#11: Victor Menasce


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Victor Menasce has raised several hundred million dollars for ventures, corporate buy-outs and real estate projects. As a fulltime real estate developer, he raises funds on a daily basis. Conventional wisdom is that raising capital uses sales technique. Victor strongly disagrees. Nobody likes to be sold. His authentic approach appeals to investors and entrepreneurs who take fiduciary responsibility seriously.

Victor is a frequent guest on radio and television. He is the consummate educator, and loves to engage the host and the audience in the fundamentals of investing, relationship building, and raising capital.

Victor speaks regularly on stage and is equally engaging to audiences of tens or thousands.

Find Victor Menasce online at:
www.victorjm.com

Stefan Aarnio: Ladies and gentlemen, welcome to the show, Respect the Grind with Stefan Aarnio. The show where we interview people who have achieved mastery and freedom through discipline. We interview entrepreneurs, athletes, authors, artists, real estate investors, anyone who’s achieved mastery and examine what it took to get there.
Now today on my show I have Victor Menasce, who is a well known real estate investor. He is a leader in one of the biggest real estate groups in Canada, OREIO, and he is doing real estate deals all over the U.S. He’s been doing it for a long time. Victor, welcome to the show, Respect the Grind. Thank you for joining me.

Victor Menasce: Great to be here.

Stefan Aarnio: Awesome, and thanks so much for being here Victor. You know I’ve been following you for years, I’ve seen a lot of the deals you’re doing. You’re a real leader and I appreciate that. I see you on Podcasts, all over the place. I see you on the real estate cruise we were at last year. I see you hanging out with great guys like George Ross, who is Donald Trump’s right hand man and his lawyer. Absolutely great to have you here.
On this show, I like to talk about people, you know, you’re obviously a successful guy, today. Great in real estate. Do you want to tell the people at home a little bit about who is Victor and what does Victor do in business and real estate?

Victor Menasce: Well, my path into real estate is certainly not a traditional one. I started my career as an engineer. I started out designing microprocessors, so that’s definitely not the traditional career path. I spent a lot of years in the telecom industry and the semiconductor industry. If you made a phone call in North America anytime after 1990, about 50% of the phone calls in North America were processed by a chip that I designed. So, that’s my background.

Stefan Aarnio: Wow.

Victor Menasce: Then, moved on from there into different embedded applications. Developed different chips that were used as companionships to microprocessors. If you’ve flown on any airline that has a seat back display, that’s typically my microprocessor. It’s a project out of a French company called, Thales, and that’s using my microprocessor. There’s literally dozens and dozens of applications all over the world using the processors that I was responsible for.
So, that’s my background, and I would say in about 2009, 2010, I was busy working on a new project. We were building a new cellular network in Japan. I was flying back and forth to Tokyo. I think I did about 20 trip to Tokyo in a year and a half.

Stefan Aarnio: Wow.

Victor Menasce: It was literally, it was burning me out. It was just exhausting and I decided at the time, it was time to do something different and take a bit of a left turn in my career and what I did. Made a very conscious decision to move out of the world of technology into the world of real estate investing. The world of real estate development, on a full time basis at that point in time.
It was an audacious move, going from earning a pretty substantial income, certainly well into the six figure income on an annual basis, taking that down to zero. Literally to zero and hoping I had enough financial runaway to survive the transition. So that’s how I got here.

Stefan Aarnio: So, Victor, that’s a scary thing for a lot of people. There’s a lot of people at home that wish they could quit their corporate job. They wish they could be an entrepreneur. Entrepreneurship’s in vogue right now, it’s kind of cool. I think entrepreneurs are the new rock stars, and there’s so many people at home that are making some corporate money and they like the money and the like the lifestyle, but they want to make the leap.
Talk to us a little bit about the psychology or the fear you might have felt when you were thinking about making that transition, because a lot of people don’t have the, excuse my word, the balls to do that kind of thing.

Victor Menasce: If I was to go back and do it again, I would certainly do it very differently. I ended up assuming far more risk than I really needed to, and I didn’t allocate enough time to the amount of time that would get lost, time and money, that would get lost to that learning process.
I started out doing projects that, in retrospect were far too small. I started out flipping houses. You’re someone who flips houses. You know that the performance from one project to the next is highly variable. You can make 80, 90 grand on one project and you can lose 10 grand on the next. It’s highly, highly variable.
Especially in my case where I was doing it not in my home city. I did some in my home city, but even ours wasn’t an extraordinarily expensive market, and that just means whenever you buy things, you’re paying far too much and it makes the projects have very thin margins, which adds a lot of risk.
On the other hand, you go to other markets that have much more diversity. Especially markets in the United States, that have much more margin potential, but I’m not the person doing the projects, you know. I’m not the boots on the ground. I’m raising the capital. I’m maybe a limited part in the project, but the projects are being done by folks that are local in those markets.
So I have much, much less control than I would if I was actually managing the project myself.
In retrospect, if I was to do it again, I would definitely have allocated far more time, but the probably the biggest mistake that I made, was working on projects that were too small. This is something that I counsel my own consulting clients against, is trying to do things that are too small and that’s born out of direct, first hand experience.
When you’re trying to do things that are too small, there just isn’t enough money in the project to fund everything that you need to get done. So, today, the projects that I’m doing are much, much larger and it’s working, and the reason it’s working is because it has that scale. It has that sustainability. Where if you’re trying to do this, really on a shoestring, it gets extraordinarily difficult. The hardest thing to do is to do something too small.

Stefan Aarnio: I love what you’re saying there, Victor. That’s something that I wish more people would say about real estate. A lot of guys who flip homes, they do a big volume of them. Like, my team I think we do about a deal a week.
I was talking to Paul Kazanofski down in Nashville.

Victor Menasce: Nashville, yeah.

Stefan Aarnio: Those guys are doing a flip every week. I was talking to Brittany Turner, she’s doing a 100 million dollar project right now.
And so, tell the people at home whether it’s on the rental side or the flipping side, what do you call as too small, so that they can get a good definition of that.

Victor Menasce: It’s very easy to do the math on a single project. You can say, I’m going to take this thousand square foot home, I’m going to improve it, I’m going to make 30, 40 grand on this home. Do the math, and say, okay, well I just need to do 10 of these and that’s 400 grand a year.
Doing 10 is a whole other scale, compared with doing one, and you know, if you’re doing 40, like for example, Paul Kazanofski is, he’s got five crews. He’s got five complete teams that he’s managing. So, he’s not a flipper, he is a construction manager. He’s a fund manager and a construction manager. To call himself a flipper, is a little bit of an understatement, the scale of what it is that he’s managing. There’s an entire pipeline that needs to be built and fed at all stages of the pipeline, from sourcing the deals. He’s got a full time guy that is focused only on sourcing short sales. That’s all he does, all day long is manage a pipeline of deals.
That’s where he gets a lot of the inventory for his projects. At the backend, anything that you don’t exit is called a prison for your money, so he needs an equally impressive system at the backend to get these finished projects completed.
When you’re doing things small, it is not just the size of the projects, it’s the size of your mindset, the size of the organization you’re planning to put in place, because at the end of the day, you need all of those skills and no one person has all those skills. I don’t. You don’t. Nobody does. So, you’ve got to put a team out, and all of a sudden you say, alright, my minimum team is five people. Okay, so, now I’ve got to feed five families, not one, and how much business do I need to do to feed five families, because that’s really the minimum hurdle.
If you don’t achieve that, it’s like a rocket trying to achieve orbit but it can’t escape velocity. You know what the outcome is. We’ve seen the movie. You’re crashing back down to earth.

Stefan Aarnio: Wow. That’s a great insight there. I love what you’re saying. Choose the bigger projects, scale up to the size that can support you. Now, Victor, you’re a very bright guy, very smart, came from technology, now out of all of the things that you could have done, what attracted you to get into real estate and real estate investing, because you’re a guy that could do absolutely anything.

Victor Menasce: What attracted me was a couple things. Number one, I liked the fact that, if I come from the perspective of a technology guy, I looked at what was going on in tech and certainly I had raised a lot of money in technology, I had done a bunch of mergers and acquisitions work and really figured out how to create fuel in that environment.
The problem I had though, was that it was far too speculative. You can come up with a great idea but that doesn’t mean that it’s necessarily that the market is going to be all over it. Whereas with real estate the risk profile was much, much lower, depending of course on the asset class. The old adage, everybody needs a place to live. You’re not speculating that if you build a decent quality home, priced right in a good location, it’s going to get … I mean, there’s not a lot of speculation there.
The risk profile is actually quite a bit lower. Moreover, people will lend you money. You have the ability to scale up because people will lend you money for real estate, because it’s a secured, buy hard asset. Whereas, if you say, I’m going to develop an app and I want you to lend me three million dollars so I can develop this app, that investor is 100% insecure. They have no idea if they’re going to get their money back on this or not. They really have no clue, and the entrepreneur who’s saying, well here’s my plan, really, they have no clue either. They will tell you that they do, but the truth is, they don’t
Real estate just seemed far more predictable. Most of the wealth in the world has been created through real estate. It’s not an industry where there’s a monopoly or a duopoly, it’s really open to anybody and everybody, and so, it just had all of the right qualities.

Stefan Aarnio: I was reading a study years ago about the top 10 businesses that were most likely to fail and the top 10 least likely to fail, and the most risky business was trucking. It was like, if you’re starting trucking, it’s the least likely to succeed. Then the three least likely to fail were, religion, real estate and I think insurance or something like that. They were just very low risk business. So, I guess we’re either opening a religion or a real estate company.

Victor Menasce: Right.

Stefan Aarnio: Victor, do you think that success is more talent or hard work?

Victor Menasce: You’ve got to have a bit of both. They’re both require and it’s not just hard work. You’ve got to do the right things. There’s lots of people working hard, that are working ineffectively. In my experience you really need three things to accomplish anything. Number one, you need the knowledge and that’s foundational. Now, there’s a trap in that because a lot of people think, well I read a book, therefore I have the knowledge, or I took a course, therefore I have the knowledge. That’s textbook knowledge, but that’s not real world applied knowledge and there’s a vast difference between the two. You need the knowledge.
Number two, you need the emotional drive to make it happen. You need to be able to persevere when it gets hard and when you’re ready to quit. You have to eliminate the emotional obstacles that are preventing you from getting to where you want to be. That’s the second.
And, number three, and this is probably the most overlooked, is you need to be in the right environment. That’s the one that people really overlook. Think about it for a moment. Let’s say you had an objective to lose ten pounds. You know what you need to do. You’ve got the knowledge. You’ve got the recipes. You know what exercises to do, you’ve got all of that. Now, you might say, alright, I’ve got a beach vacation coming up. I want to look good, so you’ve got the emotional drive, you want to make it happen. But, you’re working in the kitchen at pizza hut. It’s just the wrong environment. Right? You’re not going to be successful.
It’s really all three of those things and I can give you example, after example, after example. If you think about someone who you and I both know, think about Mr. George Ross. Here’s a guy who worked as an attorney. Now, I don’t care what your hourly rate is, even if your hourly rate is very, very high, you’re not going to amass tremendous wealth in your lifetime. There just aren’t enough hours in a lifetime. Here’s a guy, who’s personal net worth is in the hundreds of millions. What was it that enabled him to do that? He was emersed in an environment that spilled so much opportunity, he couldn’t help but make money. It’s that simple.
Now, I’m not trying to take away from anything that he did, because he did some remarkable, extraordinary things in his lifetime and he continues to invest. He’s 90 years old and he continues to invest. If you think about what George has accomplished in his lifetime, it’s because he was in such an environment that he really couldn’t help but make money, and that’s the key. It’s true for him just like it is for anybody else.
So, what do I do in my environment? I create my own environment. I create my own business environment. That’s why I hang out with guys like you. I hang out with guys like George. I hang out with other developers, entrepreneurs, who are performing at a very high level. That forms part of my environment. I don’t find that at Starbucks. I just don’t. Often, I have to create that virtually. The developers we talk with on a daily basis, they’re located in Houston or in Oregon, or in Dallas and that’s who I converse with on a daily basis and develop relationships with those people. That’s part of my environment.

Stefan Aarnio: It’s harder and harder to find friends, Victor, the higher up you go. You’re a very accomplished man and you’re right. You can’t just go down to Starbucks and hang out with those entrepreneurs who are on their laptops pretending to make a tech company at Starbucks. It just doesn’t work like that.
Now, when you went from the tech world into real estate, how did you have to change personally? Was there a personal transformation as well as a business transformation?

Victor Menasce: That’s a very good question. I would say at first, I thought I knew it all and that I had all the skills and there was an awful lot I came in with that was perfectly transferrable. I had a lot of experiences as project manager, a very transferrable skill. Other things I brought is the ability to raise capital. I raised a lot of money in technology and at first I didn’t realize that the process was similar, but later on I discovered the process of raising money for tech or raising the money for real estate, very, very similar process, and that was actually the genesis for my book, Magnetic Capital, was that realization that the process for raising money was really universal. It didn’t matter what you were looking to do as a venture, the process was universal.
Those two key things and then just being generally smart guy, where I took the attitude, whatever it is, we’ll figure it out, was a foundation as well. So I’d say those were the three things.

Stefan Aarnio: That’s awesome, and what’s more important to you, Victor? Is it more important, you know, we’re talking about raising capital, right now and building a business. What’s more important, having a great brand or having a great business. Which would you say is more important to you?

Victor Menasce: They’re kind of inseparable, because let’s talk about what a brand is. A brand is not what you say it is. For example, you can get a logo designed and you can say, my motto is superior customer service, but that’s not what a brand is. A brand is what people who don’t know you say about you. If you have a great business, that’ll be your brand. If you’re 10 minutes late for every meeting, your brand is 10 minutes late. It just is what it is, right? They’re kind of inseparable.
Now, what you can do in terms of positioning … Well, this kind of segues into, what is marketing, because there’s a lot of misconceptions out there. In my estimation, marketing is about generating interest. That’s all it is, and then sales and then generating revenue, but marketing is about generating interest. A lot of people confuse the two, and they think that by having a sales conversation, they’re involved in marketing. They’re not.
Most people, today, especially in today’s environment, don’t want to be sold. It’s aggressive, it’s offensive, it’s all of those things, and so people don’t want to be sold, but they are willing to be educated, so in my opinion, the only form of marketing that I want to be involved with in 2018, maybe 2020 will be different, but in 2018 the only form of marketing that I want to be involved with is educated marketing and a little bit of buzz marketing where you communicate some excitement about what it is that you’re doing.
People in general are very happy to be educated and so I’m happy to share, like I’m doing for Apple with the Real Estate Espresso Podcast. On those daily episodes there’s, what’s new in the world of real estate investing and this is very short, very telegraphed, very condensed, high energy content, on a daily basis. I’m not out there pitching any deals or pitching my stuff or any of that sort of thing. I’m simply positioning myself and sharing what I think is relevant for people that are interested in doing the types of things that I do. That’s educational marketing. Anything other than that, crosses that line and starts to become, like I said, manipulative, or sales. The world is just saturated with that today and most people, anyone of intelligence, has a filter for that and just rules it out.

Stefan Aarnio: Right, it’s really interesting because you always see these real estate investors, like yourself or myself, we start by educating the customers … I worked for a guy in Canada here, I think he raised 140 million dollars in a couple years. I worked with him in private equity before I got into real estate, and we gave out more free information to the market than anyone else. That was the marketing plan, give out more free information, and Victor, you’ve written a couple books now. I know I own, Magnetic Capital. You got a couple other projects going. Tell us about your books.

Victor Menasce: My first book was called, The Great Canadian Takeover. It was really focused on investing in the United States as a Canadian. My most recent book is, Magnetic Capital, which is really all about how to raise all the money for any worthy venture, and what I discovered is there’s a process. There’s almost a formula that when you follow that way of thinking, you follow the principles, raising money is remarkably easy. If some of those things are missing, it gets very, very hard, very quickly, and so just to be mindful of what are those five principles. If you can achieve all those, like I said, it’s remarkably easy. You create, almost a frictionless type of engagement. I like to use the analogy of a pair of shoes, and I’m sure anyone who’s listening or watching has gone to the show store and seen a lovely pair of shoes on the shelf, and they simply couldn’t get their foot into it. It doesn’t matter at that point how beautiful they are or if they’re on sale. If they don’t fit, you’re not a buyer, and it’s exactly the same with real estate, with investing and raising capital. You’ve got to have that perfect fit between the goals for the money and the goals for the project, or you don’t have that alignment. If you don’t have that fit, it’s not going to work.
It’s very seductive to think, well I have something that looks like it fits, but if it almost fits, it actually doesn’t, so you really have to look for that perfect fit. If you don’t have the perfect fit, then move on. Go search for the perfect fit. Don’t waste time and energy trying to force something that’s not going to work.

Stefan Aarnio: Victor, for the people at home, there’s a lot of people out there who want to be entrepreneurs. They want to raise money. They want to be real estate investors. What are those five things in your book, Magnetic Capital, for the people at home so that they can learn a little bit more about the process?

Victor Menasce: Absolutely. The first thing is, relationship, and this is a word that I think many people misunderstand. I’m not talking about networking, which is very utilitarian. It’s truly about genuine relationship at the very core. Think about people with money, with a lot of money. Think about a billionaire, and they’re always being hit by people who are looking for something from them. Well, they’re human beings. They don’t want to be used anymore than you or I do. Nobody wants to be used. So, at the core of this is genuine relationship. If I look at somebody, and I don’t see a human being, all I see is dollar signs, I’m using them. That’s not cool.
So, it really starts with a genuine relationship and I don’t start with talking about business law. I want to develop a genuine relationship and I get different things from different relationships. I might get introductions to other people. I might get advice. I might get credibility. I might get access to an opportunity. I might get some capital. Could be any of a number of things. I’m not looking to get something, I’m actually looking to give, and if I get one of those things back, that’s great.
But, it really starts with genuine relationships. I won’t even bring up business, or, you know, the specifics of the projects that I’m working on until at least the fifth or sixth meeting with that individual. Now, if they bring it up sooner, yeah, sure I’m happy to accelerate the conversation, but I’m not going to go and pitch them a deal and say, hey, how are you doing, my name’s Victor, do you have a hundred grand? It doesn’t make any sense. It really starts with relationship, is number one.
Number two, trust. Now, trust is not just, am I dealing with an honest person. There’s an entire psychological contract that is much more complex. It’s questions like, can I trust you to put together a good plan? Can I trust you to execute the plan? Can I trust you to hire the right people? Can I trust you to communicate in an open and transparent way? Can I trust you with my money? Can I trust you to keep even small commitments, and on and on and on. And, if any one of those are missing, it actually starts to chip away at the trust, and you’ll know that trust exists when decisions happen quickly.
If someone says to you, well, I don’t know, we’re going to need another two or three weeks to do our due diligence, you know, right from that statement, that there is a gap. If the trust was higher, that decisions would happen more quickly. Trust is number two.
Number three is results. Show me your track record, show me that you now how to consistently multiply my money. So, having that track record is vital. Now, you might be asking, how do I create a track record if I can’t raise any money. How can I raise any money with no track record, I’m stuck. Well, it’s actually not true. You’re thinking about it too small. It’s like being back in grade school, that if you’re doing a math test and you look on your neighbors paper, you’re cheating. Well, this is the world of business and business is a team sport. What you really want to do is if you’re missing something in your track record, go work with somebody who has that track record. Maybe immerse yourself in their business for a year or two and now you can legitimately borrow some of their credibility and some of their track record because you’ve earned it. You don’t have to go spend a decade there.
I mean if you think about guys like, say, Ken McElroy who you and I both know. Ken is Robert Kiyosaki’s real estate advisor and Ken, between him and his partner Ross, own about 10,000 units. Well, Ross started out on the construction side and Ken started out on the property management side. He was a building superintendent early on in his career. He knows, he’s collected rent checks. He’s evicted tenants. He’s done it all, so he started at the bottom and he worked his way up. He earned that track record. So that’s number three is a track record.
Number four, you’ve got to have a compelling opportunity, and the number of times I’ve heard from people, you know, I had a great deal but I just couldn’t get it funded. Well, there’s a clue in that. Maybe, in the eyes of the money, it wasn’t such a great deal. There’s a lot of people out there saying, oh I got a great deal, I got something for 10% off. Well, great for you. Where’s the money in that? Where’s the profit in that? When I’m in properties, I want to buy something at 90% off so that I can hopefully squeeze out a 30% net profit at the end. It’s a different mindset.
And then finally, is that thing called alignment, which is a catch all for a number of smaller items. So, for example, what’s the size of the investment? What’s the term of the investment? What’s the rate of return? What’s the tax consequence? What’s the control structure? What’s the security? All of these smaller items that are actually vitally important have to fit. If I go to an investor that’s sitting on a hundred million dollars in liquid cash and I ask to borrow 50 grand, he’s going to look at me like I’m nuts. It’s not worth the paperwork to him. So, I have to match the size of the investment with what the goals are for the investor. If there isn’t that perfect fit, it’s not going to work.
So, if you hit all five of those, like I said, raising money’s remarkably easy.

Stefan Aarnio: I love it. I love everything you said there, Victor. It’s all these subtle details that make up a deal happening or not, and I love what you said about, fit. It’s a pair of shoes. It fits or it doesn’t.

Stefan Aarnio is one of Canada’s leading up and coming real estate entrepreneurs and the winner of Canadian Real Estate Wealth Magazine’s Joint Venture Partner of the Year. Starting with only $1200, Stefan has built a multimillion dollar portfolio for his partners and has earned himself a spot on the self made list. Learn more about how Stefan has managed to dominate the real estate game, in the Five Million Dollar book. To order and receive your bonuses, visit the fivemilliondollarbook.com/podcast.

Stefan Aarnio: Now, for Victor Menasce, very successful guy. Very successful real estate investor. Most successful people, Victor, have an obsession. What is your obsession?

Victor Menasce: I have a couple. The first is, I just love to create things and my mother was an architect. My mother was actually the second woman in history to graduate in architecture from Cornell University back in the 1940’s and so I go around New York City and see some of the projects that she worked on. I look at the PanAm building, which sits right on top of Grand Central Station. I go look at the Pierre Hotel on 5th Avenue and see some of these projects, these landmark buildings that she worked on and yes, I went into engineering where I was working on stuff that was so small you couldn’t see it, except under a microscope, and so now I’ve kind of returned to … Which, was creative as well, in a different way. Here I’m creating things that are physically larger that you can see. So, I love the creative part. I don’t like frankly, finding deals. I’d rather create them. So, that kind of speaks to that creative aspect. That’s number one.
Number two, I really gain a lot of energy not just by working on my own projects, but by helping others as well, and just seeing them flourish and unleash their own inner giant. That to me is tremendously energizing as well. So, it’s really those two things that drive me and of course making money comes along the way with that, but that’s not the primary objective.

Stefan Aarnio: I love that. Victor, with doing all this stuff, and you’re talking a little bit about helping others, what motivates you to be great at what you do?

Victor Menasce: If you’re going to put the time in anyway, why the hell not be great? Why not? If you have a choice, which you do, anybody does, then why would you aim for mediocrity? You know, I’m reminded of an interview with the actress, Sharon Stone and she talked early on about what was going on in her career and she said the types of things that were going on in Hollywood at that time, that she engaged in or didn’t engage in, she said, no way, I wasn’t going to participate in any of that nonsense, because I wanted to be at the top.
Arnold Schwarzenegger, same thing, he was at the top, Mr. Universe and then wanted to get into acting and he didn’t want to take roles in B movies. He wanted only to take roles in A list type productions. So he stayed out of that business until he could land an A role, and he didn’t take any B roles. It’s the same kind of mindset.

Stefan Aarnio: I love those stories. Especially the Arnold Schwarzenegger one.
Now, in this entire career, Victor, especially coming into the real estate world. You transitioned from corporate into real estate, was there one moment where you thought you were going to fail and it was all going to come crashing down?

Victor Menasce: Oh my gosh, there’s more than one. I had to get comfortable. Probably the first flip I did was locally here in Ottawa. This home was a decent home. It had a small issue where the driveway sloped into the house and the drain at the bottom of the driveway was kind of buckled, so water would come into the garage. When you get water coming into a garage, you get mold. When I bought the property, there was mold in the garage, unbeknownst to me when I bought the property. This was actually a power of sale, so I had to buy it as is, where is and all of that kind of stuff.
What I didn’t know is that a building inspector somewhere down the road had said, there’s mold here, I wonder if this was a grow op, meaning a marijuana grow op, and somehow that got flagged in a database with the mortgage insurer.

Stefan Aarnio: Oh no.

Victor Menasce: So, then when the rehab was completed, everything was just fine, had it on the market. The buyer couldn’t get financing because the mortgage insurer made the assertion that the property was a grow op.

Stefan Aarnio: Oh my God.

Victor Menasce: What the heck are you talking about? This was never a grow op, there’s no evidence of that anywhere and yet somehow the problem got improperly listed, and I ended up, instead of making a decent amount of money, I ended up taking a loss on the property. Now, it wasn’t such a large … I think I lost maybe $10,000 or $12,000, nothing that was going to change my life, but that was a real awakening that this wasn’t quite as easy as everybody said. That was number one.
As I got into bigger and bigger projects, of course the risk went up as well. I was working on a project in Toronto that was a land development project where at one time we had about a quarter million dollars of investors money at risk and we were sure that we were actually, successfully close. In the end we did and everybody got their money back and there was no issue, in fact we made a lot of money on that particular project but there were several, several sleepless nights for sure. Where, I was asking myself, did I really need to bite off this much risk? I felt at that point that I had taken on too much risk. Now, it all worked out in the end and I certainly would do it again today, the way I did it then, but it’s all part of the learning process.

Stefan Aarnio: When you were in this early learning process Victor, because there’s so many people that want to do what you do, did other people doubt you? Did you have any doubters and haters?

Victor Menasce: No, I never really encountered that. Actually, oddly enough, probably the folks that were most doubtful were my own family and some of my own extended family, because, and I think a lot of you can relate to this. Entrepreneurs can relate to this, because when you’re dealing with your family, they’ve come to know you in a certain way, so it’s very difficult for them to now see you in this new way. They knew me as the engineer. They knew me as little Victor, when I was six years old, you know, throwing a Frisbee or playing ball. That’s their memory of me, versus someone who’s out there building 200 unit buildings and it’s difficult for them to understand unless they take the time to do so.

Stefan Aarnio: I love what you’re saying there and the other thing I noticed with families. I talk to so many people that want to do this and the families often try to protect you from hurting yourself.

Victor Menasce: Correct.

Stefan Aarnio: So they say, don’t do that, you know, you’re going to hurt yourself and you always see that guy at Safeway scanning cans at the checkout. He says, I used to be in real estate, it didn’t work out for me. Or the guy sweeping the floor. It scares people.
Victor, if you could go back to the beginning. Let’s say, 18 year old Victor. What’s a piece of advice you’d give yourself at 18?

Victor Menasce: It’s very interesting. So my journey, I really believe the game is mental, far more than I ever, ever though. One of the things that I’ve gone through … When I was 18 years old I was very focused on personal growth and have been for most of my career. There was a little period of time, maybe about 10 years where I stopped growing emotionally, and it’s just what happened. Then I became re-energized with this notion of figuring myself out because I was doing the same types of things in my business, I was getting the same result and realizing that the problem wasn’t the circumstance, that the problem was me. That I needed to change if I was to move beyond whatever was holding me back. So, I really started to invest in figuring out what were those behaviors that were limiting me. Was it a particular outlook? So, the advice I would give is never lose that hunger for figuring out what the obstacle is.
Most of the time, almost overwhelmingly, the obstacle involves a human being, and often it’s one that you know really, really well.

Stefan Aarnio: I like that.
Now, in the same vein, Victor, what are the top three books that you feel have really changed your life?

Victor Menasce: From a business standpoint or just generally?

Stefan Aarnio: Generally. It could be business or it could be personal, because those two things, they don’t really separate that well. They do work together.

Victor Menasce: Let me give you, from a business standpoint let me start with the, E-Myth, by Michael Gerber. I consider this a business 101 book. Definitely, E-Myth, by Michael Gerber.
Number two is a book called, Hold Me Tight, by Dr. Sue Johnson. This is about how to have a healthy relationship and the dance that occurs in relationships. It’s certainly given me a much stronger connection to my children, a much better marriage and so definitely number two would be, Hold Me Tight.
What would be number three? I’m kind of struggling because I could give you 30, so I’m just trying to limit the list to two or three. I would say Robert Kiyosaki’s book, Rich Dad, Poor Dad, certainly would be among that list, but I suspect most of your listeners have already connected with that in some form.

Stefan Aarnio: We’ve had a lot of people, Victor, it’s interesting. Almost everybody I’ve had on the show says, Think and Grow Rich, right away. Would you put, Think and Grow Rich, on the list or is it too cliché?

Victor Menasce: Yeah, there’s definitely elements of, Think and Grow Rich, for sure. It’s probably not the ones that most people think, or not for the reasons most people think. What I got from, Think and Grow Rich, wasn’t that if you think it, it will manifest, because I don’t think life is ever quite that simple.
If you look at what Napoleon Hill did, he immersed himself … It’s back to what I said before, he immersed himself in an environment. Look who he was hanging out with. He was hanging out with Andrew Carnegie, right? He was immersed in an environment where he could connect with the way the world really works at that level. It wasn’t just a matter of thinking and manifesting, which, is what I think a lot of people take away from that book. It’s really, opening up your mind to getting into that environment. He spends a lot of pages in the book describing the mastermind, the whole concept of a mastermind and how Henry Ford used the mastermind very effectively to make his business much more effective.
That’s something I’m involved with every week, every month. I’m involved in several masterminds and yes, absolutely. It has that at the core of that process.

Stefan Aarnio: Now with the books, Victor, what is one mentor that you had that changed the game for you?

Victor Menasce: There’s several. Probably Dr. Nedo Qubein, I have so much time for him. George would be another. Both those gentlemen are just extraordinary people. What I love about Nedo is not only does he possess a tremendous amount of wisdom, he’s really all about experiential learning, so, for example, when I was part of his mastermind and we would sit down and we would talk about relational capital. He wouldn’t just sit there and lecture on what relational capital is, you know, he took me to the house of Paul Baylor. Paul Baylor’s a man who owned a furniture company and he sold that company to Steelcase, made a fortune. I met Paul when he was 69 years old. He was retire from Steelcase. He had a beautiful villa in North Carolina. He had 30 exotic cars, Maseratis, Ferraris, you name it, he had it.
At age 69 he was getting bored, and he decided at that time, he was going to restart his furniture business from scratch at age 69 just so he wouldn’t be bored anymore. In his first year he did 25 million dollars of revenue.

Stefan Aarnio: Wow.

Victor Menasce: So, the question was, how did he go from a standing start. From zero to 25 million in 12 months, and it’s not that he knew how to build a factory, because he did and it’s not enough. It wasn’t that he knew how to run a factory, because he did and that wasn’t enough either. It’s he knew who to call to get the orders. It was the value of those relationships. So becoming really connected with, okay, I get it. Here’s a guy who could literally start from a blank sheet of paper and go from zero to 25 million in 12 months and to sit and talk to the guy over dinner next to his swimming pool, and have that conversation. It’s that kind of experiential learning that Nedo taught me. It wasn’t just the information, but how to access the information.

Stefan Aarnio: Wow, I love that. I think that the word, experiential learning, that’s something everybody’s got to take down in the notes at home because when you’re immersed and you’re in there, you’re really going to learn and I think Nedo’s a genius for that.

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Stefan Aarnio: Now a couple final questions here, Victor. What’s the one thing young people need to succeed these days? Talking to all the young people, the millennials out there.

Speaker 1: Get rid of the sense of entitlement.

Stefan Aarnio: Love it. Can you tell us a little bit more about the sense of entitlement a little bit?

Victor Menasce: Nothing. At the end of the day … You know, so may conversations that I have, often even with my own kids, where they’re looking for the world to give them something, and the fact is that the marketplace doesn’t care. It really doesn’t. It doesn’t matter what age you are. This is kind of one of those universal things. A lot of people think, well I’m going to build this particular app. I’m going to go build this particular service or this particular video or webinar or whatever and the world’s going to beat a path to your door. It’s not. It’s just not.
The only way that things, that the world will beat a path to your door with, is if it delivers sufficient value and they’re able to connect with that value. Gary Vaynerchuk talks about it very eloquently when he talks about, before you can even have a conversation, you need to have someone’s attention. If you don’t have their attention, it doesn’t matter what you know or what you have to offer because it’s inaccessible. It starts with that. Then once you have that you’ve got to be able to fulfill on that promise right from top to bottom. A lot of people just focus on what they like to do. The marketplace doesn’t care what you like. You have to look at it from the perspective of, what will it take for the market to engage you. For customers, not the market, because markets don’t buy anything. Only customers do. What does it take for the customer to engage with you right from the point where you have their attention to actual fulfillment of that value? Unless you’re thinking about it that way, and serving that customer, solving that problem for them, not for you, for them, that’s the key to success in business, in my opinion.

Stefan Aarnio: Make it about them, don’t make it about you.

Victor Menasce: Absolutely, and look, I’ll give you a simple example. This is a real estate project, okay? So one of the communities that I’m involved in, is a little town on the Gulf Coast, called Lake Charles, Louisiana. This is a sleepy little town of about 100,000 people. Well, this community has a pipeline infrastructure, natural gas pipelines, and because of that, there are 118 billion dollars, with a, B, of natural gas, petrol and sea port expansions planned over the next decade of which, about 48 billion is already underway.
This is a town that is on an absolute growth terror. This is a town where they need everything. There are hour long traffic jams every day, on interstate 10. Sometimes two hour long traffic jams because there is just so much growth happening in this town. This is a town that has problems and whenever there’s problems, that’s an opportunity to create value.
So, what are we looking at? We’re looking at acquiring land to do a park and ride. If I can take 50 cars off the road and get people into the plants by bus, that’s adding real value. So there’s all kinds of … Now, that’s not particularly sexy, you know, say, really, you’re going to build a park and ride? But, you know what? There’s a lot of money to be made in a park and ride.

Stefan Aarnio: Right.

Victor Menasce: As I’m solving a real business problem. You say okay, you can build a park and ride for New York City or for Toronto, but it’s solving a problem. That’s it.

Stefan Aarnio: I love that. I love it. Parking’s amazing and I love the simplicity of the idea.
Victor, now two more questions. Are there any resources you can recommend for people starting out wanting to follow a path like yours?

Victor Menasce: That’s pretty general, but I guess the first thing to do would be to just get immersed in the environment. There’s lots of real estate investment clubs. That’s good place to start, but understand that 85%, 90% of the people in the room are rookies as well, so it’s a place to start, but that’s going to be a slow process because you’re hanging out with other people that don’t have a ton of experience. If you can get yourself into the room at the next level or maybe two or three levels up, you never want to be the smartest person in the room.
For example, over the next couple of weeks, I’ll be spending time with a couple hundred investors, locked up on a cruise ship. Some of the most notable names in real estate investing in the world, will be together for an entire week on a cruise ship. I know you had the opportunity to do that last year. It’s an extraordinary experience and it’s not just for the experience, it’s to grow. It’s to grow as a person. I know that when I went on this last year it enormously helped my business, on multiple, multiple different levels.
So, it’s getting in those environments. Now it’s not cheap. To go spend 70 grand for a week, a lot of people go, oh, gee whiz. But, I’ve made that back, many, many, many times over. It’s about getting in the right environment.

Stefan Aarnio: I love that.
One final question here, Victor. Do you have any programs or causes you’d like to promote on the show today?

Victor Menasce: If your listeners are looking to grow as entrepreneurs, as real estate investors, I think they could get a lot of value from my book, Magnetic Capital. I don’t want to plug my book, but I wrote it because I saw a void in the marketplace. So many of the books out there read like a textbook and what this … And, I get the feedback from folks who have read the book. They’ve said, you know, Victor, this is very accessible and you’re giving real world examples of how you connected from A to B and they’ve found it very, very helpful in that respect, so, frankly, buy my book.
Again, it’s not to plug my book, I think it’s going to really help you tremendously, in terms of unlocking the way you thing about what is for many people, a critical resource, a limiting resource and that acts. Now, as soon as you eliminate that obstacle, I can guarantee there’s going to be some other obstacle immediately behind that, that’s going to limit your growth. As soon as you solve the money problem there’ll be something else. Maybe it’s project management, maybe it’s delegation, maybe it’s leadership. Who knows what it is for you. Maybe it’s marketing, but there will be some other obstacle and it’s a matter of simply saying, okay, I’ve solved this one, now what’s the next one and take that same discipline of growth and problem solving to that other degree.

Stefan Aarnio: Awesome. I love it. I love it, Victor. I’m an owner of, Magnetic Capital. It’s right here in my collection. If you don’t have that book, go get it. Victor’s a pro. He does absolutely great work, great projects. Any final words for the people at home, Victor?

Victor Menasce: Invest in yourself every day. I listen to Podcasts every day. I record a Podcast every day, but I listen to Podcasts every day from a wide variety of different folks. So I’m investing in my own learning, investing in my own … I read a lot, and I spend time writing down, and journaling, my goals and objectives and make sure at the end of the day, I’m closing the gap, making sure whatever was my intention at the beginning of the day, I fulfill by the end of the day. By maintaining that discipline, I’ve been able to grow and improve my business. That’s worked very well for me.

Stefan Aarnio: Awesome. Thanks so much for joining us today, Victor, and for people at home, Respect the Grind.

Victor Menasce: Great to talk with you always.

Stefan Aarnio: We’ll see you guys later.

Victor Menasce: Great to talk with you always. Thanks Stefan.

Stefan Aarnio: Bye.

Hey, it’s Stefan Aarnio here. Thanks for listening to another episode of Respect the Grind and if you loved the content today, I want to invite you to take a look at my program, Stefan Aarnio’s Blueprint to Cash. Now if you’re somebody that’s just getting in to real estate or maybe you’re somebody who’s already in real estate, has a couple properties under their belt and wants to get serious, this is the program for you. The Blueprint to Cash is a very powerful program. My team uses it, I use it. It’s the exact steps you need to get a deal in eight weeks or less. If you’re somebody that wants to acquire more deals, acquire deals at 40 to 60 cents on the dollar or just get all around better at real estate, check out my program at blueprinttocash.com/podcast. I’ve got a special offer waiting for you. That’s blueprinttocash.com/podcast. Try it out. You’re going to love it. It’s a great start to real estate, the Blueprint to Cash, it’s also a great restart if you’re somebody looking to take it to the next level. I’ll see you guys on the other side. Respect the Grind.