TGCI 225: Former B1-Bomber pilot and Lieutenant Colonel retires to become asset manager for MF buildings

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Episode 225: Former B1-Bomber pilot and Lieutenant Colonel retires to become asset manager for MF buildings

Copy of EP #18 - 2 Guests

Summary

In this episode, Pancham interviews Iven Vian, co-founder and Chief Operating Officer of Anthem Capital. 

Having retired as a lieutenant colonel from the Air Force after 20 years, he is passionate about operational excellence in the execution of his apartment communities and their impact on their surrounding communities.

Learn more about Iven, and his mission is to grow Anthem Apartments to 300 communities and donate USD2.5 million in profits to charity by 2030!

PanchamHeadshotTGCI
Pancham Gupta
Screen Shot 2023-03-15 at 10.59.25 AM
Iven Vian

Tune in to this show and enjoy!

Copy of Quote #00 - 1 Guest (1)

Timestamped Shownotes:

  • 0:35 – Pancham introduces Iven Vian
  • 1:47 – Iven’s background on what he do before becoming an asset manager
  • 5:50 – How he learned about real estate investing
  • 10:25 – Anthem Capital has acquired 3,000 doors and purchased 19 properties
  • 13:49 – Asset management in terms of renovation and occupancy
  • 21:02  – How does Iven manage tenants’ concerns and issues
  • 29:42 – Building a relationship between ownership and property management
  • 33:46 – Iven’s first time investing outside of Wall Street
  • 34:07 – Fears he has to overcome
  • 40:17 – How can you connect with Iven

3 Key Points:

  1. There’s a way to create long-term generational wealth while serving and working.
  2. Multi-family real estate is a powerful investment vehicle with many benefits more than single-family homes.
  3. Vacancy loss is managed by understanding all the processes of asset management operations. 

Get in Touch:

Read Full Transcript

(intro)

Welcome to The Gold Collar Investor Podcast, with your host Pancham Gupta. This podcast is dedicated to helping the high-paid professionals to break out of the Wall Street investments and create multiple income streams. Here’s your host, Pancham Gupta.

Dave Zook

Hey, this is Dave Zook. I listen to Pancham at The Gold Collar Investor Podcast. And so should you.

Pancham Gupta

Welcome to The Gold Collar Investor Podcast. This is your host Pancham. I really appreciate you for tuning in today. My guest is Iven Vian on the podcast. He is the Co-Founder and Chief Operating Officer of Anthem Capital. Having retired as Lieutenant Colonel from the Air Force after 20 years, he is passionate about operational excellence and execution of his apartment communities and their impact on their surrounding communities. Iven’s mission is to grow Anthem apartments to 300 communities and donate 2.5 million in profits to charity by 2030. When he isn’t working on real estate, you can find Iven spending time with family, hiking and traveling with his family.

(interview)

Pancham Gupta

Iven, welcome to the show.

Iven Vian

Thank you for having me. It’s a pleasure being here.

Pancham Gupta

Thank you for your time here. Are you ready to fire up my listeners break out of Wall Street investments?

Iven Vian

Listen, I was born ready. Let’s do this.

Pancham Gupta

Awesome, man. So, let’s start with your background. I see Anthem Capital written on your background. Before you were at Anthem, what’s your education like? Where were you born and brought up, and how you got into what you’re doing now?

Iven Vian

Yeah, absolutely. I’ve had a few passions in my life. Previous to real estate, one of my passions was to be a pilot in the Air Force. So, I went to school at the Air Force Academy. I got a degree in engineering, only because my mom told me I needed to get a degree in engineering. Because maybe I’ll fall back on engineering jobs someday. But I went to the Air Force Academy. I graduated 2001. I spent 20 years in the Air Force flying the B-1 bomber.

Pancham Gupta

Wow. My son is a big fan of aviation and generally all these aircrafts. He talks about B-1 bomber the most.

Iven Vian

No way. All right. Well, I’ll have to set up a meeting with your son. I’ll share some stories with him.

Pancham Gupta

Okay, Iven. Thank you. Tell us what happened. So, you were in the Air Force for 20 years, right?

Iven Vian

Well, yeah. Right. I was in the Air Force for 20 years. A little bit about my story. I graduated the Academy. When it comes to investing, one thing they preached really well at the Academy was you got to invest in a stock market. You need to have an IRA. You need to secure your future. And so, I learned about all these investing tactics and techniques about the stock market. While at the academy, they had this one event in your junior year where the company USAID comes on to the campus. They give you this opportunity to take back a loan. About a $24,000 loan at that time was like 3.5%. Then they encourage you to invest that money in — well, they encourage you to do something with the money. Some people bought cars. Some people went on trips. I wanted to invest in the stock market because I was learning about it. Ironically, they sent me a letter in the mail a couple of weeks after I got that loan, talking about this fund called aggressive growth fund. “Invest in this fund. You’re going to get 100% return on your investment.” I said that’s what I’m going to do, because that’s what they taught me to do. I put that $24,000 onto that fund. This is right around year 2000.

Guess what happened right around that time? The stock market crashed. A $24,000 investment went to zero. Big fat goose egg overnight. But it was a loan, so I was stuck with a $400 monthly payment for the next four years I had to pay. Then when I first started on the Air Force, I only made about $35,000 a year. So, that was a big dent to my monthly income. That’s when I rethought this whole thing about investing. I said, there’s got to be a better way to put your hard-earned money to work for you. I started studying about passive real estate investing or cash flow, investing through real estate.

I got my first stint in single-family investing. Fast forward, I was getting relocated down to Abilene, Texas. I was staying with my mother-in-law. We’re staying at her house because my house wasn’t ready to move in. She said, “Hey, there’s this lady going through a divorce down the street. She needs to sell her house. I want you to see if you can go work something out.” I said, “No problem.” I dropped everything I had, literally dropped. I walked out the door. I went down, knocked on her door, and asked her about the situation. Long story short, she sold me that house that day for $33,000. I rented it for $850. I made about a $300 monthly passive income. That’s when I got the real estate bug. I said, man, there’s really something powerful here. This property, I capture some equity. I’m paying down my principal. I learned about tax shelter. I learned about capital gains and cash flows. It paid me $300 a month cash flow. I was like, that is way better than this $24,000 loss I had many years prior to that.

Pancham Gupta

Wow. That’s awesome. You lost that money in stock market. How long was it before you bought that single-family home?

Iven Vian

I lost the money in 2001, and I bought the home in 2008.

Pancham Gupta

Okay. Seven years, really. Right?

Iven Vian

Yeah.

Pancham Gupta

So, all this time, how did you get to know about real estate investing? Like, oh, you know what? Stock market is one thing which you are preached in your school. What was it that made you think, oh, real estate is a thing I should learn about?

Iven Vian

I just started finding books. I was going online and ordering these books. Honestly, I didn’t know about Rich Dad Poor Dad when I first started real estate investing. I just find random books and I started reading. But it wasn’t as sad as I thought it was. I got lucky on that first deal. The second deal, I lost $80,000. I went in debt. That’s when I realized, oh, I need to know more. I need to learn more. Really, where I started learning a lot is, I joined an educational program. I joined a mastermind.

That time in 2008, I joined Lifestyles Unlimited. They had a base in Dallas, Texas. I went to the two-day event and signed up for the mentorship program to do the single-family investing. You can call their coaches as many times as you want. I’d always be calling. “Hey, what about this? What about this? What about this? What about this?” Then that’s when I got introduced to this whole arena of investing and all the books I should have been reading, including Rich Dad Poor Dad. That’s when I really started getting smart about how to do leasing and all these things. It’s through that mastermind.

Pancham Gupta

Got it. So, you joined that. Then what happened next? So, you started buying single-family homes in Dallas?

Iven Vian

No, I was buying them in Abilene, Texas. On that second one, I went in the hole. But I started working my way out. Then I found a third rental property, a fourth rental property. But I ran out of money. I said I got to restart. And so, I basically pulled back. I saved up all this money again. Then I moved to Oklahoma City in 2013. I saved up some money, and I hit the ground running. I started buying more properties out here, where I live today in Oklahoma City. I ran out of money again. Because the Air Force, it’s a salary job. That was part of my motivation. I realized this is a true service. Because the more time, effort, and energy you put into it, you don’t get paid more. You’re away from home, and you’re doing all these different things. I said, there’s got to be a way to create long-term generational wealth while I’m serving in the Air Force. I got to find a way to do this. That question put me on a path, where maybe I wasn’t pursuing to be a Colonel General, which that’s a lot of people’s callings on their lives. That’s the path they take. I said, I’m fine just being a flyer and still do well on my career and serve my country. But I’m going to go pursue something else. All that extra time I would put in this career path, I put it into my real estate path.

I ran out of money. I got my real estate license. This is another way people can get involved into real estate investing world. It’s to get your license. There’s no better way to learn it than to start teaching it. I became an advisor. I’d bring on these clients, and I’d teach them what I was doing. They would catch on. It became an incredible opportunity for me. As an investor realtor, I was going on my lunch breaks. And after work, open up this little door or these doors in these little homes, in this neighborhood surrounding my base in Oklahoma City. I was just doing that. It was like clockwork. Boom, boom, boom. Just opened the door.

Working with investors is a very time sensitive thing. Plus, the early bird gets the worm. You got to hurry up to get your offering. It’d be literally five minutes. It’s quick evaluation. Boom. Onto the next one, onto the next one, onto next one. Well, I did that for two years. In that timeframe, I sold 99 houses in two years as an investor realtor. Those 99 homes gave me all the capital I needed at that point to then grow my portfolio. I gained about 30 homes during that time.

Again, my goal was to retire from the Air Force, to be a full-time real estate investor when I retire. I didn’t want to work for anyone anymore. I was doing enough of that in the Air Force. I wanted to be on my own. So, that was my driving force, one of my reasons, one of my why’s. But 2016, the market started drying up. I was buying homes for $35,000 at a pop. It quickly grows about 50 a pop, but the rents weren’t growing. So, it wasn’t making sense anymore. Back in the rehab and everything. So, that’s when I got interested in multifamily investing with my partner, who was my first client as a realtor. My partner today, Tariq Sattar, I told him about this two-day event going on in Dallas and other real estate mastermind events. So, we went to that two-day event. We saw the light bulb, or the light bulb turned on. I say, “Listen, this is what I want to do.” He said, “Let’s go.” So, we we joined the group, and we hit the ground running.

Pancham Gupta

That’s awesome.

Iven Vian

Nine months into that experience, we got a first three property portfolio — 50 unit, 65 and 99, 214 units total, located in Norman, Oklahoma, and Chickasha. That’s where we started cutting our teeth and learning about multifamily investing. Fast forward today, we’ve been in this business now for seven years. Anthem Capital has acquired over 3,000 doors. We have purchased about 19 properties, sold 14. We realized about a 27% average annualized return on our investment. That’s pre-tax. That’s before tax. So, it’s been a powerful investment vehicle. It has many many, many benefits I find more than single family investing. I’m excited to be here to continue moving forward in my investing career through Anthem Capital.

Pancham Gupta

That’s an awesome story there. I have so many questions. When did you leave your Air Force job?

Iven Vian

I just retired a little over a year ago, October of 2021. So, just a little over a year.

Pancham Gupta

Wow. That’s good for you. Congrats with this Anthem Capital. Let’s actually go back to your single-family days. Do you still buy single-family homes?

Iven Vian

I do not. Just from a time value standpoint, I’m more interested in commercial real estate, quite honestly, and in multifamily real estate.

Pancham Gupta

Got it. Have you sold all of your portfolio, or you still have some of it?

Iven Vian

We got a few of left. We got four or five properties — Kansas City, Fort Worth, Dallas area, and Salt Lake City.

Pancham Gupta

Okay. So, are you planning to keep them?

Iven Vian

Yeah, they’re in their holding periods. We just acquired them. It was last year. We sold five and purchased three. So, we were net negative. Two deals. It was a busy year. But when you buy these assets and you have to digest, you have to focus on the business plan. You have to focus on the operations. That’s where a lot of my focus is today. That’s kind of the division of duties, breakdown between Tariqq and I in our company, and whoever we also bring in as part of our group and operational team. Where Tariqq is on acquisitions, dispositions, and I focus on the operations.

Pancham Gupta

Yeah, let’s talk about that. I always say it is — acquisition and dispositions are very, very important critical roles. Raising capital is also a very critical role. Everything has to work together for you to be able to do the deal. But at the end of the day, it is really asset management operations, what you do, that actually makes or break the deal. You have to be able to execute the plan to be able to create the value in order to be able to dispose the property. So, let’s talk about this. What do you, as an asset manager, see the most important thing when it comes to managing these assets? First of all, do you have your own property management? Or do you have a third-party property management?

Iven Vian

Third-party property management. We like to be nimble and be able to react, to be in multiple markets when they’re heating up and cooking up. So, we are not centralized and focus on one market to grow out this huge property management company.

Pancham Gupta

Okay. So, let me ask you this general question. Given that you’re managing the manager on the property, how do you make sure, or what kind of systems or processes do you put in place to make sure that, on the renovation side, they’re staying within budget that you have? And on the operational side, whether it is to do with occupancy or delinquency, that they are not slipping through?

Iven Vian

Sure. Let’s start with the capital improvement plan, the construction side of things. Well, it’s not a hands-off approach. The capital is hands on. So, we’re in the middle of these processes. We have a construction manager that oversees the entire operation end-to-end — all the way from estimates, change orders, invoicing, making sure every line item in the invoice is correct, making sure materials are on site on time, and the correct materials arrive on time, making sure you understand the scope and the level of rehab you need on the interiors to get the maximum return on your investment, the maximum rent bump with the least amount of cost. You’re evaluating that as you go out throughout the process.

The construction manager is one of the most critical pieces in the entire operation and in these value-add type acquisitions. We don’t take it lightly. There may be someone that we have brought in as like not a third-party, but their employee in our group. Or it could be one of our co-GPs depending on where the asset is. One of the key things is then marrying up the construction management delivery timing process with the property management renting, leasing process. So, there’s a communication piece that goes on. We have to manage that information from the construction management team to the property management team, so that the property management team knows when they’re going to get deliveries and knows when they’re going to be rent-ready. So, they can then advertise them to get them leased immediately when the construction team is out of that unit.

We are managing too vacancy loss. Our goal is to minimize vacancy loss as much as possible. Vacancy loss is managed through understanding all of these processes that I just talked about. Again, getting materials there in an efficient manner, making sure people are on site to work, making sure you’re not overpaying for construction but yet not underpaying so you get good quality and good delivery. There’s a whole balancing act that goes on in the middle of all this. Then understanding the timing of it. How many units can you turn on a monthly basis? 5 units, 7 units, 8, 10, 12, 15 units, depending on the scope. Then those units, if you can execute that piece without any or some deviation.

Execute that piece. Meaning, I know I can deliver 10 units with this scope, and it’s hitting this rent. That’s predictable. Then the leasing company knows how many units they can lease. Then again, you’re marrying up the two to minimize your vacancy loss. Then you can determine how aggressive I can be with the whole renovation plan, looking forward on. Look, I have about 15 renewals coming up two months from now. I know I can turn, say, 10 units per month. I know I’m getting this kind of rent bump. So, I have a pretty good operation here. I’m going to be aggressive with my renewals. They’re most likely not going to renew. So, I can get my renovation team get in there, quickly renovate, get out, and get that apartment. Then lease for $300 more than it was previous to that within a certain CapEx, a capital budget per unit basis. I’ll share a little bit about what goes on on the back end. The second question you talked about was — remind me the second question.

Pancham Gupta

The second question was on the delinquencies and the leasing activity. How do you make sure that you have enough number of units leased? How do you get ahead of this? If there is a problem, how do you get ahead of that? But before I go into that, I have a follow-up question on your first answer.

Iven Vian

Okay, yeah.

Pancham Gupta

On the construction management piece, I know you said that you have a construction manager who takes care of all these things that you were discussing. The property management, the third-party property management team, doesn’t do anything when it comes to renovations? Your team takes care of everything when it comes to that. And they are just talking to the tenants and giving them notices on what’s happening?

Iven Vian

It depends. That’s a good question here. It depends. Some property management companies have their own construction arm, a sister company that is tied to that property management company to manage that whole process. Some have don’t have a sister company, but they have internal construction management services that could also help out. Some don’t have any construction management. Some are adamant to not want to do anything with construction management services. And so, you have to understand the capacity of the property management company, and then whether we want to work with this company. If we do, then we complement the services they provide with our construction management team.

I’ve had companies that have, again, they want nothing to do with the construction management. So, that’s when we plug in the entire construction management team on the properties, where they handle oversight of it. But we still won’t have a designated person to oversee the construction management piece. It’s kind of like a trust but verify. Yeah, the property management company is managing all the stuff. But we want to still verify. The reason is, it’s all about alignment of interests.

The construction manager works for the owners. The general contractor, his thought, her thought is, “Get the job done.” Loaders, “Get it done efficiently, cost effectively. Get the job done cost effectively.” Get the job done means, “I don’t care where you buy the materials. I don’t care how much they cost.” They’re just, you know. Owners, it’s like, “We’re going to minimize expenses as best we can on construction sites.” So, I don’t like relying on other people because they don’t have the same alignment of interests as us, which is maximize the value of our investors and investment. So, that’s why we bring in our own construction management services ourselves. Does that answer the question?

Pancham Gupta

Yeah, it does. It’s actually quite true on what you said. In terms of the repairs on the same lines, not really renovating but let’s say the existing repairs. Let’s say, there is a problem, an emergency problem. The backup is happening in one of the units, like the sewer line or the water line. The water is coming out. It’s like, let’s say, 7 PM or 8 PM at night. The property manager gets an emergency call from the resident. What happens in that case? Do you get notified? Or they get an emergency plumber out, and they pay them whatever the plumber asks them? You take it from there, like the next day that you figured out, oh, you know what, what happened? And we had to call this blah, blah, blah. We spent $5,000 on getting this done — or whatever the amount is. I’m just making up a number. How do you handle things like that where there are repairs, and that’s more property manager’s responsibility? But then making sure that those things are getting done in a way that you would want them to be done.

Iven Vian

Good question. One way to manage this is, you have a cost threshold number. Anything below, say, 2,000, 2,500. Or pick a number. Say, 5,000. Anything below, you manage. I don’t need to know the details. Anything bad or above, do bring me in to the conversation. We could talk about it. Why? Because that’s going to have a hit overall to my capital budget. It’s going to have a hit overall to the bottom line. And I need to be able to pivot and adjust based upon this threshold number, especially the systemic issue. Maybe it’s $2,500 here. But it’s the systemic plumbing issue that’s happening throughout the property. So, I need to know, from a big picture looking forward, if there’s a systemic issue. I’m going to allocate proper budget, dollars to take care of the systemic issue. So, I want to be in the know of that.

But here’s the thing. What if I have a threshold number, we have a plumbing issue, and it’s a weekend? And I’m out of the country. I’m on a family travel in the summer with my family. I don’t expect them to wait for me to respond. They have water pouring out of the building. It’s going to cause more damage or something like that.

Property management company, you’re hiring them and trust them to overlook the safety and the functionality, the safety of the people and the tenants. So, of course, if I wasn’t available, the common-sense thing to do, let’s find a way to get this thing fixed as soon as possible. If it’s a weekend and plumbers rates go up double, if not triple on a weekend, fine. I would say good job. You took care of the problem. It’s okay. I wasn’t available. You prevented further damage, and you saved that tenant. Meaning, one, they’re not walking off the property because of lack of care or concern. They’re appreciative that we are proactive to get this problem fixed as soon as possible. So, that’s a conversation to have in the beginning of a relationship — walking through these scenarios, and how to handle these types of things.

Pancham Gupta

Got it. That makes sense. So, now let’s go to the next question that I was asking, which is, how do you put checks and balances? Or how do you make sure that property is operating properly where there is delinquencies as low as possible, and occupancy is as high as possible?

Iven Vian

Okay. That’s a great question. There’s a lot of different ways to approach this answer, and I’m going to give you a few different ways to look at the answer. One way is to, one, establish a good relationship with the property management company in the beginning. One, get to know them. Understand them. Make sure you understand what their roles, responsibilities, what their priorities, how they understand their job to be in this whole process. Have some appreciation for who they are and what they do. That will go a long way. There’s a saying. First understand to be understood. Understand who they are, so you can be understood. So, that’s one way to look at it.

Another way. Setting the budget for the year is one of the most critical processes that we go through. Because that is where the expectation is set. In the middle of those, that planning process, you’re communicating your expectation. The way we like to set budgets is, we have initial sketch out. Ideally, we want the budget to be — the property budget is not a pro forma budget. Pro forma budget has other line items in there that is not part of the property budget. But we want the property budget in the bottom line NOI, to be above our NOI for a year, one year, two projections, et cetera. But that there sets the expectations. As long as it’s high but achievable and reasonable. It can’t be something just out there in space, a big pie in the sky and you’ll never get to this number. You have to stretch the property management company and set expectation. So, that budgeting process.

Then what we do is, we sit down in a room, in a war room, together. We line out the entire budget together. We’re working together as a team, and we’re talking through how we’re going to actually execute this plan, the actual mechanics of executing a business plan in that planning meeting. It’s like a three-hour event. It takes a long time. But it’s so valuable because you’re there, and we’re already setting the plan forward for that year. Then now we have a budget.

Then what we do is we manage to that budget. We lead and guide to that budget. The way we do that is through weekly KPI calls. I have my own KPI sheet with 65, 75 different line items on there, where I’m tracking physical occupancy, economic occupancy, net tradeoffs, renewal percentages, delinquency, all the income numbers, my AP accounts payable balances, how much, what’s my book cash balance is, and all these things on this KPI call. Then if we see a delinquency issue, then we manage that. And we understand why there’s a delinquency issue. Is it something systemic that we’re creating because we lowered our leasing criteria, and we brought in people that we should have brought in? This is something more macro level.

In this case, say, for example, COVID hit. And delinquency went way up — way, way, way up. COVID hit. We really started getting these huge delinquent balances for all these tenants. It was astronomical, unfortunately. But the government stepped in through the Cares Act, and we’re able to recoup a lot of the lost money. But still, profits had 100 plus $1,000 delinquency balance, and nothing we could do. That’s a different situation. But today’s world, we’re now most just the last drip of Cares Act. Money just ran out. And so, there may be some delinquency issues of that, because people were relying on the government to help pay for the rent, and they didn’t realize it was going to run out. And now they’re forced to go out and find another way to pay for their rent. Now that they can’t pay for it, that’s going to create a delinquency problem. But we’re talking through that on the call, through this KPI call.

Another thought process is, when we set the budget, we always work from an end in mind and work backwards. What’s the end goal? What’s the one thing that I’m budgeting to? The main thing. And that is to meet or exceed the projected investment returns. That’s what this business is all about. That net cash flow, net, net cash flow at the very bottom of the budget, after all CapEx and all that money is taken out — how much cash is left over, that I can then distribute to my investors? I want to meet or exceed my projected investment returns on an annualized basis. Year one is typically 3% to 5%. Year two 6% to 7%. Year three, say, 7% to 9%, and so on and so forth. On average, annualized cash flow numbers, say anywhere from 6% to 9%. And so, I focused on creating cash flow.

Therein lies the challenge. Because one thing that I’ve learned after being in the Air Force and planning thousands and thousands and thousands of plans and missions — maybe that’s a little exaggerated. Not thousands and thousands. Say, maybe a thousand plans. Then doing the same. Apartment business is one thing that has been consistent and remains true to this. Nothing ever goes as planned. Nothing ever goes as planned. Never. And so, you have to then learn how to be flexible and be nimble, and learn how to pivot, especially on macro-economic challenges create headwinds for you, create some barriers, some roadblocks for you, COVID roadblock. A huge ice storm comes and wipes out all my properties in Dallas of all places. Who knew it’s going to have an ice storm at Dallas? Roadblock. Now rising interest rate environment roadblock. That’s where the magic lives in asset management world. For me, being in the Air Force and finding these missions all over, again, nothing ever goes as planned. Maybe one of my hydraulic systems went out. My engine went out. Or maybe something malfunctioned, or maybe someone made — there was a human error or mistake. We still had to find a way to win and accomplish the mission. That’s the same kind of mindset I apply in this business and world today.

Pancham Gupta

That’s awesome. Cool. I would love to know what kind of missions you are most — not on this podcast. Maybe some other time. Great. Well, thank you, Iven, for sharing that. Anything else that you’d like to add before I move on to the second part of the show?

Iven Vian

I talk a lot about the relationship piece as so important between ownership and property management. It’s really property management. It is another team member on your team. You need to treat them as such. I’ll just be point blank. I think a lot of owners talk down to property management companies. I think they’re disrespectful. I don’t think they appreciate and value the work they do or understand it. It’s not easy. It is one of the most challenging jobs to have.

Honestly, you’re never right. You’re never going to be right. Imagine going to work every day, and knowing you’re never going to be exactly right. Like, well, the minute you got everything where it needs to be 95% occupancy, you realize that rents above perform above. Something happens. And so, you’ve got to have some awareness of that as an owner. I think passives need to understand that piece. On the other side of your investment, which, again, I appreciate. I’m not trying to discount by any means the value of our partners or anything like that, but to share some perspective and some understanding on the other side of this whole investment.

It’s a machine in operation that is working tirelessly to make this a success for everyone. And if you can have that appreciation and understanding, that makes the experience a whole lot better, of course. You actually can do some pretty cool stuff. I can get some really cool things done that you wouldn’t have been able to do otherwise, and overcome some very challenging situations you would not have been able to otherwise, and come out on top. The value in that relationship, I think it’s what sets some good operators apart from other operators.

Pancham Gupta

That’s so well said. They say that the property management is such an under-appreciated business. If you do a really good job, you get fired because the property is sold. And if you do a bad job, you get fired. So, you have to do just the right amount of jobs to keep going.

Iven Vian

To keep going, right.

Pancham Gupta

It is a hard business to be in. Well, great. Thank you, Iven, for your time. We’ll be back after this short message.

(break)

If you’re an accredited investor and have been thinking about putting your money to work for you, then I have a good news for you. I have created an investor club which I call the Gold Collar Investor Club. I will be putting together investing opportunities exclusively for the group. These are the opportunities where I have done the due diligence for you and will be investing my own money alongside you.

If you are interested, please sign up on thegoldcollarinvestor.com/club. I repeat, thegoldcollarinvestor.com/club. I will reach out to schedule a 30-minute phone conversation to discuss your investing goals once you sign up. This can be a good opportunity to diversify and take some chips off the hands of Wall Street to produce some passive income.

And in case you are wondering what is an accredited investor, an accredited investor is someone who has earned more than $200,000 as filing single or more than $300,000 filing jointly for the last two years. Another way to qualify as an accredited investor is if your total net worth is more than $1 million, excluding your personal home. It includes your stocks, 401ks, IRAs, cars, et cetera—just not the equity in your personal home. If this is you, I would highly encourage you to sign up.

(interview)

Pancham Gupta

So, Iven, let’s move on to the second part of the show which I call Taking the Leap Round. I ask these four questions to every guest on the show. My first question for you is, when was the first time you invested outside of Wall Street? Was it that single-family home?

Iven Vian

It was that, yeah. It was that single family house, about $33,000, in Abilene, Texas. That was the first one.

Pancham Gupta

That’s in 2008, right?

Iven Vian

2008, yeah.

Pancham Gupta

So, did you have any fears that you had to overcome when you knocked on that door and the lady said yes, let’s do it? And you were like, “Oh, my God, what am I going to do now?”

Iven Vian

To answer that question, I wasn’t afraid at that time because I wasn’t aware of what the heck I was doing. I was just reacting. There’s something about it. Once you become aware, then you overthink it. Then that’s when the fear comes in. Another example would be — I’m not kidding you. My first landing in the B-1 bomber, my first training mission, I still remember it to this day. After practicing the simulator, I greased it on. It was like the best landing ever. I was like, “Oh my god. I got this thing. Cool. I can land this plane.” Then the next 20 landings after that, I was crashing into the runway because I was afraid of making a mistake. So, that’s kind of the same thing now, how it is in the multifamily space here.

There’s always fears. And that’s fine. Fear is a natural human response to anything. If you understand how the brain works, it’s just really your brain trying to protect you from harm. And so, knowing that, then you can find ways to circumvent those thoughts, those fears, those feelings and keep moving forward in your business and in your real estate investment.

Pancham Gupta

Got it. I love your B-1 bomber analogy there. My third question, can you share with us one investment that did not go as expected?

Iven Vian

Let me tell you about that.

Pancham Gupta

$80,000 house?

Iven Vian

Yeah, that one. Listen. Again, the first one, I got lucky. I didn’t do any thinking. I just bought this house for $33,000. The second one was a house next door to me. I way overpaid for this house. I over rehabbed it. I didn’t even look at comps for how much it would rent for. I thought I knew how much it would cost. It cost double than that. I went the whole $80,000. I had to borrow money from my mom. I had to go in debt on credit cards when I was a young captain in the Air Force. I had my first baby. That was a challenging time. But that’s part of the entrepreneurial world, honestly.

At the end of the day, looking back, those experiences actually came out to be like a blessing in disguise. Because it forced me to understand the value of education. It forced me to get sharper and better in pursuit of my real estate career. It gave me a sharper perspective on how to approach things. Listen. Even to having challenges today or even in the multifamily, not every deal goes as planned. Don’t let anyone talk you into thinking the next best thing since sliced bread in the real estate multifamily arena. There are those singles and doubles that happen. You get the grand slams. You get the third bases. But those singles and doubles, sometimes you haven’t grounded out yet. But knock on wood. But you know, that’s just part of it.

All I can say is, step up to the plate. My goal is to hit a home run every time. And if the base is a load, I want to hit a grand slam. I’m going to keep just working on that sweet spot in hitting that ball every single time. Sometimes you get a couple of pop, ground outs or outs. But at the end of the day, you keep swinging, and you’re going to win.

Pancham Gupta

Yeah, great. Cool. My last question is, what is one piece of advice would you give to people who are thinking of investing in Main Street that is outside of Wall Street? What would you tell people who are in your class who were taught Wall Street?

Iven Vian

Thinking of investing in Main Street, not Wall Street. Main Street, meaning like what I—

Pancham Gupta

Meaning, investing in hard assets like real estate.

Iven Vian

100% the best thing that’s ever happened to me. There are so many different hard assets, different asset classes outside even multifamily investing — triple net leases. I mean, you can turn anything into a passive income opportunity, really. I like it. Because even me as a passive investor in another investments, I’m more directly tied to that investment I have. I know who the operators are. I know who’s managing. I know what the business plan is. I’m getting in-depth monthly reports. And at the end of the day, I’m getting a better return on my investment.

In the Wall Street world, how many people’s hands are in that pot for that return to get watered down overall? On average, what are the returns in the stock market compared to these assets? I mean, I’m 20 plus percent on all the holdings we’ve had. 27%. Right? Well, what has Wall Street been? 8? 10? Depending on when you got in. Right now, it’s down. The thing is, when you invest in assets, you know there’s going to be demand. You got to understand the macroeconomics to why multifamily, for example, is so powerful. Because one, supply demand imbalance, way more demand and supply. Two, the construction slowed down in the previous crash. 2008, construction slowed down. And during COVID, construction is slowing down again. Because it takes forever to get permits, and construction loans are hard to get again. So, it’s like we’re always under supplied, and there’s a huge demand. More and more renters are out there than ever. The millennial generation, they don’t have it in their spending habits. They want to own a house. They want to be able to fly around and bounce around and lease from apartment complexes.

Affordability gap is definitely a very significant reason why multifamily is so powerful. It costs a lot from a down payment standpoint to buy a single-family house, a first time house. Now with rising interest rates, it’s even more expensive to buy these homes, multifamily. Yeah, we’ve been an inflationary environment. But multifamily grows just like in value as inflation does. A lot of these markets has grown greater than the rate of inflation even though inflation has been high. Your cash sitting in the bank account is deteriorating over time, depreciate in value because of inflation. You could put it in hard asset. It grows over time as the hard asset grows in value. So, those are a lot of the reasons why it’s, to me, so much more powerful to invest in Main Street than Wall Street.

Pancham Gupta

Thank you, sir, for all that, your time and the knowledge that you shared today. How can listeners connect with you or find more about you if they want to connect and reach out?

Iven Vian

Absolutely. Right. Come find us on unlockwealthpotential.com or you can find me on LinkedIn. First name Iven, I-V-E-N. Last name Vian, V-I-A-N.

Pancham Gupta

Great. Well, thank you for your time today.

Iven Vian

Thanks for having me. This has been great. My pleasure.

Pancham Gupta

Thank you. Thank you for tuning in today. If you have questions, do not hesitate to reach out to me at p@thegoldcollarinvestor.com. That’s p@thegoldcollarinvestor.com. This is Pancham, signing off. Until next time, take care.

(outro)

Thank you for listening to The Gold Collar Investor Podcast. If you love what you’ve heard and you want more of Pancham Gupta, visit us at www.thegoldcollarinvestor.com and follow us on Facebook @thegoldcollarinvestor. The information on this podcast are opinions. As always, please consult your own financial team before investing.

Copy of EP #18 - 2 Guests

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