Reading the Market to Make the Right Move with Nic DeAngelo, Ep 72

Today's guest is Nic DeAngelo, the "Fixed Income GOAT" in real estate. With a $206M+ portfolio, Nic blends economic foresight and real estate expertise for a value-driven discussion. As CEO and Founder of Saint Investment Group, he leads a team acquiring institutional-grade real estate nationwide. Their portfolio spans over 20 states, 24 projects, and 500+ loans, aiming to raise $100M+ yearly.

Nic’s episodes with top podcasters like Hunter Thompson, Tyler Lyons, and Jonathan Cattani are often highly reviewed. His ability to simplify complex theories makes him an engaging and insightful guest.

In this episode, Nic delves into wealth-building in multifamily real estate. From his early curiosity to nationwide success, he shares secrets of mentorship, perseverance, and adding value. Learn how he navigated foreclosures, and leveraged economic insights, tech, and strategic leasing to triumph nationwide. Discover stable income strategies amid global shifts and the impact of consumer behavior on the market.

Episode Topics

[01:29]  Meet our guest, Nic DeAngelo
[02:11] Real Estate Riches: Teen to Tycoon
[05:25] Wealth Unveiled: A Teen's Guide to Real Estate Success
[09:29]  Risk-Takers to Market-Masters: Our Real Estate Revolution
[15:32]  Mastering Real Estate: Scaling Strategies Unveiled
[23:15]  Navigating Global Economics for Real Estate Success
[30:16]  Decoding Multifamily: What the Experts Want You to Know
[34:58]  What is one red flag every investor should look out for?
[36:17]  What is a myth about the real estate business?
[39:45]  Connecting to  Nic

Notable Quotes

• "Construction is hard. It's a lot less hard than whatever these guys are doing, driving Ferraris. So I want to learn what they're doing." - Nic DeAngelo 
• "The really rich guy treats everyone with respect and gets respect in return. That finds its way of adding its own value." - Tim Little
• "Our success lies in understanding global economics and making strategic moves at the right time. It's all about reading the market." - Nic DeAngelo
• "Diversity in real estate isn't just about property types; it's about giving investors options for cash flow and long-term growth." - Tim Little
• "The rock is you can't leave money in the bank because inflation is going to nibble away at it at a rate higher than we've seen in decades. And on the other side, if you're tied up in certain investments you're not confident in, there might not be distributions, there might be rocky seas ahead."  - Nic DeAngelo 
• "The resilience of the American consumer and the surge in revenge spending caught the Fed off guard, fueling unexpected inflation."  - Tim Little

Connect with Nic DeAngelo

• LinkedIn: Nic DeAngelo
• Website: saintinvestment.com 
• Podcast: Email: info@saintinvestment.com
• Work Telephone: (949) 8

👉 Connect with Tim

• Linkedin: Tim Little
• Instagram: @tim_at_zana
• Email: tim@zanainvestments.com
• Visit www.ZANAinvestments.com for more info on Tim and how you can passively invest in multifamily real estate
• Get your Passive Investor's Cheat Sheet FREE

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Transcript

Nic DeAngelo: 0:00

The fundamentals of multifamily and single family real estate we really like. So we lean into the mortgage side for two reasons. One is the fundamentals are good, meaning we can confidently put money there. Meaning if you have cash in the bank, you're getting crushed by inflation. The investors are in a tough place. the rock and the hard place. The rock is you can't leave money in the bank because inflation is going to nibble away at it at a rate higher than we've seen in decades. And on the other side, if you're tied up in certain investments you're not confident in, there might not be distributions, there might be rocky seas ahead, etc. there's really good operators that are doing great. And then there's operators that go shoot, like there's a lot of things that you got to consider here.

Tim Little: 1:19

Hello, everyone, and welcome to the journey to multifamily millions. I'm your host, founder and CEO of ZANA Investments, Tim Little. And on today's show, we have with us Nic DeAngelo. Nic is the founder and CEO of Saint Investment Group, where he leads a veteran team acquiring institutional grade real estate assets nationwide. They have an impressive 24 projects in over 20 states, and they're on track to raising more than 100 million annually. Nic, welcome to the show.

Nic DeAngelo: 1:47

Oh, Tim, really great to connect with you. we have a lot of mutual friends, been a big fan of what you guys are doing. So really happy to connect with you today.

Tim Little: 1:55

Yeah. And it's awesome to have you on the show. So I gave everyone a very high level overview of your background, but on this show, we really like to get into the details of how you got started on your journey. So please take us back to the beginning and tell us how you got to where you are today.

Nic DeAngelo: 2:11

Sure. it's I'm actually celebrating right here this year. I'm celebrating 20 years in real estate. if I don't have any black eyes and bloody noses on this, it's, because those were You know, especially early on, those were taken especially early on, but a long, a long, amazing story, a long, amazing, road that we've traveled. I started out really luckily. I had to basically bargain my way in with some ultra high net worth, family offices and investors. And I basically they, I, I went in saying, I will work for you guys for free. I just want to be able to learn and they very clearly said, Hey, you're way overpriced. Okay. Working for free is not something that we have time to train you and get you up to speed. So long story short, I bartered my way in, I put together a marketing list of 500 interested people that I handed to their brokerage and just said, here's a peace offering, can I please just work hard for you? And, so since then, I learned a lot of the strategies from them early on. The 2008 financial crisis, the GFC happened, the global financial crisis. I started raising money and going to town at distressed assets. Many weeks were spending north of 10 million a week on different assets ramped up really crazily during that time. We did, and our investors were happy. We were very happy. The problem was we actually did a little too well, meaning we bought too many assets. So sat down with the investors and just said, Hey guys, where y'all at here? Okay. Because these are a lot of assets. Everybody wanted to be big landlords, but now we got so much stuff going on. how are you guys doing? And it was a unanimous saying we thought we wanted to be landlords Now we want you to do all the work and we want to be limited partners. And so I said, hey, absolutely We founded St. Investment Group at that time and started taking outside capital at that, about 2015 and just this year crossed 206 million in assets under management, primarily in industrial and in US mortgages. So we really like that barbell approach of debt and, a solid fixed income option where we know pretty much exactly what we're going to get on a monthly basis from the mortgages. And then our growth side is pretty centered on industrial U. S. industrial and a couple key markets.

Tim Little: 4:36

Awesome. Yeah. So there's a couple of key points that I want to take out of there, especially for those folks who are just getting into the game or they're trying to figure out how they can get into the game. And it sounds like the way you did it is. one by finding the right people, right? People who are doing what you wanted to be doing, at a very high level. and it sounds like you didn't let that intimidate you, which is really impressive in and of itself. So many people would be like, I can't talk to millionaires and billionaires like I've never known one in my life. I wouldn't know what to say. it's awesome that you didn't let that hold you back. And then The fact that you were like, how can I add value? That's the other piece to it, right? why would they interact with you if you don't bring anything to the table? And so what I don't know i'm guessing you were like in your 20s probably

Nic DeAngelo: 5:25

I was actually a teenager. I was in high school and I just saw some wealthy people. My background was construction before then I've come from an immigrant Italian family where you start work at 12 and I was like, construction is hard. it's a lot less hard is whatever these guys are doing, driving Ferraris. So I want to hang out with them. Like I want to learn what they're doing. So I just tried to get close to them. Truthfully. I

Tim Little: 5:45

Yeah, no, and that is awesome because at 18 I was adding value to Taco Bell Not millionaires and billionaires. No, you definitely had a leg up on me And so again you went in there and you know They don't even want you to work for free because the problem there is then they're having to do a lot of the work your you don't know anything So they're having to teach you but you found something that you could bring value with And that was your foot in the door So talk to me about just the exposure, of being around people with, I would almost say a different reality than most of us. And I'd say, probably 90 percent of us in terms of the lessons that they had already learned and were able to bestow upon you just by proximity, just by you being there, seeing them talking to them.

Nic DeAngelo: 6:37

mean, here's what I thought. Here's what I thought. And here's what was the reality. I thought because early on it was such a difficult process to get in with some of these. With these people and, really mentors, right? Really just amazing mentors. I thought that they were like rich assholes or rich jerks or rich, excuse my French. but just like maybe that's just how people were at a certain level. The, it was the opposite. They're actually the most gracious community. the people that I was surrounded by. Infinite amounts of wealth. The issue is they're wealthy, successful, and really busy. So the number one thing they're looking for is ROI and not just money, the return on investment of if they spend time on some teenage punk kid, and then a week later, I'm like, I want to be an artist now, or actually I want to go into sports or actually it's like they have so little time that they need to know that I was all in. And so that, and I proved that, with just being one, probably obnoxious and annoying and hurt, and very persistent, but the other side was, I said, look, if you want an ROI on me, I will go first and give you an ROI first, right? cause I know the values there. that's why I was there. I said, Hey, there, these are people that have a lifestyle that I just want to learn whatever I can and just be around it and absorb. So that ROI perspective and understanding and being confident to go first. I just, I don't know where that came from in my head, but it was like, it's not going to happen. If I expect them to go first, I'll be sitting around playing video games. And with my personality, it's very hard driving. It's very intense. Boredom is the biggest fear I have in this entire world and insignificant. So it was easy to just say, they're doing it. I want to do that. Let's just stick around them and see how I can bribe my way in and add enough value that I have their attention. Absolutely.

Tim Little: 8:25

Yeah, and you talked about like some of these preconceived notions that people have about the. ultra wealthy, right? and it reminds me of, I don't know if you've ever seen, what's his name, Thomas Crown? Rich versus really rich. the rich guy is always a douchebag. And the really rich guy treats everyone with respect and gets respect in return. And that finds its way of adding its own value, in, in other ways that we might not think about.

Nic DeAngelo: 8:54

Absolutely.

Tim Little: 8:55

Yeah, so that's an awesome story. So I guess what did that transition look like? like you said, right after the financial crisis when there was basically a fire sale, and it sounds like you guys started buying everything you could. and then there was that shift where they realized like, Hey, we don't want to be the landlord. and they said, you can do that. what did you have to do in order to make that change? Did you have to build a team or was that team already in place for you to make that transition?

Nic DeAngelo: 9:29

Oh, I love this question because I'm an entrepreneur at heart built and sold multiple companies over the years. And this, what you just asked was a really, a lot of the beginning of. Where I was like, Oh crap, I just got handed this really complex, a lot of dollar figures, right? A lot of zeros in this equation and there's zero room for failure, right? So what, so the, it's a really complex story because of so many properties and kind of the complications that go into it. But, early investors, many were family and friends. Many were extended people that we knew, from the investing world and from the acquisition side, the network builds and really where it was at was. We got really good at buying properties. We were buying foreclosures like fantastic systems for foreclosures, for identifying foreclosures, our entitlement process. We were best friends with all of our entitlement guys. We had cell phone numbers directly to the entitlement office to drill down 15 layers into paperwork. So we were really geared up for an acquisitions. Channel, because what, a lot of the guys I was working with were very successful fortune 500 CEOs, entrepreneur types that really had a, a COO for most of their lives that were managing that whole other half. Their job was to go hunt and it was to go take down the woolly mammoth. And then they brought it back to the tribe and everybody chopped it up and they went out to hunt again. So we, they were gunslingers. They were willing to take some risks. They saw the obvious returns. So when we all were hunters. And we all sat down and realized, it's like that Spider Man meme where everybody's pointing at each other and everybody's the same personality, that's a problem. Because what happens is nobody's actually asset managing at a high level. I was very young. My job was defined as going and adding value in the acquisition process. But I realized guys. If we don't drill down here, there are holes in this bucket that will bleed everybody dry, right? We're way ahead of it. We didn't have any negative return years. everything went well, but it was just us seeing what was around the bend. So I leaned into it and I said, these guys are successful enough. They have really no interest in starting a new asset management company. I think we all, they especially thought, they could manage more than they could with their huge portfolios and businesses and things going on. So I had leaned into leasing a little bit before that, because I said, how can, we buy these properties? how do we generate, how do we really push the value on these? And it's above market leasing was the answer at that time. It still is for a lot of things that we do. We have a lot of strategies we still use. So we started pushing the leasing market. We found out that leasing agents at that time were really lax. They weren't really leaning into the freaking internet. Okay, which Kind of ages myself, but, there were things where guys were still faxing each other leasing listings at this time, which is insane. So we leaned in heavily to online marketing. We really found the leverage points of where we could push values. We aggressively started leasing. We cleaned up a lot of what the property management was doing. That was not very tight. We ended up firing multiple property managers over the years. Probably half a dozen, at least two, we found a really good fit and we just upgraded one piece at a time, like looking at a car engine and saying, we got to get it from an 82 Ford to an F one car. What is that transition? And it's one piece at a time. And so we really built it from the ground up. My brain wasn't on operations and asset management before that I was all Hunter and adding value. And so I really learned the asset management piece from that point. And that allowed, saints next growth phase to really flourish because I understood not just how to get the properties, but how to advance the property significantly from a financial point, what the leverage points are, how to streamline them in multiple markets. So that's a long answer to a short question, but it was one piece at a time and it was, we really built it from the ground up on the asset management side. So I'm really proud of

Tim Little: 13:28

Yeah, no, as well, you should be. I, cause that's a big step, right? When you have to move in a completely different direction like that. And I think, some of the things that were resonating with me, it's okay, you have acquisitions, right? And certainly buying right is important, but if you don't manage slash operate, then you can still drive that deal into the ground, right? like you, you could snatch. Defeat from the jaws of victory. If you don't handle that property correctly, once you have it, and especially if you had a giant portfolio that you had accrued, like I said, during that fire sale. and then I think the other things, catching up on technology. technology is always changing. So that's something I think all of us need to be mindful of as we're trying to improve our business. And the other piece is, I think it's good to great. They talk about stabilizing first and then optimizing, right? So you're like, okay, let's. Figure it out and lay the groundwork, make sure everything is there. Then you were able to take each of those things and tweak them and optimize them so that you had this smooth, streamlined operation.

Nic DeAngelo: 14:35

that. That's exactly it. we sat down to give you one idea of what happened. We sat the team down and said, everybody now operates on iPhone. We're getting rid of blackberries and Palm pilots and everybody's on a MacBook pro laptop. Okay. We have to, we can't be doing multiple systems. We can't be. So things like that were really painful. Everybody hated, really me for a long time, but, after the pain period, everybody speak in the same language and all ships are sailing the same direction. So you nailed it.

Tim Little: 15:01

Yeah, no, that's awesome. And dovetailing off of that, we talked about the size of your portfolio, which is pretty robust. can you talk about, and you mentioned this at the top, the types of assets that you have, it sounds like it's focused on that industrial and the mortgages, talk a little bit more about the composition of that and the whys, and then we could go into the, how you're able to effectively and efficiently. Run those properties despite them being all over the country.

Nic DeAngelo: 15:33

Yeah. I love this because it's what you're really asking is how to scale. What systems allow this portfolio to scale. So again, being, entrepreneurial minded, part of every entrepreneur group I can get my hands on. I love this question. So the first is, I'll drill down on the portfolio side on, on the real estate side, the hard assets, the four walls and a roof we love industrial right now, specifically every decision that we make. Is aggressively economic based. We, I am not an economist, but I'm a really big fan of economists and I follow it very closely. Economics is like a huge, pastime of mine and a passion, really it's the movement of money and understanding things on a really big scale. So that's how we choose our properties. I don't want to overcomplicate it and say that, we know something everyone else doesn't have access to. It's really that. I see what's going on globally right now, and I, our team had serious discussions around the early COVID stage. And we said, we got a lot of this retail floating around. We got a lot of office. We got all these things. How do these fare in the next five to 10 years? And the bet was not, we need to transition because if you look at the economics of what's going on, increases in e commerce. concerns about China, we were pretty early to be like, Hey, China has massive economic issues ahead. Their demographics are not going to sustain what we've seen the last decade plus, right? So we leaned into industrial, we repositioned, I don't know, at least 50 percent of our hard assets in real estate into industrial, because that's what we saw as the biggest opportunity and our returns over the last, during those several years, we're like, I don't want to over quote this, but I think it's approaching 40 percent that we were getting each year on. it was ridiculous. It was just a timing play. It was we read, we made the right play at the right time. The market did the hard work. Okay. our 10 31 drove us nuts, but it was all the right moves and we're happy with that right now. I really like multifamily. That's probably our second favorite on everything. Because the fundamentals are so great nationwide. There's just so many good operators, right? We knew we could be best in class at industrial. Our catch up period for multi family, we evaluated as the gap between what we knew and what we could perform at, versus the market was too big. We said, look, we know that we already know industrial. We're already great at it. So we can really leverage up on that. The other side of the coin is us based mortgages. Our average home values around 400, 000 that we own mortgages on. We own just shy of 500 mortgages that we're partnered on throughout the U S. We have great FICO scores, extremely conservative loan to values. Our combined loan to value on our portfolio averages about 61%. So we buy loans where the borrower has a huge chunk of equity. They'd be crazy to walk away from it. We've already worked with them to modify the mortgage so that they're dialed in. They finally are on track. And if you have 500 of those. There's a great portfolio effect where we achieve about 96. 3, 96. 7 percent performance of on time payments. So between the mortgage side, which is our income fund, we have a great income component for investing. And then our other side, which is the syndication side, the industrial side, we have a huge growth component with a lot of tax benefits. Between those, our goal for our investors is that they can invest just like we do, which is to basically focus on those two components at all times. So that's the background. if we open the kimono on the portfolio of why we do what we do, it's economics based. We see we're very bullish on those two sectors and that combination of both. Gives our investors a ton of flexibility and fixed income. And then it gives them a ton of upside and tax benefits, but a little bit of a longer hold period. So those two things are trying. That's how we balance our portfolio.

Tim Little: 19:33

No, that's really interesting. it, you're giving investors that diversity, right? The, those options that they're looking for. Not everybody wants to have their money tied up for five to seven years. who doesn't like cashflow? but everyone has different priorities, but if you're giving them the best of both worlds, then they get all of those benefits. They do, they still get the tax benefits, et cetera, associated with real estate. Can you clarify for me, what industrial real estate consists of in my mind? I'm thinking, warehouse, but is that, does that actually encompass like factories and stuff like that as well?

Nic DeAngelo: 20:46

I love this question. So industrial real estate is just like all real estate, right? You take office. There's infinite subsectors of office or even multifamily. There's a three pack, a three plex and a 700 unit. Are they the same thing? they're distant cousins but not really. So industrial is the same way. Industrial encompasses everything from a Coca Cola manufacturing plant where they bottle and manufacture, they do printing all the way down to. these 2000 square foot units, which is just a, a guy who, messes around with cars and has a roll up door in the back. Everything in between is industrial. The general sectors of industrial that you'll see are manufacturing, like heavy industrial. So it's messier uses a lot of, manufacturing of things like plastics and, metals and, mining. Sometimes you can throw in the industrial side. then you move towards things like distribution warehouses. Things where there's a lot of doors. It's in a centralized region. There's a ton of surrounding infrastructure like freeways and railways and ports. This is where we invest right here. Other sectors include R and D it's like a warehouse on one side, a lot of office on the other. It's a lot of like pharmaceutical companies or medical backed companies. And then there's a lot of smaller industrial and subsectors refrigeration. things like that and their storage yard, storage, mining. Those are like the specialties we operate on the warehouse distribution side. So we're looking for, if you want to see, understand why we choose this, we're looking for very large buildings, let's say 60, 000 plus square feet. Class B. So we want, 32, 34 foot ceiling heights. We're looking for triple net tenants that pay all the bills, the net bills associated with the property. And really we're looking for national credit, oftentimes international credit because these guys deal with shipping. The problem when you deal with that is that again, I'm really into economics. The economics are what make that building. Absolutely nothing else. The ports, the infrastructure, the shipways. That makes industrial in a market, hands down, no question. So we lean into that because the economics are clear. If you understand them, I think there's still a huge upside with China stumbling and some other parts of the world stumbling and a lot of things near shoring or on shoring in the U S. That's a big bet for us. and one we think will pay off and has paid off.

Tim Little: 23:16

Yeah. And so let's, I think that's an interesting point about the economics, right? it's important that people understand you're not just looking at, Hey, what's going on in the U. S. What are the trends here? How is that impacting our business? You're looking globally because you understand and appreciate that still affects your business or will affect it in the future. So you're trying to forecast where things are going. Yeah, it takes a little more effort to understand what's going on globally versus just locally, that gives you a distinct advantage if you understand the macro picture. So let's get into it. in, in the state of the market, I won't dive. too deep into Chinese economics or anything like that. I study I studied China all through, undergrad and grad school. but yeah, obviously what you were hinting at was their demographics, and they're just not gonna be able to sustain their economy. And then. They have all kinds of lingering issues that may come to the fore, especially on the real estate side while we're talking about that, because they decided to build a bunch of cities, that didn't have residents to actually move into. so that, that could definitely come to haunt them later. And you talked about the on shoring, near shoring, I've heard friend shoring. What that basically means is, instead of relying on that, network, the distribution network and trade networks with Not so much allies necessarily of folks that you know we may have issues with trying to put those in a place where it's safer if stuff does go down Or if they have issues right or say they just shut down their country. We're able to continue our You know our trade and our functions without having to rely on unreliable partners let's get into Real estate here closer to home. what are you seeing in the market writ large? And then, we could get into, multifamily more specifically, since you, you do, participate in that as well. And that's, the largest part of the audience listening right now, what they're interested in.

Nic DeAngelo: 25:27

Absolutely. So we, the, let me, let's go back to economics. The fundamentals of multifamily. I love. I think, the U S I, not because I'm overly an eagle, but because if you just look at the numbers, any problem we're having in the U S the rest of the world, it's 10 X at least it is such a wide margin. And it's especially due to our best efforts of trying to make that not happen by. in equips, political, et cetera, et cetera, et cetera. But that said, I'm very bullish on the U. S. Again, multifamily is very operations heavy, and we have huge respect for the operators there. So we said, what can we do to participate in the multifamily realm of economics that we believe in, but not manage the operations of that side and lean into something we know more about, which is the debt side. Again, my background is a lot of foreclosures. It's a lot of working with REOs with banks. So we have the relationships with banks. We could use the relationships that we have with banks to buy assets that still have the underlying benefits of multifamily. So that's why we leaned into the mortgage side and why we started buying mortgages so heavily is because the fundamentals are great. Housing is extremely tight. If you're buying mortgages in a position where there's a borrower with a good FICO with good fundamentals. It's great. And what you're asking about the economy, there's some alarming stuff on the headlines, in the headlines right now. And on the horizon, what we're seeing just, these are the most recent numbers. These are from August, right? We're doing this interview or we're doing this podcast in the end of 2023, August is the last set of CPI numbers, the inflation index numbers. It was, let's see, again, I got to read these. I haven't even memorized them. It was 0. 6 percent in August, right? So that's almost 4 percent annualized of where we're at for inflation. And mind you, which I'm positive, but just to remind everybody, including you and I in the audience. This is after the largest increase in rates at the fastest rate of increase we've ever had in the United States by the Fed, way more than the seventies and eighties. They had a net, highest rate, I think it was 18, 20 something percent, but this is the largest increase in the fastest increase. And we are still seeing inflation be sticky up to almost 4%. Now that's alarming on its own. The other, even more alarming that I see digging into the economics, a little bit of it is the PPI, the producer price index being involved in industrial. I keep an eye on the producer price index. How much does the producer, the manufacturer, et cetera, of goods, how much does their price increase? Because if that goes up, let's say 5%. Now, do they call their shareholders and say, Hey guys, sorry, we're just going to eat that 5%. No, they pass that along to the consumers as part of the consumer price index, right? So the PPI often leads to the CPI increases the producer price index in August was 0. 7 percent for that is the highest rate we have inflation was mid 2022, summer of 2022, we hit 9%. We're not far off from that as of last month. It's almost like we're back to there. We're almost at that 9 percent rate, 8. 4 percent annualized. So if you look at all that, the number one question that we ask is how to make money during that. Cause again, we have a lot of investors and we, they are the first priority for us. The fundamentals of multifamily and, and, single family real estate we really like. So we lean into the mortgage side for two reasons. One is the fundamentals are good, meaning we can confidently put money there. Meaning if you have cash in the bank, you're getting crushed by inflation. The investors are in a tough place. the rock and the hard place. The rock is you can't leave money in the bank because inflation is going to nibble away at it at a rate higher than we've seen in decades. And on the other side, if you're tied up in certain investments you're not confident in, there might not be distributions, there might be rocky seas ahead, etc. there's really good operators that are doing great. And then there's operators that go shoot, like there's a lot of things that you got to consider here. So we picked the middle of the road and we set up an income fund for that reason. So there's a lot of flexibility where someone could bet on the fundamentals of the housing market, but still get their money back in a pretty quick amount of time. With a fixed rate of return. So that's what we've seen in the market. And we've seen just a huge interest in something that's fixed and flexible. So they know exactly what they're getting and being able to get out of, because the inflation numbers, who knows what the federal do next? My bet is rates are going up.

Tim Little: 30:16

Yeah, and I agree. I don't know how much more they're going up. he's just taking a pause right now to see where things shake out. Because there's all kinds of lagging indicators and he has to acknowledge that and say, okay, I've been pretty aggressive. let me step back for a minute and see where this all lands. from an economics perspective, I'm really big in like behavioral economics. I love. that the psychology of what people do and why they buy and all that. And I think one thing the Fed wasn't expecting is the resilience slash stubbornness of the American consumer and all this revenge spending that they've been doing. And, at first it was okay. I've been cooped up. I'm going to go on this vacation. I'm going to, they were buying everything that they needed during COVID because they were stuck in their house and they were getting checks. and then after that they kept spending and what does increased spending do? It increases inflation, right? And no matter how much the fed kept trying to beat them down, they're like, no, we're not going to take it. And so they'd pull out their credit card once their, the spend, their savings was used up. And so now we're at a point where. The, average, household credit card debt is at the highest it's been in a while because people are just spending there. They don't care. It's really interesting to think about. But, so going into that, all right, you know where multifamily is going and you talked about the operators. And I think, one thing I want to dispel there's some, a lot of our armchair quarterbacks out there, armchair economists, talking about how Oh, everyone should have seen this come in. And, how could they have gotten. You know these bridge loans didn't they know, this was going to happen and it's No, that's no one foresaw it. Otherwise, they wouldn't have been doing it right now There's some people that certainly took on way more risk than they should have over leveraged or you know Didn't have, rate caps and stuff like that. didn't make the prudent decisions that are actually conservative. but there's some folks out there, they just got caught in the moment. Just like a lot of us, like you said, the timing got lucky during COVID, right? the assets that we held, oh, they, Doubled in value in two years instead of five years. it's not because we were geniuses. it's because of timing So I just think it's important for people to recognize that too you know as they look at because I see You know headlines from like the real deal and other Like basically real estate tabloids like that who are trying to sensationalize and even on CNBC and stuff like that. They talk in very generic terms about commercial real estate and the bad place, that it's in, but that's not necessarily the case for everyone, which should be obvious, but sometimes isn't.

Nic DeAngelo: 33:04

Absolutely. I think I, I believe the last numbers I was digging in on the multifamily side where that 1 percent nationally. At the last clip. some markets are getting kicked somewhere. They don't appreciate more than others. But that said the trend of multifamily, the fundamentals of multifamily, I think over, a five to 10 year horizon, definitely a 10 year you're way ahead. And it's not like office where the fundamentals might've completely changed. I think there's a lot of questions left in office and there's a lot of things to shake out. Where CNBC attributes that to all of commercial real estate, right? like you said, it's class A offices in a dying city is not the same thing as the fundamentals of an entire multifamily space that still has income growth, that still has rent growth, still has, density increases and family formations. I don't have the same concern with multifamily. I think office i'm holding my breath and seeing where that goes multifamily over a decade. I'm not concerned about that Not performing i'll put it that way.

Tim Little: 34:06

Yeah. and I agree. And I think just like a simple point that a lot of people don't think about is that rents are sticky. it's easy to raise them, but it's very rare that they start going in reverse. They may slow down in terms of rate, rate increases, but rarely do they go in the other direction. And if they do it much more slowly than, necessarily how fast they went up, rents are sticky. So people need to think about that, too. It's just. but people who don't rent probably don't think about that, but the people who rent that they realize it I assure you all right. Hey, this has been some amazing conversation and we could probably do it for a couple of hours But we are going to need to transition into the turbo round So i'm going to ask you three questions that I ask every guest that I have on the show and I just ask for a quick Honest answer you ready?

Nic DeAngelo: 34:56

Yes

Tim Little: 34:57

All right. What is one red flag? Every investor should look out for

Nic DeAngelo: 35:02

i'll think about it from the perspective of a passive investor. I think Lack of transparency is the number one thing because you can evaluate as an individual. Humans are smart, right? we're really smart. We sniff out problems very quickly. We sniff out lack of trust. If your issue with a potential sponsor is that you just don't trust them, or you feel they're hiding something, or they're not transparent. Just run away. Whatever you think it is, it's probably worse than you think. and at least if somebody's 100 percent upfront, you trust that they're going to be 100 percent upfront about all the bad things, or at least the vast majority and paint them in the right light. I just want to know the problems I'm getting into. I invest a lot with other, with a lot of other sponsors. So if somebody's not transparent, I'm out instantly. Exactly right. Okay.

Tim Little: 35:47

Yeah, I couldn't agree more. And that comes with the good, the bad, everything. I'm in the military and army, as and one thing that I always brief my people when I have my initial counseling with them is bad news does not get better with time. Like you need to tell me this. The sooner you tell me one, the better I feel about having known it. And, but the sooner I can react to, and for investors, So they don't think that you're trying to hide something cause that makes it a million times worse. All right. Number two, what is a myth about this business that you would like to set straight?

Nic DeAngelo: 36:21

myth that I've seen over and over. I'm on, many hours of investor phone calls a week. It's that being a landlord where you own the properties is hands off. It's passive investing. I think that's by far the biggest myth. It's been shoveled, to potential investors. Oftentimes when I'm on a call and someone says, I'd rather just buy the property myself. I'm like, you should just save my number. Okay. Just save my number. Call me in about a year. Let me know how it's going. I'm rooting for you. I genuinely want you to win. But when your high income, our community is a lot of really successful people with very little time. So I go, you have not enough time on your plate to manage this, how you would like to and get the returns that you'd like. So just keep in touch because we could probably do higher returns and I'm sure you do the same, Tim, but you could perform higher returns for somebody and they do essentially near zero work, right? Whereas if they do it on their own, it's tenants and toilets, it's a lot of management. I think that drawing the line between real estate and passive. Is, ownership. If you own the property, it's not passive at all. And I think that's been, not clear to investors along the way.

Tim Little: 37:29

Yeah, I couldn't agree more having been in both situations. and even, self managed, which I will never do again. because I think a lot of people just don't realize that. they've never been exposed to the opportunity of passive investing. So they can't even compare the two, right? They've just always been told, like you said, Hey, buy properties, hire a property manager who, we'll take anywhere between six and 10 percent right off the top. And then, but once you start adding in, everything that goes wrong, that profit really starts to dwindle in addition to the time that you're spending. managing the manager.

Nic DeAngelo: 38:06

Absolutely.

Tim Little: 38:07

All right. Final question. What does success look like to you?

Nic DeAngelo: 38:13

This is a good one. So this is like the, why do we work all these freaking hours? Why do we put in such hard work? What do we want to give our investors opportunities for? I think about this a lot. I'm a really big why guy. I don't want to do something unless I see the reason for that very clearly and strategically for me. It's three things. It's health, wealth, and legacy. That's success period. If I'm not healthy, I can't give, I can't give to my family. I can't be a good dad. that includes spiritually, physically, mentally. wealth. So health, wealth on that side, it's freedom, right? It's freedom. It's being able to give my family and my children the opportunities to, be whatever they want, but they must be the best in the world at it, right? So if they're going to compete, that you give them the best advantage as possible where they can work their butts off and be world class. and also the ability from wealth to give legacy, not just to your children and opportunities that way, but to give the causes, make the world a better place as you see it. For me, I have a lot of health causes and other causes, entrepreneurship's a very passionate thing for me to arm people, how to make themselves more money and to be able to create that freedom for themselves. So it's health, wealth, and legacy, and it's maximizing those three. Every single second of my day is going to one of those.

Tim Little: 39:34

Love it. And I agree with every one of those sentiments. Nic, Hey, this has been awesome. Please tell our listeners how they can get ahold of you. And if there's anything else that you'd like to share with them.

Nic DeAngelo: 39:46

The best, absolute best way to get a hold of me is on our resources section of our website. We have killer webinars that are strategic, they're economics based, they're very topical, very timely. It's saintinvestment.com/resources. So we just have everything there. we're a hundred percent transparent. We give it all away. if your listeners want to, learn a little bit more and we can offer some cool information, then that's the best place to check it out.

Tim Little: 40:12

All right. we'll definitely have all your information in the show notes. Nic, thanks again for coming on. I appreciate you being here and look forward to continuing to see you do big things on your journey to multifamily millions.

Nic DeAngelo: 40:25

Tim. Great hanging out with you. Great talking.

Tim Little: 40:28

All right. Have a good night.