For today’s episode, we will be discussing three important aspects of a real estate deal.
This is going to be an interesting conversation to see what is proposed as the most important.
New book LIVE! Passive Investing Made Simple: How to Create Wealth and Passive Income through Apartment Syndications.
[00:01 – 10:00] Opening Segment
[10:01 – 16:04] The Passive Investing Made Simple
[16:05 – 21:14] The Third Aspect Of The Most Important Thing
[21:15 – 26:39] The Perspective With A 50,000ft View
[26:40 – 34:52] Closing Segment
“You know, at that point, you need to start taking some chips off the table and allocating them into something that's not correlated to you because you could get hit by a bus." – Dan Kreuger
“the way that I think about this is numbers don't lie, but I can make them say whatever I want them to say, right?" – Anthony Vicino
"This is like the target is business owners, small business owners, medium business owners, entrepreneurs, people who have built something." – Anthony Vicino
"I think that's a perfect example, because all the, you know, the smart money for lack of a better word is one hundred percent looking at the operator." – Dan Krueger
LEAVE A REVIEW if you liked this episode!!
Keep up with the podcast! Follow us on Apple, Stitcher, Google, and other podcast streaming platforms.
To learn more, visit us at https://invictusmultifamily.com/.
**Want to learn more about investing with us?**
We’d love to learn more about you and your investment goals. Please fill out this form and let’s schedule a call: https://invictusmultifamily.com/contact/
**Let’s Connect On Social Media!**
LinkedIn: https://www.linkedin.com/company/11681388/admin/
Facebook: https://www.facebook.com/InvictusMultifamily
YouTube: https://bit.ly/2Lc0ctX
For today’s episode, we will be discussing three important aspects of a real estate deal.
This is going to be an interesting conversation to see what is proposed as the most important.
New book LIVE! Passive Investing Made Simple: How to Create Wealth and Passive Income through Apartment Syndications.
[00:01 – 10:00] Opening Segment
[10:01 – 16:04] The Passive Investing Made Simple
[16:05 – 21:14] The Third Aspect Of The Most Important Thing
[21:15 – 26:39] The Perspective With A 50,000ft View
[26:40 – 34:52] Closing Segment
“You know, at that point, you need to start taking some chips off the table and allocating them into something that's not correlated to you because you could get hit by a bus." – Dan Kreuger
“the way that I think about this is numbers don't lie, but I can make them say whatever I want them to say, right?" – Anthony Vicino
"This is like the target is business owners, small business owners, medium business owners, entrepreneurs, people who have built something." – Anthony Vicino
"I think that's a perfect example, because all the, you know, the smart money for lack of a better word is one hundred percent looking at the operator." – Dan Krueger
LEAVE A REVIEW if you liked this episode!!
Keep up with the podcast! Follow us on Apple, Stitcher, Google, and other podcast streaming platforms.
To learn more, visit us at https://invictusmultifamily.com/.
**Want to learn more about investing with us?**
We’d love to learn more about you and your investment goals. Please fill out this form and let’s schedule a call: https://invictusmultifamily.com/contact/
**Let’s Connect On Social Media!**
LinkedIn: https://www.linkedin.com/company/11681388/admin/
Facebook: https://www.facebook.com/InvictusMultifamily
YouTube: https://bit.ly/2Lc0ctX
Anthony Vicino: [00:00:15] 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 am your host. Anthony Vecino of Invictus Capital, joined as always, by the man. The myth, the legume. Dan, I'm not a bean Kruger.
Dan Krueger: [00:00:37] I do enjoy a good look who doesn't fly high in fiber? A good source of protein?
Anthony Vicino: [00:00:43] Yeah, you are known not only in the real estate space but also in the nutrition space, so
Dan Krueger: [00:00:52] Specifically the bean space
Anthony Vicino: [00:00:53] Beans. This man he knows as beans. You might not know this, but he does not just specialize in multifamily, but also in being consumption. Mm-hmm. Now, this has nothing to do with real estate. This is just the intro banter. Exactly. I just trying to keep you guys entertained at home now. We do appreciate you joining us today as we are going to dive into a very, very interesting, very important topic, which are the three most important aspects of a real estate deal. And before we get to that though, because there's a lot there to cover, this is going to be a good episode and I'm going to just kind of bury the lead here and entice the listeners just a little bit. So they stayed till the very end. We're going to talk about these three most important aspects of a deal. There's one in particular that today I'm going to propose is the most important. So we're going to save that one to the very end. Ooh, they're going to stick around. Don't you leave? Don't you go? No, no, no.
Anthony Vicino: [00:01:48] Right now, no, no.
Anthony Vicino: [00:01:49] You got to wait. And don't you push like, fast forward on your little podcast listening device that's cheating to speed. Mm-hmm. You don't have to bear with us as we slog our way through this episode. It's going to be we're going to meander.
Dan Krueger: [00:02:03] We're going to go on tangents. We might not even get to it.
Anthony Vicino: [00:02:06] We'll see. You might not remember. I just start talking about beans. Now, what we do need to talk about because we're not just full of beans, is we need to talk about our bad investing advice of the week.
Dan Krueger: [00:02:15] Mm-hmm. Yeah, we're full of bad advice, as you
Dan Krueger: [00:02:18] Know, up to our ears.
Dan Krueger: [00:02:19] Yeah. So I think I'm going to try to tie this in a little bit to what we're talking about today. And that is the best investment you can make is into yourself. You've probably heard us say this. In fact, if you listen to our last episode, actually, yeah, I think we were talking about this topic and we were preaching this concept. So it might come as a surprise that this is my bad investing tip
Anthony Vicino: [00:02:42] For this week old Dan. I'm a contrarian. Krueger always likes giving advice and then taking that advice right back. Yeah. So in one episode, he like the most important are the best investment you can make is in yourself. And now you're telling me it's not guys, you have no idea how hard it is to work with Dan. You have no idea. He just constantly. He's just flip-flopping left and right. I'm a hypocrite. He's like a politician over here. I will never know constantly. Ok, so break this down for me. Help me understand why am I not my most important investment? Well, you
Dan Krueger: [00:03:12] Are. So there's an asterisk to this. Ok. The asterisks are. That's great advice. Up until a point. Oh, right. So at a certain point, right? Whether you're in a career at a, you know, W-2 job, your sales, maybe you're just, you know, working the corporate thing you do and you're climbing that ladder to a certain point, you should dump any and all resources into yourself, i.e. going to college or getting yourself educated on the thing that you're going to do at that point in your life. You don't have a whole lot, so every dollar needs to be going into yourself until you reach a point of, I guess, I'll call it, don't critical mass right where you get successful enough at the thing, whether it's a sales job or just a regular corporate job or a business that you started once you get to a certain point in, this thing is successful and it's really spitting off some cash and you've got some extra money. At that point, it behooves you to really diversify for the sake of just, you know, protecting your assets, a steal a line from my property manager. He says that all the time protecting our assets, we've got
Anthony Vicino: [00:04:16] To protect the
Dan Krueger: [00:04:17] Assets. Yeah, yeah. But really, it's all about just diversity.
Anthony Vicino: [00:04:20] I think that's cover your assets. You got to cover your assets.
Dan Krueger: [00:04:23] Yeah, what did I say?
Anthony Vicino: [00:04:24] You said to protect your assets. So they got to cover it,
Dan Krueger: [00:04:26] Cover it, protected. Watch it. Watch the assets. No, but really, at a certain point, once you get to a point of success when you've achieved, you know, whatever you're going for a sales guy, you're running a business and it's turning out a profit. You know, at that point, you need to start taking some chips off the table and allocating them into something that's not correlated to you because you could get hit by a bus. Your business could fall apart. You know, the world could change. You never know. And so you want to make sure that at a certain point once you've reached that critical mass that you start to allocate some assets outside of yourself and your area of expertise. And this applies to us as well. We're working on this right now. We've been so deeply invested in real estate for so long, which is great and there's nothing wrong with real estate, but it's it's wise to start to. Allocate some things outside of things that are connected to you or the specific industry that you're already very leveraged, hmm.
Anthony Vicino: [00:05:21] The way to think about this and I feel like in the last five episodes, we've just been talking about Alex Formosa every episode. So pretty much he owes us some kind of affiliate or sponsorship fee at this point because we are just pimping him hard. But he talks about how you need to be investing as much back into yourself as possible until you get to the point where you're making so much money, where you just feasibly can't keep investing into yourself. You can't join any more groups or take any more courses or do any of these things, so it just isn't feasible. And I like the way that you put that where you are the most important asset. But one of the mistakes a lot of entrepreneurs, business makers, and investors make is they put all their eggs into the same basket. And that could be like in your skill acquisition. You're too leveraged in yourself and your business is too reliant on you. So you've been working in the business for so long, you know how to do it. You haven't outsourced it, you haven't created systems and processes so that you can work yourself out of a job. You are integral. And so really, what's happened is you're super skilled and you're making great money and your business is doing great. But under no circumstances will you ever be able to exit that business, you know, profitably because you can't put anybody in to take over. You can't leave. And so you don't have what I consider to be the most important freedom of all, which is time, freedom, the ability to go and do what you want, where you want, when you want, you're making good money. And so to your point, once you're making that net money, once you have that business established, once you're you're solid in terms of your own skills, you need to be thinking about creating leverage and there's a couple of different types of leverage, right? There is people's leverage. I guess that would be labor like outsourcing, bringing other people in to do jobs for you.
Dan Krueger: [00:07:01] Let's use Duvall's language human capital, human capital.
Anthony Vicino: [00:07:05] So you can talk about human capital bringing the ball back. Yeah, yeah, God. We haven't talked about Nepal nearly enough, but this is actually, yeah, we're on his topic now, which is, you know, there are only four different types of leverage. We have human capital, we have the technology, we have capital, capital, money, rich capital leverage and then you have media leverage. And so if you think about that, you want to be leveraging all four of those and there's going to become a point where you really want to be putting your money to work for you into alternative assets outside of yourself, leveraging technology, leveraging media like there's a lot here.
Dan Krueger: [00:07:41] So yeah, and I'll say it's really easy to say that this is what you ought to be doing, but it's really tough to be able to tell exactly when you should pull the trigger on that and make that switch, especially for the entrepreneurial types out there. Because we tend to be very routine focused, we get into a groove and once we've had success in a certain thing, we really don't want to deviate from that thing. And so it becomes really difficult to pinpoint exactly when you should start to take some chips off the table from that main endeavor and start to put that capital elsewhere. So this is another one of those times where I think it's it's really helpful to have some kind of advisor or somebody a mentor that can help help you make that call because if you do it on your own, chances are you're either going to do it too early or too late. It's really tough to really hit it on the bullseye with this one.
Anthony Vicino: [00:08:31] Yeah. And the other part of that too is where we're prone to moving the goalposts on ourselves. And so right now, you might be saying my goal is to make $2 million in a year and then you get to two and, you know, five would be cool. And then you get to five and you get the five and then you're like, Okay, maybe 10, maybe 20, and the number just keeps growing because you get to that goal and then you move the goalpost. And so one of the things that can be really helpful again, this is like part one of becoming a good investor, a good business person or just good human is, you know, understanding what's your desired end state and setting those parameters that say, like when I get to this place, that is the goal. And so if that's saying at five million, this is now when I'm going to start diversifying out or at one million, this is what I'm going to start hiring and bringing on more people or saying when I'm no longer work when I'm working more than 40 hours or 60 hours or 80 hours in a week, that's when I need to bring somebody on. And like holding yourself to that.
Dan Krueger: [00:09:26] Yeah, yeah. It's like I said, it's really tough to pinpoint exactly when these things ought to be happening when you're in the thing yourself. So I think it's just really important to get, you know, some non-emotionally involved the third party who knows what the heck they're talking about to help you kind of pinpoint when this makes sense. But yeah, I think that's our bad investing tip of the week that we can so bad. Yeah, we dove in pretty hard as we probably get to the actual meat and potatoes of ours.
Anthony Vicino: [00:09:56] Yeah, well, let's get to the thing that you can listen
Dan Krueger: [00:09:58] To that to the lagoon.
Anthony Vicino: [00:10:01] Let's get to the good stuff that everybody looks forward to at dinner. It's still cool. The beans, the beans. Ok, so let's talk about the three most important aspects of a deal, and this is something that we dive into in great detail in the book. Passive investing made sense. Bill, if you haven't already go pick up a copy on Amazon or go to that the passive investing books, you can get it for free, just pay for shipping and you get it for free. Ok, that's my sales pitch.
Dan Krueger: [00:10:23] The passive investing BookCon.
Anthony Vicino: [00:10:24] The not to be missed with just a passive investing book. This is the passive investing book, the only one the URL says. So I mean, there are others and this is the book. This is the one to read right here. So I want to do this kind of in the vein of Howard Marx's book The Most Important Thing, which we've mentioned on the podcast before. Every chapter in that book, he talks about the most important thing, and each time it's different, it's fun. So that's the angle I'm taking here. Great book.
Dan Krueger: [00:10:50] Not this week's recommendation, but check this week's.
Anthony Vicino: [00:10:53] But with that in mind, we're going to talk about the first two most important aspects of the deal. And you've heard us talk about these before. It's the deal itself, and it's the operator. But number three on this list, which I'm still going to bury, I'm going to put it towards the end is the actual most important. Believe me when I say that,
Dan Krueger: [00:11:10] So we've been lying this whole time, the entire time. Yeah, we've been fibbing. We've been saying that the operator is the most important thing. We've said it so many times
Anthony Vicino: [00:11:19] And actually, I'm going to take that back now. I'm just going to I'm just going to say it right now. The deal is the most important thing
Dan Krueger: [00:11:25] Here, you
Anthony Vicino: [00:11:26] Know, but the deal is very important, but it's not the most important. It's just a mistake. I think that a lot of new investors and even experienced investors make, which is to put too much time and energy into vetting and analyzing the deal itself.
Dan Krueger: [00:11:41] The people jump into the weeds right away.
Anthony Vicino: [00:11:43] Yeah, and that makes sense. I understand the process that goes into that. But the way that I think about this is numbers don't lie, but I can make them say whatever I want them to say, right? And so if you have an unscrupulous operator, they can do things with the numbers. And so don't put too much emphasis on the numbers. Make sure that first and foremost, you're finding the operator that you have a lot of trust and confidence in and they have the track record. They're not just putting numbers on a spreadsheet and saying, this is what we anticipate we're going to do. Actually, they have the track record of this is what we've done and I've used this analogy previously, but this is the first time our audience will have heard this or the way to think about this for me, at least, is when you want to invest in stocks. One of the first things that you're going to do for a lot of people is starting to go and analyze the business's underlying business, like look at the profit loss statement, look at the price per share, all these things. I want to understand the market of this business and how it works to know if it's a good investment. But if you did that for a certain company named Tesla. Then. You probably wouldn't have invested in it for the first decade. It wouldn't have made a lot of sense. And yet there were a lot of people investing in that company. Why were they investing in that company? Well, presumably it's not because of the technology or the industry-disrupting nature of this vehicle. It was the potential and the potential represented by the guy behind the whole scene. Mr. Musk, there was a lot of confidence that, Hey, I'll bet on that guy to win this game. And so that's how we think about investing in real estate as well is like the deal itself, the business itself. No, the person behind it.
Dan Krueger: [00:13:31] Yeah, especially like that example, because in the example that you use there with Elon Musk. What we'll notice is, you know, with a lot of these companies like Tesla and Google and Amazon and Facebook and Twitter, we can go down the list. All of the early investors in these companies are private, institutional, very sophisticated investors. And almost always, these companies are not profitable. You know, so from the, you know, cash flow and P&L and balance sheet perspective. By any conventional standards, by Warren Buffett's standards, right, these companies would not pass a smell test, right? They would look horrible from the get-go. However, all of these very sophisticated, very intelligent guys who know what they're doing are 100 percent betting on the jockey every single time. And then it's not until much later that the general public comes in when the numbers actually start to align with the leader in the vision. But I think that's a perfect example, because all the, you know, the smart money for lack of a better word is one hundred percent looking at the operator.
Anthony Vicino: [00:14:33] Yeah, I'm a big fan. I've been researching a lot into angel investing these days because I find it really fascinating the mindset that thinkers like nivel implement when it comes to putting money into a startup and over and over and over and over again. When you're listening to really successful angel investors when they're talking about what they're looking for before they're willing to place a bet, they're not really looking at the total addressable market or the technology and its potential to disrupt the world, they're not really looking at that. What they're really looking at is the founder, the founding team. Do they have the passion, the motivation to drive the skills to succeed regardless of the business, because they're going to go through pivots? There's always a pivot in the tech startup world. And so what you're really banking on then, does this person do they have the skills, the traits, the behaviors of a successful person?
Dan Krueger: [00:15:26] Yeah. I mean, Elon Musk could come up with a bubblegum company tomorrow and people would be clamoring to get in. So I think again, this is just something that has been proven over and over again in the markets. If you look at the smart money, the institutional guys who are doing what they're doing, you're going to notice that it's always looking at the operator, right? But that still implies that the operator is the most important part of a deal and or the poorest part of investing. And I guess we're starting to say now that that's not the case. We've been lying this entire time. There's actually another element that might be more important.
Anthony Vicino: [00:16:05] There is a very important third element, and it's something that I didn't talk about a lot actually in passive investing made simple because I spent a lot of time talking about the operator and the deal specifically there. But there's a third aspect of the market, which is also very, very the most important thing. So here's how I think about it. Here's an analogy that I've been using is the operator is your team right? You could have the nineteen ninety-six Chicago Bulls with Michael Jordan. You got the best team of all time. I don't know. I don't know sports, but I hear they were pretty good and they could have the best deal in the world. So they got the best. Nike's the best shoes, the best shorts. The best balls. But if they're playing basketball out in the middle of the Sahara desert, it doesn't matter if they're playing out in space, it doesn't matter. So the market, the context of where they're performing, it does matter. And to put this into the lens of the deal of the jockey versus the horse context, it doesn't matter to bet on the horse or the jockey if both of them are racing like in a race in the middle of nowhere by themselves.
Anthony Vicino: [00:17:16] If the market isn't there, then you got nothing. You don't have a deal. You don't have an operator. None of it matters. And I've been thinking about this a lot recently because and I was having a conversation the other day with a prominent investor in the space where we see a lot of newer investors, specifically people that are getting in as capital raisers. They're doing like these like five and six deals in the first year, and they're all in different markets spread across the country. And it's interesting for us because we only invest in our backyard and we're fortunate it's a really great market. But one of the interesting things is like, we know our market really, really well, and I have a hard time believing if you're investing in like five or six different markets at the same time in the first year like that, you could possibly know those markets, as well as we, know our market.
Dan Krueger: [00:18:02] Yeah, no. I think it's a very good point. There's a certain, not a certain level, but a significant amount of the risk comes out of any deal. The more times you've done something similar, so whether it's the same business plan or the same market, you know, each subsequent deal that's in that same vein is going to be significantly less and less risky because you've experienced more and more and there are less and fewer unknowns every time you do a deal. So part of the reason that I like, even though you know we're geographically limited, right? We don't really, you know, exit our little area. But part of the reason I enjoy that is because there are just fewer and fewer unknowns with every single deal. It's almost like it doesn't get easier, but it feels more and more comfortable every time. And another kind of example of this, this concept where the market is, is really one of the most important parts. I think is, you know, going back to kind of the stock market analogy that we were using before, right? If you wanted to invest in, you know, the best operator in a space, in a sector that's failing, that's shrinking every year, it doesn't really matter how great they are, right? Let's say that the EV market just starts to take a bath. It doesn't really matter if you're investing in Elon Musk. If no one wants electric cars and no one wants these batteries don't matter. He could be a rock star. But if he's in the wrong market, it's not going to be a good investment. So that's another aspect that we need to consider is, you know, within the sphere that you're looking within, that that vacuum, right? Is the operator even in the right space, right? What is he doing? Is he executing the right business model given the macroeconomic climate that we're in, right? If we're at the peak of a market and you're looking at the best flipper in town probably doesn't matter because that's not going to go well as things start to turn.
Anthony Vicino: [00:19:44] Yeah, I was listening to I can't remember who it was. It might have been Alex Ramoji. It could very well have been, but he was talking about the fact that he had a buddy who his company wasn't growing as quickly as he wanted to like his growth was maybe like 10 or 12 percent year over year, and he wanted to be like 20, 30 percent, right? And they're trying to address it. He's like looking at all these things and his systems, processes, people. He's like, What am I doing wrong? And you just look at it from the macro level, and you can quickly identify exactly what was happening in this guy's business. The problem was this guy was running ads in newspapers. And if you look at the total addressable market share of newspapers over the last 15 years, it's been declining. So he's still achieving growth year over year, but he's doing it in a declining market. And so you're never going to achieve the type of growth that you're looking for.
Dan Krueger: [00:20:33] You can't get stuck in the weeds, you know? This is why I'm such a huge fan of the top-down approach to everything, right? Because if you start from like the wide perspective, if you start from like, you know, the 50000-foot view, you're going to notice these dynamics before you start jumping into the weeds, right? But if you start in the weeds, if you start looking at individual deals, if you start looking at individual stocks, you might miss the fact that you're actually looking in the entirely wrong space and you should be where the heck over here. So it's always a top-down guy. A lot of people are not that way by default, so you've got to actually kind of manually switch the way, you approach things and force yourself to at least even if you don't start from the top down, at least incorporated at some point. Otherwise, you're going to miss some important stuff.
Anthony Vicino: [00:21:15] Yeah, perspective is just so, so important. It's one of those gifts and it takes a long time to develop. Or you can work with somebody who's been there before and they can fast track. And maybe they have a better perspective because you've got to be able to see things both from the fifty thousand foot view. But then I also have to be able to get in the weeds occasionally and see it from that angle too. You mentioned something before about something that got me thinking about home-court advantage for some reason, like thinking about us in our market of Minneapolis and St. Paul, like we have home-court advantage. We know this market because we've done it over and over and over. And so it's just kind of. Rinse and repeat. And I was thinking about sports again because, you know, we're sports guys for some reason like I always go to sports analogies because I think it's something universal that a lot of people can really relate to. But I'll put this in the context of tennis. I've been playing a lot of tennis in the last year. It's like my COVID activity because you can play with a buddy, you just stand on opposite sides of a court and hit balls at each other. It's a lot of fun. But there are three really big players in the world of tennis. Think I know? Can you name them Federer? Federer is one of them. Nadal, Nadal's another one.
Dan Krueger: [00:22:20] And then the guy yells and throws his racquet.
Anthony Vicino: [00:22:22] That's the other one. Yep, so Novak Djokovic, Djokovic. Oh, no, I was thinking of McEnroe. Oh, McEnroe, he's old. He's old now. He doesn't count anymore. Oh, okay. So we have these three players, we have Federer, we have Nadal and we have Djokovic and they're in tennis. A lot of people aren't aware of this, but there are actually three different surfaces. They play on grass, they play on clay and they play on hard court. Now each one of those three big players is incredibly dominant on a different surface. Nadal is the best clay-court player of all time. He's won the French Open like 14 times. Federer has won Wimbledon on grass eight times. Djokovic has won the Australian Open on hard courts eight or nine times. Ok, so the point here is these are fantastic, great players and they're going to play well regardless of the court. So if you take us, we can invest in any market. We're going to do good. But if you put us on our court where we have home-court advantage, where it plays to our strengths, a.k.a. the Twin Cities, you can't beat us. You can't like good luck. And so that's how I think about the market. That's how I think about understanding where your strengths and your potential points of leverage lie. And for us, that's a huge one.
Dan Krueger: [00:23:31] Yeah, I'd like to use food and restaurant analogies because that's something I know and I love a lot of sports. I'm not going to lie. I cannot keep myself interested in sports like I can go to a live game and enjoy the experience, but I cannot force myself to really pay attention to all the things that are going on. I can't do it, so I'm going to use food, right? So you can go to The Cheesecake Factory and they've got a menu about the size of this book and it's all OK, right? But if you want a really good burger, you're going to go to the burger spot. If you want a really good pizza, you're going to go to the pizza spot. If you want really good pasta, you know you see where I'm going here, right? If you want something done really well, you go to a place or a person or an entity that has identified their niche and they've doubled down on it and they've gone deep and they know how to do that. One thing really, really, really, really well. Now you only go to them for that one thing. So that's, you know, that's fine. You go to the great burger spot. They probably don't have pasta, whatever, but you get the best of the best when you go to somebody who's really figured out what their niche is and they've dialed that in. Hmm.
Anthony Vicino: [00:24:33] So regardless of whether we're talking about food or we're talking about sports, you'll notice that the thing that keeps coming up is we're talking a lot about the operator and the market. So if we go back to the tennis analogy, Federer, is the operator. Wimbledon is the market. What you're not hearing us talk a lot about is what racket he's using. That's the deal. We're not really talking about that. When we're talking about the cook and the kitchen, we're talking about the cook and we're talking about the restaurant itself. But we're not really talking about what stove he's using as it does. That doesn't really matter in the grand scheme. If you have the right operator in the right market, the deal is going to take care of itself.
Dan Krueger: [00:25:10] It implies that it's going to be a good deal, right? And, you know, typically kind of to at least defend some of what we said before about the operator being the most important part. If you do find a good operator there, probably in the right market, right? That's probably why they're a good operator. So I mean, we're not going to completely discredit everything we've said in the past, but we felt it necessary to do a deeper dive on this to really just kind of hammer out some of these finer elements and really, really, really flush out our logic and our philosophy here. So with that said, you know, if you do find those rockstar operators, they're probably in the right market, but you do want a double check as well.
Anthony Vicino: [00:25:45] Yeah. At the end of the day, I think we're advised that the operator is the most important part of the deal. I think that truly is still the case because they know the market. They're going to pick the right market like that's a given. If in the analogy of the Championship level jockey, they're not going to get on a lame horse, they're also not going to go race and PO dunk. Well, I don't want to call it any podunk place. You just
Dan Krueger: [00:26:10] Lost the people in projects
Anthony Vicino: [00:26:12] Somewhere. Yeah, I don't want to. I don't want to call out any place in particular and make them feel bad because they live in potente. But like, you know, like Tom Brady isn't going to go play in. I'm sorry, the Canadian Football League, like, he's just not going to do it.
Dan Krueger: [00:26:24] So sports analogies, I mean, we're absolutely leaning into that today.
Anthony Vicino: [00:26:28] Who's Emeril Lagasse? That's a cook person. So he's not going to go cook. He's that. I don't know. I got really lucky to even get close to knowing it.
Dan Krueger: [00:26:39] Cook. I don't know if you got the last name, right, but
Anthony Vicino: [00:26:40] He's not going to go. He's not going to go cook in. Like some off the beaten path under Wal, Fuddruckers restaurant delivers nowhere like he's not going to do it. So sponsor? Yeah, I'm sorry, Fuddruckers. But actually, Rutgers is a place that I bonded a lot with my dad when I was little because I'm sorry about Rutgers, so it has a special place in my heart. Anyways, so that's that's it. What are the three most important aspects of a deal? You got the operator, you got the market and you got the deal, and don't put too much emphasis on the deal at the end of the day. Later, we're going to be shooting an episode actually, probably right after this because we like to batch our content. We're going to talk about specifically how to compare two deals, and we're going to go into that. And in that episode, which is probably going to come out a week after this episode, you're going to hear us talk about the fact that a lot of the things that you're looking for between these two deals are completely arbitrary, and it just depends on what the operator decides to put in there into their projections. So stay tuned for that episode, I think could be really illuminating. Now, before we walk out of here, out of this fancy podcast studio and out of your earholes, Dan, what kind of book recommendation do you have for us this week? We've already mentioned a couple.
Dan Krueger: [00:27:48] Excellent question. Thank you. The book recommendation this week is not going to be this one, even though this is. Sitting on the table and is nicely situated right in the center of the
Anthony Vicino: [00:27:59] Screen for people listening at home, they're like, I don't have a clue what you're talking about, but that is passive investing made simple
Dan Krueger: [00:28:04] Passive investing.
Anthony Vicino: [00:28:05] The new number one Amazon bestseller.
Dan Krueger: [00:28:07] Kind of a big deal. Kind of a big deal. But yeah, today's recommendation is actually going to be a book that is kind of ingrained in my mind at this point because we've been so deeply embedded in it, and I think it's probably one that we recommend it before. But because it's become such a staple in our office and it's become such a big part of, you know, the the the reading material of our team at this point is I think we need to talk about again, that's traction by Gino Wickman. So anybody who's in the entrepreneurial space, you probably already heard of this, and if you haven't heard of it, then you need to go pick it up. It's all about how to run and scale your business effectively, specifically around bringing in the right people and then keeping a cadence going with them for communicating your goals and your values and all these things. And it's been such a great resource for just getting ourselves organized and helping bring rock stars on our team and help up the game. As far as this podcast is going, I mean, this is all a result of putting the right people around us, and that book has been instrumental in us just kind of grabbing this business by the horns and really kind of steering it effectively where, you know, if you're an entrepreneur, you can appreciate the fact that you'll probably just get caught up putting out fires all day long if you're not intentional about actually driving forward and focusing on the things that matter. And that book has been
Anthony Vicino: [00:29:24] Hugely valuable, and that's a good book recommendation, given the bad investing advice at the beginning of the show, which was you are your most important investment. One of the issues that we alluded to at the beginning is that entrepreneurs if they're not careful, they're very easily sucked into working in the business all the time and not working on the business. And that's because they don't have a system. They don't have a process, a playbook to go by. And that's all traction is. It's just a system. It's just a process of the playbook that helps you implement so that you can work your way out of being into those critical positions where you're the bottleneck all the time. Now I've built other businesses on the back of other frameworks and my advice. I really like traction a lot, but my advice is regardless of which system you choose, the best one is whichever one you're going to use at the end of the day, like we can, we can sit and recommend all these different books. But at the end of the day, it's the one that you actually implement. And so if you're at this point in your, your business, your investing career where you're like, I'm doing too much, I want out of this, give some serious credence to the idea. Go pick up this book and then actually implement it and stick to it. That's going to take you just so much further than simply reading the book and then not doing anything with it.
Dan Krueger: [00:30:36] Yeah, I'm going to double down on that advice, for sure, because as Anthony alluded to earlier in this episode, I do have a history in the fitness business, and one of the biggest things I'd run into there were people asking me, You know, what's the best workout? What's the best time to work out? What's the best diet? And the answer to all those questions was whatever you're actually going to keep doing consistently for a long period of time. It doesn't really matter what the system is, what the diet or the food is, or the workout. You have to actually enjoy it and it's got to jive with your personality because all that matters is consistency. The system itself is kind of irrelevant, kind of like the deal.
Anthony Vicino: [00:31:13] There's a great quote. I can't remember who said it, so I can't give proper attribution. But it's like I would rather work with an idiot with a plan than a genius without. I like that quote. Yeah, a plan. A plan takes you a long way, and that's really what traction is about, and that's why we like it. It's a great, valuable resource for us. So go check that out, and that's going to do it for us. It's all. Yes, that's everything that we guys do. Go home. Go about your business. But before you do, make sure you go, go pick up the book. Passive investing is made simple. We have a free special going on right now, so if you go to the passive investing books, you can get the book for the price of free $0 dollars. All you do is pay to ship.
Anthony Vicino: [00:31:56] We will ship it. We did not discuss this.
Dan Krueger: [00:31:57] We will give you the book for free. Yeah, well, I made a unilateral decision. That's what happens.
Dan Krueger: [00:32:02] Go get it. Before Dan vetoes these 20 minutes you
Anthony Vicino: [00:32:05] Got you got a limited amount of time. Go get your copy. We don't know how long we'll run this special for, so go get your book. Pay for shipping. We'll send it out to you for free. And that's going to do it for us, guys. We love you. We adore you. We appreciate all your support and we'll see you next week.