest with your, with your investor, um, group that wants to go into a property. It’s awesome. You can move so quickly. Mm-hmm however, you can also really convolute the whole. Whole world of a joint venture and create what we do which is called a tick or tenant in common.

So let’s just kind of like lay out, like why do we do joint ventures? What is a tick? Why do we do ’em? Why are they [00:09:00] interesting? They’re again, let me just jump to the, the end. It. They’re a pain in the butt.

[00:09:06] Dan: yeah. Yeah. So, I mean, to answer your question, the reason we do joint ventures is because they have the potential to be simpler and quicker and easier than doing a full syndication.

The legal costs are, are, are less. Um, and typically you’re gonna have less partners involved. And when you have less cooks in the kitchen, it’s usually makes for, for a simpler transac. With that said a lot of the joint ventures that we do are ad hoc, meaning they’re, you know, for the, for a specific purpose.

So somebody will come to us and say, Hey, Danny, Anthony, I’ve invested with you guys before. It’s been great. But I tell you I’ve got a property that I’m gonna sell and I’m on a 10 31 exchange into something else. Uh, but I don’t want to go out and buy something on my own and do all the stuff myself. Um, I love what you guys are doing.

Is it possible to take some 10 31 exchange capital and put it into a deal with you guys, cuz traditionally in a syndication that wouldn’t work for? You know, [00:10:00] a bunch of different reasons unless we get to a certain size where it’s, it’s not, um, uh, cost prohibitive to do so. And so someone will come to us and say, Hey, can you, you know, help me satisfy this, this, uh, this capital need that I’ve got here and we’ll go, we’ll find a property that traditionally is gonna be a little bit smaller than.

something that we would syndicate and it’s win-win we get to, uh, get something, you know, in house Invictus can, you know, take, uh, the ownership along with the single investor and less cooks in the kitchen usually ends up potentially being a little bit simpler. But with that said a joint venture, you, you kind of step away from that cookie cutter syndication format and open up could potentially open up a whole can of worms for other little levers that could be tweaked and things could be changed.

So it could be very simple, but it could also get infinitely complicated depending. How many, 10 31 partners and what everyone’s wants and desires.

[00:10:52] Anthony: The, the thing with, um, our investors who come to us with 10 31 money is a lot of cases. They, they buy like a single family home or a [00:11:00] duplex, or tripex many, many years ago.

And maybe they bought a couple of them because they didn’t know at that point, maybe they, they weren’t aware of syndications as like, uh, an investment vehicle. And once they get turned onto passive investing, they’re like, oh my God, this is really awesome. This is what I wanna do, like all the time, but now I still got these single families and these duplexes, I wanna do something with them, but so what they’ll do is I’ll sell ’em and they’re not usually, you know, you buy a duplex, let’s say, and maybe you have a couple hundred thousand dollars of equity in that.

That’s not gonna usually be enough to go out there and buy like a 30 unit 40 unit complex. That’s gonna be, you know, need millions of dollars of equity. So we tend to look for smaller things in the past. We’ve done, you know, like a six unit. I think we did a nine unit. We did, uh, what was Emerson? 20 units, 23, 23 units.

The deal that we’re, we’re just about to close tomorrow is, is an interesting one. It’s called pleasant view. Um, and it’s actually maybe the most complicated deal that we’ve. Technically.

[00:11:56] Dan: Yeah. Well, the difference with this one is we’ve always had one partner [00:12:00] and potentially other partners, uh, in there as well, but we’ve, we’ve always had 1 10 31 exchange partner.

And this time we have 2, 2,

[00:12:07] Anthony: 2 ticks. Yeah. So we had two separate investors with 10 31 needs, and we were able, so the interesting thing about a 10 31 is it’s like threading a needle while riding a horse. It’s very, very difficult. And so threading the like two needles. With two pieces of thread while like, like Jean Claude, van dam splitting between two horses running through a field, that’s kind of what, what this, this is, um, went to that little visual in your guys’ minds.

[00:12:34] Dan: So who’s Jean Claude van dam in listener. Is that us?

[00:12:36] Anthony: That’s us. Yeah, we’re doing the splits. That’s what it feels like. And, and threading needles. And for our investors, it’s really simple. Like honestly, on their end they did, they don’t have to do very much work at all. Um, but there’s a lot of things that go into the, into the.

Um, one big thing is, you know, our, our 10 31 intermediary guy, our, our pro he, um, he put this on our radar, which is the, the use [00:13:00] of partners. And co-owners, mm-hmm so this is like one fun, like fundamental thing that, you know, if you’re not aware of it can get you into some trouble, um, you wanna unpack the difference.

[00:13:11] Dan: Yeah. So I guess, you know, we found out going into this, that, uh, through. Uh, inter intermediary that we’ve been working with is very knowledgeable, comes from, uh, legal backgrounds and then got into being a 10 31 intermediary. Cause there’s a lot of guys in the, in the space who, you know, don’t really have a lot of prerequisite experience.

They can learn what they need to learn, but having somebody who was previously a real estate attorney, Specializing in these types of things going into the inter intermediary seat, uh, makes them especially valuable because they know all the things. Uh, but the biggest thing that we came to realize when we first started doing these was that, uh, we can’t have a partnership.

We were so used to structuring deals as partnerships that we kept trying to force the square peg into a round hole and make it a partnership. And we’re getting all this pushback and he simplified it and basically just said [00:14:00] a. Tick agreement with, you know, two co-owners here is specifically not a partnership that is kind of the whole point because for whatever the, for whatever reason, I’m not exactly sure why, but the IRS has decided that.

If you are active partners, you know, together, and you’re not, co-owners where in a tick, everything’s just basically sliced down the middle. Deed’s cut in half. Everything’s cut in half. Uh, if you don’t have that, then for whatever reason, that will disqualify your exchange. So you’ve. Gotta specifically not be partners.

Mm-hmm gotta be co-owners. So I don’t know why the IRS decided that was the thing. Yeah. I mean, it’s kind of like the 27 and a half year depreciation schedule. I it’s just, just kind of randomly pulled outta

[00:14:42] Anthony: the sky. Yeah. It’s just what they came up with. So, and we didn’t really explain the tenant common, but it, it is different.

Whereas a joint venture, let’s say Dan and I were not connected through Invictus. We decided we’re gonna go buy a building. We do it as a joint venture. Like we’re maybe 50, 50 partners in that deal. Right? Like we’re partners. We co-owned the entity that owns the. Cool simple, but in a [00:15:00] tick it’s a little bit different because, um, what, what makes a 10 31 so tricky is that it’s a light kind exchange and the name on the deed has to match the, the building that you’re you’re selling has to match on the building you’re buying.

Right. And that’s where this syndication gets a little tricky is because there’s, that’s, that’s not gonna happen. There’s gonna be, yeah. There’s gonna be some different names on that deed. Um, a bunch of people probably, um, So what ends up happening then in a tenant in common is we take this building, let’s say, it’s you, you and I, I have a 10 31 and you, you wanna live on the other side of it.

And so we’re gonna do a tenant in common. Really? What they, they do is like, they cut down the building in half and they’re like, okay, Dan, you own this half. And Anthony, you own this half the deed, you own this half the de out on this half of the deed, they don’t literally say like, you get that half of the building and I get this half.

But like, that’s how we think about it in that way. Like on my deed, my name does match on it so I can do the 10 31 into it. Dan can do whatever he wants with his. And what’s really cool too. Is this it conserves the ability to do a 10 31 out? So let’s say we get to the point where we wanna sell the building.

Like I can 10 31 into another building. I I’ve still [00:16:00] retained that. Or what’s also pretty cool is I don’t even have, you don’t even have to sell. I can just 10 31 to sell on my side. Mm-hmm like, you’re you’re you got your side of the building, so

[00:16:08] Dan: yeah. Yeah, it’s a, it’s a great setup because it gives you optionality on the way in and on the way out, which Anthony just said there, which is great.

Uh, but. Create some, you know, some difficulties because tactically, what should happen at this point? Once we slice this building in half and Anthony owns one half and I own the other half, um, the residents ought to be cutting two rent checks, one to one owner and one to the other owner because they are two very distinct co-owners.

Now that’s a nightmare. No one wants to, nobody wants to do that. What we do is we create a, a management agreement that says that, Hey, this management company. Is going to collect the rents on behalf of both co-owners and they’ll be split up. Um, uh, those monies will be split up afterwards, so that for the resident, they pay one management company.

They don’t have to worry about any of this stuff. So that could be easily solved, but there’s, there’s definitely some little nuances [00:17:00] there.

[00:17:00] Anthony: Yeah. That’s one side of the thing, the equation where things get a little bit trickier, a little bit hairier. Another aspect of it is if you think about what we do, you know, we’re out there acquiring and doing this a lot of work, like, like I mentioned, we’re doing the splits on two horses through a field.

um, at least at minimum you should tip us for big. Like for, for, I don’t know, doing, are you not entertained? Is what comes to my mind. Like, yes,

[00:17:23] Dan: Russell Crow,

[00:17:24] Anthony: gladiator, but, but for us to get, you know, an acquisition fee or an asset management fee, and then the fees that we typically get for doing all the work associated with a, uh, with an acquisition, we can’t really do it in the same way.

Like you have to, you have to find a workaround. So even that’s kind. Convoluted mm-hmm um, just another part of the headache, a little bit more of the brain damage, but it’s possible. Yeah.

[00:17:45] Dan: It’s possible. As long as you don’t have the right steps to do it, so we’ve refined it. Uh, so that we’ve got it to a point where it’s getting fairly systematic, like Anthony mentioned for our investors, it’s a fairly straightforward transaction.

Uh, they’ll do a little bit more than an investor in a [00:18:00] syndication would with maybe a couple extra documents signed, but by and large, it’s effectively the same process they vet us. We present a deal to them. They vet that deal. And then, you know, beyond the actual legal structure, Shouldn’t feel a whole lot different, at least that’s what we’re

[00:18:16] Anthony: shooting for.

Mm-hmm yeah. So all has to say, this is a long sales pitch. If you, if you have a 10 31, if you’re looking to get out of it. No, no, this wasn’t 10 30. Uh, this was not a sales pitch, but you know, it would

[00:18:26] Dan: be a bad one. We just talking about home. How

[00:18:28] Anthony: horrible. Yes, but it is, um, It is valuable. It’s a valuable thing to know that if you are out there and you want to be passive, you’ve got, you’ve tasted from that forbidden fruit.

And this is really delicious. I don’t want these properties anymore. Um, just know there are groups like us that do this. Like we’re not the only ones. I think we’re the best ones. Um, headquartered on Washington avenue and downtown Minneapolis right next to SWAT de Thai re. A hundred percent. Um but if we go beyond a mile radius, I start to lose confidence.

I don’t know. But, um, [00:19:00] yeah. You know, on this block

[00:19:01] Dan: we own this block I mean, it all depends on what the investor’s looking for for their investment. Yeah. And, uh, who they’re working with on these things. So, you know, if what we’re doing is a good fit for you. That’s great. And one thing worth noting, I think for people is if they’re in, let’s say they own a building.

You know, Dan and Anthony twins out there, they own a building. They own a 50, 50, they’re not in a tick and they want a 10 31 out separately. You can actually create one midstream. Mm-hmm you gotta let it kind of season or marinate for, you know, an unspecified amount of time. But I think the general think, yeah, general consensus is about a year or more, less than a year.

It might be kind of pushing it. But if you are in, you know, 1, 2, 3 main street, you and your buddy own at 50 50, and you guys wanna be able to 10 31 out and go your separate ways. You can actually do that. You can, uh, memorialize a tick structure, let it, let it season for a year. That’s actually good to know.

And, uh, well, foresight be on your Merry, be on your Merry way. So yeah, that’s a thing you can do. [00:20:00] Find yourself in, in that situation. Um, then there’s the old drop in swap.

[00:20:04] Anthony: If you want kinda the drop in swap, we’ve done a podcast on that. We can do it. Another one, that one we have, we’ve never personally done it.

So we can’t speak as, as authoritatively, um, as we can about ticks because what is, this is probably our fifth tick fourth tick. There was the fourth or fifth Holly, Riverside, Emerson, uh, pleasant. At all? No, that’s it. Yeah. Yeah. Okay. Yeah. So we’re getting pretty familiar with that format. Um, again, it like in all honesty, it’s, it’s not my personal favorite.

Um, from the sense of like how much brain damage, it, it, it it’s a lot of work, but it’s also maybe my favorite in the sense that we get to help solve a very particular niche problem for our investors, which. You know, they might not have been able to solve otherwise. So I think that’s pretty cool. Yeah. I think the,

[00:20:50] Dan: the difficult part, at least on my side has just been the learning curve now that we’ve kind of gone through the learning curve and learned, okay, here’s how we, we need to do this and, and [00:21:00] not to learn it real time in a transaction.

Um, once we got to, once we’re at this point, I’m feeling like, okay, we we’ve kind of got the framework built out. Uh that’s where a lot of the brain damage I think comes from. It, it is just learning this stuff. Yeah. So we’ve got that, uh, we know what to look for in a deal. We know, you know, what, what types of partners would be best for these types of things?

So it’s a, it’s a great little tool because there is a lot, there’s a lot of people out there that find themselves in the situation where they had properties like Anthony mentioned, and they wanna sell them and they want to avoid the tax hit, but also not be active owners anymore. So it’s a definitely a very popular, uh, solution for people to wanna avoid the DST thing, which we’ve talked about before Delaware statutory.

Kind of like a re that can serve the same purpose, except for a multitude of reasons. It’s not really the best option for a lot of people, low yield, um, lack of liquidity or control or, or say in, in the business

[00:21:54] Anthony: model. Um, probably the only reason to go with that is if you ha are trying to kick the. A big tax bill [00:22:00] down the, the road and you’re down at the end of your, your runway and you, you don’t need a lot to live off

[00:22:06] Dan: of.

Yeah. It it’s a great option for people. If they try to find other replacement options and they can’t, it’s a great thing to say, okay, this is my last resort. I can throw it in here and maybe make. I don’t know what the yields are on those things. Maybe like three to

[00:22:18] Anthony: 4%. Yeah. It could make three or 4%, but it is a guaranteed payment, which is pretty interesting.

So it’s not big, but it’s something. So, Hey, uh, we’re, we’re reaching the top of this episode, but maybe just give me like 30 seconds highlight like 50,000 foot view of pleasant view. Like tell me how many units purchase price, all that stuff. What makes it

[00:22:37] Dan: cool? Yeah. So this one, I think what makes it cool is.

If you were on our investor list and you saw any of the information about this, uh, it’s a workhorse. That’s how we’ve been describing it because that’s really what it is. It’s not gonna be, uh, you know, a brand new class, a shiny building it’s built in the mid seventies, um, a hundred percent occupied and it is a price [00:23:00] point opportunity for the residents.

Meaning there is almost no other resource in that area for comparable, um, quality. Building with, um, the price points that we’re able to charge even after we up our rent. So we’re looking at about probably a 20% Delta between where the rents are and where the, the market comps are. And we’re really only trying to get about half of that really maximize the occupancy.

And it’s just a solid building in a really, really great location. So for people that wanna be in the, uh, in a nice area, And access to all the local amenities. It’s an amazing price point option for people, which is in short supply these days with inflation and the prices of everything going through the roof.

[00:23:41] Anthony: Mm-hmm , you know, this building does have one of my least favorite features of any building that we own though. Do you know what

[00:23:48] Dan: it is? Yeah. Those

[00:23:49] Anthony: shingle things. Yeah. The what, what do they call it? Like the man sour mansard roofs from like, like they were big in the 1960s. If you guys dunno what I’m talking about, it’s like when the, the roof, they, they [00:24:00] come down the sight.

And so there’s shingles on the side and it, it can kind of look cool if it was like in a mountain forest environment. Yeah. But looks not super cool in a city.

[00:24:11] Dan: yeah. It’s I mean, it, it was a thing in a period where they did a lot of it. I don’t do very much anymore though. Again, it’s it’s these

[00:24:18] Anthony: there’s two bedrooms.

Right? Am I remember that part? So this one, we have a lot of properties that we’re working on right now. So I’m like brain farting, but I feel like these. Large large

[00:24:27] Dan: units. No, these were one, they are large units. Uh, they’re ones and twos. Primarily ones. Okay. But significantly larger than a lot of the comparable, uh, properties out there.

So when you look at it on a per foot basis, there’s a lot of upside to be had. Okay. Um, but yeah, I think that’s, that’s. The best part about this one is it’s just, it’s, it’s a constant performer or it has been yeah. Uh, for years. And it’s, it’s not necessarily the, the first building you wanna bring people by and brag about.

We’ve got a lot of other, really pretty cool, unique, uh, buildings that have a lot of character, but this is the one that you’re, you’re gonna really [00:25:00] smile. When you look at

[00:25:01] Anthony: your, your bank accounts, it, it reminds me a lot of, uh, mini haha manner, which we closed mm-hmm back in January, um, where. It’s they’re actually, they’re, they’re good looking buildings.

I’m not like saying that like trash buildings or anything like that. They’re good looking buildings, but they’re not like the class a shiny, really, really cool stuff, but they, they just print. Yeah. Is what, at the end of the day, they just like fully occupied all the time. Really easy to operate.

[00:25:25] Dan: Yeah. Those mid-century builds.

I mean, the, we do historic brownstones. That’s a lot of what we have, and those are absolutely gorgeous. Especially when the previous sauna that we’ve gotten ’em from has really done a good job of maintaining a lot of that original architecture and woodwork and marble and all that stuff. That’s those are fantastic.

But those mid-century builds. I mean, they. They’re always boxes. They’re always square. Yeah. But what I do like is the, uh, the floor plans are always the same. So you go through one unit, they can

[00:25:52] Anthony: be big a lot of

[00:25:53] Dan: times they’re bigger. Yeah. They didn’t start shrinking units until later. Definitely in the nineties and 2006, you start getting a lot smaller.[00:26:00]

And, um, they built ’em well, honestly, they don’t have a lot of repairs relative to the historic brownstones that you see. So they built ’em well consistent floor plans and. Perform. Well, they’re just not the prettiest ones.

[00:26:14] Anthony: I, I would say those, those historic brownstones, and it’s not fair to many haha or pleasant, uh, to say that they’re not pretty, it’s just that we’re comparing ’em against like some pretty, we have some pretty properties in our portfolio.

Yeah. Um, those, those old brownstones, those historic ones, it’s not that they don’t hold up really well. It’s just that they’re, they’re old. right. Like at this point, some of these were built in like a hundred years, 19 fifteens, 1920s. And they’re, they’re amazing. Yeah. Um, those are some well built buildings, um, where you look at ’em and you.

You know, assuming we continue taking care of this and you know, the plumbing and the electric is updated and taken care of and the roof, all that stuff, and this building is just never gonna fall over. It’s it’s pretty awesome.

[00:26:53] Dan: Yeah. I mean, that’s why there’s a saying built like a brick house, right? I mean, yeah.

They’re brick buildings. They are gonna last, so, [00:27:00] um, you’re gonna spend more on plumbing just the way it is. That’s where a lot of the money goes. If you get one of those and the electrical, isn’t up to date, that’s where the rest of your money’s gonna go. Uh, damn. They’re gorgeous. They’re so good

[00:27:11] Anthony: looking.

Yeah. Yeah. All right. So that’s the, that’s the deal that we’re working on right now? Or we’re

[00:27:15] Dan: gonna answer your question too. 4.4 million was the purchase price about 129 and change a door and 4.9. Yeah, it should be going for at least a buck 40 buck, 50

[00:27:26] Anthony: it’s right in the, in the uptown region, which is, it’s kind of cool.

It’s right off this main throw fair on a nice little quiet street. I like that. Um, yeah, I like being close to the action, but not in the action personally. So, so that’s it’s would feel, we we’ll we’ll come back and let you know if we recorded this episode too soon, if everything fell apart, the closing hours, like we might have, this might be like, have to go pull this episode.

Like that was embarrassing. Um, but yeah, that’s the deal that we’re doing. Uh, I thought this would be a cool episode to talk about because I don’t think a [00:28:00] lot of people talk about the ticks. Specifically. Um, I think a lot of people think that we’re just syndicators and yeah, and honestly, I, I, because these ticks end up taking more time for us than the syndications in a lot of ways, I, I tend to think of ourselves more as, uh, ticks tickers or tickers tickers.

I had a tick on me yesterday. I was playing Frisbee golf. When I got tick on me, it scared me. Um, My story. What do you do? Do you burn it off? What do you, well, he didn’t get, he didn’t embed himself yet. I just, I, I plucked him and I said, you’re not welcome here, sir. Throw him away. Polite. Uh, I’m a gentleman and a scholar.

Okay. So let’s, let’s talk about the book of the week. This book is actually a little bit of a cop out because I think we’ve recommended it before and there’s like a hundred percent chance that you’ve heard of it. Um, so zero value, zero value, but I’m putting it back out there because I, I think like Naval says he would rather read the.

100 books over and over and over and over rather than reading a thousand like mediocre books. And I do think that this is a really good book. And the reason I say this is because if you’re listening to this podcast, there’s a high probability that you study finance and money and wealth, and [00:29:00] like, Personal finance, all these things.

And so you’ve, you’ve probably encountered this book, but I would encourage you maybe to go back and just revisit it, because now that you have a more sophisticated understanding of these concepts, I’m thinking there’s still gonna be some things that you can pull out of it. And if nothing else, it’s always good to be reminded of the fundamentals and go back to the basics.

And so the book that I would recommend this week is the richest man in Babylon.

[00:29:23] Dan: Aw. have we

[00:29:25] Anthony: recommended that? I don’t know. I would assume that we did in like episode 15, but I don’t know if we did. It’s super good. It’s it? It feels like it’s gonna be a rich Dadd poor ad book where it’s like, this is cheesy.

Um, but the concepts and it’s quick read concepts are good. They’re solid. Yeah. So go check it out. If you haven’t already you’re you’re in for a treat. If you have, I would encourage you go back and revisit it. Um, maybe you’ll pick up a thing or two and, um, especially as we go into this new era of the world where.

I don’t know if you guys noticed, but everything’s falling apart out there. And so

[00:29:57] Dan: everything, lot of

[00:29:58] Anthony: things, many things, [00:30:00] all the things, many, most things. I, I only see death and destruction in decay and it’s it’s um, , that’s my worldview. That’s how I look at it.

[00:30:07] Dan: So that’s wonderful. Yeah. No, I think that’s definitely, now I’m gonna go see, I haven’t read that for a long time actually.

What’s that? I haven’t read that for a long time.

[00:30:14] Anthony: Yeah. I mean, neither like, but, um, but I was writing something else recently that I hadn’t read in a long time and it reminded me like, oh, there’s concepts in these books that I. I, I, it, it would behooved me to go back and, and revisit them. So yeah, a lot of

those

[00:30:28] Dan: kind of philosophical books, um, I think are worth reading once a year, once every couple years, at least mm-hmm to remind yourself, cuz it’s not gonna, I print that.

I, I read rich

[00:30:37] Anthony: dad porn out, like once a

[00:30:38] Dan: week. I can tell it’s why you just said all those negative things about the market Kiyosaki’s getting used. Oh

[00:30:44] Anthony: yeah. He says it wasn’t he’s saying recently that the best investment is tuna. oh, geez. Cans of tuna fish. And I’m like, I don’t disagree that in bullets.

Get your una fish. Get your bullets. no guns. You’re bullets. You start selling those on the street. You’re gonna make you gonna make a mint. Tuna fish,

[00:30:59] Dan: una [00:31:00] fishing. Yeah. well, I mean, una,

[00:31:02] Anthony: I don’t remember why he is said una fish either. I assume it’s cuz he is a, like a. A hoarder or no, not a hoarder, a prepper also,

[00:31:09] Dan: maybe a hoarder.

His house is filled with tunas

[00:31:12] Anthony: bitch. Robert Kiza is a weird man. Now he’s not mean I have no idea. I like, I like a to sandwich. I, I go in and out of phases. uh, sort of like our listeners who were in a phase where they’re like, okay, I’m on board with this episode. This is going places. I like this. And now they’re like, they checked out along.

Oh, they’re just, they’re just rambling now. Yeah. Okay. So let, , uh, save ourselves from just the, the mindless ramblings of senile young men. Uh, do us a favor, go leave a review. If you enjoyed the episode, uh, if you’re having 10 31 coming up, reach out, we got some things that you might be interested in and, uh, that’s gonna do it for us guys.

We appreciate you. Um, roughly 31 minutes and 39 seconds outta your day. And we’ll see you next week or whatever the next episode comes up.[00:32:00]

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