The Strategic Art of Getting Everything You Want Out of Life

I’ve spoken here the last two years, and I was like, well, I don’t want to say the same things that I’ve said the previous times. So I sat down this morning, I came up with a completely different strategy for this talk, and what I wanted to talk about is not real estate. So what I want to talk about is the strategy, the subtle strategic art of getting everything you want out of life. That sound good? Not really real estate specific. We’ll weave some real estate in there, and we’ll make some time at the end so that you guys, if you have any questions, fire them at me. But I’m just. I’m generally curious, for people your age, why real estate? Like, what’s drawing you to real estate in the first place? What’s the interest here? Go ahead and raise your hand or shout it out. I don’t care.

But why real estate? There’s just so much opportunity and, like, so many different avenues that you can go down. And it’s like, if you work hard, you can be successful. Yeah. And, like, the sky’s kind of a limit, literally. Skyscrapers. Right. Like, real estate’s everywhere. There’s tons of opportunity.

What does that opportunity afford you? Flexibility. Flexibility. Somewhat of a security. Security depends on where you. What you go into. But who thinks real estate is inherently super interesting? Like, I like buildings. I like the idea of buying. Cool.

If you don’t find real estate inherently interesting, you’re gonna have a really hard time in this field. But for a lot of people, it’s exactly that. What’s your name again? Layla. Layla. Congratulations, by the way. Events coordinator. So a lot of people get into real estate for the opportunity specifically tied to the money, because everybody knows, like, more millionaires have been made through real estate than through any other asset class. Right? We’ve probably heard that before, yeah.

Is that familiar? But the thing with making money, the thing with opportunities, is that every opportunity really boils down to one of two directions that you can approach it from. It can either be a strategic direction or a tactical direction. So, pop quiz. Who knows the difference or has a very good definition for the word strategy versus tactic? What’s the difference? Go for it. Strategy is a plan as a whole, and tactic is something that is to achieve that plan or goal. Nice. I like it. So strategy is a plan for achieving a goal.

Tactic is the thing that you’re going to do in pursuit of that, another way of putting this. And that’s really good. Gary Kasparov. Anybody familiar with that? Old man chess player? No? Okay. That’s okay. He played deep blue back in the early two thousands. First human to lose to a computer. It’s been downhill ever since for us.

Now with AI’s coming up, it’s game over. His definition is very interesting. Right. Chess is a strategic game. It’s also very tactical. He says tactics is knowing what to do when there is something to do. Strategy is, is knowing what to do when there is nothing to do. And this is a really important distinction because strategies, like you said, they’re the plan that give you the opportunity to then exploit tactically.

And I have a feeling that a lot of people, when they come, they talk to you in a lot of the classes that you guys are having right now. They talk to you about tactics, talk to you about how to fill out the spreadsheet, how to talk to brokers, how to sign a contract, all the tactics. The problem with that is that tactics can be taught, they can be trained, and so they’re inherently not very valuable. You guys have valuable skill, but I can train somebody to do the same thing. And so if you want to move forward in real estate, if you want to exploit the opportunities that will come your way, you have to have a strategic plan for doing so. You have to know what to do when there is nothing to do. You have to know what to do when nobody is telling you what to do. Because if I have to tell you what to do, then you’re just my monkey.

You’re just an extension of my hands. And that’s useful, but it’s not uniquely useful. It’s not uniquely valuable in a way that’s going to help you rise through your field. What I want to talk about is five strategic ideas that you guys can implement as you move forward out into the real world, as you move through your education. And I have never given this talk before. I was sitting down this morning, I found out yesterday, I was speaking to you guys and I was like, well, let’s not say the same things over and over and over. So what we are going to do is we’re going to discover what I think on these topics as we talk about them. Does that sound good? But you guys don’t know who I am, right? No clue.

So a little background. I’m an old man now. I turned 40 in a month. About twelve years ago, I was turning 28 and my life fell apart. My fiance, out of nowhere, I thought things were going great. She calls me and she says, this isn’t going to work for me anymore. She kicks me to the curb and that was a problem for me because at the time, I had about $1,000 in the bank account. I had $80,000 of debt, and I had no clue what to do.

I had no real skills because up to that point, I had been on a pseudo professional rock climber, which sounds really cool, but it really just means you live in the dirt and you climb on rocks a lot, doesn’t pay very well. So suddenly I found myself in the back of a van that I bought from a church for exactly my life savings, all thousand dollars. And I lived in the back of that van in downtown Oakland for the next four or five months. And, ooh, there we go. Strategic guard of getting everything you want out of life. And like I said, I just put these together this morning, so I don’t even know what they’re going to say. So we’re discovering this in real time as we go, but, okay, so I’m in the back of that van. I have no clue what I’m doing.

I’m dirt poor, and I’m pretty bummed about the fact that my life at 28 is not going how I thought it would. You know, I graduated five years before that triple major. Thought, hey, world’s my oyster. I got this. And so when you find yourself in the back of a van in downtown Oakland, praying homeless people don’t break your window and move in with you like you really do some soul searching. And from that place, I got really lucky. I got really lucky because a friend, he came to me and he’s like, dude, this is sad. This is really pathetic.
We need to do something about this. And so he suggested that we start a business. And I was not the entrepreneurial type. I had never plucked flowers from the neighbor’s yard and sold it back to them. I didn’t have a lemonade stand. Like, the idea of talking to strangers, of trying to sell something, you guys don’t understand this, but I was born in the eighties, and we learned about stranger danger, which is like, you don’t talk to people you don’t know. So this was a problem for me. But when you’re at rock bottom, you’re desperate.

You’ll try anything. And so I was like, yeah, okay, fine. Let’s build a business. And next day, we went and bought a couple hundred dollars worth of cleaning supplies. And then we spent the entire afternoon knocking on doors, asking people if we could wash their windows. Nobody took us up on that offer the first day, but we kept showing up over and over and over. And after about a year, we were doing top line, around a million dollars. So that’s a lot of windows.

And what I discovered was like, wow, entrepreneurship is really cool. And now I had a new problem, which is, okay, now I have money coming in. What do I do with that money? And so I went to people who are ahead of me in life, and I was like, what do you guys do with your money? And they’re like, we invest in real estate over and over. As I talked to every single richest person I could find, they’re like, yeah, invest in real estate. Just hold the real estate for a long period of time. You’ll do good. So that’s what I started doing back in, like, 2012, 2013, started buying real estate. Started with a triplex that I house hacked, got an fha loan.
So I put down about $7,500, lived in it, rented out the other two units, and then nine months later, it appraised for about $375,000, which was $125,000 more than what I paid for it. So in nine months, I discovered I am the best real estate investor in the world. Huzzah. So start investing in real estate. And I had no intentions of building a real estate business. I was just investing in real estate. And there’s a distinction between investing in real estate and building a real estate investing business. It’s one thing just to put your money into a piece of real estate and let it keep compounding and let it do its thing.

You hire some property managers, you allow them to run it. The different thing, to build a real estate investing company, where you are going, and you are actually going to manage this thing like a business. You’re going to hire property management, you’re going to hire marketing, you’re going to hire leasing agents, you’re going to raise capital. Right? It’s a very different thing. But we started this in 2019. That’s Invictus Capital. And since then, we’ve acquired about $85 million of real estate here in St. Paul and Minneapolis.

We manage it all in house with a team of about ten to 15 people. We’re a little weird in the sense that we are hyper local. We like the twin Cities. We like buying apartment buildings between 20 and 80 units. It’s kind of a forgotten middle, where people are like 20 units, it’s too big. And then you have the institutional investors who are like 80 units. It’s so tiny. So we play right in that forgotten middle, where there’s a lot of opportunity.

And so here we are now. I guess that’s why they brought me in to talk to you guys. Okay, so that’s my real estate background. Any questions? Save them for later. Just kidding. How far along were you when you invested in your first apartment? That was more than just so. The question is, how far along was I before I invested in the first apartment complex? I was probably seven years in at that point. Yeah, there’s this big rush in the world of real estate and investing.

People say, oh, scale is better, you got to get to scale and bigger is better. But honestly, I found there’s a ton of profitability in really small properties and that there doesn’t need to be a rush to go scaling really quickly. Just because you have 10,000 units doesn’t mean you’re 10,000 times more profitable than if you only had 1000 or 100. I know guys out there who have very large portfolios that jumped very quickly into institutional level apartment complexes, and they’re not making a ton of money. It’s a very competitive space there, so you have to find where the opportunity is. And that goes to something else that we’ll probably talk about at some point today, which is that if you paid attention over the last couple of years, we’re kind of in a weird market. Interest rates are very high. There’s a lot of question marks about what’s going to happen long term with the Fed.

Are they going to keep raising the rates? Are they going to bring it down? And there’s a lot of question about debt maturing. So is there going to be this cataclysmic catastrophe like we saw in 2007, 2008? And my big thing, when people are asking me, what are you guys doing, given the current state of the market, is just to remember that there’s no such thing as a good market or a bad market. There’s merely the right or wrong strategy, given your skills, your resources and your business plan. So in any market cycle, you can make a ton of money. In fact, if you look back historically, we talk about these times of froth and turmoil as like the great wealth transfers. A lot of money changes hands during times of turmoil. So this could be a really good time. If you’re young, you don’t have a lot of money.

You don’t have a lot of access to capital at this point to get into deals that maybe you couldn’t have three or four years ago because there’s a lot of people sitting on the sidelines, a little afraid, a little scared, and maybe rightfully so. But you’re young and you have your entire life to make it back so if there’s one thing to take away, now is the time to take the risk. Not saying take blind risk, but understand that I’m old. I don’t have as long, if I lose it all, to get it back. You have literally probably twice as long as I do. Time is an investor’s best friend. Let it do the heavy lifting. Let’s talk about these five ideas that you can use to strategically maximize your opportunities in life as you go out into your internships, as you go out into the future, getting jobs and trying to figure out how do I rise to the top of the ranks? Number one, learning versus earning.

Where you guys are in your journey right now, all of your focus should be on learning, not earning. Because as soon as you go out into the workplace and you start focusing on earning money and getting this, negotiating, like, I want the top contract that I can get. I want to come out of school and I want to be making 60,000, 70,000, $80,000 a year. Okay? But just understand that you’re not yet worth that because you don’t really know what you’re doing. And that’s okay. That’s okay because you can learn. But if you go and you take the job that’s just offering you top dollar, you might find yourself in a position locked in in a couple of years where you really haven’t progressed very far. And the reason for that is if, let’s hypothetically, what’s your name? Sam.

Sam. Sam, let’s say you came and you’re like, I would like to be your chief marketing officer, and I would like to make $120,000 a year. Like, cool, I will pay you $120,000 to be my CMO. I am not. What the hell? I just got. There we go. I am not going to hold your hand. I am not going to tell you what to do.

Because for that dollar amount, I am paying for your expertise, your know how, your ability to go find the answers, your ability to go execute. So when you start getting these jobs just to earn, it comes with the expectation that you know what you’re going to do, that I’m not going to have to hold your hand, and that you’re going to be able to go execute. Now, if you go into that job, instead of saying, I want to be your cmo, instead you said, hey, I want to be your apprentice. I want to be your intern. I don’t care about how much I make. I don’t need very much because I live with five buddies and we live dirt cheap. Cool. Now I know what to expect.

You’re not costing me very much. Maybe I only pay you 30, $40,000 a year, and I’m getting exactly what you’re worth. And you’re getting a better deal because you’re getting access and opportunity and hand holding. And this can seem very counter intuitive when you first graduate and you think, okay, it’s time to go get my big girl job, my big boy job, I want to go get that. And my friends are all getting these high paying jobs. I encourage you to really think hard about optimizing for the opportunity that comes from getting around the highest level people you possibly can. And I’m not going to let you get around me and pay you a ton of money if you don’t bring anything to the table. So just understand that what you’re learning right now in school, it’s very good.

You’re learning the tactics, you’re learning what to do. But understand that a lot of what you’re learning here is already outdated, unfortunately. And that’s not the fault of the school system. It’s just that it’s a rapidly evolving world. Right. Have you guys had any classes this semester on, like, AI implementations into property management? No. What the heck? That’s all anybody’s talking about in the industry. The points of school is not to teach you what you need to do.

That’s irrelevant. That information is going to be obsolete by the time you get into the marketplace. Largely, the value of school is in its ability to teach you how to think, how to go find the answers, and also to surround yourself with people who are also doing the same thing. They’re learning how to think. Now, that might not seem like a very big deal, but I assure you, most people do not know how to think. Now, there’s two types of thinking. The first is convergent thinking, and this is what school teaches us. School teaches us that there is a right answer.

If you follow the formula. If you do x, then y, then z, it pops out, whatever. And that is the right answer. But out there in the real world of real estate, of investing, of entrepreneurship, there is no right answer. There are simply better and worse answers along a spectrum of probability. I think this is more likely to work out. I don’t know for sure, but I think it might. This is what we call, what do we call this other form? So we have, convergent is the answer.
Oh, the answer’s up there. Damn. Okay. Divergent thinking. Yeah. So how do you learn divergent thinking? Any ideas? Failing a bunch. Failing a bunch. It’s a good way.
Any others? Mentor. Mentor? Yeah. It’s a great one. Experience. Experience? Yeah. Did you have a hand? No. Okay. Yeah.

Failing. The people who are ahead of you in life, the people who are, like, standing higher on the mountain than you just understand, they are simply there because they’re standing atop a larger pile of failures than you. That’s it. And you can accelerate your learning. You can accelerate your growth. If you fail as fast as you can and you get a mentor, you get somebody who has experience, and you learn from their failures. So I believe the apprentice model is wildly underrated. You know, nowadays we call them interns.

I don’t like that word so much. I think it has a weird connotation. But the apprentice model, getting next to high level people who think differently, who think divergently, who think strategically, who have a lifetime of failures and experience behind them, that they can help accelerate your growth, that is more valuable than all of the tactical stuff. All of it. I guarantee it. Because I can teach you all the tactical stuff in six months. I can’t teach you all of the strategic stuff that’s taken me a lifetime to learn, and the same with everybody who has reached any level of success. So as you go out, you’re looking at these jobs, you’re looking at these opportunities.

Don’t look at them through the lens of what’s the most prestigious, what’s going to pay me the best, what has the best benefits. Look through it through the lens of what’s going to give me the most opportunity to learn and to grow. If you do that for the next five to six years, as you get out of school, or as you’re even in school and you’re doing your internships, you will be so far ahead of your friends who just took the high paying job and they got stuck in the closet looking at spreadsheets all day, you would be better served, in a lot of cases being the right hand assistant to somebody who’s running their own company. And you can see day to day exactly how they move and how they think. Now, that means you’re probably going to have to do some things that you’re like, I didn’t train for this in school. Right. But that’s where the opportunity is. It’s from the proximity.

Proximity is power. So are you guys familiar with Warren Graham? No. Benjamin Graham? Warren Buffett? I’m sure everybody here knows. Yeah. Okay. If not, then you gotta go. I’m just kidding. Does everybody know who Warren Buffett is? For real? No judgment.
Okay. One of the greatest investors of all time, Benjamin Graham, was his mentor. Benjamin Graham was the original value investor. He, in fact, he wrote the book, I believe it’s called the value investor. And many years ago, because Warren is now, like, 98 years old, when he was in his twenties, he went to Benjamin, who I think was working at the University of Chicago at the time. And he goes to him and he says, hey, I want to work for you. I’ll work for you for free. Just teach me everything you know.

Just let me be around you. I’ll do whatever it takes. Benjamin Graham looks at him and says, even for free, you’re overpriced. And Warren would go on to be one of the best investors the world has ever seen. Harsh. And that is the reality, is that even for free, you’re probably overpriced in the marketplace right now. And I say that just so that you go in with realistic expectations and you understand the value of what you’re getting in the first decade of your career, it’s not the earning, it’s the learning. Because as soon as you make the transition to making the money, you’re probably going to slow down on your learning, because now it’s time just to execute what you already know, and you don’t have a lot of time to go.
Continuing putting in the time and the reps to continue learning and growing. Does that make sense? Idea number two, master leverage. And we’ll leave it at that. I’m just kidding. Leverage will get you further ahead than hard work. But hard work is required to get the leverage. So you, over the next however many years of your life and your career, need to focus on putting in the hard work and optimizing for the opportunities that will give you maximum leverage. There’s four types of leverage, in particular that you want to be on the lookout for.
That you want to be actively developing, actively mastering, actively acquiring. Does anybody have any idea what those four are? It’s very popular these days. A lot of people talk about it, not just me. Any ideas? No? Okay, cool. Fresh ground. All right. There’s four types of leverage to think about. Yeah.

Labor, capital, technology, media. These are the four types of leverage that really play a part in making money, optimizing for opportunities, growing businesses, taking advantage of real estate. Right. Labor is, you know, your own labor or recruiting people to come and work with you. This is the part of leverage that most people get all jazzed about. They’re like, how many people work for you? That seems to be the criteria a lot of people value is like how many people work for you? How many people do you manage? Right? Just tell you, it doesn’t matter. It doesn’t matter if you manage 100 people or ten people. It matters the output, it matters the value that those people are able to bring to the world.

The labor leverage is very valuable. Without it, we would not have pyramids. Don’t know how valuable those really are. But, you know, I am struggling with this. So labor leverage, a really good example of this is when I grew that window washing business all those years ago, I did not wash a million windows. I did not wash a million dollars with windows. I hired my buddies to do it and they washed the windows and I paid them. That’s great.

That’s a great way, right? That’s the first type of leverage. It’s the lowest form of leverage, but in the beginning it’s all you have. So you have your hard work, and if you’re really, really persuasive, you can get your buddies to do work with you. Has anybody read Mark Twain, Tom Sawyer? The whitewashing of the fence? No. Some see, some. Ok, I’m not going to tell you the story, but do go look it up, it’s a good story. And then start thinking, oh, how do I do that? How do I attract talent to do the work alongside me or for me, so that I don’t have to be the one that’s doing it? I can focus not on the tactics, but on the strategy. When you hire people, they’re doing the tactical work, not the strategic work.

Does that make sense? Yeah. Okay. Second form of leverage, you guys are all familiar with capital leverage. This is equity, this is debt, right? You give me your money, I will invest it on your behalf. I’ll take a little bit of the delta, you get some returns, and that’s great. We acquired our 80 ish million dollars of real estate as we raised $40 million of private equity from private investors. It’s a great thing. Problem is, nobody’s going to give you their money unless you have some kind of track record, right? Like some kind of know how, some kind of skill.

But that is how the majority of wealth was created in the 20th century. Warren Buffet, greatest investor anybody’s ever heard of capital leverage. People give him billions of dollars and they’re like, just invest it for me. Take what you want. And he does, he does it really well. Third form of leverage is technology. So that’s code, that’s AI, that’s everything that’s out there right now. That the marginal cost of replicating the product is practically zero.
What I mean by that is you could create a software right now, right? Is anybody familiar with Appfolio? It’s a property management software. No. Okay. That one piece of software they create at one time, they have tens of thousands of users that are generating hundreds of thousands, millions of dollars of profit for them every single year. So software. So when we’re talking about AI and how to implement that into our property management systems, that’s an opportunity for leverage. And this is where you really need to be thinking as you go out into the world is like, where are the opportunities for me to express leverage? Where can I get this from? I’ll tell you what, old guys like me, we don’t know a lot about technology. I still use Facebook.

Who’s on Facebook? I didn’t. Yeah, ok. Like five of you. I get it. You know more about the state of technology. It’s moving so quickly, so rapidly. You know it better than others. So that’s an advantage, but only if you lean into it.

The fourth one is media. The fourth form of this is my favorite one. Media is, you know, you can put out content, you could put out a blog, you could put out a Twitter post, you could put out a book, a podcast, and that thing could be viewed millions and millions of times. We put out a video. Well, our YouTube channel has like, what, 200,000 subscribers and gets millions of views every month. We write for Twitter, we write on LinkedIn. They get hundreds of millions of views every single month. That’s the power of media.

Create it once everybody knows who you are, because you’ve probably heard it before, that it’s not about what you know, it’s about who you know. You guys heard this. Okay, that’s wrong. It does not matter who you know. It matters who knows you. I know Oprah. Oprah does not know me. So if Oprah has, like, the best deal anybody’s ever seen, the best opportunity that I am the perfect person for, it’s not going to me.

Who’s it going to go to? Who she knows, who she knows. It’s going to go to somebody she knows. Media is your opportunity to become known. This is the beauty of a personal brand. You might think like, oh, I’m young, I don’t have anything. Like, nobody cares what I have to say, right? I call bullshit. I think starting off in the beginning of your career is like, one of the most interesting times to document what you’re doing and to share it with the world, not from the position of, look, I’m the expert, but look where I’m going through. Look what I’m doing.

People love watching other people, and that can be a massive form of leverage. In fact, it’s that form of leverage which has enabled us over the last three years to not pursue a single deal. They have all come to us from sellers selling us their portfolios, the media. So all four of these are valuable in all aspects of entrepreneurship and business, but specifically within real estate. Any questions on this? No. Cool. Why would someone then come to you to do a deal with us? Because people do deals with people they know, like and trust. Well, because we have done close to 600 podcasts.

We’ve done tens of thousands of hours of content, we’ve written books. People know who we are, or at least they feel like they know who we are. And so when it comes down to, do I want to do a deal with Anthony, who I sat and watched all this content from, or this other person who I’ve never really heard of, they’re probably going to lean towards me. It’s the same reason why Joe Rogan has so much pull, so much ability to move product. If he says, hey, I use this product, it’s really great, millions of people will go buy that product. Why? Because they feel like they know and trust Joe’s opinion. It’s the same thing. You can’t do business with somebody if they don’t know who you are.

You can’t sell a product to somebody unless they know who you are, even if it’s the best product in the world. The truth is, you can’t save souls in an empty church. People have to be there. They have to know who you are. If it’s a choice between doing a deal with somebody who I’ve heard of a few times versus somebody I’ve never heard of, they will always do it with the people they’ve heard of. And we see this in election cycles all the time. People vote based off the name they recognize. They’re like, I don’t know who all these people are, but I’ve seen that one.

That’s why they do the yard signs. Have you ever wondered, why are all these yard signs out here? Does this actually do anything? It does. It puts that name into your mind so that when you go to the ballot box, you think, I’ve seen that name before. That feels familiar. And we vote with things that are familiar. This is one of the six laws of influence. There’s a really great book by Robert Cialdini called influence. The six weapons or tools of persuasion.
And influence. This is one of those highly recommend you all read that, because everything you’re going to do in real estate is not really about the numbers, it’s not really about the deals. It’s about relationships. And a relationship is only ever between you and another person. And so understanding human psychology and what motivates another human to take action is a very powerful tool in the world of getting deals done. Does that make sense? Does that answer the question? And I think they just like, I don’t know, like we’re pretty nice to look at. I don’t know. You never know what’s really going to motivate.

Here’s the thing, this is a tangent, is that you can know that a thing works but not why a thing works. So I know that if I say this in this sequence, if I do this thing, that it leads to x result. It’s very easy because humans are just explaining machines to create these fancy narratives. As we look back in history and connect dots and say, oh, this is why that worked. We love creating explanations. But there’s another great book called fooled by randomness by Nassim Taleb. Highly recommend you read that. The truth is, often we fool ourselves into believing we understand why the world is moving the way it is.

In reality, it’s just randomness. So you can know that thing works, not necessarily why it works. And I know that what I’m telling you works. I’m a little bit hazier on why exactly it works. Okay, you guys ready to move on to the third? You need to learn to communicate. Victor Hugo said something very profound. He said, there is nothing in the world more powerful than an idea whose time has come. But I think this is only half right.

Because the truth is, an idea is only as effective as your ability to communicate it. If you can’t communicate your ideas, if you can’t communicate why this is a good deal, why they should do a deal with you, why these numbers make sense if you cannot communicate it, you can’t move people to take action towards you and in your favor. And this is hard because I think everybody has felt this at one point in their life where you’re sitting across from somebody and you’re trying to explain something that’s super important to you. Maybe that’s a loved one, maybe you’re on a first date, maybe you’re in a job interview. You’re trying to convey, I’m the perfect person for this job. And you can see the other person, the words are flying over their head. They’re not getting it. It’s not landing, and it makes you feel invisible.
It makes you feel very worthless, because one of the core human desires that we all have is to be seen, to be heard, to feel valued. And a lot of that comes down to our ability to communicate effectively with other people. So if there’s one super skill that I would recommend you guys start working on right now is the ability to communicate your ideas. And that really comes down to two forms. You can either speak your ideas, or you can write your ideas. I recommend everybody starts by writing down their ideas, sharing those, because thought is made physical when pressed through the pen tip, when pressed through your fingers into the keyboard. The people who do not know how to write, who do not know how to convey their thoughts through the written word, they’re what I call lily pad thinkers. Do not be a lily pad thinker.

When you go for a walk, when you’re just hanging out, you’re just sitting here and you’re thinking right now, the way the human mind works is it is a chaotic, scary jumble, and your mind is probably bopping from a thousand different thoughts simultaneously. It never goes very deep on any of them. As soon as you start to go a little deep, it’s like, I should think about this other thing. And it just keeps doing that over and over and over and over. It’s chaotic. If you’ve ever felt overwhelmed, like, man, I just can’t get my thoughts straight, it’s because you are a lily pad thinker, and that’s not your fault. That’s just how we’re designed. The forcing function for not just going wide and shallow on your thoughts, but rather going deep into them, on what you truly believe is through writing.

Writing forces that chaotic jumble of thoughts into a cohesive narrative. And often what I find is that people have no idea what they believe on a topic until you force them to write on that topic. And so the most valuable, and I’m guessing most of you won’t do this, one of the most valuable life skills is to write every single day, whether that’s a journal or writing on Twitter. I don’t care where you do it, but the most potent, clear thinkers in the world, the people who will rip you to shreds out there, are good writers because they are good thinkers. Writing is just another form of thinking, and thinking ain’t easy. Neither is writing. And I don’t think school did us a lot of favors generally. So I’m going to rag on school again.
And I can say this because I’ve written twelve bestselling novels. I write every single day on Twitter, on LinkedIn, and I get hundreds of millions of views. And I also have an english degree. And I know from personal experience that a lot of what I learned in schools, it made the act of writing even harder because I thought there were rules. The truth is, there are no rules. You get to make them up. All that matters is that you get the thoughts out in a way that makes sense to you. And when you do that, well, that’s what we call voice now.

You have style. Have you guys ever read Cormac McCarthy? No, that. What are they teaching you guys? I’m just kidding. That’s another great author. Cormac is famous because he has a beautiful style, and he would have failed every single literature exam in the world. He has the worst punctuation. It doesn’t make sense. He has run on sentences.

It’s terrible. But we call that voice. So don’t get in your head about whether or not what you’re writing is actually good. If it’s actually worth reading, it doesn’t matter. The value of writing, learning how to communicate, is you gain better clarity. So when you’re sitting down in that job interview and they’re like, hey, why do you want to be in real estate? You have a really damn good answer. Because you’re like, well, because of x, Y and Z. And I’ve thought this through, and there’s a depth to my thinking that the other person feels, and they go, oh, this is not just a shallow thought.

She’s not just a lily pad thinker. Does that make sense? Yeah. Is anybody going to go right after this? I encourage you. Is anybody on Twitter x anymore? Yeah. Twitter is great because it forces you to be concise and it forces you to articulate your thoughts with as few words as possible. It’s a great forcing function. You don’t have to tell anybody you have an account, but go and make this a practice. I know you look at this, you might think, I don’t know what this has to do with real estate, but if in ten years, if you were writing every single day, learning how to communicate your ideas effectively, you will be unstoppable.

There’s literally nothing that you could not accomplish. I’m confident of that because I’ve seen it play out time and time again. All right, fourth idea. The secret to success. Does anybody want to know the secret to success? Let me look it up, make sure I have it. One person. I saw one hand. Yeah.

Okay. Okay, cool. My dad told me this when I was like twelve years old, I was just a kid. I have severe adhd and this was very problematic for me. It’s a lot of the reason why I landed in the back of that van, because I really couldn’t sit down and focus and get things done, couldn’t follow through, couldn’t be consistent. And he looked at me one day, this is a very weird thing to say to a twelve year old, but he looked at me and he goes, Anthony, in the games worth winning in this life, you can’t win if you don’t start, and you can’t lose if you don’t quit. Even as a twelve year old, I was like, that doesn’t sound like a good strategy for Vegas. You can lose a lot before you quit.

But in the infinite games of life, the infinite games where you are pursuing your greatness, where you’re building a business, where you are trying to be a better version of yourself every single day, the games of relationships, where there is no end in sight, there is no top of the mountain, you’re just trying to improve, trying to get better. He’s right. You can’t win if you don’t start. You can’t lose if you don’t quit. And I say that because you’re at the beginning of the journey and you’re in the game now. And the only thing that can derail you is if you decide to give up. This is a game where you get infinite numbers of swings at bat until the day that you die. You only strike out when you stop swinging.

Okay, does this make sense? Yeah. And this is really important because it’s a hard game. Even when it’s going really well, you’re going to feel, okay, maybe I’m not cut out for this. Maybe I should go do something else. Maybe I’ve made some bad choices. Maybe I should give up. Just keep in mind that the people who are ahead of you are simply there because they’re standing atop a larger pile of failures than you. Now, if you don’t want to die in the process, here’s how to stay in the game.

This is for real estate. This is for business. But this is also just good personal finance advice. Number one, live below your means. As soon as you get a check, if it is all going out the window to pay for expenses and things, you are not living below your means. Has anybody ever heard the idea of fu money? One person? No. So the idea of fu money is you get to a place in life where you have so much money, nobody can tell you what to do, where to be, what to do, when to do it. You are in complete control of your life.

They can’t do anything to you because you have so much money. You’re like, doesn’t matter. I’m fine. Screw you. That’s fu money. I believe fu money is less about how much money you have and how willing you are to simply live with the consequences of your decision. So right now, if you were only making minimum wage, living in the back of a van, and you were okay with that, you have fu money. After I built my first seven figure business, the window washing company, I went on to build an eight figure manufacturing company.

And I was making good money living with my best friend’s mom for $400 a month. And it was embarrassing in the sense that when you tell your friends, they’re like, you live with your best friend’s mom. You’re 32 years old. What’s that about? Well, I’m building something. I’m doing something that matters because I don’t care to impress people whose opinions don’t matter to me and who, in reality, they’re not even thinking about you. So much of what we do to status and posture is simply to impress people who don’t care one way or the other. So just realize you’re on your own path. Live below your own means.

Number two, maintain strong cash flow. This is the lifeblood of any healthy business. Any healthy finance situation is to have money coming in consistently. It sounds cool to have a billion dollar net worth, but if you can’t access that money, is it really useful? No. Cash flow is what pays the bills. It’s what keeps the lights on in real estate. Dirty little secret here. As you start to get into it, you will be very equity rich and very cash poor, because as soon as you start getting any money, you’re going to go buy something again.

And this is very tempting. You’re going to go buy another building. And so your equity keeps growing, and your net worth is going to grow. And one day you’ll look up and you’ll be like, I’m worth $10 million, and I make $50,000 a year. Cash flow is very important. Optimize more for that than you do for the equity growth in the early days. Does that make sense? Keep ample reserves. You can’t be forced out of business if you have an infinite war chest.
Could you imagine Apple has, like, more money than God in a bank account? I did the math on this, and I was like, if they lost a billion dollars every year for the next hundred years they would still not go out of business. They have so much money put aside in the bank account. I’m not recommending that you keep all your money stashed aside in reserves. But it’s a good idea if you want to take risks and pursue opportunities in your life to keep an ample amount at least I would say twelve months. I know a lot of people say three to six months of expenses. I’m a big fan of twelve months because you can take some big risks and you can go for some big opportunities when you know you have the cushion to fall back on. So live below your means, maintain strong cash flow and keep ample reserves. Last but not least, and then we’ll open up for some questions.

Nobody is coming to save you. Your teachers won’t make you smart. Your doctors won’t make you healthy. Your trainers won’t make you fit gurus. We won’t make you rich. We can only point the direction. But you have to do the work. The people who are the most biased towards action, to doing the work, to going where it needs to be gone, without having to be told.
If you can find the destination that needs to be arrived at on your own and start working towards it, you will be so much further ahead than everybody else in your age group. Heck, in my age group, because most people are simply sitting around waiting to be told what to do. The deals aren’t just going to land in your lap. You have to go knock on doors, you have to make the calls. The equity isn’t just going to land in your account one day. You have to put out the content that makes people aware of what you do. You’re not going to get that job as the right hand of that really cool gal who runs her own private equity firm. Unless you’re reaching out to her, she ain’t reaching out to you.

You have to do the work. And again, how much work you do will dictate how much leverage you ultimately get. And that’s really the game. Like in a nutshell, I think if you could take these five ideas and implement them consistently on a strategic level, figure out how to apply them on the tactical, they’re going to be doing pretty well. So, any questions? Let’s open up. We can talk about anything. Could be about these ideas. They can be about real estate tactics.
Happy to talk about whatever. Yeah. You said you were living through van in oakland. What brought you to your real estate in Oakland cities? Good question. So the first real estate that I bought was in Oakland. I still own it. To this day. So if you do the math on that.

We bought in 2012 coming out of the financial crisis. We’ve owned it for over a decade, and the Bay Area has done very well. So I mention that only because people talk about how, like, oh, the Bay Area is a hard market. It’s too expensive. Rent control. A lot of people talk about twin cities in the same way. I assure you, if you hold a piece of property for 15 years, regardless of the market, unless you’re in Detroit, that’s like, the one exception. Like, you’re probably going to make some money.

And even Detroit saying, God bless their souls, they’re trying. So I left the Bay area. After selling my window washing company. I moved back to Minnesota because this is where my family and my friends were from. I had moved out to California to pursue rock climbing, and I was lonely. Like, at that point, I was getting old and washed up. I couldn’t climb in the same way that I could in previous years, and I was looking for the next challenge. I came back home.
My buddy had built a. Had started building a manufacturing company producing polyurethane rock climbing holds. And so him and I teamed up in 20, 1516, and we scaled that. And that’s when I really started making a lot of money, and that’s when I started buying here in the Twin Cities. But the main reason that we still invest in the Twin Cities is for two reasons, like, two unique advantages. You always have to look and say, like, where’s my unique edge? What makes me stand out gives me a competitive advantage in the marketplace, and ours is twofold. One is that me and my partner, Dan, we’ve lived here in the Twin Cities combined a really long time. So we know this market really well.
We know how to operate within it, and that gives us a lot of locals advantage. Deals come to us because other sellers know who we are, and then because we’re vertically integrated and we manage in house, we have the ability to group assets geographically by neighborhoods, and then run the assets as though they’re a larger facility, which a private equity firm coming from out of state would have a very hard time doing. So we’ve carved out this unique little niche in our space that gives us a competitive advantage. What’s not to love about Minnesota? Go ahead. So, with this current market, are you investing a lot? Are you? I think we’re going to see, like, a lot of pent up capital, kind of waiting for it to die down to spend it or. Yeah, we’re still spending. We’re supposed to close a deal to Friday. So we’re pushing that back.

So we’re still buying. We, a couple years ago, we lined up a portfolio transaction with a seller who had about 700 units that we’re buying across, I don’t know, 40 ish buildings. And so we acquired a bunch of those last year. We’ll acquire a bunch more this year and then finish out the transactions next year. So we had those locked in a while back at a really good rate. So we’re still doing those. But we’re not really actively looking to go and scale to the moon right now. Because again, when you’re vertically integrated with in house management, it’s not just a matter of how fast can you find the deals and how fast can you deploy capital.

For us, there is the monkey wrench in the operations, which is like, oh yeah, we actually have to operate these, so we have to hire leasing agents, maintenance, and actually profitably run these things. That’s harder than the other two. We probably have. Truthfully, if we really pushed at it, we probably have access to more capital than we really need. But that’s an easy way to get greedy and start growing over your skis and then the whole operation starts to fall apart. Do you guys invest in only hold or do you sell? So Charlie Munger says, if you buy with the intention of selling, you are not an investor, you are a trader. And my belief is there’s all sorts of ways to make money, but I believe time is an investor’s best friend. The longer that you hold things, the harder it is to screw it up.

So if you buy something and you plan to sell it next year, a lot has to go right. A lot can go wrong. But if you’re going to hold it for 20 years, you can smooth out a lot of bumps. Over 20 years, you can take a lot of lumps. So that’s our personal strategy. That doesn’t mean it’s the right strategy. We’re conservative in that way and we can afford to play that longer game. When you’re young, at your guys age, you probably don’t want to play that game because it can take you a really long time to generate meaningful money.

Off that better is to start probably with the faster transactions. Get those equity bumps like I did with the triplex, where, you know, that thing appraised for $125,000 more than what we paid for it nine months after. But instead of selling that, I took out a heLoC which gave me access to the equity in the building. I took that, I redeployed it bought another building. So you want to be thinking like, what’s the highest and best use of my capital? And generally, when you talk to the old guys who’ve been in the game for 50, 60 years, what do you regret? They almost always say, I regret selling too soon. I regret selling in 2011 because if I just held it for another ten years, that thing would have tripled. Selling is a headache, too. You gotta deal with brokers, you gotta deal with tax implications.

You gotta figure out, am I gonna 1031 this? Right? So generally, I’m a big fan. If you have a solid building in a great neighborhood, just hold the thing like the bird in the hand is better than the two in the bush. That’s my approach, at least. That’s my approach, at least. Did you have a question? Are there any key, like, milestones? Well, real estate’s hard because it takes a lot of money, right? My big strategy for everybody is build a cash generating machine and then invest it into real estate. So you got to first learn how to make the money and then manage the money, because real estate is like what people, they kind of gloss over. This is, yes, it makes a lot of millionaires on paper, on equity, but it’s very hard in the early years to get the money necessary to go and buy that and then to hold it long enough to realize the gains. So you hear all the success stories and you’re like, hey, that’s really great.

You made $125,000 neat. That’s like, what, a year’s salary? I got to go do that again and again and again. So generally what I recommend is go figure out how to make a ton of money first, whether through a business or working your way up through the corporate ladder, making yourself very, very valuable, get to the top, have a lot of money coming through, and then figure out how to deploy it. If you’re really scrappy and you’re like, I want to get in and I want to get my elbows dirty. You have to understand that the only way to make money in real estate then, is through your sweat equity. It is going and buying those run down buildings that don’t cost a lot. And you’re putting a lot of time and energy, and you’re young, so you have that capacity to do that. And so I don’t mean to deter anybody from that.

I’m just old, so I’m not going to do that right now. But for you guys, that sounds great. And so if you can figure out how to get next to, let’s say, hypothetically, a person like me. You’re like, every deal needs three things. Every deal needs somebody who has the time, somebody who has the experience, and somebody who has the capital. Have you guys heard this before? Okay, I have the experience, I have capital, but I don’t have a lot of time. Now, if you’re a young, scrappy person, you came and you’re like, I have this amazing deal over here. It’s perfect.

I know exactly what to do. I know how to run it. I have the contract all lined up. All you need to do is put $50,000 in and tell me what to do. Hold my hand and show me. I will take 20% of the equity. I’ll give you 80%. You’re giving me 80% because you don’t know what you’re doing.

You don’t have the capital. Now you’re into your first deal, and now you’re learning. And that’s what I mean when I said at the very beginning, are you learning or are you earning? It would be, I’m not. Don’t bring me deals. You can’t do deals with me. I’m not using this as, like, bring me deals or anything like that, but if you were to bring a deal to a person like me and say, hey, this is the best deal, blah, blah, blah, blah, I’m going to do all the things, and blah, blah, blah, it’s great. And they look at it and they’re like, that is a fantastic deal. And you say, hey, you put up the money, I’m going to give you 90%.

All I ask is ten, just enough to live off while I manage this thing. Whatever. You look at this and you’ll be like, I could get more money. 10% for finding the deal, for running the deal. I should get more, but you’re going to get so much more out of the education of being next to that person and getting their experience. So back in 2020, we did a deal with the guy who actually, we’re buying his portfolio now. We bought a building over here on grand and good. We bought four buildings from him on Grant and Goodrich, or grand Goodrich holly.
And now he’s selling us the other 700 units. When we first met him, we were newer to the apartment space, and so we ingratiated ourselves and we were willing to pay a little bit more for those assets and to make a relationship with him. So we weren’t being so transactional. We were taking the long view. Like, we want to know this guy, learn from him, because he’s been in this market for 30 plus years. That’s a very valuable asset. And so even in that instance where you’re not working for the person, but maybe you would be in a more traditional sense, like on opposite sides of the table, buyer, seller. We were still looking.
How can we put ourselves into his good graces so we can learn from him? So always be asking yourself, is the money more valuable, or is it the knowledge and the access? And in 90% of the cases in real estate, it’s the knowledge and the access that’s way more valuable. That was a rambling answer. I don’t know if it helped. Any other questions? So if you were graduating college in a month, how would you start your real estate career? With a wise tactic. I would take two. I would do a two prong attack. This is very different for where your skills are. Just knowing what I know about my personality, my skills, and what I could be good at, I would be miserable sitting on spreadsheets all day.

And I find the financial analysis is actually a low leverage activity. It’s very easy to outsource that. Harder is the sales and operations. So what I would do is I would go and first become an agent and sell. I would start selling because they have the relationships with everybody. Even if you’re not actually making a ton of money and actually making the sales, you’re getting access to who those sellers are. You’re starting to see behind the scenes of how these things work, the different players and what’s working, what’s not working simultaneously. I would try.

If your goal is to do what we’ve done and go and build at some point, like a management company or an equity firm is to moonlight maybe 1 hour a week or not 1 hour, but maybe like one day a week for a property management company, go get your hands dirty on the leasing, on the management side. So you can see all the way from the beginning of the transaction to the end, from, oh, from residents getting placed in their units, collecting rent all the way through to, oh, this is a building closing. Oh, they’re bringing investors into it now. I can see how did they raise the equity? How did they raise the debt, and how did they get residents in? If you can see that entire spectrum and you spend the next five years learning the skills that come with selling property and managing people and systems, you would be so far ahead of the game. Most people won’t do that, though, because both of those jobs are very hard. They take a long time to get meaningful traction, and people will feel like they’re wasting their time and energy and their skills, because it will require you. You’re not going to make a lot of money as a leasing agent, probably right. So it’s going to be a step down versus what you could make if you went and, you know, did something else in finance.

But the problem with taking the high paying job, just so you guys know, right out of the gate, is that you get the golden handcuffs, you get the life. That’s good. It’s comfortable. You have the nice apartment, you have the nice car, you’re making good income. But because you’re probably not living as far below your means as you should be, you’re not putting as much time and energy into growing and learning your skill set. You’re going to get locked into that path. It’s very easy to be like, I’m making $125,000 a year. That’s great.

That’s great when you’re 25, maybe even when you’re 30, then when you’re 35. But if you keep following that path out, if you wanted to be an entrepreneur and build something and have an investment portfolio, it’s actually quite hard to break those handcuffs. It’s very, very hard. The truth is, it’s a paper prison that you’ve put yourself inside of. There are no guards. You could leave it at any moment and walk out. You’re free. But for whatever reason, like, as soon as you.

I can’t remember who said. I think it was Nassim Taleb. You said, the two most addictive things in the universe is heroin and a monthly paycheck. The bigger that monthly paycheck, the harder it is. And that’s why I just encourage you guys, do not optimize for that. That is the wrong thing to optimize for, because a paycheck is fundamentally an exchange of your time for money. You will never win the money game if that is your goal, and I’m not saying it is, you’ll never win the money game, exchanging your time for money, because you only have so much time and there’s only so much money people are going to be willing to give you for it. Does that track? Any other questions? Who’s got the zinger? Who’s got it? Bring the heat.

How do you not get greedy in a world, or like, a real estate world specifically, when, like, most people enter it for the money? Yeah, I think greed is less of an issue. I think the motivating, the dark motivating factor for a lot of people, it’s not greed, it’s envy. It’s this feeling of needing to keep up, this feeling of, like, I need to go get this next thing, this next purchase. I need to get that raise. I need to get that promotion so that I can stack up. They’re playing the status game. It’s a hierarchy. For me to be number one, that means somebody else has to be knocked down.

There can only be one person at the top. There can only be one person in the second spot. Right? And that’s the game a lot of people are playing. But the game of wealth, the game of money, it’s a fundamentally different game, because I believe everybody can be wealthy. And you can bear this. You can look at this statistically. We are living across the globe better than our grandparents did just two generations ago. Life, the quality of our medicine, quality of our infrastructure, quality of our food.

And you could say, yeah, there’s still people who are suffering and struggling, and that’s true. But across the globe as a whole, we are improving. We’re becoming wealthier. And when you take this abundance mindset and realize that for you to make money, it doesn’t need to take it out of anybody else’s hand, that what you are actually getting paid for is to bring value to the world, and usually you can only recoup about one 10th of the value that you bring other people. So, for instance, when you get that job for $100,000, let’s say your employer is looking at it and saying, I will pay you $100,000 because I believe you can make me at least a million. And so that ten x is a pretty good approximation, generally, for what a business will look at your value and say, this is what I can get out of it. So to avoid the greed, I don’t really see a lot of greed in the marketplace. Generally, I see people trying to keep up and not understanding, like, what do you actually need to be happy? What would actually fulfill you? And those have nothing to do with the perceptions of other people.

It’s not a dollar amount, because, honestly, the marginal utility of money starts to drastically fall off after a certain point. And you will realize that if you live below your means and then you have freedom to go and do the things that you want to do. But money itself is not evil. It’s just a tool. And you can do whatever you want with that tool. And so what it tends to do is it. It highlights the features of personalities. If you are a greedy person and you want money, so that you can show the world, like, I’m better than you and take that, yeah, like that’s.

Bad. I know thousands at this point of like, very wealthy people. And I would say the number of people that I’ve come across that have that mindset are very few and far between. Most of them come at the, the act of building wealth through the lens of I want to make a positive impact on the world and money is a way of doing that. And now you could say, should they give more to the government in taxes and whatnot? But what I found is that entrepreneurs and business, it is the best way to improve the world. I think entrepreneurship is like, you guys are fundamentally agents of change, agents of transformation, because you’re bringing value to the world that wouldn’t have existed otherwise. And I think when you look at it through that lens, you can sleep well at night knowing, like, your intentions are pure. And if you want to give it all away, you can.

Nothing’s stopping you from that. But I think if you’re not already a greedy person, you’re not going to have that problem.