April 18, 2022

Passive Investing Made Simple

Passive Investing Made Simple

Anthony Vicino is a best-selling author, real estate investor, and serial entrepreneur committed to helping people maximize their Return on Life.

He is the co-founding partner of Invictus Capital, a multifamily acquisition firm based in Minneapolis, MN with $30m in AUM, that provides busy working professionals with the opportunity to Invest Better.

As the host of the Multifamily Investing Made Simple podcast and author of Passive Investing Made Simple, Anthony firmly believes investing shouldn't be complicated, scary, or overwhelming.


Website

Invictus Capital

 

Book

Passive Investing Made Simple Book

 

Contact

Anthony@invictusmultifamily.com

 

Social Media 

LinkedIn

Facebook

Instagram

YouTube Channel

Transcript

Welcome back, everyone, to the No BS Apartment Investment Podcast, where we take away all the fluff and BS from investing in apartments and we give you the real. And today we have with us Mr. Anthony Vicino. Anthony, welcome, sir. I appreciate you being here. Yeah, thanks for having me, man. Awesome. So let's jump right into it.

Who is Anthony Vicino. That's a good question. Depending on the day, depending on the person that you ask, Anthony is going to be different, right? Like, we all have different identities and wear different masks in different environments. But I guess in this one for your audience, the most interesting bit is I'm a multi-family investor based out of Minneapolis St. Paul, Minnesota. And we are vertically integrated. So that's one of the things that makes us pretty interesting. We have about $30 million of assets under management, and we're completely vertically integrated from property management, working with our residents, boots on the ground, leasing, maintenance, repairs, all that stuff. We do that all the way through to raising capital from our investors. So we're kind of like a one stop shop for investing. And yeah, that's like the real estate side of things for me as a person. I'm just a guy who really enjoys building things, like, a lot. I really like the act of creation. So whether that's writing a book or creating a podcast, building a business, like, as long as I'm able to create, I'm in my happy place. 2s

Nice. I like that. So I know you just mentioned one of your superpowers, we're going to call it is writing a book. And I know you are a best-selling author right now of a book. And you explain a little bit on that. Yeah. So it's funny. I wrote a book recently. It came out in August. My first nonfiction book is called Passive Investing Made Simple. And it's designed for people who want to learn how to be passive investors. They want to invest in commercial real estate, but they don't want to deal with toilet tenants, trash all that stuff. And we know that there's a ton of resources out there for people who want to be active. Right. They want to go and find the deals and work with the brokers and then work with the tenants, like be actively managing. But there's not a lot of resources out there for people who want to participate, but they don't want to do any of the work. And so we created that book. And yeah, my superpower, I guess, is writing because in a past life, I was a full-time science fiction and fantasy author. So I was writing a lot of books. And so when I said, this is my first nonfiction book, I've written twelve or 13 books at this point. But this is my first one where there weren't any lasers or robots. So it was pretty exciting to see that it hit number one on Amazon, has been really well received by the community. So that's been really awesome to see. 1s

Nice. And congrats on being Amazon number one bestselling author. Yeah, I wish they would send us, like a pendant or something. We're not the ones they don't do that. 2s So with that said, it's news to me that you actually wrote Sci-Fi books. I'm definitely going to check that out. But to stick on the investment side, 1s how did the conception of passing investment made simple come about? What did you see was lacking out there that made you say, hey, I want to write a book about that? Well, a lot of it is the fact that we're having all the same conversations over and over and explaining the same things to people. Because a lot of the investors that we're working with, they fall into one of two camps. They are either fairly sophisticated and they've done a number of syndications and passive investments, and they understand how it works or they're completely new and they have no clue and they're, like, stepping into it for the very first time. And so when we're having conversations with the really new people, because our core belief is that everybody should own a piece of commercial real estate. Everybody should. And so what we do is we try to lead with education. And so we bring in a lot of people who maybe have never experienced this vehicle before. And having the conversations about what's value add, why apartments, what's a cap rate, what's capex, like all of these things. And we're having these conversations over and over. And what I discovered is that no matter how articulate we are in the moment, as I'm sitting here talking with you, there's going to be some things that you don't understand that just going to fly right over your head. And most people, they don't feel comfortable saying, I don't understand. Right? And so when I'm sitting here explaining how this all works, you'll go, oh, that's awesome. That's really cool. That's cool. And even though you might not understand everything that I'm saying, you're going to keep going along with it, and then you're going to go home and you're still not going to fully understand it. And the confused mind says, no. And then you're not going to take action. Right? And so we're like, okay, let's create a resource where people can consume and learn at their own speed. And then they don't have to feel stupid saying, like, I don't understand this because there is no such thing as a dumb question, only the question that goes unasked. Right. And what we're finding is a lot of people, they wouldn't even know which questions to ask. And so they were feeling overwhelmed. And so we created this book, actually started creating a podcast and saying, Hey! Here are some podcast episodes where we cover this topic in depth. Go consume it at your own pace. And people really responded well to that. And then they're like, hey, let's go deeper. Let's create the book. And that's where that was really born out of. And here's a really interesting side effect of the book that we did not anticipate is that I live in a world of metaphor and analogy. And so I try to talk as much with investors in the form of analogy so they can understand the concepts through something that's familiar. And so we use, like, the jumbo jet investing analogy, for instance, to serve as a surrogate for apartment buildings. Well, the really interesting thing is that other operators, people who raise capital and have the same conversations with their investors, they found the book really useful because they're like, oh, there's like, frameworks and ways of structuring how we talk about these things that I hadn't thought about. That makes a lot of sense. So while we wrote it for passive investors, it turns out, like other capital raisers, were finding the book really useful, too.

Nice. I know I've heard the story before you said it on my other platform, but I love the jumble jet analogy. 1s Without giving too much away from the book, can you sort of detail that out? Yeah, I'm happy to go as deep as if you guys don't want to read the book or if you do want to read the book, it's out there, all the content. You don't have to go buy it. We've already written blogs and videos. It's all out there. So the jumbo jet analogy, when people think about a syndication, first of all, that word is very scary. It's kind of scary sounding word. Syndication starts with the word sin. So we're already predisposed to think like, this is bad. 2s People don't know what that means. And at its simplest, we know that a syndication is just a way of pooling resources so that a group of people can go out and acquire something that they maybe couldn't acquire on their own. And every deal needs three things, right? It needs somebody who has the time, somebody who has the experience, and somebody who has the capital. Sometimes you can bring all three of those. You have the time to find the deal and get it under contract. You have the experience to know how to operate it, and you have the capital to buy it. But a lot of times when we're talking about big apartment buildings, they cost tens of millions of dollars. Most people don't just have that sitting around. So we have to pool our capital resource, and maybe we don't have the operational expertise to go and run 100 units. Or maybe we just don't have the time to go and find the thing. So the jumbo jet analogy is a way of conceptualizing it worked. Like, okay, you already do this in so many other areas of your life, you might not realize it. So let's think about a plane. If you wanted to get a plane to get right now from New York to Paris, you could just get on your phone, go to Delta's app and get a plane ticket, right? You give them capital, and in exchange, they're going to let you on the plane and all you get to do is sit in the back and they're going to transport you from New York to Paris. And you have the GP or the general partners or the pilots and the flight attendants and the ground control and everybody else who knows how to fly the plane so that you don't actually have to go and get your pilot's license, you don't have to learn how to fly a plane or buy a plane, you don't have to do any of that stuff. And that's really what passive investing in a syndication is like, is that most people don't want to deal with the toilets, the tenants, the trash, but they want to invest in real estate. So you bring the money and you get to get on the plane and you partner with the pilots and the people who know how to operate the deal. And so that's like at a very high level, the jumbo jet investing strategy. 2s

Nice. I love that comparison. That is very simplistic enough for me to understand someone like myself. 4s You got to pass the grandma test, right? Like, if your grandma can't understand it, it's not simple enough. There you go. Go. I like that. So with that said, you do have people who are the passengers and they're going to let the pilot do their thing. How do you deal with individuals who are passengers and feel like I have some knowledge, but I also 2s want to have a little control, but still allow the pilots to do the thing. 1s Is there a workaround to that situation or how do you handle that situation? So that's a great question. I think the two biggest weaknesses of investing passively in, like an apartment complex is one liquidity. And actually the liquidity, it's more of a feature, not a bug. And I can explain what that means in a little bit. But the second part is the lack of control. Right. Like as an LP or a passive investor, you don't have control in the deal. In the same way that when you're on that Delta flight, you might be a bomb pilot, you might have your pilot's license, but they're not letting you up into the cockpit. They're just not right. It doesn't matter how good you are. And that's actually a good thing. If you really think about it, that's a good thing. Because if we just let you go up into the pilot's cockpit and give them instructions or maybe even take the controls at certain points, well, we have to give that ability to everybody else on the plane, and you might be a bomb pilot, but I'm not. You don't want me in your cockpit making decisions about what to do with the plane. And so putting that in the hands of the dedicated professionals is actually a good thing. Now, if you are still super reversed to the control issues and you're like, I need to have some kind of say in this, well, then a syndication is not right for you. But a joint venture might be. And a joint venture is different in that all the participants are actively involved in the management of the asset. Nobody's allowed to be passive. It's by being passive. That makes this thing a security and the SEC then looks at it and we have to have all these regulations associated with it. But if you're willing to take control and be active and have a voice in operations, the joint venture is going to be the way to use it. That the right tool for the job. 2s

Awesome. Well said. So now 2s you are active. I believe you own about $30 million in assets under management. Can you share a story throughout out all throughout your tenure as an investor that totally went awry, caught you off guard, and 1s it just rang the alarms. Like, how did you handle it? What happened? How did you handle it? And how did it help you become better as an investor today? It's interesting because you stay in the game long enough, and things will go wrong, and that's okay. Nobody's perfect. The only constant in the universe is changing chaos. 1s But it was funny because the most traumatic event occurred in the first month of my first property. I closed on my first property, and a month later, it is middle of January in Minnesota. And we're having what's called a polar vortex, which is like, it means that for, like, a week straight, it was 50 degrees below zero, below 50 degrees, and so very cold. And on one night in particular, I get a call at, like, 2:00 a.m. from one of the tenants. And this is again one month after I closed. And he's like, the police are out here. Swat is here. They're threatening to kick down the door because there's a fugitive on the premises. I'm like, what is happening here? And so long story short, one, we get into car, there's a Blizzard in addition to the polar vortex. And now it's really snowy and it's really cold and just really horrible in general. We drive across the city to get over to this property, and I'm like, what's white knuckling my car? And the whole time I'm, like, on the phone with my tenant, it's like they're going to kick down the door. What is happening here? So I get over there, and it's not swat, it's bounty hunters. It's bounty hunters who, like or after a fugitive that wasn't actually doesn't end up being in the property at all. But the tenants, the residents, they were friends with this person. And those residents for the next month were like just nightmares. They so there was the bounty Hunter issue. And then the father was arrested two days before they were supposed to move out for grand theft auto. So now 2s the lady just had a baby a month prior. So they had a little baby. And from beginning to end, this was one of those things that when you become a new landlord, they do not prepare you for you go in there and you're like, tenants, residence, it's going to be hard. But when you get smacked with all the stuff right away, you're like, this is overwhelming. This is the worst decision I've ever made in my life. But through it all, it was okay, well, we're in it now. So the only way out is forward, right? If you find yourself in hell, just keep on walking. Find the door. Yeah. Don't stay put. Exactly. We just kept doing what we could, trying to communicate, trying to be open to possibilities, trying to not remain fixed in outcomes that we had come in with and saying, okay, where is the opportunity here? And 1s all told, it ended up working out just fine. Like when you're in the moment, it really sucks and it's really stressful. But in hindsight, it's actually building up a lot of the skills that you're going to need if you want to scale and succeed just in general. And here's the thing, if you don't want to deal with headaches, then don't be an active investor, right. It is hard, it is difficult. And this is why we wrote the book is like, I don't recommend it for everybody. To be an active investor, you have to have the right mindset, the personality, the skill set, and most people just don't want to deal with any of that stuff. So just know that there is a way that you can get involved without having to go buy your own property. 2s

Nice. Well said. I think there's a lot of misconception out there that investing, especially on the active side, that it's rainbows and unicorns. I've never seen a rainbow. 2s We're going to collect cash flow and be and sit by the beach, sipping Mai Tais, but then again, when reality strikes, it's all right, we have to answer. We have to deal with the toilets, we have to deal with people kicking our doors down. We have to deal with XYZ. And not a lot of people are prepared for it, which is why as active investors, we are problem solvers. We have to think outside the box, be creative, and be ready to pivot at any moment's time. So I appreciate you sharing that story. 1s You've probably heard this before, too, right? Like, we're paid in direct proportion to the difficulty of the problems we solve, right? Exactly. If you solve easy problems, you're not going to make a lot of money this period. There's just not a lot of value in that, because if it's an easy problem, somebody else can solve it. It's not a big deal. So if you want to make money and that's ostensibly why a lot of people invest in real estate. To make money, then you're going to have to solve increasingly hard problems. And if you're okay with that, then cool. Dive in. If you're not cool with that, get out of the pool. 2s Great example. So with that said, 1s what is the barrier to entry? I know a lot there's so many ways out there that people say you should start with single family, start with residential. I mean, start with multi-family. For you, what would you recommend as the barrier to entry into the real estate space on the active side? I think this is a really good question. And you hear a lot of people say you got to go big. You got to start with really big. But the thing is if you look back at how people started all the gurus and the stories that you hear now, by and large, all of them started way smaller than they're leading you on to believe right now. So Grant Cardone is a great example. He's the King of like ten X and go big. And he's like, don't touch anything under 1000 units, whatever. He started with single family homes. Right. So the people will give the advice through the lens of the skills and experiences and relationships they have now for if I was to go back, I would go bigger and sooner and blah, blah, blah, blah, blah. But that looks over the fact that when you're starting out, you lack some of the key components to make it work. One, you lack the money. Two, you lack the deals. Three, you lack the operational prowess. So even if you jump in and you somehow solve for all three of those things, that's a big ask. And so what I encourage people is like set your sights lower to where you are right now, that you can get involved and take action. So if money is the issue, well, maybe you're looking at like a house hack situation, a Duplex or triplex a quad where you can get in with an FHA loan for 3% down that's going to bring that barrier nice down and low. Or maybe you talk to a family member or a friend and maybe guys pull your resources and go into an asset together. Maybe you can only afford something very small, but get that first deal so that you can start building that operational skill. Because even if I gave you 100 units right now and the capital to do something with it, if you don't know what to do with that asset the day it closes, what was the point? So I find build the skills and the best way to do that is to start small with the consequences of failure are reduced. And just look at the fact that you're probably not also going to be able to go and get 100-unit deal just right out of the gate. Unless you have some kind of strong relationships with brokers or sellers and lenders, it's probably not going to happen. And I think a lot of people just get into the cycle of looking at really big things and then they never get involved because it's like, well, the barrier is very high. Whereas if you would just start closer to home where you are, what you can get involved in and then start snowballing it that can get you to where you're trying to go really quickly because again you need money, you need deals and you need operational skills. None of those you don't really have any of those at the beginning, so start small. 1s I love it. Star small.

So what would you attribute to your success or, quote, unquote, the secret to your success? 2s The secret sauce, I think, for me, is hyper focus. And I talk about this. Hyper focused means something very specific to me and how I use the term. I have really severe ADHD, which is attention deficit hyperactivity disorder, and we have this unique quirk of our biology where it's not that we can't focus, it's that we can't always control what we're focused on. But when we do get focused, we go into what's known as the hyper focused state. And it's the kissing cousin of the flow state, which you might be familiar with. When you get in the zone, you're just operating at peak capacity. That's hyper focused, except for people with ADHD, can't always control it, which is why we'll be playing video games, the house will burn down around us, and we won't leave the house. So it can be detrimental. And for the first 30 years of my life, it was more of a hindrance than it was a help until I figured out how I could start utilizing that skill set so I could get more of the important things done in my life. That's when things really started turning around. So I would say the ability to direct your focus. And every day I write down like a thought that I want to have at the forefront of my mind today's thought actually is 1s the quality of your attention will dictate the quality of your results. And so just living with that concept at the forefront of your mind, I think, has been really instrumental in my success at least. That is a powerful quote, I like that.

What is the biggest failure that you have learned from in your journey? 4s I was on a hot streak of building businesses, and I couldn't go wrong. Everything was just firing. Every time I would touch a business, it would succeed. And I was like, I felt invincible. And I had some friends who had a business that it was not going well. And they asked if I could help. And I came in and for two years try to turn that thing around. But I came into it with a lot of overconfidence and not enough humility to really assess my skills in relation to what the company needed. And ultimately, 2s I failed. I failed miserably at that company. And that was the biggest failure, both from an operational standpoint, but then also from a friendship standpoint, because it did a lot of damage to the relationships where it was like these were my friends business. It was their dream. And I could come in and say, I will take care of this. It will be all right. And then I couldn't. And at the end of the day, it was a thing where I got to walk away. But for them, it was their dream. And so that was the big lesson for me was to never assume just that because you've had past success and what's worked in the past, these things does not ensure victory in the future. You have to go into every business recognizing that it's hard and that unless you're a student and you're learning and you're growing and you're trying to improve and not just resting on your laurels of what's worked in the past, you will eventually fail and you'll fail miserably. And that's what I learned. 1s Awesome. I appreciate you sharing that.

What is the biggest surprise you find in your success and what happened that you did not expect? 1s The biggest surprise in success? In your success! That's a good I think success is such an interesting concept because we get to define it however we want to. And I find that high performers tend to move the goal posts on themselves a lot, which means you get to the target, you got to the goal, you won the game, and then suddenly you're looking at the next thing already you've already looked beyond. And for me, I think the biggest surprise is I've done a lot of things. I've accomplished a lot in my life. But accomplishment is no substitute for fulfillment. And I did not understand that for a very long time. So I kept trying to win the Championship or win this goal, so that would make me feel better and make me feel fulfilled. And it never happened. And so in the pursuit of success through achievement, I was left feeling always1s empty. And so it was when I shifted my focus away from just trying to achieve, to want to try to be fulfilled and what that meant for me. And that's why I left at the beginning, when I'm creating, that's me in my happy place. Doesn't matter what I'm creating, doesn't matter if people love what I created, right? It's not about the achievement of the creation. It's the act of the creation. And that's what makes me fulfilled. Nice. I love it.

As a business owner, what would you say is the least favorite part of your job that you are comfortable sharing? 1s Listen, people are always the hardest part, period. Always. So if you're running a business and you have employees, you have customers, or you have vendors or suppliers, people are always the hardest part. And there will come a day. 3s If you're running a business, you will have to fire somebody. You will have to reprimand somebody. You will have to try to build a path from where they are, which is insufficient to where you need them to be. And that is incredibly difficult, not sitting down and saying, hey, this isn't working out. We got to let you go. That's really not the hard part. It's everything that leads up to that, where you're just banging your head against the wall, like, how can we get from where we are to where we want to be? And like your constant failures, because at the end of the day, people don't fail because they're inadequate. They fail because the systems that you built around them were inadequate. And so them failing is really a reflection of you in the systems that you're building. And so you're struggling with the reality that you are failing, but they're the ones that are going to have to pay the consequence. And as a business owner, you should always be aware of that is that the buck stops with you. And so it's always your fault if somebody isn't living up to the standard, it's your job to fix it and make it better. But at some point, the only solution is to cut the losses and it never gets easier. Never. 1s Powerful. Truly powerful. 1s

What is the best time saving hack that you found to help you stay structured and navigate your business? Oh, that's an easy one. That's time blocking for sure. Like, if you were to look at my calendar, it is timed out to the minute, every single day. So I sit down the night before and I look at what I need to get done that next day of what's already been scheduled and where I have time available. And I schedule what I'm going to do in each one of those segments. So that when it's that day and I'm in the moment, I know exactly where my attention needs to be in every instance. So once we get off of this call, I know the very next thing. I don't have to sit and wonder and look at my To do list and think, what should I do next? I just immediately say, that's what the calendar says, that's what I'm doing. And that's the biggest thing to remember. The quality of your attention dictates the quality of your results. And the more attention you can put on the task and not on deciding what the task is, the better. 2s I love it. I know I've recently reached out to you regards to time blocking, and I am implementing that in my day today. 30 minutes increments that schedule every day. I love it. A few more questions. 1s No. Go for it. Yeah, sure. So what is a huge life lesson you can share? And how has it changed afterwards? How has your life changed afterwards? 3s That whole dichotomy between the science of achievement and the art of fulfillment. Achievement is a science. If you want to build a business, I can teach you the steps to do that. If you want to win the gold medal in the ten K, we can show you the steps to do that. Achievement is the metric that most of us judge the quality of our life. And it's the wrong one, and it's the one that everybody's after. It's like, how do I make a million dollars? How do I build a business? How do I do this thing? And it's not the right metric because it's about the fulfillment. And the problem with the fulfillment is that it's an art and it's different for every single person. Whereas the science of achievement, I can teach you the framework and you can go execute the steps and achieve the thing. Fulfillment is not the same. I can't lay out the road signs for you. You have to go figure it out for yourself. And the best way that I can think about these two concepts is that they're just completely different mediums. Right. So fulfillment is the asphalt road upon which we're driving our car through life. And if we have a pothole in it, because fulfillment means that we have a hole in us. And if we try to fill that with achievement, well, it won't work because achievements like a bowl of noodles. It's great. It's great to eat. Like, it's delicious, but it's not going to make very, it's not going to bond with the asphalt. Right. And that's the problem that we get into is like, we take achievement these noodles and we're like, fill that pothole with it. And then we're like, why isn't my road any better? And so really wrestling with that concept of what does fulfillment mean for you? What makes you light up with joy and excitement and energy every single day? Figure out what that is and build your life around that. Not around the achievement, not around I want to be a millionaire, I want to build a business, I want to have that nice car. It's about what is lighting you up. Because the million dollars, the car, the business is not going to light you up. Nobody gets out of bed in the morning, like, I can't wait to go drive my Lamborghini. Maybe the first day you have it, but never again are you getting out of bed at 4:00 a.m. to go drive the Lamborghini. That's not going to do it. 2s I love it. That's powerful. Because again, I think the misconception out there, of course, is we're tying what we want in life to a monetary value and foregoing everything that truly matter, which is, spending time with family, doing what really matters as you mentioned. So I appreciate you sharing that. That is actually a powerful statement here.

So what is next for Anthony and Invictus Capital? So we're just continuing to scale, keep playing the game on bigger, bigger levels where we can continue to make larger and larger impacts. That's the goal is make maximum impact. And to that end, next year, we'll be writing another book with I'm working on it right now at Gino Barbara called Operators Guide to Entrepreneurship. That's probably just a working title. This is a very early days, but really excited just to continue leaving an impact in whatever way that means, whether it's for our residents or investors or for just putting out educational content for other people to kind of maybe follow in the steps of what we're doing. 2s Awesome. 1s Do you have any tips or what tips would you offer to individuals who are either looking to invest passively or aspiring investors who are looking to get into the space on the active side is easy. Go pick up the book. Passive investing is simple. There we go. 1s Man, that was like a softball. That's easy. 3s Yeah, I appreciate that.

So, Anthony, we're pretty much on winding down. So if anyone wanted to get in touch with you and connect, how would they go about doing so? You can go Google me Anthony Vicino. I'm the first thing that shows up. I'm pretty much the only Tony Vicino out there in the world. If you want to learn more about what we do at Invictus Capital and the investing side, go to Invictusmultifamily.com. We have a bunch of free resources there. And I mentioned the book all throughout this podcast. So if you want a copy of the book, go to thepassiveinvestingbook.com. You can pick it up there. If you don't want to spend money on a book and you're like, I want the information, but I want to spend money because they're cheap. That's okay. Just email me, Anthony@invictusmultifamily.com, and I'll send you a digital copy of the book because I get it. I don't want spending money on a book to be the reason that you don't get the education. So if you want that, just shoot me an email. Awesome. So all the information that Anthony is sharing will definitely be in the show notes of this episode.

Anthony, this was fun. I want to thank you so much for jumping on and again for all our listeners. Go get that book. Passive Investment Made Simple. I got my hands on it. It is an amazing, incredible book. I love it. So thank you, sir for being here with us. The platform is always open to you whenever you want to come back on and speak to us. I appreciate it. Thank you, Marc. Thank you, guys. And to all my listeners out there until next time and to your success. I'm Marc Cesar and we're out.

Anthony Vicino Profile Photo

Anthony Vicino

Founding Partner

Anthony Vicino is a best-selling author, real estate investor, and serial entrepreneur committed to helping people maximize their Return on Life.

He is the co-founding partner of Invictus Capital, a multifamily acquisition firm based in Minneapolis, MN with $30m in AUM, that provides busy working professionals with the opportunity to Invest Better.

As the host of the Multifamily Investing Made Simple podcast and author of Passive Investing Made Simple, Anthony firmly believes investing shouldn't be complicated, scary, or overwhelming.