GI226: Financial Freedom Through Real Estate Investing with Agostino Pintus

GI226: Financial Freedom Through Real Estate Investing with Agostino Pintus

Over the past two decades, Agostino Pintus has been involved in over $350 million worth of real estate investments, and specializes in large-scale multifamily development projects, acquiring apartment communities, single-tenant net lease assets, and office buildings

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Announcer:
Welcome to the Global Investor Podcast, a show that focuses on helping foreign investors enter the lucrative US real estate market. Host Charles Carillo combines 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:
Welcome to another episode of the Global Investors Podcast; I’m your host Charles Carillo. Today we have Agostino Pintus. Over the past two decades, he has been involved in over $350 million worth of real estate investments, and specializes in large-scale multifamily development projects, acquiring apartment communities, single-tenant net lease assets, and office buildings. So thank you so much for being on the show today, a Agostino.

Agostino:
Charles, thank you so much for having me. Appreciate it. Appreciate

Charles:
Yeah, it’s great to connect again. I was on Tino’s podcast a little while earlier, so it’s great to turn the tables here.

Agostino:
Yeah, absolutely. Absolutely.

Charles:
So give us a little background on yourself, both personally and professionally, prior to getting involved in real estate investing.

Agostino:
Sure, sure, sure. So, yeah, like you said a second ago back about 17 years ago, I was working in tech. I was in you know, ex corporate executive working in you know, my W two job doing all that. And a friend of mine said, Hey, you know what? You should do real estate. So, went on a whim and started doing, started buying like small multifamilies, single families, stuff like that. And I was doing all that while I was working the corporate job. And, you know, I was managing it, doing all that fun stuff. Well, you know, there’s, so, there’s only so much you can do of that. And but at the time, I didn’t know much of anything else about syndication or anything on those things, right? But back, this is back before 2008 when 2008 hit, I pulled, I put the brakes on everything, stop buying single families and small multi-families, and kind of like took a long hiatus from doing real estate.

Agostino:
But it wasn’t until I was working back in corporate and and ended up getting, you know, I’m, I’m not, I’m not a good employee, right? <Laugh> <laugh>, definitely not a good employee. And I ended up leaving another company and I’m like, you know, what the hell am I gonna do now? And I remember that despite all the problems I have and every that with, you know, working in corporate and the, the ups and downs and all that, that kind of fun stuff, it may be someone out there that might be in the same position. Right? My real estate always produced, it always made money. So I’m like, you know what? I need to figure out how to do bigger deals. And out of a friend of mine who explained what syndication was, I had no idea what syndication was, and he explained it to me.

Agostino:
I’m like, you know, it’s about raising capital, register the asset with the, or register the deal with the s e c, you know, all that fun stuff. And I’m like, I could do that. So I started working on it, then partnering up with people, and next thing you know, I’d say what really put the, put the accelerator on probably about, I don’t know, five, six years ago, and partnered up with the right people and started building the business up. You know? So now aside from doing acquisition, we also focus on developments, adaptive reuse, ground up, that kind of thing. And we also do single tenant net lease of a fund that acquires single tenant net lease assets, like Dollar General, dollar Tree, Walgreens, stuff like that. And the intent of that net lease fund is to give us and our investors steady streams of monthly income. That’s what that does. It does it very, very well. It’s extremely predictable, right? So, yeah, it’s like, that’s what we do now, and we’re just focused on, on those three lines of business. We also have an education business as well, but you know, it’s like whatever, with the education business, it’s all rooted in actual real life experience that yours truly runs. So it’s, it’s kind of a big deal, you know? Yeah,

Charles:
Yeah. It, it is hard to find the teachers that have actually been through a recession and everything like that. Everybody’s been writing it up for the last 10 years and then we got a little distorted on top, and then that’s where we are now. But, so, very interesting. You have a lot of different assets you’re working with. Let’s talk about the, the triple net lease fund, a little bit about that. ’cause It’s something we don’t talk about too much on the show, but it’s a very interesting asset class. I’ve never been on the GP side of it. I have been on the LP side of it. So can you explain a little bit about actually what these properties are who these tenants are and you know, how you go about it?

Agostino:
Well, Charles, I love net lease. Net lease is fricking amazing. And I’ll tell you why. I mean, you already know why, but the great thing about the net lease assets that we’re buying, so these are very specific types of assets.

Charles:
Can you explain, I’m sorry, explain what net lease is before we start?

Agostino:
Yeah, sure, sure, sure, sure. So net lease, when we’re talking about net, net lease, people often refer to it as triple net. Alright? The, the three nets, taxes, insurance, and maintenance. Right? Those people referring to three nets, right? But these days might be double net or a single net or whatever, right? Depends on what it is. But net lease in general is an asset, a commercial asset that someone’s buying and the tenant is paying for those three things, or two things, or one thing, depending on what the, what the lease actually says. Right? So that is a real cool thing. Now, the, the, the, the, the amazing thing in a, in a deal like this though, is that when you have a corporate tenant and you have a tenant with, like, with a corporate back guarantee, and you have a big tenant, like was a publicly traded company or a, some sort of large franchisee.

Agostino:
So think of Dollar General, Walgreens, burger King, pizza Hutt, like companies that have been around for a long time and they’re not gonna die tomorrow, right? Those are the types of deals that we’re doing. And the mechanism that we use though, is a fund. So we’re using, we use a blind pool fund. We, when we get the LP investors to come in, and then we go and buy these assets. Now, why would these LPs even wanna do something like this? Because you get steady cash flow backed by a corporate tenant who’s been there for some length of time and will more than likely come still stick around for some period of time in the future, right? Right. So when you can hang your hat on that monthly cash flow, ’cause then whenever the rent comes in, we like, you know, we, we do a distribution, right?

Agostino:
So the month the monthly rent comes in, we do a distribution. That’s how, basically how it works. It’s a phenomenal, phenomenal way to have monthly steady cash flow backed by a corporate gar corporate guarantee and a tenant that’s not gonna bounce tomorrow. Right? You don’t have to worry about that. Like in multifamily, you have to worry about stuff like that. You don’t have to manage the vacancies, manage the evictions, all that fun stuff’s part of doing the business. Not poo-pooing, multifamily, but when it comes to net lease, you don’t have to worry about those sorts of things, at least. Yeah. Not at the onset. If you do your underwriting properly and you, you go through the lease, it becomes lesser of an issue.

Charles:
Right? Right. So with, with the, with the assets you’re buying, if you’re getting large national tenants, I imagine these are pretty high quality assets. Yeah. And that you’re buying, do you deal with anything that maybe is sub premium, maybe like, you know, that where you’re getting asset or you’re getting maybe regional tenants smaller tenants going into them? Or do you stay away, stay away from them? Yeah,

Agostino:
We stay away from that stuff. We stay away from the, right now we’re staying away from the strip malls. We’re staying away from, yeah, we’re staying away from the, from the, from the regionals, that kind of thing. Regional, we just bought, we just bought a V c A animal hospital actually, right? Mm-Hmm. <affirmative>. So why would anybody buy a V c A animal hospital? You know, vvc, you’ve heard of it, I’m sure, right? Yes.

Agostino:
V c Animal Hospital. Well, here’s the thing. V c a animal hospital is it’s a corporate tenant. It’s a national, and you know who owns it, right? Mars Company, the guys who make the chocolate bar. Yeah. They, they own that. They, and Mars owns a bunch of other stuff. Yeah. There’s a massive, massive company. People don’t know that. But there’s a corporate guarantee in that store. Cor corporate guarantee in that location. It’s an animal hospital, and they were open through Covid. So many of the assets that we’re looking for that we buy have survived covid, which is probably one of the worst events that could have possibly shut down the, the retail space. Yeah. If, if it could stand through that type of of scenario, then we’re, we’re very comfortable continuing to buy those types of assets. If you’re going with a regional or going with even an independent store like a hair salon, like Jojo’s hair salon up the street or whatever. Like she, unfortunately, jojo was forced to shut down during Covid. Borks wasn’t, Bo works was open.

Charles:
Yeah. Right.

Agostino:
So it’s like, is it unfair? Yeah. It, it might be unfair, but you know what, it’s like, sorry, <laugh>, it’s, I can make the rules, you know? Yeah. We’re buying the assets that can stand through those types of, those types of, of of events. So that way the investors are still getting that steady stream of income. That’s ultimately what our, what our bar is when we’re looking at stuff

Charles:
Like this. Yeah. It’s like buying a class, multifamily versus C class or B class multifamily. And there you’re gonna get lower returns. However, the asset’s gonna be as closely correlated to, I hate to say this, but like maybe a treasury where you’re up in that security, because let’s be honest, if a large tent like C V s or Walgreens or one of these other people, if they’re having financial issues, there’s gonna be major financial issues that are happening in, in the, the United States. So that’s one thing. ’cause I usually, I, I’ve spoken to people, we had somebody previously on the show that was he would deal with smaller strip malls and stuff like this. And I’d always find out how do you vet the tenants and also how are you reviewing their leases? Because, I mean, it’s much different if a multi-family person, the, the, the key there is that you don’t have to worry about the inflation escalators ’cause it’s a one-year lease. You’re getting into more complicated leases now. We’re worried about, you know, everybody’s been worried about inflation. They just realized it about, you know, about the last 12 24 months. But it’s something that wasn’t an issue before. Now it is. And so now it’s like, if I have a, a lease that has eight years left on it I mean, now it’s something that I have to really worry about because when they signed it, they probably weren’t worried about it. You know what I mean? Yeah. So, yeah.

Agostino:
But

Charles:
Interesting. Very interesting. So what, how are you guys picking, go on. Sorry. Yeah,

Agostino:
No, no. I was gonna say that, that, that’s a very good analogy. It’s like a a net lease is very similar to like a an a class type of asset. I think that the main difference here is that cap rate. When, when people refer to cap rate on multifamily, or even development for that matter, where there’s people that live at these assets, cap rate is, is used incorrectly in my opinion. Right? cap rate’s generally used in commercial, but when it comes to these types, when you’re trying to do a cap rate on a C class, asset cap rate implies that it’s gonna be a steady return no matter what. It doesn doesn’t work that way with C class because you have people that live there. People are not predictable, right? And to use a cap rate to define revenue is stupid if you ask me.

Agostino:
Right? It’s dumb. All it does. Now, cap rate will tell you the level of risk of an asset, right? If you’re buying a C class asset or a D class asset in a bad neighborhood, it’s a 10 cap and people get all excited about it, you probably shouldn’t get excited about it. It’s a 10 cap, it means it’s a high risk deal. The higher the cap rate, the higher the risk, the lower the cap rate, the lower the risk and net lease, it’s different, right? The cap rate defines, it defines the same sort of risk level, right? But to your point, it’s extremely predictable. Are you gonna become a billionaire off of net lease? Probably not. But you know what? It’s steady, steady return in times like where we are right now in the economic cycle. And you don’t know if you’re gonna have a job in, in six months from now.

Agostino:
If you’re, like, if you’re one of those people that don’t really know, he’s like, do you really, really know how steady your company is? Maybe you don’t know. You might get the box, you know, the box we talked about the box on, I think on our show, right? The G T F O box, you might get the G T F O box, right? And if that’s the case, most people, what they’ll do it is they’ll invest in net lease these alea, a net lease fund to make sure that that money keeps rolling in no matter what happens. Yeah.

Charles:
So

Agostino:
It’s a great way to do that. And, and I think you asked me about leases, right? Just a second ago.

Charles:
Yes.

Agostino:
The, the leases are where everything begins and ends because it, it’s funny how people refer to net lease has like, oh, it’s a triple net lease. It’s, it’s, it’s, it’s, it’s triple net dollar General. It’s like, then you look at the lease, it’s not actually a triple net. Right? <laugh>. So I think it’s, it’s, it translated from many, many, many years ago when it, everything used to be triple net, right? And the triple net was, I shouldn’t say everything. A lot of deals were triple net, right? Where the tenant was responsible for everything, the taxes, insurance the, the maintenance, everything. Right? And I think over the years to try to offload some of the risk for the, the, the, the tenant living there or, or using the space, they would make it, make it responsible for the landlord. Us as owners, well, you still have to read the lease. The lease says everything. And we’ve looked at deals where it’s literally the same, like similar, the same store, right? Same dollar general in the same area with two different leases. Right? But because they’re assigned at two different times, it’s bizarre. Right? <laugh>, and, you know, one, one deal was actually great. The other one was not so good. Right. Because of, because of the nets that were in there. Right? Like, we never wanna be responsible for taxes. It’s, it’s too unpredictable, right? Yeah.

Agostino:
Maintenance is one of those things. Yeah. We don’t mind doing the maintenance stuff depends on how the condition of the, of the property. So we’ll do a P c a report, we’ll understand, we’ll get an idea as to how much money we have to set aside for that asset and and, and put it in reserve for the entire fund. I mean, there’s different ways of, of, of, of doing that kind of thing. But I think the difference, though, that we do in our deals is it’s our background. My background as I alluded to is, is tech, is it, and my wife, her background is data science. So, and we have our partners that, that also they do sales and marketing. It’s a great combination. We apply a high amount of data technology to determine the viability of an area, how strong it is, how many, how many people are visiting that property every single day. We look at stuff like that, right? Yeah.

Agostino:
And we pull it onto a database and we visualize it, and we see like, what is the probability of that person, of that, of that tenant bouncing or sticking around for the long term, right? So these are all things we look at. And we do this without even asking for any type of information from, from the tenant. You sometimes they give it to you, sometimes they don’t. Sometimes they give you their, their their financials for the store. Sometimes they do. Most times they don’t. They used to a long time ago. Mm-Hmm. They would just hand it to you. Now, they don’t do that. They gotta do what? You gotta gotta deal with what you got, right? Yeah. So the data will tell us. The data will tell us.

Charles:
So are most of your deals now going into a double net situation where you’re offloading taxes and insurance to them and you’re handling maintenance?

Agostino:
For the most part? We get a lot of those deals. We do. I mean, I, so I, it’s funny. I looked at a, at a, at a triple net deal and it happened to be here in outside of Cleveland, actually in, in a nice area called Parma. And it was for a bank, and it was a triple net. And I went to go visit the property, and the property was a complete disaster. <Laugh>, you know, the asphalt hadn’t been fixed. The the building itself, like, it, it was brick, right? Yeah. But it hadn’t been, hadn’t been pointed or like, you know, it needed all kinds of work. The, it hadn’t been taken care of. You could tell some of the wood was rotted. Mm-Hmm. <Affirmative>. I mean, it was, it was terrible. And I think the lease is probably gonna be up in like 12 months. So it’s like, this doesn’t give me confidence that if they’re responsible for the maintenance, and they haven’t even maintained the, the, the, the asphalt or the building itself, are they gonna stick around? Probably not. I’m not taking that gamble. I’ve not visited that, that property since I should probably just go by and take a drive out there just to see if they’re still there. Yeah.

Charles:
But

Agostino:
It’s, it’s too much of a risk. Like, we won’t do deals like that if it’s, if we think it might be risky, we just won’t do it. We just won’t do it.

Charles:
Yeah. So one of the great things about this net lease type business I see is that you’re offloading a lot of high cost variables off to the tenant. Yeah. Like taxes, you don’t deal with insurance. I mean, I’m in South Florida or Florida. Do I have to even explain that to anyone? Anybody with anywhere where there’s been inflation, which has the whole United States, there’s been some sort of issue before selling up a portfolio I had in Connecticut a couple years back I mean, right when I was selling it, my insurance went up 8% in central Connecticut. You know what I mean? There’s no, there’s no issues per se there. It’s just inflation. So you’re offloading those big ticket items because taxes, in some places, there’s some sort of control on that. And you know, how high it might go for certain properties. There’s sometimes a cap on inflation. I mean interest insurance, there’s not. So that’s one thing that I find very interesting too, with the asset class. The, so for people that want to tap into this, this business getting into net lease properties I mean, tell us about how you really go about someone going into a new market for yourself, let’s say, and you’re choosing a market and you’re building teams there, or are you partnering with someone already there?

Agostino:
No, that’s, that’s a good question. I cover some of the stuff that I’m about to say on a, on an ebook that I have guide to net lease.com. If you go there, it’s a free ebook, go ahead and download it. I talk a little bit about this stuff and selecting the right type of assets, but we don’t, we don’t really partner with any individuals on site. We don’t, we don’t have to. Right? That’s a great thing. That’s another great thing about net lease, right? So generally, and not to turn this into a political situation here, <laugh>, I’m not doing it. But, you know, we buy in red areas, we stay away from the blue areas, right? We, we did, we, we’ll, from time to time, maybe we’ll look at a place in Chicago or something like that. Depends on where it is, depends on the density.

Agostino:
There’s a lot of dependencies, right? Like if there’s, if there’s a lot of traffic in that area, there’s people, there’s money maybe we’ll consider it, you know mm-hmm. <Affirmative>. But it has to be, be an exceptional type of deal. We, we look at a, we look at, at at average income, we look at, depending on the, on the tenant of course, and some of the tenants, you know, dollar General, dog, tree, animal hospital the, the type of type of assets. That’s what we’re buying these days. We’re getting into the, the v the, the CS or the C S V <laugh>, the C v s the Walgreens, the pharmacies we’re, we’re getting into that too. So, but we, we, what we’re looking at, we’re looking at income levels for that as well. So again, it’s very similar crime stats. And we look at how much activity is in that market too. We also look at flow of traffic vehicles per day variety of things like that. How busy that, that area is. But one of the things we always think about, and this is the thing that I thought about from the very first time I did my very first deal. How fast can I unload this thing? Yeah.

Charles:
That’s

Agostino:
The first thing I think about. How fast can I, when I bought my first house, my very first piece of real estate as a rental, how fast can I unload this? That was a rule that I came up with. Meaning, if something happens to this property, meaning this Dollar General decides to shut down, how fast can I put another tenant in here? That’s what I think about. Right? So if, if we, if so, we’re typically looking for the, the right square footage, the right the right location. If, if the square footage is too small, we don’t, we don’t, we don’t consider it. It falls off immediately. If the lease, if lease is short, but we’re, but we have reason to believe they’re gonna renew, we’ll do that deal. Usually we go out and see the property personally, right? We’ll either drive there, fly there, whatever, you know.

Agostino:
But for the most part, I mean, due due diligence is extremely important when you’re doing these deals, because that is the most amount of leverage you’re ever gonna have in any deal, is due diligence. And if the, if your due diligence sucks, you’re gonna have a lot of problems down the road. ’cause The leverage is gone. Now you have to work with what you got. You know, so you better have a lot of reserves if you’re gonna do it that way. Right. But like I said, the, the ebook covers some of the stuff too. So Yeah, definitely check that out too.

Charles:
You brought it up. How long does it take to really rent out one of these places lease out one of these places when they go vacant?

Agostino:
Yeah, that, that’s a good question right there, right? That’s a scary, that’s a scary thought, man.

Charles:
Scares me right now, <laugh>.

Agostino:
It’s, it is, it is. You know, and it’s funny because I’ll give you an example, right? So we’re, we’re looking for vehicles per day, because if there’s a lot of activity, a lot of traffic in that, in that market mm-hmm.

Charles:
<Affirmative>

Agostino:
Hopefully it might lease up in a year, right? I, I mean, if, if you do, okay, if you know they’re gonna be bouncing, you can start doing, it could start lining up the relationship with a, with a big national mm-hmm. <Affirmative>, that’s typically who I would go with. It just depends on how big the broker is in the market. Just like in, in, in multifamily, there are, there’s, we talked about it a second ago, a, B, C, and D class assets, right? There’s also A, B, C, D areas, a, B, C, D brokers. What does that mean? Well, some brokers, they only like doing certain assets and they’re only good at doing certain assets. Just because Colliers is big in this market here in Cleveland. Colliers may not be big in Cincinnati. And, and in fact they’re not, you know, out there it’s ccb, Richard Ellis, so, or C B r e, you.

Agostino:
So it’s like, it, it, it just depends on who is the dominant player in that market. And usually they will get the right tenant for the asset if they have a big net lease practice. These are all things that you really have to understand. Mm-Hmm. There’s I, I spoke to a friend that he, he brought, he brought an investor on, on a call. He was asking me questions about doing a net lease asset in one in my hometown in Windsor, Ontario. Small, super small town. And it, it was, it wasn’t gonna have a, wasn’t gonna have a corporate guarantee. I think it was a, like a single location. Ah, it was a Quicken Loans is what it was. It was a remote office in Canada. It’d be the first and only office that they would have outside of the United States. And I’m like, okay. And you wanna, you wanna build it out? Like you have to buy the, buy the space, build it out. And how long is the lease for? Only like three years.

Charles:
Wow.

Agostino:
And it’s like, and I happened, I used to, I grew up in this town. I knew that there’s so much vacant space. I told the guy like, go downtown right now and count how many vacant spaces there are. Why, what makes you think that you’re <laugh>? It’s a good idea. Like, why would you do that? You’re right there, you’re right downtown. Why would you do that? So it’s a high risk deal. Don’t do that deal. So we look at stuff like that, you know, we look at how much other vacancy is in the market, what is like, if we have a, an understanding is what is the cost per square foot? What is it leasing for? What is our, our subject asset leasing for too? Is it below? Okay, great. That means that chances are they’ll stick around, you know, if they wanna stay in that market. You know? I mean, these are all things that have to, you have to look at when you’re putting a deal together, you know? So Absolutely. We look at stuff like that, you know, and ’cause there’s a lot of risk in taking on an asset and you realize they’re not gonna renew and you’re stuck with it. I mean, how many you, I’m sure you’ve been to those towns when like half the town is, is is empty, you know?

Charles:
Yeah.

Agostino:
Retail’s tough. It’s a tough business.

Charles:
The yeah, my dad had a partner years back and he, I remember him telling me when I was younger, and he said, commercial real estate’s great when it’s occupied. It’s very expensive when it’s vacant. And that’s like my mantra I’ve heard for <laugh>, I’ve kept in my mind for every time I’m like, I’ve anything like this happens with commercial and you’re talking about it. But and it’s exactly true because you have these multimillion dollar properties with maybe one, two tenants and then if it’s a single, you know what I mean? So it’s just it can be very expensive. And there’s, everybody knows those sites you’ve gone through with like a premium property that’s been vacant for years ’cause it’s difficult to rent or they’re doing something else, or they’re looking for the right tenant.

Charles:
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Charles:
Um so moving along here. So with, with new in, well, it could be new investors or just investors in general, what are common mistakes you see triple net lease or net lease real estate investors make maybe when they’re starting or maybe even act actually when they’ve been doing it?

Agostino:
Yeah, sure. So I, I will say this, that they don’t take the time to learn it. They just wanna get in and they, they want to they wanna get in without any partners. The same thing happens on the multi-family side. You know, and there is a way to get into this and reduce the overall risk. And the way you do it is to buy, buy into a fund partner on a fund. Because like I said a second ago, or you said a second ago here, it’s like commercial’s great when it’s occupied, but then when it goes dark, people leave. It sucks. It’s bad. Right? Well, and an net lease fund, we might buy like 10 or 15 or 20 or more of these assets in a single, in a single fund. So what happens is if they, if there’s nine or 10 of these things, and then one of ’em say the say Dollar General decides they’re gonna leave, leave a market.

Agostino:
Mm-Hmm. <Affirmative> or the other ones are still producing cash, right? So this DG right here is, is only a part of it. Does it suck? Of course it sucks. But we as, as the, the partners, we, we get to work trying to backfill that, that vacancy, right? That’s a great way to help offset the risk even a little bit by, and you’re by spreading your money across multiple assets that are still producing money so that you’re not vested entirely in one asset. And if that one asset goes dark, you’re screwed. You know? So that’s the last thing you wanna do. You don’t wanna do that, especially if it’s gonna be your nest egg for you and your family in times of trouble, the last thing you wanna do is have great that, that the store that you bought <laugh>, the DG that you bought with your own money, suddenly go dark. Now what the hell are you gonna do? And, and it’s a big worry. You know, it’s a, it’s a, it’s a huge worry. ’cause Rent, to your point where you just said a second ago, leasing this stuff up is not easy. It’s not, it’s, it’s, it’s a thing. It’s a challenge, you know, it really is. Yeah.

Charles:
I can imagine too with dealing every time. I know people that have clients that are large, you know, fortune 500 companies, and they wait months and months and months to get paid on stuff. So you imagine how long it takes them to make a decision on leasing a property or whatever they have to do with it. So Augustino, you’ve been doing this for decades and you were in tech before. So kind of over your whole, let’s say professional career to now, how has your relationship towards money changed over that time?

Agostino:
Oh, that’s, that’s a great question. You know when I was, when I was working in corporate I was living the 40, 40 40 plan. I think you know, and I think we talked about the 40, 40, 40 plan last time we might’ve talked about it, right? It’s when you work for 40 years,

Charles:
Oh, 40

Agostino:
Hours a week, and you only get 40% of your money ’cause the government stole 60, you know that is, that is the most expensive way for anyone to earn a living. If there’s a, if there’s an expensive way to do it, that is it. What do, what do I mean by that? Well, the W two income is the highest taxed method of making a living. Huh? Isn’t that strange? So what is, what is one of the lower ones? Passive income. Passive income is taxed at a lower rate. So what does that mean? That means there’s an incentive to invest as opposed to working for a living at a W two job. That’s what it means, but it’s not presented in that way. Right? I didn’t know this, right? I thought investing was doing, you know, your, your stocks and bonds and mutual funds, which was a, it’s a, it’s a, it’s not, it’s not good. It’s not good doing that. It’s a risk if you ask me, you know, that’s why I chose real estate. Because here’s the thing, here’s, here’s the ugly reality. Okay? Charles, you, we buy you and I buy 20 grand worth of Apple stock today. It’s made, it’s say, it’s made the first, what is that Apple stock gonna be valued at the end of this month? Do you know what the cost, what, what the cost is? 20 grand? What’s, what’s, what, what, what’s the total amount gonna be worth at the end? Do we know?

Speaker 4:
No idea.

Agostino:
No idea. But if we have a multifamily asset or we have a net lease asset or a group of net lease assets, if we are expecting to get 20 grand on the first, what’s, what’s, what’s it gonna be on on and what’s it gonna be in June 1st? Yeah.

Agostino:
20 grand. Right. Why? How can I say that with such confidence? Well, I got a bunch of legal documents called leases that say that they don’t pay. I can come after ’em. It’s a legally binding document that I can go after them. I can either evict them, I can take some sort of legal, there’s legal, a legal remedy to collecting that money. You can’t do that with stocks. Right? And when you get to, to understand all of the, the, the, the depreciation you can take on your personal income, it’s, it’s a, it’s an amazing tool. And now more than ever, you have to do that. Like the, the value of the dollar is dropping like crazy. You, you need every advantage you can get. I didn’t know this stuff I figured out on my own. And, and, and the W two world HR is pushing this nonsense of like, you know, 4 0 1 k and all this stuff.

Agostino:
I mean, listen, sure, okay, great. Max out your 4 0 1 k, don’t leave that money on the table. Fine, do that. But as soon as you’re able to move some of that money to a self-directed i r a and start taking control of your money, who you should always be in control of your money, why would you wanna let someone else that you don’t even know control your cash? This your family livelihood? Why would you ever do that? Right? Yeah. It would, you know, it’s ridiculous. You’d partner on an asset, you wanna make a decision to buy a property and then then understand what the plan is. And you’re, you’re an active partner and we’re going out and buying properties. Yeah. And you get all depreciation, the appreciation, you get everything along with it. Why wouldn’t you do that deal? Makes sense to me.

Charles:
Yeah. The 4 0 1 k thing is always something. ’cause I’ve had from, you know, friends, acquaintances, they’d like ask for assistance with their 4 0 1 k or whatever. Just like, and you just look at it and you’re like looking at the returns and I’m like, this is how much money you have here. And you have so many years left. Like, I don’t, with without doing anything like what you’re invested in here and this sounds like a great thing. This target date fund or whatever it is. I mean, you need a lot more money right now. This will work. But like you, most people get started in their thirties doing it, you know what I mean? And you’ve lost like such an advantage with it. So it, you know, it’s just, you don’t wanna Yeah. It, it’s good that people are retiring. I mean, putting money away for retirement, but I never think it’s enough.

Charles:
So it’s always something that if they move into something, ’cause it doesn’t earn enough. You know what I mean? Yeah. And it’s, it’s the, you know, unless you start it when you’re like 18, you know what I mean? Yeah. It’s you know, with a Roth I r a or something like that, and you’re putting it away, maybe you’ll be fine. But it’s something that most people start and like really start padding it up when they’re in their thirties. And you know, that might be too late. You know what I mean? Especially depending on with inflation and everything like that. But well, I’ll

Agostino:
Tell you, I’ll tell you what Charles I’m, it’s, it’s rather, it’s rather cool to see some of the students that we, we have coming into our programs. They’re in their twenties, some of them. I, I spoke to a guy a student yesterday actually. He’s gonna be signing up for accelerator. He’s 23 years old and he’s, he wants to learn how to syndicate big deals, right? Amazing. 23 years old. Really, if you think about it, if he could syndicate just one multimillion dollar deal, and you know this as well as I do. ’cause We’re, we’re gonna, we’re do this, right? You buy one deal, the second deal’s gonna be right behind it, third deal’s right behind that. And, and you can expand. You could, you could basically be retirement ready, but before you’re 30 years old if you do it properly. You know, same thing goes with, with a small multifamily business or rather coaching group.

Agostino:
It’s like, even if the kid starts house hacking today, he’s in a way better position. But again, we’re all taught, I was taught the same way. I don’t know if you were go buy the giant house, take on this massive expense, go buy two cars, take on that massive expense and go to work for 40 hours a week plus actually, ridiculous. No, I didn’t, I didn’t know that. I should, I should have taken all that money. I should have moved into an apartment, stayed in the apartment, make a bunch of cash, and then buy a multifamily.

Charles:
Yeah, that’s, and my fir my first property was a house hack at 22, and I didn’t do it as lly with going into a syndication, everything afterwards. But it was a great starting point. And it’s a great way for anybody that’s starting out to follow that. And it’s so simple. Yeah. And how many people I told in college to do that? No one took me up on it. And, you know, it is what it is, but no one wants to listen. They want to go right. You said they want to, people wanna start at the top and work sideways. No one wants to work from the bottom up or live in an apartment with their tenants next door. So,

Agostino:
No, it’s hard. That’s the thing. It’s hard. It’s hard. But you know what though? It’s like that, that’s, that’s the tough part. You know, it, it’s, it’s difficult if you make it difficult, like when you, when you begin to understand how, how it works, how, how apartment living is not house living. Absolutely. It’s not. But you know, what, if you, you take a little bit of suffering, air quote suffering today. If you consider it suffering, I don’t, I even, I even, I live in an apartment right now. I think it’s great. I don’t have to worry about anything. I don’t have to worry about cutting lawn or, or shoveling snow or this nonsense. I just live my life and I, and somebody even comes to fix my stuff. How, how’s that so bad? Right?

Agostino:
But you know what, what I’m, what I am focused on is taking all this cash and putting it to work, and then when, when the assets are producing cash flow, I can go and live the life the way that I want to live it, as opposed to having a bunch of dead equity sitting in a house. Ridiculous. Yeah. It’s ridiculous. Why would you leave? Why would you leave half a million dollars or whatever tied up in a house? They, you can’t do anything with it, you know? Yeah. It’s, it’s, it’s dumb. It doesn’t make any sense.

Charles:
No, no, no. It’s it’s kind of what we’ve been taught and what realtors have been pushing on us for decades. Yeah.

Agostino:
But

Charles:
And

Agostino:
The banks too. The banks too. The banks. The banks were able to take that single dollar, multiply it nine times. Now they have all this inventory. What do we do? We sell the American Dream. We gotta and sell it to sell the same dollar nine times to everybody and get them to buy into this whole single family scenario. Yeah. It’s, it’s a, it’s, it works well for the banks. They’re the landlord. <Laugh>,

Charles:
<Laugh>, I augustino. How can our listeners learn more about you and your business and your coaching and your triple net lease offers?

Agostino:
Yes, absolutely. So if you go to bulletproof cashflow.com that’s, it’s a portal that, that talks a little bit of some of our coaching. It does talk about some of the, you know, some of the investment opportunities as well. We only, we only deal with accredited and sophisticated investors right, right now. But, you know, set a time if you wanna talk about that. Absolutely. and like I said, guide to net lease is a great way, if you really wanna understand how net leases work. It’s a it’s a great, it’s a great book. And the book, the stuff that, the content that we put out, I like to think is top-notch. It’s a very complete book. It’s not just like a pamphlet just to get your email address. It’s an actual book that you can read and actually learn from <laugh>. It’s real, it’s good stuff. It’s good stuff. It will, it won’t disappoint. It’s always good stuff.

Charles:
And also your podcast, Bulletproof Cash Flow as well

Agostino:
Open. Yeah, yeah. We have we we’re on on all the major channels on YouTube as well. If you wanna watch the video YouTube youtube.com/bullet of cashflow. We have over 700 videos right now. Various things. Everything from net lease to development to multifamily. We’ve talk about a bunch of different stuff. Mm-Hmm. Yeah. Yeah, definitely check that out a lot. A lot of great material there too. Totally free obviously.

Charles:
Yeah. Well thanks so much for coming on today and looking forward to connecting with you here sometime in the near future.

Agostino:
You bet. You bet man. Thanks for having me on.

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 Agostino Pintus

Agostino is the Founder and CEO of Bulletproof Cashflow where he applies nearly two decades of real estate experience to source, negotiate, and acquire commercial properties.

He is a dynamic speaker who has spoken at a wide range of events in throughout the United States and Canada. His talk topics vary from business strategy to real estate to leadership development, and he is always a great resource for aspiring commercial real estate professionals.

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