Episode #632 - Being The Ideal Entrepreneur with Victor Menasce, Senior Partner at Y Street Capital

Welcome to this edition of the million Dollar Mastermind podcast. This is where we pick the brains of high achievers from all walks of life and get their hard earned real world insights on winning. I'm your host, Larry Wydell. There's advantages at looking at things from a different point of view. And like, you know, you and I can only look at things the way we look at it. We can't look at it the way, you know, it's almost like we should have an autistic person on board just to look at it from that point of view because they clearly see things from a different angle and usually they see the truth, you know, and so they see things that it's good to see, but we can't see it, you know, because our mind works differently. But it's in Salesforce, it's that way. If you. I found that if you have a group of people and they're all kind of alike and they get along real good, there'll be a pretty much mediocre producing group. And we used to always joke that we need to go looking for an unwashed heathen to throw right into the mix of all the clean cut choir boys and get, so he could turn, you know, get a dog fight going, you know, put some challenges out there and insult some people and get some competition. Production always went up, you know, so when you're looking at your success at this point, how do you, how does your. I'll tell you, listen to it this way. How does your day go now? You know, how control are you of your, you know, because all we have is 24 hours in a day. And it really is fascinating how people slice that up and use it, you know, and how much variety and how they go about deciding how to get through a day, week, month, year. Because all of, of life is cycles, you know, it's like, how can you, you know, and general consistency almost always wins, but inside the general consistency, it does not necessarily get done in the same cycle, you know, the same pattern and everything. So how do you get your. The things done that need to get done that make you and your company successful? How is your day and week and month and year broken up these days?

So let's start with the daily. There's a number of different cycles. For example, if we look at. Yeah, we'll start with the daily. So right now I happen to be building a house for my wife and myself. So that's just an added piece that's just adding to the, adding to the mix. But so there's a certain amount of just being on the job site to see what's going on and, and make sure that the right things are happening. So typically I will use that drive time in the morning to research podcasts, research other material that I need to prepare for my podcast. Oftentimes I will be dictating the script for my podcast. So when I produce a five minute show, I actually script that show. I know that five minutes is 850 words. So I'm writing 850 words every day. And I do that for deliberate reason. That way that when I'm recording I can focus my energy not on what am I going to say, but on intonation, cadence delivery so that I deliver a better quality product, part of that production value. So I do that typically in the morning when my energy is the highest, I can produce the highest quality work in the shortest period of time. Sometimes it happens when my day gets away from me and I'm producing that podcast, scripting it at 11 o' clock at night and man, it's painful. That's a hamster wheel at that point because it's hard for me to get it out and get it on paper and then go record it. My voice is tired. You can tell the difference in quality, you know, between something that was recorded in the morning versus at night. So you know, there's a certain. When you produce a daily show that is part of the day, the daily practice. We have a staff meeting every morning, all 12 of us, 9:15 every morning. I feel badly for the folks that are on mountain time zone or Pacific time zone because I'm on Eastern so they're getting on Zoom at 7:15 or 6:15 respectively. Yeah, but we've decided that that's the time and okay, it would actually work better for me if it was a little later. But that's the time we have. So, you know, we try and knock that out in about 45 minutes. We go through the projects. It's a very disciplined type of meeting and we.

What do you do in the meeting? It's a discipline meeting. You know, we've got a, our staff meeting. I stole this idea from somewhere along the way because we get, we have a 20 minute meeting. Everybody goes through and says what they did the week before, what they. And then they go around the horn, but they didn't, what they didn't get done the week before. And then they go around the horn and say what they're going to do this week. And that's like a staff 20 minute meeting that pulls Everybody together. What do you do? The format for your 45 minute. I'll only do this one interruption on the day thing.

But no, no, that's fine. So we typically, we will set the agenda in advance so we communicate through a Slack Channel meeting. Knowing what is going to be on the agenda doesn't mean we go through every project. We have 14 projects in the company. We can never get through that in 45 minutes. So what are the issues that we absolutely need to talk about? We're not putting status updates in that meeting. It doesn't make any sense unless it's something that we're actively working on. Like right now we're in the middle of three different capital raises. We're about to. We're closing one down right now as we speak and opening another one. So we're going to still have three capital raises running concurrently, which frankly is a little bit nuts at the moment. But so there's a lot of activity, a lot of activity, A lot of communication with our investors. We talk about what's working, what's not working, what, you know, what needs to happen in time to get things done. For a particular closing, it's really issues focused and making sure that the right communication is happening. So we deal with things on a real time basis. If it's too big to deal with in the daily meeting, we'll say, okay, we need to set up a separate deep dive. On this particular topic. We have a weekly time set aside for a weekly deep dive that's just reserved on everyone's calendar. Some weeks we'll cancel it if there's nothing to talk about. Most weeks we have one or two topics for that deep dive meeting. So it's putting a bit of process around that. And then my day, a lot of it is consumed in review of contracts. That's not something I feel you can delegate as a business owner, you can delegate. Look, there's lawyers out there that will move semicolons and things like that. But that's not where it's at. It's understanding. It's not just finding mistakes in contracts. The contracts say what you want it to say. That's a different thing.

Right?

Right. Or where are the landmines in this contract? If this was written from the perspective of someone who's predatory, how would they use this contract? Does that exist in this contract? So really look at it from that perspective and making sure that our legal team is of that same mindset and caliber so that they know to look for those things and they know how to architect the documents in the right fashion. We spend a lot of time in plan reviews, architectural reviews, underwriting reviews. We spend hours and hours every day re underwriting projects, making sure that, yes, market conditions have changed, interest rates have gone up. Running sensitivity analysis. What happens, you know, how can we value engineer this project and pull $5 a square foot of cost out of this project? What can we do to, for example, increase the value? Are we better off designing a product that has some credits for affordability or better designing a product that has credits for energy efficiency? They're different. One's going to contribute more to construction costs. They both might be a win. But which one's better and how do you conduct that sensitivity analysis? This is stuff we do literally every day. And then there's always new opportunities coming in the door. So we have a team, we have a due diligence team. We make decisions, often on the daily call, whether to go where, how to manage the due diligence process. Are we going to kill this project or not? Is it? And we, when we look to kill a project, we look to do a quick kill. Yeah. Because the last thing you want to do is put a ton of time and effort into something that will never see the light of day.

Yeah.

Right. So you want to make sure that you're killing it quickly.

And that's better than occasionally missing out on a good opportunity. Occasionally. Rather than waste a lot of time on worrying that you're. You're going to miss something, you know, it's better just to call it. Go. Go with your instinct.

Well, it's not just instinct. It's also just understanding, you know, what are our criteria being clear on our criteria and does this fit or not?

Yeah.

You know, and by the way, we've killed projects and then brought them back, you know, one of our largest projects, which frankly could end up being a legacy project for us. We threw it away when it came in our lap. I mean, it's a massive, massive undertaking. It's almost 1800 acres. Yeah. And we, at first when we looked at it, we said, ah, it's too big, it's too complex. It's too, you know, fill in the blank. And it took a while for us to wrap around, wrap our minds around it, that in fact we could do it.

Yeah.

And I'm glad we did. This is a project, it's on the outskirts of Colorado Springs. We literally have taken down a property that has a perimeter of seven miles.

Huh. In Colorado Springs. Yeah, yeah, I'm there a lot. And so what side of Town.

It's on the east side. It's sandwiched between Peterson Air Force Base and Shriever. Shriver is almost our immediate neighbor. And Shriever's Space Command.

Yeah.

It'S an extraordinary property. We've submitted our annexation plan to the city. We submitted the master plan for what will ultimately be thousands and thousands of homes, of rooftops, commercial, residential, industrial, office, schools, fire department, the whole bit.

Wow. And so now that's the day. And I'm sure you squeeze in time for podcasts and other interviews and things like that as they come up. Do you. How do you make sure your week is. Is. You're still. You stay in control of your week.

Some days it feels like I'm just hanging on to my week. It's. Yeah, you know, there's. There's just a lot going on, but. And it's a conversation that my wife and I have regularly about making sure that we find time to create balance. Sometimes I do it well, sometimes, quite frankly, I don't. Right. Right now, I would say that things are to feel a little bit imbalanced, working. Working very hard. But we are at a critical juncture on several projects, and it's just going to take a lot of effort to. To get this. Get this all done. I mean, like I said, we're raising on three projects in a difficult capital raise environment.

Yeah, it's just like a farmer. When it's harvest time, you just got to get it. You just got to get the hay in the barn, you know, and like in mergers in New York, you know, and. And up in New York City, when they're. You're having companies merge and things like that, you know, you got to keep quiet, working around the clock and. But when it's done, it's done, you know, and you forget about all of that, you know, you get a chance, you know, you don't get chance to do great things all that often. And when you do, it's. It's worth the effort. You know, that's this judgment call we all have to make. And so anything I don't want to. I appreciate your time. This has been great. We've covered a ton of stuff, and I get the idea that we're probably destined to circle back and to do this again down the road, because we've got lots of things to explore and I want to hear about how some of these projects turn out. Do you have anything that you want to add as a final word here, A question, a comment, or something that you want to pass on to people to you know, they, they want to do great things in their life. You know, they, they want to be able to have some satisfaction, not just work hard, but have some satisfaction that they're doing something that matters to them and they're looking for, they listen to these things so they can get ideas, actionable type items or insights that they can act off. Do you have a final thought that you use when you're getting ready to move forward?

Well, I'll leave your listeners with two things. One is the notion that we talk about different types of capital. There is maybe your physical capital, that might be your health. There is your social capital, that is what's your reputation in the marketplace. There is your financial capital, what's your balance sheet? And then there's your relational capital. And I think that's probably the most valuable, which is who do you know who knows you and do you really have access to. Can you really connect with those folks and get things done? And if I think about just a simple example, if I look at my bookshelf at home, probably 80% of the books on my bookshelf are signed and I know the author personally.

Oh, that's fantastic.

Yeah. So that's different than going down to Barnes and Noble and saying, I'll try this book this week. It's a different thing. There's a connection. I know I can't get rid of those books because it's a connection with the author. And how does that relationship play out? And am I going and buying more of those books to give out as gifts to people? That's a different thing. It's really establishing depth of relationships with ultra high quality people, and I mean ultra high quality people so that you can deliver value to them and they in turn deliver value to you. That's it. If I look at who my mentors are, they're extraordinary, extraordinary people and we just cherish those relationships. So that would be, if I was to be a catalyst for any of your listeners, do something different, you know, at the end of this show, that would be it. Love to have them as a listener to the podcast, my show, Real estate espresso podcast, seven days a week on 20 different platforms. So wherever they listen, they're sure to find it. It's spelled like the Italian coffee espresso. And would love to have them as a listener.

Fantastic. And of course, your book, Magnetic Capital. And they get excited about that. They can leave you a five star review.

Absolutely.

That's the coin of the realm, isn't it? In that world? So congratulations on what you've done so far. Congratulations on the projects you've got underway, those 14 you've got underway and those three more fundraising things you're under right now. And good luck on building that house. Exactly what hope is more than what you're doing your wife is expecting. So anyway, congratulations. Thanks for what you do, what you stand for and looking forward to talking down the road.

Terrific. Thank you, Larry.

Appreciate it. Goodbye. Thanks for listening to the Million Dollar Mastermind. If you felt there were any valuable takeaways from this episode, please take a minute. Leave us a five star review. Your feedback is important and really helps us get the word out to a wider audience. Remember, we have a valuable webinar that is absolutely free. Register for it right now@whiteallonwinning.com thanks for listening.