GI159: Education Times Action Equals Results with Gino Barbaro

Gino Barbaro is an investor, business owner, author and entrepreneur; who has grown his real estate portfolio to over 1600 multifamily units & $1.5 billion in deal volume.

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Transcript:

Announcer:
Welcome to the Global Investors Podcast, a show that focuses on helping foreign investors enter the lucrative US real estate market. Host, Charles Carillo, combined decades of real estate investing experience with a professional background in international banking to interview experts in all areas of US real estate investing. Now here’s your host, Charles Carillo.

Charles:
Do you have money sitting in the stock market? And you’re worried about it or worse. You have money sitting at the bank, not keeping up with inflation. My name is Charles Carillo, founder and managing partner of Harborside Partners. And since 2006, I’ve been investing my money and my family’s money into income producing properties. These are real assets, real properties with real addresses that produce real cash flow. At Harborside Partners, we provide passive investors who love real estate with a turnkey investing solution. If you want to put your money to work in real estate, but can’t find deals, don’t have the time to get funding in. The last thing that productive people want to do is manage real estate. We find the deals. We fund the deals and we manage the tenants, the termites and the properties. Partner with us at investwithharborside.com. That’s investwithharborside.com. Go to investwithharborside.com. If you love real estate, you like the idea of passive income and believe that income producing properties will appreciate over time. Go to investwithharborside.com. That’s investwithharborside.com.

Charles:
Welcome to another episode of the Global Investors Podcast; I’m your host Charles Carillo. Today we have Gino Barbaro. He is an investor, business owner, author and entrepreneur; who has grown his real estate portfolio to over 1600 multifamily units & $1.5 billion in deal volume. So thank you so much for being on Gino.

Gino:
Thank you, Charles.

Charles:
So it’s awesome. To hear your story and all your success and give us a little background on yourself, both personally and professionally prior to making leap into real estate investing.

Gino:
Well, as we were speaking off camera I, Ray, born and raised in the Northeast in New York, went to Fairfield university, you know, get a job after college went to work for a AIG for one year. And after that I hated cubicle life. So what, what did I decide to do with an Italian name? Like Barbara Oak? I opened a pizza shop and my dad, my dad had a restaurant. So I said, let me take my hand in that 20 years later, let’s fast forward to 2008 and it’s like, wow, the grind is real. The great recession’s here. I need to do something now. I love the restaurant until I didn’t love it anymore. My dad passed away in 2007 and it was a mom and pop shop. I had one restaurant for 20 plus years. Didn’t know how to scale it up. Didn’t even know how to create a really self-sustaining business.

Gino:
I, I had basically self-employed, it felt like I had a w two job. I dunno. How many of you out there feel like that? I felt like that for years. And, and, oh, wait, I read the book by T har record called secrets of the millionaire mind. And to me that was a powerful book. It was all about responsibility. I hated the message at first. I wanted to punch T har in the face, but you know, obviously that’s what happens when you read truth. And I read it again and I said, you know what? He’s right. There are people out there making millions of dollars. I’m not one of them, what are they doing? And that led me down to the rabbit hole of investing in real estate, partnering up with Jake and, you know, ultimately buying our first deal in 2013. And you know, as a side note, married over 20 years, got six kids.

Gino:
We homeschool our children. So as far as the responsibility I had in a lot of aspects of my life, just the business world and not understanding how to really create an amazing business, cuz we’re not born with these skills. We’re not born as a salesperson or as an entrepreneur or how to scale a business or how do we become an investor? You have to learn all of these skills and, and people think, you know, you look out there and you wanna compare yourself to somebody else. You say, well, that person’s doing it. You know, he’s just a natural born person. Not, they may have some talent, it may have some skill, but you have to learn all of these different skills. You have to learn how to actually develop your mindset, to be able to accept it. Cause you know, your behaviors are believe driven. If you don’t believe you can do something, then you’re not gonna be able to do it. So for me, ultimately taking responsibility was the first step. And then the next step becoming more clear of my goals. And then hopefully you can find a partner like I did with Jake, who partnered up in the rest is histories. They say

Charles:
Now, how did you guys find each other? It’s always partnerships are so important. How did you find each other? And what were, what, what do you, what is your specialty and what is his specialty to make it a, a great partnership

Gino:
In that’s one of the things people say, well, would you have changed in your past? Well, if I had said, I didn’t want the restaurant, I would never met Jake. Jake was a pharmaceutical sales rep in, you know, up in Putnam county. At the time he was coming to the restaurant, we were doing catering orders out of our restaurant. So he was going to doctor’s office is with our food. And the one thing that I stuck out with Jake, I realized that he was such a diligent worker, the only pharmaceutical rep that would come in with his lunches scheduled for the entire month. I mean, I would get a call the night before, Hey, I need food down to the Bronx. Unlike I need delivery people. I need catering. I need product. I need people to come in. And he was the one that would say, you know, January 18th, I need to be here.

Gino:
And I, I respected that tremendously. He was young, he was coachable hard worker. And he also had his mentor slash role model who was also a doctor, big shout out to Dr. Nero in, in Carmel. We going to Dr. Nero’s office at the time back in 2009, 2010, all these offices were consolidating. The doctors were giving up their autonomy and going to these medical groups. And Dr. NHI was one of the only ones. And Jake’s like, well, why aren’t you doing that? He’s like, I don’t have to practice law. Do you know why? I’m sorry. I don’t have to be practice becoming a doctor. I have all this real estate up and down. The Eastern seaboard. My real estate is my job is my cash flow coming into the office and being a doctor. I love to do that. So I don’t have to, you know, really do that.

Gino:
I love to do that. And that really impressed upon Jake. Wow, that’s the vehicle. And we met, we started talking in 2011. He moves down to Knoxville, Tennessee. And I said, Jake, these deals down here look phenomenal up in New York. You really can’t cash flow. There’s no deals. We started that process. Everybody. It took 18 months to find that first deal, even though I was coached, even though I had the education, that first deal was really, really difficult. He decides to get married, he’s married. He decides to go out and buy his house. That slows us down a little bit, but not having the goals, not having the framework that we had set out. It was a difficult that first deal stick into it. Cuz then three months after that first deal, we got our second deal. It’s that momentum. All of a sudden you build that credibility, but you know, for us the most important thing for partnerships, I think everyone needs to really write this down.

Gino:
What are your values and, and your values align with your potential partners values. And what about your vision? We are still in a multi-family. We don’t trade crypto. We, we do, we do very business that are complimentary to real estate. We stay in the multi-family niche. We wanna become experts in that. We didn’t, you know, we had that long-termism mindset more than anything else we wanted to invest for the long term. And ironically enough, the first deal we did in 2013, we still own that deal. And the second deal, we still own our second deal. So those values really align. So make sure that your values align. And if you’re going to do something long term, and if you wanna generate and build wealth, everybody generating and building wealth is a boring concept. It’s boring and it takes a while. But if you stick with it, you look back five years from now and go, wow, it wasn’t that difficult. I just need to keep my eye on the ball in the future.

Charles:
Yeah, the first place first multifamily property I ever bought, it was from at the closing table. The guy was telling me that his first partner was like 25 years older than him. And obviously you have different, completely different visions. Yes, probably same values, but different visions of where I want. I don’t want my money. You know, here for that long, I’m doing quick stuff and you have one person that really wanted the build. So we found someone that was much, you know, closer to his age two, but they were a much closer on vision. Mm-Hmm <affirmative> that was one thing the first time, just to kind of sentiment on what you’re saying, there is how important that is to make sure that 5, 10, 15 year goals are all in alignment of some, you know, mm-hmm, <affirmative>, you’re going the same way. I love that that’s retiring in four years. <Laugh> yes. You know what I mean? So, yep. But so let’s talk about main factors for choosing multifamily. You guys are a hundred percent multifamily investors. So why is multifamily investing over other asset classes? Cause I imagine especially both of you guys are very thorough and diligent when you did your due diligence on getting into real estate. Why was it why’d you think that,

Gino:
And I wish I could say it. I knew the future <laugh> I didn’t, I did a deal in oh five, which was mobile home park. I crapped out on it. Oh seven. I did a strip mall, held that deal for 10 years, crapped out on that one. And then ultimately I said, I’m working at the restaurant. I, I need to do something part-time while I’m working the restaurant. So I can scale into something and multifamily 25, you know, our first deal is a 25 unit. There’s 25 units in one location. We can do that. Part-Time while we’re doing our business full-time and I know I didn’t want to fix and flip homes. I love HGTV, but you’re not getting rich flipping homes unless you can automate it and you create it as a business, but then it’s ordinary income. There’s no tax benefits and you’re killing the goose, going out, getting another goose.

Gino:
And there’s really no wealth building there. It’s an amazing business to generate income, to put it into other assets on the passive side. I, I would say, yeah, but for me, I, we, we like to actually Jake loved the property management side, our first deal, we managed it ourselves. We’ve become vertically integrated since then. It was an easy model to understand it’s food, clothing and apartments. That’s the three basic human needs. We need a place to live. And as you can see during COVID, we’ve been really insulated. Her rents have gone up, I don’t know, 20% in the last two, two and a half, three years. Whereas office is downshifting. Whereas a lot of other niches aren’t doing as well, you’ll always need a place to live. And as we were talking before online, the demographics are playing that out. Millennials are still renting and baby boomers are downsizing. So for us it was really a needs based. We just needed to start something part-time cause we were both working full time and we loved the niche. We knew it was a need that people needed. And then obviously we got lucky cuz demographics are showing that more people are renting homes right now.

Charles:
Yeah, no, definitely. And the other thing too, is that depending on the houses that you’re or the properties that you’re focusing on there, people will say, well, there’s new inventory being built. Well, they’re not they’re building when they’re building new inventory, it’s all this really, really nice stuff. Mm-Hmm <affirmative> and if you’re buying stuff, that’s in that BBB minus whatever it is, work class, workforce, class housing, all this kind of stuff. Mm-Hmm <affirmative> you can’t build that. I can’t build a 1985 vintage property mm-hmm <affirmative> and if I build something, I have to be charging top for it. And that’s just how it is. It’s just so you price out all these other people. So if you’re buying these properties or you can take properties that aren’t as nice, do some work to ’em and then bring ’em back out to people that probably wouldn’t live in there. Before you, you purchase them. Now you have additional housing for those people, so,

Gino:
Yep.

Charles:
So what’s your firm’s current investment strategy and criteria.

Gino:
One of our coaches came up with the three pillars of real estate. And then lemme explain that. And then I’ll explain to you why, what we have as our, as our current for current forum it’s three pillars is market cycle debt and exit strategy. So I wanna, I want everyone to write that down. What part of the market cycle are you in? What is your exit strategy on the deal and what kind of debt are you gonna get into it? When we started back in 13, it was a buyers market. Everyone’s buying these value, add deals, C properties, 8, 9, 10 caps that part of the cycle. It’s great. You can buy older assets because the pricing is really good. And this part of the cycle, we’re seeing B and C properties. The cap rates are pretty close, pretty even. So in this part of the cycle, if you’re buying older properties, both in the fifties, sixties, and seventies, you’re going to have CapEx issues.

Gino:
If you’re paying top dollar for them and you’re not budgeting properly, you are going to get hurt on those kinds of deals. So for us in this part of the cycle, we’re looking for old for newer assets assets built in the eighties and above. Now doesn’t say that we’re not gonna buy properties in the seventies. We did. We close into 25 unit a couple months ago, we paid blended rate of 63, a door we’re safe with that property because if we gotta put 10 or 15 a door into it, we’re into it for 75, 80 tops. We rented out units of two beds at 1150. So you see, you can do the math. So just be careful of where you’re buying these assets, our criteria and our exit strategy. The first thing you need to do when you’re underwriting a deal, you’re looking at an asset.

Gino:
What, whatever investment is, what’s the exit strategy on most of our deals, we wanna buy these deals, perform with them. And we like to hold them long term. We like to refinance them out. The idea is to put ’em on what we call an imaginary conveyor belt, get that deal in a conveyor belt. Let that deal start to matriculate. You’re gonna get a little cash flow day one, hopefully year one, year two. But then by the time, year three goes on, you’ve got other assets coming on that deal in year three is either selling or you’re getting equity out of it or it’s, or it’s refinancing. And we replace that, that capital and get into the next deal. We’ve been able to refi over $20 million over the last seven years out of our portfolio using that conveyor belt analogy and just keep putting it into really good deals to get into specifically what we’re looking at right now, eighties and above.

Gino:
We’re looking, you know, unfortunately those, those assets a hundred plus are pretty tough to buy, right? And there’s a lot of private equity that is chasing those deals. So for us 25 unit, we closed on two months ago, we’ve got a 21 unit on the contract, an 18 unit on the contract. We’ve got a 40 unit on the contract right now and we’re looking at 2 33 units. And the reason why we can do that is we can assume them into our portfolio. Cause we’ve got offices with about 200 units. So it’s, even though it’s a scattered site, they’re really close to a lot of our other assets. So we’re able to assume them we like brick. If you can brick, we like pitch roofs. If there’s any amenities on the property washer, dryer, hookups is probably one of the hottest amenity right now.

Gino:
We love two beds. Two beds, town homes are phenomenal right now you get, you can get top dollar for them. And if you’re looking for a median income, if we wanna get as granular as that, it’d be great. If you get at least a $50,000 median income, at least three times, whatever you’re trying to charge rent. And we’re within a three hour area of Knoxville, Tennessee, cuz we’re vertically integrated. So we love to manage our own properties. So for everybody out there, you know, we call that our by ride criteria, what is your criteria? And everyone’s criteria is gonna be completely different if you’re just starting out, maybe it’s a duplex or a quad, but what is the year? And also obviously what is the market and what is the submarket? Let’s drill it down to that. What is the age of the property you’re looking for?

Gino:
The amount of capital you can invest in. These are all things you need to think about because Charles, one of the first questions people ask me is I need deals, find me deals. And then I say to you, well, what’s a deal. A what’s a deal to you. A deal to Charles is a lot different than what a deal to genome is. We may have different experiences, different capital, different time constraints, different goals, but understanding the market cycle will help you. That three pillars will help you figure out, okay, I need to look at this kind of deal. I’m not gonna say no to the old properties, but I can’t be overpaying in this part of the cycle, cuz we’re pretty high right now. And if prices do take a dip, I better have that long term fix rate financing locked in so I can ride it out. And I better have make sure that I have a couple of exit strategies that work with the deal I’m looking at. Does that make sense?

Charles:
Yeah. Yeah. It makes perfect sense. It’s fantastic. The other thing too, is that about a deal for me and a deal for you would be also about the teams you guys handle a lot of in in-house property management for your properties. I might not be able to. So when you’re putting in an offer in, you might be able to fine tune, sharpen your pencil a little bit and get those numbers to make, pay more for property because my costs are higher. You know what I mean? Yes. So it’s, it’s also something too about who you are actually competing with for that offer, but let’s talk about the property management in house. Why, why do you have it and why do you feel like, why did you make that decision and how is it benefit or how do you think it’s benefited you? Over these several years,

Gino:
Charles, you made a great point. As far as goals, our goals are, cuz everyone’s always saying how many units do you wanna get next year? We’re vertically integrated. So when we add on properties, we need to add on property managers and maintenance tax, cuz you’re vertically integrated. So our goal isn’t to buy 3000 units a year. Our goal on average is to buy between 500 and 800 to a thousand units per year. Really good assets. That’s what we’re looking for. If you’re using third party, property management and your syndication company, well you can scale up a lot quicker than Jake and gen can. That’s the reality. We’re looking for profit per unit. That’s what we’re looking. Last month, we hit about $290 profit per door in our portfolio. That’s the metric we like to look at. That’s where vertical integration and property management in house has allowed us to do.

Gino:
We’ve been able to really create an amazing business with tr from being able to create, you know, that customer experience that we’re trying to get for our residents. Now a lot of pain points, cuz we have a COO of our company. We have area managers, regional managers, we have to have head of maintenance. So it really is building out a company. But what we get is we get the control of that asset. We’re able to really perform a lot better, but have less assets. So it’s either less performance but more assets and people have made a ton of money in this market cuz the market’s been elevating or you have less assets and, and more control and you get more per per unit. The reason why we started was Jake wanted to get outta his W2 job. So for anybody out there who’s starting out and is like, I hate my job.

Gino:
Well the first property we bought had 13 grand in revenue per month. 10% of that was 1300 bucks a month, basically that was Jake’s mortgage payment in Tennessee, 10 years ago. So all of a sudden he’s got his mortgage payment. The next deal three months later adds on another 10,000 a month in gross revenue. So we’re at 20 he’s we’re at $23,000 a month in revenue taking 8% of that. Cause it dropped down. You’re looking at a really good number of almost two grand a month in property management fees. He liked that idea. He liked that concept. He was a salesperson. He wanted to deal with the residents. He gravitated towards that and I said, sure, let’s do it. So by our third deal, within a year of us buying deals, we had another 136 unit deal that led us 200 units. Well let’s create this property management company, let’s start hiring managers and maintenance techs.

Gino:
And then, you know, the rest is history. He loved it though. And it was a, it’s a great way to control the asset. But at the same time, property management and asset management are two different things. We made that big mistake of saying, wow, we’re property managers, but hold on a second. Really need to delineate the difference between what property managers do versus what us as the owners do. We’re creating budgets as owners and the property manager needs to follow that. Sometimes those lines get blurred, but you know, we learned our, we learned our lessons and learned our mistakes. It’s it’s a thankless business. You know, if the electricity goes out, everyone’s calling ConEd or sag in New York or they’re calling Florida power and electric else. It’s all smooth sailing. Same thing in property management, you can have 29 great days that one day the hot water heater blows up and your life is, is a nightmare. So don’t think that they’re getting overpaid for what they do. It’s a really difficult business. A lot of empathy, a lot of listening to residents, especially during COVID, it’s been challenging, but it is a rewarding business and it really does help drive the you know, the property itself, the pro the profits of the property.

Charles:
I also feel it’s the most important position of the whole investing process. Cuz you could have all these millions of dollars worth of properties, but you have someone that’s probably getting paid $40,000 a year on the property site. That’s talking to your tenant, that’s running this multimillion dollar business. Yes. And you have to have someone that manages that and then you’re on the other end of that, making sure, like you said budgets and like, yeah, we don’t need to do this. Let’s do this first. And then we’ll to do this and you’re, and it’s just you know, they’re solving prob problems all day long and this is an issue and this light and this and that and all the type of stuff that’s going on in the property. And like you said, especially during COVID, I mean, you’re doing a lot of negotiating mm-hmm trying to keep people in their homes, trying to keep everybody happy. You know what I mean? And it’s, it’s very, very difficult. But usually, I mean they, they can, you know, put everything together and it just it’s. It’s great. If you it’s so important to have that really good management, Charles,

Gino:
That’s why we call it the three step framework we call it, buy right. Manage. Right. And finance. Right? The, the wheel barrel. I hold out the book for everybody. That’s that’s our logo right there. When you’re buying a property, it’s a three-legged stool, the buy, right. It’s fixed. It’s the back leg of the wheel barrel. The finance right. Is the back leg. Once they’re done, they’re fixed. The only one that’s in constant motion is the manage. Right? And you can learn, we teach our students. That’s our USPS. I like to say, we love the manage, right? Cuz we thrive there. And a lot of our students are bringing property house in, in, you know, in house. And it’s awesome. It’s constant motion. And if you don’t want to, you still need to learn how to manage the manager. That’s what the asset manager does. So you can learn how to do that. But that’s a core component to driving net operating income in a property. Great. You’re bought the property really well. You don’t make money on the buy. You make money on the sell. And how do you make money on the sell is by driving operations through great property management. So really important buy right. Manage. Right and finance. Right?

Charles:
Yeah. So let’s talk about scaling there. You’ve scaled your real estate investing business and your education business. What were some of the most important modifications you made in your business and your personal life? So you could scale so fast in so few years

Gino:
It really is a mindset. Unfortunately, you know, mindset, when you first start out, it’s the, I’m a mentality. How many people out there know the I’m a mentality I’m gonna do this and I’m gonna do that. And I’ma was stuck in the kitchen for years and years and years washing dishes. You’re not scaling a business when you’re doing $10 an hour work. But that’s what my pop taught me. He was an immigrant back then 30, 40 years ago. That was great. You needed one income. My father had a restaurant with four partners back in the eighties and we lived an amazing middle class lifestyle. Went on vacation every year, drove great cars. That’s that’s inconceivable nowadays. You can’t do that nowadays. Unfortunately you need to start working on jobs that generate revenue, editing a podcast bookkeeping, all this, sending out emails, all this stuff that you can get somebody else to do really has to come off the deck and the person that you start out with as an entrepreneur, when you start out your journey, you need to shed that person.

Gino:
You need to grow into something else. You need to start learning how to delegate and dictate. And I think there’s so many things that you need to focus on when you’re starting to scale a company. And I didn’t learn any of this by myself. I was taught by, you know, coaches. We had traction with genome Wickman. We hired them as coaches. We hired Verne harnesses, co company called scaling up as coaches. And we figured, and we found out by them that you really need some core values. You need. If you’re gonna be a leader, you need to create a vision for your company, cuz no one’s gonna wanna come to work with you just for money. They wanna see what vision you have. And if you can lead them to the vision, that’ll really help out. So creating core values, creating a mission statement and then having the cadence of accountability.

Gino:
As you start scaling up, you’re going to have to become more efficient with meetings. You’re gonna have to have great communication when you’re by yourself. You’re not meeting with anybody other than maybe your partner. But now with the education company, I have a, you know, community director. I have a student success specialist. I have a vendor specialist. I have an operations manager, my executive assistant. I have weekly meetings with all of them. We have daily huddles in the morning for the entire team. So you start scaling these companies up when you’re by yourself and you’re first starting out. I want everyone to have this paradigm shift, this mind shift. You’re buying assets in multifamily, but where really what you’re ultimately becoming as an entrepreneur, Jake and Gino, we teach and we create multifamily entrepreneurs because you’re creating a business. That’s why you’re getting into multifamily.

Gino:
Cause you’re scaling it up. It’s not just about Iman, about me and me doing everything. You’re going to bring amazing people on. And I mean, if anybody’s at that Costco, you’re at the 50, 60, 70 unit mark, you know the pain because you’re getting to be too big to do it all by yourself. But you’re scared to let go of control, take one step at a time and go out there and find, hire a business coach that could scale up David Finkel. Another gentleman that we’ve had on our podcast. A couple of times he’s written Maui mastermind. Yeah. He has amazing resources out there. And it’s a great book. Yeah. As you’re reading these books and you say to yourself that I can’t do that. Yes you can do that. Remember behaviors that believe driven. If you think you can do that and you get the right coaching and you have the right vision and the right partner, you can do that. Cuz one restaurant, 20 years, 1800 department units in five years, you do the math. I mean, I don’t know what happened to me other than I embraced the journey. And I said, I have to find a different way. And I had a partner who’s willing to go on that journey with me. And we got the coaching that we needed to take that to the next level.

Charles:
Yeah. That ma mastermind, you can read that in an afternoon. So if anybody’s interested in learning how to scale and systemize a business, mm-hmm, <affirmative> definitely pick it up for a few dollars. Yes. And review it. I’ve given that and gifted that many times to people. So what are some common mistakes you see real estate investors make, I guess in any kind of, part of it, whether it’s finding deals, underwriting deals, taking down deals. I mean, you, you you’re a coach. I mean, you see these deals all the time from people that are trying to close on stuff and you might say no and yes, or what

Gino:
I could fill my this show up just with the mistakes that I’ve made. <Laugh>. So one of the mistakes that most of us have made over the last seven or eight years is if I had a dollar for every time somebody thought the market was at at its peak, <laugh>, I’d be rich. You have to follow the market. I, you know, don’t listen to any experts out there cuz we were supposed to have inflation years ago. It’s finally hit. They finally printed too much. But I mean back in 2019 and 2020, we were supposed to have a tsunami, foreclosures, a tsunami of people not paying. You need to buy in fundamentals. You need to follow the market cycle. That’s one thing that I didn’t do. You need to actually select the right market. Don’t chase cap rates. If you’re in a market, that’s got a high cap rate.

Gino:
Well let me tell you something that may be a risky market. You may be losing population, right? You may be, you may not have job growth in that market. Find markets that have great fundamentals that people are moving to. And you, I think the biggest mistake, I unfortunately didn’t make this mistake, but they’re investing for the short term. I mean, why buy an asset for only two years later, you’re gonna flip it and make money unless you’re gonna repurpose that money into a different deal. Hold the asset. Our asset in 2013, we bought the first one. Rents were 350 bucks for a one bedroom. In 2013, the rents today are 9 95 plus rubs. We’ve tripled the rents. We’ve refied this deal twice. And this deal is still paying us between eight and 10 grand a month, every month. And principals being paid down, the asset is appreciating and I’m getting casual every month.

Gino:
Did it happen overnight? No, but within five or six years, that property was churning and burning. Within two years it was churning burning, but you can see the longevity. We have the short-termism where people jump in there and go, oh, I made, you know, 50% I or whatever. If that’s what you’re trying to do, you’re never going to create wealth to create wealth. You really need to. And maybe that may not be for all of your assets, but I promise you if you can hold the core of a hundred, 200 assets where you’re investing and you’re holding those assets for the long term, those are the ones that are gonna pay you. Cuz majority of our deals, Jake and I, we own them ourselves. It’s just, it’s just me, Jake and a partner. Mike, no three syndications. We’ve sold two. We only have one syndication left.

Gino:
The rest of our portfolios is ours. And now we’re allowing our employees to invest in it. So they get by in and they love it. Our property managers and our maintenance techs. Hey, when you put six grand into a deal, a year later, you get a check for $18,000 to a maintenance tech that’s life changing. Yeah. And now they all want to invest. So for me, invest for the long term, Dr. Peter lineman says it invest for decades. I mean, if you wanna buy a property today, can you see yourself holding it for the next 10 years? If the answer is yes, I think you go buy that property. If the answer is no, maybe you buy it for short term and you fix and flip it, but have that exit strategy. If you don’t have the exit strategy, that’s a huge mistake. And if you don’t look at this as a long term endeavor, that’s another huge mistake.

Charles:
Yeah. The other thing too, is that I always think the longer you own a property, the less risky that is that investment is mm-hmm <affirmative> because when you’re going into a property you’re gonna, you know, you’ll find these things out in the first six months that you didn’t know before. Yes. But five years into it, you know that, okay, that roof that’s coming up, but all my hot water heaters are done. All my HVACs are done. Yes. I got this one here. I got that one there. I got all these things, the major things I gotta take care of. Just a couple things here, everything else is done. And you really then lower your risk compared to you buying that property again and going through the whole thing. Yes. And you know that list, I got two tenants that aren’t paying here. I got this one.

Charles:
That’s not calling back, blah, blah, blah. But you, you have an idea and you know, it’s accurate. Mm-Hmm <affirmative> when you’re getting that third party through a broker or through the seller and they don’t even know what they’re doing. Cause it’s mom and pop stuff. You’re buying mm-hmm <affirmative> I mean, it’s just like you it’s, I think it’s a lot, lot riskier. So if you’re buying it and once you get through that, like initial stabilization of six to 12 months, you find out exactly what’s going on, you got to do management and you’re on the upswing now. Yes. Of what you’re doing. That’s when the wrist starts, like I think coming off of it and you become, it becomes a lot more. So when you’re holding it for six or seven years, I mean, you know, those properties, you walk through those properties, you know, ’em inside and out.

Charles:
Mm-Hmm <affirmative>, you know, you know which step on the basement, there’s a little wobbly, you know, which, you know, hot water heater is gonna go first, you know, all this kind of stuff because you know it inside and out your tricks and your text. Oh too. They’re probably down in those places once a week, at least. Yep. So so just finishing up here, one more question before we final up someone listening wants to get started in real estate investing, but does not know how to get started. What would you suggest to them other than putting together your goals?

Gino:
So for me that you, you start with the goals, but then I think you need to pick a vehicle. I mean, there’s so multifamily is just one niche. Mm-Hmm <affirmative> in this vast sea. So if you’re investing in multifamily, all, there’s no deals right now. Well, if you jump over to self storage, they’re going to secondary tertiary markets as well. You wanna build industrial great warehouses are even a lot more complicated than multifamily. Yeah. I, I, I think just pick a niche and, and become an expert.

Gino:
Join coaching, invest in your education. I always looked at it as an expense. Jake and I in the last, I dunno, five or six years, we’ve spent well in excess of a half, a million dollars in personal growth and personal development, your income can only grow to the extent that you do. So if you’re stuck back in the restaurant, washing dishes, you’re gonna get paid for that until you start growing yourself personally and professionally. And for me, choose the vehicle, let’s get multifamily all online, start consuming, start reading books, start listening to podcast YouTube videos. Then when you’re serious and you wanna really put skin in the game, go out and find a coach, find a mentor. Who’s gonna do that because that’s the accountability piece. I mean, we can do it ourselves, but let me tell you something. How many people out there have started something without accountability and have quit three weeks later, mm-hmm <affirmative> new year’s resolution.

Gino:
But if you spend money and put money into an education program and you have a coaching call a week from now, guess what? And your, your homework is to go do a property tour and underwrite three deals. You’re not letting the coach down. You’re gonna let yourself down. But that coach, you’re not letting down. Cause you paid, you’re gonna go do the work. And then the following week is the same thing. And then all of a sudden you’re on these calls with investors and you’re on the calls with other pod members. You’re gonna jump onto that stuff. Ultimately, when you start doing that, just focus on a market and focus on a market. Whether it’s, whether it’s, you know, close to you or it’s jumping on a plane, you have to choose one or two markets to become an expert in the market. Start doing property tours and start putting in Lois. That’s what you need to do if you’re gonna be getting into the multifamily space.

Charles:
Yeah. I definitely agree in the education. I had one mentor years back. Tell me you gotta put 10% of what you make into education.

Gino:
Yes. Somebody came that yesterday, the podcast. Oh

Charles:
Yeah. That’s, that’s a hard nut to swallow initially.

Gino:
It

Charles:
Really is. And then when you tell people what you’ve spend, you’re like, and then you, I think about myself and go, you know, I really just need like one idea, right? Mm-Hmm <affirmative> if I get one idea, it can change the whole business

Gino:
Trajectory. Exactly.

Charles:
Yeah. And, but it’s hard when you write that check, you know what I mean? Yeah.

Gino:
But Charles, let me ask you what one relationship can do. The same thing. We just had a boot camp, you know, at our event in Phoenix, we had 130 Jenkins, you know, students out this past weekend, they didn’t pay just for the education. And just for the videos they paid for the access to us, they paid to be able to speak to our coaches this past weekend. They all 50 even went out to top golf and another 60 went out to dinner together. So it’s a networking Bonanza, but it’s networking Bonanza with the right people, right? Cuz they’re all like-minded they all have similar goals. Multifamily is a team sport. They all bring different aspects of skills to the place. And they, they want community being involved in a community, really fires you up and lights that fire underneath you. And like I said, that accountability.

Gino:
So go out there and don’t be afraid. There’s the paradigm shift. I looked at it as well. People see the world as it is as they are not as it is as Steven Covey says, if you look at that check as an expense, well, you’re not gonna wanna write it. But if you’re looking at it as an investment in yourself, you are your best asset. Charles is an asset and a brand Gino an asset in a brand. Why don’t we invest in these things? Why don’t we put money into these things instead of calling in an expense, think of yourself in as an asset and you’re gonna continue to invest because ultimately you’re gonna be the one that’s generating the cash flow with those ideas and with those investments going forward. And how do you do that? Unless you learn how, unless you learn how to do that.

Charles:
Yeah. I love it. Gino so how can our listeners learn more about you and your business?

Gino:
Just go to jakeandgino.com. If they wanna, you know, reach out to me by email, I’ll send, ’em a PDF copy of our will. Our profits book, just email me Gino@jakeandgino.com. And I’ll send you a PDF copy of the book to get started.

Charles:
I really appreciate it. Thank you so much for coming on today and looking forward to connecting with you here in the near future.

Gino:
Thanks Charles. Appreciate it.

Charles:
Bye-Bye

Charles:
Hi guys! It’s Charles from the Global Investors Podcast. I hope you enjoyed the show. If you’re interested in get involved with real estate, but you don’t know where to begin, set up a free 30 minute strategy call with me at schedulecharles.com. That’s schedulecharles.com. Thank you.

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About Gino Barbaro

Gino Barbaro is an investor, business owner, author and entrepreneur. As an entrepreneur, he has grown his real estate portfolio to over 1600 multifamily units & $1.5 billion in deal volume.

Gino and his partner, Jake, are teaching others how to do the same through Jake & Gino, a multifamily real estate education company. To date their students have closed 34,000 units and counting!

He is the best-selling author of three books, Wheelbarrow Profits, The Honey Bee and Family, Food and the Friars. Gino graduated from IPEC (Institute for Professional Excellence in Coaching) where he earned his designation as a Certified Professional Coach. He currently resides in St. Augustine, Florida with his beautiful wife Julia and their six children.

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