Buy Right, Manage Right, and Finance Right Made Simple with Gino Barbaro

Today we are diving into how to make multifamily investing simple with our guest Gino Barbaro. Gino is the co-founder of the Jake & Gino community.

In this episode, Gino breaks down what it takes to make multifamily investing simple. Establishing your core values and building a team-centered around it.

Understanding the three pillars of real estate and implementing the buy right, manage right, finance right framework.

[00:01 – 06:36] Opening Segment

• We introduce and welcome guest, Gino Barbaro
• Gino breaks down how to make multifamily simple
  • Buy right
  • Manage right
  • Finance right
• One plus one does not equal two when it comes to partnerships

[06:37 – 11:10] Partnerships Made Simple

• Gino talks about the DISC Assessment

[11:11 – 21:23] Limiting Beliefs

• How do you go from not being a systems person to a systems person?
• Gino shares how he wasn’t a systems person before and how he overcame it.
  • Realized he needed to become a systems person
• Going out of your comfort zone

[21:24 – 27:18] Buy Right, Manage Right, Finance Right Made Simple

• Gino walks us through the three legs of the stool that holds the foundation of their real estate framework
  • Buy right – figure out what’s your criteria for buying right
  • Manage right – are you self-managing or hiring third-party property management?
  • Finance right – choose the right type of financing for your deal
• The THREE pillars of real estate
  • Market Cycle – know what part of the cycle you’re in
  • Debt Component – what debt are you putting on?
  • Exit Strategy – know how you’re getting out before you go in
• Look at every deal as a unique opportunity

[27:19 – 36:33] Closing Segment

• Gino’s investing tip
  • Be wary of people telling you to invest in the long-term
  • Are you working hard for money, or is your money working hard for you?
• Gino’s book recommendation
  • Mindset by Carol Dweck
  • Connect with Gino online! See the links below.

Tweetable Quotes:

“One plus one does not equal two when it comes to partnerships, and I think most people think that, yeah they think it’s, you know what, one dollar one dollar you get two dollars.” – Gino Barbaro

“Success is just continuing to try to do something and get better.” – Gino Barbaro

Connect with Gino through their website https://jakeandgino.com/, grab a copy of their book The Honey Bee. Check out their Youth Academy course.

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Anthony Vicino (00:15):

Welcome to multifamily investing made simple the podcast. That’s all about taking the complexity out of real estate investing so that you can start taking action today. I am your host, Anthony. You couldn’t find a working camera casino joined as always by my partner in crime, Dan Krueger. How’s it going, Dan?

Dan Krueger (00:32):

I’m good. I’m good. How are you doing?

Anthony (00:34):

Fresh off [Inaudible]? Yeah, you know, it’s a good thing that this is a podcast and people can’t see all the technical difficulties that I, I suffer through for our art.

Dan Krueger (00:45):

Yes, no, that’s fine. I think we’re all a little, a little shiny after a property tour, a tour and some properties a day. So it’s a beautiful day, but a little sweaty, a little warm.

Anthony (00:55):

I always liked property tourists, get some boots on the ground, get to see how other people operate their properties and, and look and say, Hey, we can do this better. Nice to get it out from behind a spreadsheet every so often. And absolutely. So today we’ve got a very special guest, a very special guest of both of us. Actually. He’s been a big in both of our investing careers. We are part of his. What would you say? I wouldn’t want to say cult, but maybe, maybe we can say family.

Anthony Vicino (01:24):

There you go. That’s a better term. I like that better than cult. So join with us. Definitely. Definitely. So joining us today is the only Gino Barbaro. If you don’t know who this guy is, you probably have been living under a rock. He is the co-founder of Jake and Gino that the educational community, the Rand family of vehicles, you guys have like a property management arm, you have an acquisition arm, and you have a capital arm. They’re doing all sorts of things. He’s a father of six children. He’s 25 years in the business as a restaurant owner. So he has tons of small business experience. He’s a certified professional coach and it’s currently invested in over 1500 multi-family units. That’s 1500. So a hundred. Was that, is that a real number? A hundred million assets under management?

Gino Barbaro (02:11):

Yes. A hundred million. Yes.

Anthony Vicino(02:12):

Wow. Yeah. That’s [Inaudible]. So Gino, thanks for being with us [Inaudible]

Gino Barbaro (02:18):

Good to have you here. Thanks for having me on my camera’s working, you know,

Anthony Vicino (02:23):

Gino, it’s bad for him to show up the host, right?

Gino Barbaro(02:28):

It’s from one time to another, Love your last name, Anthony Vicino. I was out of the year, which means I wish I was closer to you and nice last name. Thanks for having me on the show. And guys, let’s try to make multifamily made simple. How do you make it simple? You break it down into what you guys are doing. You buy right. You manage right. And you finance, right. Basically. I mean, you’re out there. You guys are doing it all. You’re vertically integrated. You’re doing property tours, you’re buying these deals. And I think that’s a, it’s a three-legged stool. You have to pull on all those levers and you have to learn those levers. And I think Anthony, when you came on, you had that experience as a small business owner, you had

Gino Barbaro (03:00):

The experience of the business building and the systems. And just coupling that with Dan his experience and his ability to, you know, look at the deal, great syndication company and go out there. I think that’s like a marriage made in heaven as far as I’m concerned with partnerships.

Dan Krueger (03:13):

Uh couldn’t have said it better ourselves. I think we both, you know, we had our strengths, our weaknesses, and when you put us together, we balance each other out perfectly. So it’s been a great team. And I think the same could be said about you and your partner, Jake and Jake. Yeah. You guys are kind of the same thing.

Gino Barbaro (03:29):

You know, Jake says, he’s been saying this for the last few months. One plus one does not equal two when it comes to partnerships. And I think most people think that yeah they think it’s, you know what? You get $1, $1, you get $2. No, you get Gino on an education podcast, Jake property touring today, he’s signing a contract on a 48 unit. We’re looking at another 400 plus units. So it’s multiple things. You can do multiple things. You can create multiple streams. And then obviously when you first start guys, you know, it’s the Island mentality, Ahmed, do this and do that. But then after a while, after you get the 30, 40, 50, maybe a hundred units, you start saying, okay, what am I really good at? And what is he really good at? Or she really good at you start breaking it up and there’s inflection points. And that’s, that’s a struggle. I think that most entrepreneurs have is they’re used to doing everything. And then all of a sudden inflection points in growth is like, okay, I’ve got to take it to the next level.

Gino Barbaro (04:16):

What do I need to do? Well, you probably need to start hiring. Right? Because most entrepreneurs are usually on an Island by themselves. And that’s probably the hardest thing to do is to start hiring and start giving up some of that control because we all are big you boys. Right. So hard. Yeah. It’s interesting. Important things also, as I was just going to say real quickly and in addition to find out like what you’re good at? Like what do you actually enjoy doing? Yes.

Dan Krueger (04:35):

Because just because you’re good at something that doesn’t mean you actually like it. So really identifying, okay, what do I enjoy doing? Because when you find that out, you know, at that point you’re not working anymore, you’re just having fun. So if you identify what you enjoy and outsource the rest and, or build a team that fills in those gaps for everything else, then you’re on easy street,

Gino Barbaro (04:51):

Well said.

Anthony Vicino (04:51):

Yeah. You know, and you mentioned, you know, find the things that play to your strength. One of the things that I’ve found in previous partnerships, not necessarily in real estate, but in business, right. Is one plus one in a great relationship equals three or more. But if the partnership isn’t right, one plus one can equal zero or just one. Right. And if you find somebody who has all the same strengths as you, that’s not going to get you very far. Like you guys are going to be stumbling over each other and you can be really good at those things that you do. But one plus one in that case just still equals one. And I think, you know, for you Gino and for me and Dan, the key to our relationships is like, what I’m strong at is not necessarily what Dan‘s strong at or what he enjoys doing and vice versa. And so that number that we can really complement each other.

Gino Barbaro (05:36):

So I think some of the partnerships we’ll have a lot of similarities. Like Jake and myself, we’re both very organized. We both liked to get things done. We both like to commit and figure it out. Like if my camera didn’t work for podcast, I’d still be on the podcast like Anthony Wright. And I’m sure, I’m sure that’s just how it is. Right. We just done is better than perfect. That’s how we are. Right. And I think, you know, we do have a lot of similarities. We’re both more on the D part when it comes to the disc assessment. So we have a lot of similarities, but we do have some differences. And I think those differences where I don’t think Jay could be on our coaching call, I think I would just kill him at the end of the week. And then at some points, I was just burned out by dealing with a lot of overhead, a lot of employees. So there are certain times where like, you know, like, like Dan said, I didn’t enjoy that aspect as much. And Jake didn’t enjoy this aspect. So just tended to gravitate towards what we’d like more. But then at the end of the day, a lot of the things that we need to do are very similar as far as getting on these level 10 meetings that we have our weekly meetings or weekly pulses getting on and doing a tracking, a lot of the stuff there are similarities, but there’s definitely, you know, areas where we like to divert and do our own things. Also,

Anthony Vicino (06:37):

You mentioned the disc assessment, there is that for the people at home that aren’t familiar with that, what is it? And do you find it useful for vetting partners or where is the value [Inaudible]

Gino Barbaro (06:48):

That’s a great question. I mean, for me, I was always doing Strength Finders. I wanted to find what my strengths were and I honestly don’t know what the hell my strengths still are to this day. I think the only strength that I have is I work hard and, you know, I’m willing to look stupid and I’m willing to try and I’m willing to figure it out. And I’ve learned over the years that man success is just continuing to try to do something and get better. I can give you an example. I wrote our first cookbook back in 2010, it was a struggle, a real pain in the, right? The second one that we wrote was willpower profits. That was a little bit easier, but still hard. Third one, the honeybee was a lot easier. Now that that’s what life is all about. It gets to be a lot easier as you do things.

Gino (07:28):

And we’re preconditioned in this society to think that, you know, you look on Instagram and everyone’s having success and everyone’s wealthy and it comes easy to them. It doesn’t come easy to anybody. People are out there really working hard and really sacrificing to get better. Now, this socialist mind set of we’re all equal and we do harder work, less work. That’s not true. It really takes a lot of work. Now the disc assessment is just basically a personality assessment D is dominant. I is as a systems see, is I forget what they all are, but it really talks about how your personality is. And let’s say, Dan and I are both the D it just gives you an ability to be able to communicate better with a person. Like for instance, Jake is a D he likes things said, don’t give him a 17 paragraph email.

Gino (08:09):

He’s not going to read it. You’re going to kill him. Right. Meanwhile, another person who may, I think it’s the, I may want to sit down and it’s just a little more sensitive and likes to be heard and that kind of stuff. So you’re really learning the type of person that you’re dealing with. And it’s a great way to communicate. Because we, you know, sometimes I’ll say to some of my employees, like, let’s just do this. This is a great idea. Let’s create this funnel. Boom, boom, boom. And the person sitting there going, I’m a little nervous. I don’t know if I can handle this. And you’re just coming on a little too strong, whereas I need to recognize that. And I need to say, well, what do you think about this, Dan, do you think we should? And then Daniel sit there for a second. And I know I’ve got the great idea, but maybe make him have to make him think that it’s his idea and let him work on it. So it’s really learning about yourself and learning about how to communicate with others. And, you know, lastly, your disc is going to change

Gino (08:56):

Because as you get older, you start changing. I mean, basically if you’re an introvert, you may say introverted as you get older, but you do change because I was never assistance person five or six years ago, but I fall in love and I like the structure of systems. And I like to learn how to adapt to them. And I was a little less dominant. Sometimes that can be a little more dominant. It’s not, you’re not one characteristic. You can turn it on when you want to, but it just shows the kind of, you know, the kind of personality you have where you gravitate more towards. Does that make sense?

Dan (09:22):

Absolutely. That’s such a, a huge thing for people to be aware of as well, not just in like looking for partners, but also may be taking that assessment so that you become more self-aware of yourself, but at the same time, learning about what those different types of personalities are, so that you can identify them out in the field, because this could be, you know, a broker you’re working with or a seller or a lender or an investor, like understanding the type of person that you’re speaking to, lets you structure your communication to meet their needs. Like invaluable.

Gino (09:52):

I love that point. That’s a great point. It’s build a rapport, right? Because you want to build a rapport with somebody and that’s the way to build it is to communicate in their language. Yeah.

Dan (09:59):

And this came up actually yesterday I was having a conversation with a city inspector and my property manager was not driving with her. So I was like, okay, let me hop on the call. Let me just try it from a completely different angle. And she loved me for whatever reason. I went into it with a different attitude. She was looking for someone to just be a little bit more passive. He’s a little bit more of a take charge kind of guy. She didn’t like that. And you know, just going into it, knowing that, okay, his approach with this person didn’t work, I’m going to try a different communication style and a jived. And now we’re best friends. Sounds great. Yeah.

Anthony (10:31):

It’s kind of like learning your partner’s love language, right? Like yeah. Which it seems silly? And if you don’t, if you’re not familiar with what love languages are highly recommend, you go check that out because it can be very beneficial for my marriage and relationships. Right? Exactly. Because it goes a long way to understanding how your partner gives and receives affection and love. And I think that’s a valuable thing. And that’s one of the other key benefits of having a partnership. Something that we don’t talk about a lot, which is Dan has a different personality than I do. And I’m going to click with different people better than Dan is going to click. And he’s going to click with people in a different way. And so sometimes my approach, isn’t going to be the best approach and his approach. Isn’t going to be the best approach.

Anthony (11:08):

And so we can come at things from a different angle, something I do want to cycle back on that you mentioned Gino was this idea like a couple of years ago, you said I wasn’t very much of a systems person. And one of the things I’ve been thinking about a lot recently, and I think you think about probably a lot to our limiting beliefs and how we start to tell ourselves certain things about like, I’m not a systems person. How do you go from saying a couple of years ago? I’m not a systems person to now being more systems oriented and maybe even saying like, I am a systems person. What’s that trajectory look like for you?

Gino (11:41):

I can answer that question. Thank God. I thought you were going to name this podcast. Love languages made simple. So let’s, let’s get away. Get away.

Anthony (11:49):

That’s well, out of our wheelhouse, we are not getting relationship advice. Thank God

Gino (11:55):

We married 20 years. I don’t know how the hell that happened. Maybe he got six kids. He doesn’t want to get away from me. I don’t know about that, but, but it’s really simple. Anthony, for me, it was the ability to say to myself that I sucked as a business owner. When I had the restaurant for 20 years, I made money. I was successful in the fact that I helped thousands of thousands of people. But when I look back, I had no core values. I had no true mission statement. When somebody answered the phone, would they say hello, Gino is going to help you. Hey Gino’s hi. Gino’s I mean, I had no system even answering the phone. When I on-board an employee that I have an employee manual to say, these are your responsibilities. When somebody walked into the restaurant, did I greet them a certain way?

Gino (12:32):

When they pack food to go, was it done a certain way? All of these little and these systems will have, don’t have to be huge. And they all have to be documented. And I look back at it and I’m like, that’s why I have one restaurant. That’s why I was the mom and pop. And when we bought our first 25 unit property, I was still doing a little bit of the mom and pop action going on. But then when you got your 36 unit, I will send, I got 60 units in four months. I’m like, okay, I got to start buckling down. And then the first year we had towards the units on the management, and that’s the first inflection point of if you want to be serious and everyone’s telling you, multifamily is scalable and it is, and there’s economies of scale and you want to grow a business or what you need to do.

Gino (13:06):

You need to start buckling up and really taking this quote unquote system seriously. And it’s not this big, scary thing. It’s basically Google docs, Google sheets. We use a sauna. We use Slack. We have zoom on here. We have go to webinar, all these different tools that make your life a lot easier. App folio is a big, big system for us where we have our property management software on there. They’re just able for you to actually replicate it, put it into a box, and create it. And then, you know what, if you don’t like doing it, you can push it off to somebody else and let them handle it. And I think when you start doing that and compartmentalizing your business, and this can be done in any facet, that’s why when I walk into a restaurant right now, it’s very hard for me to enjoy because I’m like, these people are not going to last.

Gino (13:44):

I can just see right when I walk right in, I can see how the flow of the people is. I can see, you know, how long it takes for the food. I can see how the servers are trained. If you know how they’re responding to us and all that stuff. And it’s hard for me to enjoy meals sometimes because I’m like, this is, you know, it shouldn’t. But when I look back at my experience, the only reason why we lasted is because we were there all the time and that’s not what you want in the business. You don’t want to be in a business all the time. You want to be able to create the people, the systems and the culture. That that’s what it, that’s what it takes to build a really vibrant business. You have to have amazing people. And how do you do that?

Gino (14:16):

You hire by creating those core values and by firing and hiring on those core values. And I mean, you look at the systems that we talked about, the systems and the culture comes from the people from the, from the owners on the top. So when I was hiring crappy employees, maybe it’s because the culture that I had at the restaurant and maybe I was, you know, attracting what I was and not what I wanted. Right. That’s the problem. So now, you know, the guys in our team, the people on our team, we have Josh or Jen, my brother’s there. Jake is there. I mean, there’s a property management team. They’re all amazing because we’ve tried to create this culture and it starts off the top up. I’m still hard worker I’ll pack books. I’ll do anything it takes. And that’s one of our core values is make it happen.

Gino (14:56):

And, you know, extreme ownership, we make a mistake, we’re extreme ownership. So I was actually going to jump on the call and as Jen, Hey Jen, where’s the link. I’m not getting on this podcast. So, I mean, that’s the kind of like relationship we have with the team. And it all really starts with the core values. And it really starts with, once you start scaling up, you’ll have those inflection points in life where you need to continue to create those systems. And I mean, in the beginning, it’s scary. Because you know, you’ve got to give away those responsibilities to somebody else. Because it’s like, you know, it’s funny because my dad’s an immigrant. So he was, he taught me that you can’t leave the business. If that business you’re not there, that business is going to suffer. And I know a lot of small business owners are like that.

Gino (15:31):

I need to be there. No one can do it better than me. Well, somebody can do a better than you, 80% of the time. And you multiply that by 15 times, you’re leveraging other people’s experience and other people’s time, that’s much better leverage than money. And people don’t understand that the entrepreneurs should be leveraging time, experience and money. If you can leverage all three of those, I mean, look at all the successful and rich people on the planet, whether it’s a bayzos, whether it’s, you know, you look at bill Gates or anybody, that’s what they did. They leverage, they weren’t the smartest people in the world. They actually went out and took the risk and paid other people for their time, for their experience and for their knowledge. And they built an amazing businesses.

Dan (16:06):

So it sounds like you kind of transitioned from a non-systems person for the people listening. I’m doing air quotes from a non-systems person to a systems person. When you essentially kind of backed yourself into a corner and had to become one, right? You got yourself out of your comfort zone because when you’re in the restaurant that was your comfort zone. You’re able to kind of stay small and tell yourself you weren’t a systems person because it lets you kind of keep the environment that you knew rolling. But by the time he got to 200 units, you kind of like you had to, you had to be of assistance for a summary fail.

Gino (16:35):

I think that’s a great point. Also. I had my brother’s a partner, so my brother really didn’t want to change the status quo. He’s working in the front, he’s bouncing around and he’s having a great time. Mark, if you’re hearing it’s the truth, you know, he was enjoying himself in the front and I was, I was the grunt in the back washing the dishes and I just, I was, I was fed up and at that point

Dan (16:50):

Was the one out there meeting Jake, right? Is that all that that happens?

New Speaker (16:53):

Well, that’s right. He’s the one exactly. He’s Wining and dining, the, their drug reps. and he’s, he’s out in the fun and you know, it was great, but I hated what I was doing. So for me, I was actually starting to implement those systems. In another way, I was creating a company called Gino‘s family, where I wrote the cookbook. I was creating the physical products. I had the Amazon store. So that was like the inception, right? Just to get out. And it was really driven by pain. I mean like most of those big changes that we have in life is because you’re not really happy with what you’re doing. And all of a sudden you looking for something better and you knowing that, you know, for you to get from point a to point B, there’s going to be a lot of struggle. And to reach that goal, it’s not the goal you’re trying to hit as the person you need to become to get to that goal.

Gino  (17:30):

And for me systems, as part of that journey, if I want to create a great business, I’m going to have to learn how to implement systems. I’m going to have to learn how to hire people who I trust and who I like and who fit those core values. And I’m going to have to have faith that they’re going to do a great job. And when they don’t do a great job, don’t go back to my limiting beliefs and say, ah, you know, told yourself that assumption, that one of those big energy blocks that we all have, you know, we get into a relationship. It fails. Can’t get into all the relationship by multi-family property. You mess up multi-families risky. No, those are just assumptions based on what’s happened. Does it that doesn’t have to actually be the future because you can learn from those mistakes and prosper.

Gino (18:04):

So those limiting beliefs really hold us back tremendously. I think.

Dan (18:09):

And I think it’s sneaky because a lot of people aren’t even aware that, that there, I mean, I’ve spent my entire lifetime myself that I’m an introvert and that I suck at math. And now I am a real estate investor who spends all this time going, I’ll try and meet everybody out there. It’s like, okay, I wasn’t an introvert and didn’t necessarily suck at math. I just didn’t have a reason to be good at math because it was boring. But what I could apply to something else. It’s interesting. And guess what? I love talking to people when it’s about things that I really care about, like real estate investing and financial freedom and stuff like that. So it’s like, I was telling myself these things, which allowed me to keep doing what I was comfortable with, but in reality, none of them were true. It just kept me in my comfort zone where I felt safe. So,

Anthony (18:45):

And for me, I, for years I told myself I’m not a people person, because that was, it was an easy shielding mechanism. Cause you know, going out there, putting yourself out there and meeting people, that’s it, wasn’t my comfort zone. It wasn’t something that I would seek out naturally, but it doesn’t necessarily like I convinced myself that that was the truth. And that was really starting to hold me back then in terms of being able to grow my network in real estate and specific. And so really addressing and being brutally honest with yourself, looking in the mirror and saying like, what, what are the internal narratives that I tell myself so consistently that I’m not even aware anymore. That it’s really just a voice in my head and not the actual truth. So I think that’s really powerful stuff. You know, something else that you mentioned in there, you, you had so many pieces of gold there, but one thing I want to point out is a lot of times I find people think of documenting systems as this big, scary, hard thing, because you know, they’re afraid has to be perfect. It has to be completely comprehensive. And I think you from what I gathered there, you know, you have this approach of, you know, write it down, and document it and just start. It doesn’t have to be perfect. It could just be a three-step process. Hey, we pick up the phone and every single time we say, hey, this is Gino’s welcome to the family. What can we get for you? Or, you know, like it just to be really simple and documenting because done is better than perfect.

Gino (20:01):

Right [Inaudible] I think Anthony, the other thing is that it systems, a lot of this stuff is still evolving and it’s never a hundred percent complete, right? Because there’s always things to change in a lot of the systems. I mean, for example, we want to hire somebody to, to do our podcasts, to help our podcasts. So we get the, create the scope of work for the podcast role. Now, what does that look like right now? Jen is sending out emails to solicit podcasts. Guests. We ask for the bio’s we ask for headshots, we send out the zoom links, we send that questions and then we get feedback. We ask for reviews, you document all that stuff that you’re doing. Right. And then when you find somebody that can take that off your plate, it’s all done. And it’s step by step by step process. And it’s a lot easier than you think, because you’re doing it already. You’re already doing it already. So you might as well document it. So when you’re ready and you say to yourself, you what I’m getting overwhelmed. These are certain things that I can get somebody to do for 15 bucks an hour. And I can spend my time doing something else that will save you a lot of time and you’ll make you a lot more money.

Dan (20:57):

Absolutely. Yeah. And you could also just a little fun, little tip for people as well. If you’re kind of tech savvy, you could also just utilize video as well because there’s some free software out there to record your screen. So you don’t even need to write down some of the electronic tasks that you have. You just turn on the recorder on your screen, record what it is you’re doing, and then give that to your VA or your employer, whoever you’re outsourcing to, or you know, tons of resources.

Anthony (21:20):

Yeah. Well, that’s a really good one. Actually. I’m writing that down now. It’s for, for my future self now. So Gina let’s make this relevant to real estate now. Cause we’ve talked a lot about business. We talked a little bit about mind set, which are key aspects of succeeding in real estate. You guys have a really awesome system or framework that you use, which is the Buy-Rite manage, right? Finance right structure, right? The three legs of the stool. Can you for our listeners at home who have never heard of this system, walk us through those three stool legs.

Gino (21:48):

So for, you know, any investment to be profitable, I even think the single family space is probably relevant. You need these three legs. You need to be able to execute them. And you know, when you buy a property, you buy it. It’s done. It’s the backlog it’s fixed, right? The other back leg is the finance, right? Once the financing is done, it is fixed in the wheel viral. Those are the two back legs. The manager, right, is the wheel of wheelbarrow. It’s in constant motion. If one of those three is out of alignment, then what happens to the wheelbarrow? It will tip over. And I think it’s important that visual, that people need to see that, you know, Jake is out in his backyard. One day he’s cutting grass is epiphany. It’s a three legged stool. Now when we’re teaching this, the Buy-Rite criteria is different to different people.

Gino (22:27):

Figure out what your criteria is on buying. Right? And when we were buying seven, eight years ago, cap rates were really high. We’re buying it. Eight caps, follow the market, follow where you are, figure out what cap rate you’re comfortable buying it, figure out what type of assets you’re buying. Are you buying older assets, newer assets, A B C’s are you buying properties that have quote unquote proven value add? Which just means they’re distressed. I mean, you know, you really have to hone in on what you’re Buy-Rite criteria are, the manager, and right? That’s a whole beast in and of itself. Either your props, self-property managing, or you’re getting third-party property management. We teach all the systems, whether it’s the KPIs, the processes that you need to do that. And I think the finance rate is the last piece. There’s so many different ways to finance a property, whether you’re using, you know, traditional, Fannie Freddie, you’re using community bank financing.

Gino (23:14):

Are you going out there? You’re using owner financing, master lease. That’s really important. But when you weren’t, you know, I guess wrapped the whole thing around. You’re looking at real estate. As you know, we call it the three pillars of real estate. And the three pillars of real estate, I think are probably just as important as our framework. And you know, the three pillars comprise of the market cycle. Number one, whenever, when the write that down, number two is the debt component. And number three is the exit strategy. So you’re looking at a deal, everyone, the market cycle know what part of the market cycle you’re in and market cycles are very specific. You can a city in Arkansas and it’s in a recession and you’re going to a city in Florida. That’s an expansion or hyper supply. So nowhere you’re in the market cycle because you’ll know what type of assets to buy. Because if you’re, you’re at the peak right now, and you’re buying 1960s, you know, C properties for three and a half caps, it’s a little risky right now because you got a lot of cap coming up. You know, you’re at the type of market you’re going to be putting a lot of money. If the market does go down, you better be able to hold that property. Long-Term so the market cycle is very important. We’re trying to buy assets that are a little bit newer right now with a little, a little less CapEx. That’s important. The debt component to think about what kind of debt you’re putting on. What’s your strategy? Because if you’re exiting this property in two years, are you going to get payments or are you just going to get, you know, you’ll mean, and that’s really important. Are you going to get bridged debt financing?

Gino (24:27):

Do you want to go to community bank? And then all of a sudden, two years down the road refi out, it’s really important. What kind of debt you’re going to get on? And the exit strategy, obviously this is something you’re going to think of. You may have to pivot. You may say, you know, after yourself, after holding for two years, I want to sell, but at least go in there with the plan of what you want to do. We like to hold to the long-term. We think there’s so many more benefits to holding for the long-term. Whether it’s the tax benefits, whether it’s a principal pay down, whether it’s the capital appreciation, all those things in multi-family are great. And having the ability to actually run that asset is what we’re doing. We’re running a business. So look at it from the three pillars of real estate and then move on to the market cycle.

Gino (25:03):

Number two, the debt component and number three, the exit strategy, and then implement that Buy-Rite managed right and finance. Right? And take the deal down. And I think one last thing, guys, when you look at a deal, I want you to look at every deal is unique. I don’t want you to go in and looking at the deal just to see if it’s owner financing or just to see if it’s a syndication. Cause we can look at a 48 unit deal that we’re buying. Now. It’s not a syndicated deal. It’s a little too small for us. Plus it’s a pretty big lift. So our investors don’t want to hold on for 18 months with no return us. On the other hand, we’re buying with community debt. We’re going to refi this thing out into agency within 18 months. So that’s what we’re going to do.

Gino (25:37):

So look at every single deal, as unique opportunity and underwriting through that prison. Yeah. It’s so valuable to know how you’re getting out before you go in. I think the Marines talk about that. Know how to get out before you go in. So understanding that exit strategy is then going to influence what kind of debt you’re putting onto it. What kind of business plan you’re going to execute? Is that a syndication or is it a buy and hold forever joint venture? You know, like you, you have all these quivers in your, all these arrows in your quiver and you don’t want to just keep reaching for the same arrow every, every single time thinking it’s the miracle shot. So I think that’s really, really valuable and then understanding where you are in that market cycle, because your exit strategy is going to be largely dictated by where you are in that. And the market that we’re in up here in the twin cities is different than the market that you’re in down there in Florida and Tennessee. And, you know, be cognizant of that. And don’t just assume that it’s a one size fits all economy out there cause it’s not.

Dan (26:31):

Yeah. And I think being able to pivot, like you mentioned as well, Gino‘s hugely important. Especially over the past six months, we’ve seen how much things can change on a dime. So being really conservative when you look at your, the debt side of the equation, I think is key, you know, make sure you’ve got several options available to you. So you’ve got your core business plan, but do you have contingency plans? Like have you done sensitivity tests on these deals that you’re looking at and are you aware of how, how wrong things can go? Do you have a plan for that? I think that’s huge. A lot of people over the past several years of forgetting the forgotten to look at the downside and you know, the silver lining to this the past few months is okay now we’ve this kind of reminds people like, okay, you’ve got to actually plan for some black Swan events. You’ve got to make sure that you’re aware that stuff can hit the fan. And what are you going to do when that happens? Hugely important.

Anthony (27:19):

So Gino, we skipped over this part at the beginning of the show because there was just so much meat and potatoes to get into. We had to have our meal, but now it’s time for dessert. Hit us with your bad investing tip of the week.

Gino (27:32):

Wow so for me, I was always brainwashed. Getting out of college, invest for the long-term, keep your money. It’s going to grow at 8% and 40 years you’ll have blah, blah, blah. And for me, the stock market is different than it was 20 years ago. Right? It’s just amazing how things change so quickly, the information age, and to me, that’s not really investing. That’s more speculating cause you’re buying a, hopefully it goes up price unless you’re buying dividend yield stocks. I just think investing for the long-term. I want to invest in a business for the long-term. I’m going to invest in multifamily for the long-term because I know that’s a business. I’m buying a stream of cash flows and I’m buying a basic human need, guys, food, and clothing, and apartments, baby. That’s what it’s going to come down to you look at demographics. You can go through Harvey dent stuff.

Gino (28:16):

You can go through Chris Porter stuff from big shifts ahead. He wrote a book on demographics. We’re living in right now, apartments going to become very viable. So, and when I went and tells you to invest, long-term especially a financial planner. They’re telling you, give me your money. I’ll dollar cost average. So you buy how you buy low. You’ll average it out. What kind of plan is that? That sucks. They’re basically taking your money. They’re controlling your money and they’re putting it in, in whatever vehicles they want to. And it’s a low level of financial intelligence. As far as I’m concerned, people work so hard to make money and then they just give it over to somebody else. The question I have for everybody, and I’m watching a webinar today, are you working hard for money or is your money working hard for you?

Gino (28:52):

Five years ago? I was working hard for my money. Now it’s a little bit of both, hopefully in two or three years, that a little bit more of my money working hard for me, but that’s where we need to do so be wary of people, telling you invest your money for the long-term. You need to be able to. Dan said previous, which I think is perfect. You need to be able to pivot. I mean, Josh hates when I pivot because I’m always pivoting because I don’t mind having an ego and being wrong and saying, hey, this product is not going to work. Our price points too high. It’s okay. That as entrepreneurs, we see that. So investing for the long-term, what does that mean? I’m going to put money into Apple and hope it goes up and I’m never going to sell that. That’s stupid. So really beyond mature with your investments and stay educated and stay with what’s going on in the market, in the current market.

Anthony (29:35):

It’s the whole Genesis of this podcast for us multifamily investing made simple is because a lot of times when it Comes to financial systems, investing a lot of people, they feel overwhelmed and that’s intentionally done through the, you know, the financial markets are incentivized to do that, to make it seem really complicated. And so I’m just going to put my money in and trust this professional to do right by me. And that’s the wrong approach, right? You need to take personal responsibility for where your money is going. You need to understand what it is doing there. And real estate is such a simple system to understand. It’s not necessarily easy to execute, like it takes work, but to understand how it works, you can do that even with the limited amount of time and energy. So I love that. Anything that there, Dan, before we move to the book rack,

Dan (30:18):

No, I mean, I think you hit the nail on the head. I say it all the time is on the, on these podcasts. You know, the, the traditional financial knowledge, quote unquote again, air quotes, that’s been you know, fed to everybody basically since they entered grade school, it’s just, it’s not good. And it’s just been exasperated in recent years because like you said, you know, the markets different, you know, 20 years ago, it wasn’t that crazy. These days it’s incredibly volatile. It never used to be like that. So I think a lot of people saw that first-hand over the last few months, they got to see their 401k shrink by 30%, then come back up by 20%. And it’s like, our properties didn’t do that. You know, who wants to, I like to be able to sleep at night personally. So yep.

Anthony (30:58):

Agreed. All right, Jake, I’m sorry. I keep looking at your name tag. It says Jake and Gino. I just want you to, so do you know, what’s, you’re an avid reader. You’re an actor Advocate of education. What should we be reading right now?

Gino (31:12):

I think everyone right now should be reading the book mind set by Carol Dweck. I don’t know why I read it about six months ago and I like it because it really teaches us how to teach our kids. You know, it talks about a fixed mind set versus a growth mind set. It’s not a hard book to read, but a really reiterate to tell your kids. No, you don’t want to tell your kids, Hey, you’re really smart. And you’re really great at that. You want to tell your kids, you know what? It’s all about hard work. And if you’re in third place, there’s no participation trophies because Dan won first place in Dan worked really hard to get the first place. And if you want to win first place, Anthony, get your camera working. Number one and number two, put some more words.

Anthony (31:44):

Come on. I got to step up. I got to step it up. It’s true. It’s like, this is on me. I’m just saying, put some more work into it. And the growth mind set.

Gino (31:51):

Listen, look at John macaroni. They talk about John macro in the book, every excuse in the book, it was too windy. It was too loud. I, my racket sucked, whatever. He was always blaming somebody else. And that’s what the fixed mind set is. And if you, we all want to adopt the growth, we can blame everything on the pandemic and the pandemic sucks and that’s wrong and we’re all hurting from it. But the growth mind set says, how can I learn? Well, maybe virtual tours are going to be great now. And you know what? Cap rates are going to be going down. Now’s the time to raise capital because there’s so much money in the market right now. And there’s so many family offices that have a ton of money and there’s so many high net individuals.

Gino (32:23):

It just got PPP and all those other capital. So I’m just saying the growth mind set sees a way to do it. It doesn’t shut down. It doesn’t say, you know what? I was great in high school and I’m in college and I’m not really that average I’m going to quit. That’s what the fixed mind set does. They quit at the first turn, the growth mind set says, you know what? I’m going to figure it out. I’m going to get better at this. And it’s all about hard work. So I mean, I love the book and it’s really good for parents to read it. And just to see that their kids don’t tell your kids, they need self-help or they’re special needs. They’re not special needs. They just learn differently and teach them to work hard. And once they figure out the work hard, and it’s ironic that most, I mean, I wouldn’t, I don’t want to say most, but there’s so many amazing entrepreneurs out there that were dyslexic and that really had to figure out how to learn. And they had growth mind-sets because they’re like I had to work extra hard to figure out how to read and how to do these things that when, when everything else came on and I had problems, it really wasn’t a big deal. Because I was already, I was already used to working hard and bootstrapping it. So great book.

Anthony (33:18):

Yeah. It’s an absolute classic in the psychological field, highly recommended. Like at the end of the day, you can blame the pandemic. You can blame your external circumstances. That’s fine. And it’s, it’s true. Those things, those are valid excuses, but it doesn’t change anything. It just appropriates the responsibility to somewhere else. And that takes the power and control away from you. And that’s not a good place to be claim ownership, say, Hey, this is where I could have done better. This is what I’m going to adjust and how I’m going to fix. And then move forward. That’s affecting change, Take control and take ownership. So That’s going to do it for us here at multi-family investing made simple for this week, guys, Gino, this has been a great conversation. Really enjoy everything you’ve done. Where can people find you? How can they get a hold of you? If they’re like, I want more of this guy,

Gino (34:04):

Oh, just go to Jake and Gino.com. We’ve got the honeybee out. So just go to Jake and Gino.com forward slash honeybee and boys, we came up with the youth Academy. So something that I’m really, really proud of and you know, the achievement that, you know, my wife has just walked in the room right now. And she just reminds me of saying, Hey, Gino, how about we start a youth Academy for the kids. She told me about two years ago, like, Oh, come on. And she can’t hit me six months ago. And I’m like, you know what came up with a slogan? People with financial intelligence can change the world for the better. And through this pandemic, I see people who are financially intelligent, who have money saved, who have budgeted, who have the ability to leave and leave the state Gore.

Gino (34:38):

If they want to, they have the financial intelligence and that’s really propelled them and it’s give them more comfort and more safety. So for me, you know, creating the youth Academy to teach parents about financial intelligence, teach parents about the banking system, about inflation, about investing, about credit, about renting an apartment about buying a car. These are all things that I’m really passionate about. So if they just go to the Jake and Gino page and just look on their education, it’s in one of our courses do youth Academy. So that’s what I’m really excited about. And we all need that. I mean, we’re not being taught stuff in school I could down previously. And that’s really important just to take control and be responsible. And how are we responsible by learning by just doing what other people aren’t doing?

Anthony (35:18):

Yeah. I love it. So yeah, financial Education and financial freedom, these concepts, if you understand how finances work and you can achieve financial freedom, then you are now freed from one of the biggest stressors that affects so many people around the world. And when you’re not worried about where’s my next meal coming from, and you have your finances set and you know that you’re on the right path, then you can start turning your attention towards solving the really big, interesting problems in life that you’re interested in. Right? And you’re not focused on just going to get that next pay check. So I absolutely love that. Now, if you’ve been listening to this podcast this entire time and you haven’t stopped what you’re doing yet And left a review, hit the subscribe button while you’re doing it wrong, you’re doing it like me without my video camera. We’re failing, but that’s okay because of the growth mind set says, we can fix this. We can change. We can take responsibility. I’m going to go get a new camera this afternoon. And you, my dear listener are going to go leave a review. And that is our promise to one another. So I will see you next week and we will hold each other accountable then until next time guys, I really appreciate your time. Gino. I hope you guys have a fantastic week. Thanks guys. Thanks to you. You’re welcome.