Prioritizing with Gino Barbaro

Welcome. This is the Insider's Edge to Real Estate Investing with James Nelson, the principal and head of Avis and Young's Tri State Investment Sales Group. In this program you'll learn game changing strategies to outperform the market. James will teach you how to source, execute and capitalize on the best real estate opportunities in New York and around the world. Now, here's your host.

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Welcome to episode number 172 of the Insider's Edge to Real Estate Investing. This is your host, James Nelson. Thank you as always for joining and if you have not checked out jamesnelson.com in a while, definitely go take a look. I guess I can't say it's new and improved. I was always told it's either one or the other thing, but it's definitely improved and the whole site is really designed for your success. This site is not about me, so don't let the name of it fool you. This is how to help you gain the insider's edge to real estate investing so you can outperform the market. That's what we're doing on this show. That's what the book is all about. That's what the site is about. And while you're there, when you log on, you're going to get the option to sign up for the newsletter. I strongly encourage you to sign up for that newsletter. It's only one a month and what it's doing is aggregating all the lessons of these podcasts, providing white papers I post not only on Forbes Real Estate Weekly and helpful content to give you the advantage. So really look forward to your feedback on that. It's wonderful when you all reach out. LinkedIn is a great way to do that at James Nelson nyc. Sometimes it takes me a couple days to respond, so when you link in with me, don't think that I'm not seeing it. Just sometimes it takes a bit of time. But I really appreciate the thoughtful response. Many of you have just left comments saying how you found various shows meaningful. One of you actually just asked for clarification on a show, had a question about it. That's a great way to do that. So as always, really appreciate the engagement there and looking forward to today's show with Gino Barbero from Jake and Gino and we have had Gino on the show before. I've had a lot of fun collaborating with him. He has an incredible network and we've also spent time together with our mutual friend Ryan Serhant at one of his summits. So, so Gino today is going to be talking about prioritizing, which is such an important thing because when there's a lot going on, sometimes you feel like you're just lost, you're running in place. And so he's going to talk about how to set priorities and to learn the processes of real estate investing. Gino is an investor, a business owner, an entrepreneur who has grown his real estate portfolio to over 2100 multifamily units with $280 million in assets under management. You're also going to learn how Gino shifted from being involved in the pizza industry to real estate, a decision he made when he was looking for passive income streams. He set up a strategy with his partner Jake Stenziano, who built a track record and delved into coaching. The partners are co founders of Jake and Gino. This is a multifamily real estate education community where they teach others how to invest in apartments. So you're going to want to check that out. You can also learn about Gino's various ventures which he supports his investments. He's the best selling author of three books, Wheelbarrow Profits, the Honeybee, which I have now read the Second Time that's a Must and Family Food and the Friars. I'm gonna have to check that one out. He currently resides in St. Augustine, Florida with his wife and their six children who they homeschool. Amazing as always. You can go to our show notes guess where jamesnelson.com and you can find out how to connect with Geno. So we're gonna have a brief word from our sponsor and we're gonna get right into that interview with Gino Barbero. A Different Approach to Putting our clients first Avis and Young's Tri State Investment Sales Group sells multifamily office retail development and specialty sales throughout the New York metro area. As experienced thought leaders in their industry, our 35 member group is available to help you make informed investment by advising you on your current holdings or identifying new opportunities in the marketplace. Our one unified team is built on an industry unique platform which promotes unparalleled collaboration and teamwork. We share core values of hard work, integrity and expertise. We put our clients first providing tailor made strategies to achieve superior results. Please Visit us at aytristateinvestmentsales.com and follow us on Twitter, LinkedIn and Instagram amesnelsonnyc to learn more. Welcome everybody. We have a real treat for you today. Back with us, Gino Barbero, who is co founder of Jake and Gino. Gino and I met through our mutual friend Ryan Sirhan at a conference. And Gino has done so many incredible things. He's an investor, he's a business owner, he's an author, he's an entrepreneur. He's grown his real estate portfolio to over 2,100 units, $280 million of asset management. Although if you asked him what he's most proud of, he would tell you his six kids. And last but not least, he was formerly a pizza guy. So Gino, I don't even know where we start, but why don't. Hopefully you do so much for the community. So maybe it would be helpful just to tell our audience a little bit more about what Jake and Gino is all about. You all have incredible training programs, networks, you're the author of some really incredible books that I want to get to and speak about. But why don't you tell everybody a little bit about the Jake and Gino community.

There's one other thing that you forgot. I'm an aspiring opera singer. I've been singing for two years.

Wow, okay.

Who do I sing? I mean, you know, I'm an Italian. I think all Italians are born to sing. But I was that pizza guy, James. And I think everybody who gets into real estate gets it into it when, with this conception of just buying buildings and all. And when I got into it and I got in with Jake, I understood that it was a business, it was an entrepreneurial venture and I was doing it the wrong way. Life before Jake was like, let me buy a deal here, let me buy a deal there, let me buy a multifamily, let me buy a mobile home park. And I was all over the place. When I met Jake, I was serious. I was desperate. I had started doing some personal development. I didn't want to be the pizza guy anymore. I knew that wasn't going to form the lifestyle in New York and Putnam county to have one restaurant for feeding myself and my brother's family and my mom. And I said, real estate's the way. I just have to understand. I have to under unlock what I'm doing wrong. And when Jake and I, we bought our first deal after 18 months, we figured it out. It was a process called buy right, Manage right and finance right. It's a three legged stool that if you look at any real Estate investment. I don't care what you're doing, you need to buy the asset properly, you need to manage it properly. That's the wheel, what we call the wheelbarrow and we need to finance it. Those three legs. Take a look at any investment. If you're in real estate right now, you're not in real estate. You are in the business of real estate. You need to look at it from that venture. Whether you have two single family homes or you're flipping 30 homes a month, or you've got 17,000 apartment units, it doesn't matter. That's the thing that I missed and I lacked early on. I had one restaurant for 20 years. And how do you explain having 1500 units with Jake within the first five years of our journey? That one shift, I'm telling you, understanding that, that, that shift to say, wow, this is a business, this is an entrepreneurial venture. What are the systems and processes that you need to learn to grow that business? And man, it just, we just took off.

Such an incredible story. And I think you really captured the principles in your book the Honeybee, which everybody's got to get. And it's this incredible parable. But, but talk about that because I think that really kind of exemplifies what you just said. So maybe talk a little bit about the impetus of that book and what it's all about.

When I was in the restaurant business, I already understood this multiple streams of revenue. I just didn't want to be working on the weekends, I didn't want to work on the holidays. So I'm trying to think to myself, how do I get out of the restaurant business? So I started thinking of these multiple streams of revenue. If you have the restaurant, well, why don't you write a cookbook? Which I did. Why don't you start doing some YouTube videos, which I started doing. Why don't you start selling physical products and education, which I started doing. Well, let's start doing some backyard barbecues. And I was aspiring to take events people to Italy to teach them how to cook in Italy. So all these different streams of revenue I was starting to build. But when I met Jake, I'm like, I don't want to do the restaurant anymore. I don't want to be that, that business. And when I saw real estate, I'm like, oh wow, this is really cool. I can translate it into this business. So in our first deal, we bought, we bought, our very first deal was a 25 unit deal. Jake started the property management company. So all of a sudden we have the property, which is the main hub. And then we have the first spoke, which is the property management company. Two deals later we have Jake and Gino Education, which is another spoke. It's another revenue generator. And for us, it wasn't just revenue. It was about wow. Interviewing being on shows like yours, meeting someone like Orion Sorhan at an event, doing these masterminds. That was the second one. And the third one, we started syndicating, raising capital. Well, all of a sudden we've got a syndication business. So you start looking at a business, the lens of wow. I can create multiple streams of revenue for, from this one source. And then you start buying more deals, the deals get bigger. But I would caution everybody is if you're in any kind of business, whether it's self storage, restaurant, multifamily, stay in your lane and create multiple streams of revenue that are complimentary to that business. Now if I'm going to go out and I'm doing multifamily and I'm going to invest in a real, in a, in a restaurant, well, I better be investing in that building for the restaurant. I'm not going to go off course and invest in something different. I'm not investing in crypto or stocks. I'm staying in my lane and trying to create that business. Because they all feed each other. There's such a beautiful symbiotic relationship by having a real estate business and then having a syndication business and then you have your education business, which is actually helping you to educate your investors and to educate the community which brings in leads. So if you see, once you start building out, and I don't want everyone to get overwhelmed, don't think of this as the end in mind. This is how you start. But that's the possibility that you can have generating that one little business, that first little property man, the sky's the limit after that.

Yeah, Gino. And what I took from the book is with the multiple streams, that they all work together and feed each other. So it's a really important point for our listeners that doesn't mean go out and do 10 entirely different kinds of businesses. These all are aligned and they help each other. So talk a little bit about what came first then. And I know you were very fortunate to meet with Jake and start investing together. So at what point did you say, okay, we want to start teaching and start building this network and tell us about your team because you do a lot of incredible things. I know I couldn't even do a quarter, let alone 10% of the things that I do without an incredible team. So it might be helpful for people to understand how you went about. I'm sure you didn't just snap your fingers and all of a sudden you had this incredible education course or all of a sudden you just wrote multiple books. So talk a little bit about your support and how you grew your team.

Jake and I used to be the imma guys. I'm a do this, I'm going to do that, I'm going to cut the grass, I'm going to collect the drenchecks. And that works really good for the first 60, 70, 80 units. But then after you do your second deal, we did our first deal. I remember it was a 25 unit. The second deal came three months later. It took us 18 months to get that first deal because incompetencies because of not having the framework. The second deal came right after that. So we have two deals, we're both working full time jobs, we have resident managers. And that third deal thankfully came six months later. And like you said, if we didn't hire the property managers and we didn't hire the maintenance techs, it would have been a disaster. After that third deal, we were very fortunate because Jake's like, let's write a book. So we wrote Wheel of our Profits and it was really getting it out of our heads. And it was more for us than for anything else because we knew we're onto something. And from there on, you know, once again, like I told you, that one restaurant for 20 years, I didn't have systems, I didn't have a team, and most importantly, I didn't have the core values and the mission statement that I think any great organization, any enduring organization has. When there was something going wrong at the restaurant, it was always the employee's fault, it was always someone else's fault. And it wasn't the leader's fault. It was never my fault because I didn't have expectations laid out. I didn't have these core values. And when Jake and I hit around 500 units, we said timeout. You know, you used to work at corporate. Jake, what did you guys do at Glaxo? He's like, well, they had these core values. Poo, poo poo stuff. I really hated corporate. But he's like, you know, they had something, they had culture there, they had direction, they had their North Star. And we decided at that point to start, you know, doing, scaling up, coaching and we started doing traction with, you know, with Gino Wickman's company as well. And that Absolutely. Just exploded our culture. We've got, like, almost 90 employees in our property management company right now. We're starting out Jake on a lawnmower in 2013 to over 90 employees. And to think about that, there would be no way that you'd be able to scale a vertically integrated company by yourself. It's just not physically possible to manage 1800 units, to be able to go, you know, fix all the toilets. It happens slowly. You buy one or two deals a year. You don't outgrow your infrastructure, but you work on culture and core values, and you live by those core values, and you die by those core values. And you want to, you know, have those core values exude throughout your organization, but also with the people that you work with, the vendors that you have, the, you know, the partners that you have, the investors that you have, you want them really feel what your culture is all about, and hopefully that will blend into the rest of the organization. I hope that answered your question.

No, it's fantastic. And I'm a huge fan of Geno Wickman, and I was very lucky that one of my coaches recommended that book to me very early on, that book Traction. And one of the main takeaways from it was the idea of these 90 day rocks and being able to chunk these things up. Now, interestingly, it turns out that I don't think maybe he was the one who initially came up with rocks, because that. That was Stephen Covey, if I'm not mistaken. And there's this old video out there from when he used to speak in front of these live audiences. And it was a woman trying to take. Excuse me, pebbles. There was pebbles in this. This. This vase. And then he was trying to drop large rocks into it and. And saying, okay, fit everything in. And of course you can't do it. And so the lesson was, you pour out all the pebbles, start with the big rocks, the things you have to get done over the next 90 days, and then you can fill it in with the pebbles and everything else. And of course, not all of them are going to fit in there, but that was very helpful. And also, if you have a leadership team, it's really helpful for me to know what my director of operations, what his 90 day rocks are, because then I don't bother him with 20 different things, because you can only do two or three things really well. So I'm sure you're going to tell us you didn't just accomplish this all at once. I'm sure there was a season where you said, okay, we're going to commit to this book. Okay. Now we're going to build out the educational program and then build on it.

I think, James, what everyone needs to realize, listening to this, and I think you may attest to this as well, everybody is winging it and then trying to figure it out. That's the reality. We all look slick on Instagram. We all look great on Facebook. But I think as you're learning, Chris Voss said it best on our podcast a couple weeks ago. Awkwardness is an indication of learning. If you're not feeling awkward throughout this entire process, I felt awkward for these last 12 years of my life. Every day it's something different. Whether I'm looking stupid on a video or I say something wrong on a podcast, or I don't pull through the priority, or I do something wrong with the story student or whatever it is, every day, it's an awkwardness. It's, it's a, it's a time to learn. So when we started, it really was. The education was all about us trying to monetize. And real quick, soon after that, I'm like, this is not the thing about the education. The thing about, for me, the education is, is about impact, is about growing the brand. Like, you know, you, you so mentioned we had Ryan Serhant who was in common. His is all about branding. I mean, that's what you want. That's what we wanted the Jake and Gino brand to emulate, really, professionalism, credibility. So that when we do speak to a real estate broker, they're like, oh, you guys have a cool podcast. I like you guys. Let me send you guys a deal. And oh, by the way, let me get on a podcast with Robert Kiyosaki. I just met Kim Kiyosaki last week through the Jake and Gino platform. T Harv Eker, Chris Voss. We're actually interviewing JP Sears tomorrow. I mean, these are people that I would never have an opportunity. Ryan Sarhan, James Nelson, these are all people that I would never have an opportunity to meet unless I had that educational platform. And for me, growing it every day, putting in a little bit more work every day and working on it. And what you said, those quarterly priorities are so important because people like us, we like to machine gun our team. We want to put 20 or 30 priorities every quarter. And you know, when no one is accountable and then you have more than one or two people, then nothing gets done. So for us, those quarterly priorities are so important. Putting down four or five real big priorities. And a priority is anything that takes More than eight hours. So. So that's how we built it. In the very beginning, what was the most important thing for us was the fulfillment was trying to hire coaches and trying to get a really good platform out there so that when you do sign somebody up, you can fulfill with them. That was the most important thing. And then as you start scaling and growing, well, how's the sales process look like? How does the marketing look like about the branding, the looks and the feels? I think everyone does it backwards. First they worry about what they look like, then they worry about fulfillment. To us, it really comes down to the fulfillment. Fulfillment. And you saw us back in January there with Ryan. We had over 40 students at an event. Those students were getting some amazing fulfillment at that weekend and our previous event. So to us, it was about the fulfillment, then it was about building the brand, then about the sales and the marketing. And I think that's how we've been able to scale over the last couple of years using that model.

Yeah, Gina, you just said so many good things. And you're right. These. When you put yourself out there, one thing leads to another. And the fact that we had the chance to come and in contact with each other, now we're collaborating and again, it's just going to give more of an exponential impact to help more people. So it's an incredible thing to watch. I think. The other thing that I wanted to make sure and ask you about was the power of partnership. And you know, you had said, and early on trying to figure it out on your own. It wasn't until you met Jake that suddenly you found out that you complemented each other and that you could do a lot more together. So maybe talk about the power of partnership. There's probably a lot of people listening right now. Maybe they're starting to do some things on their own. You know, what would you say to them? When do you decide? Do you take on a partner? If you do take on a partner, what should you look for in a partner?

I was blessed to be married to my wife. We've been married 25 years and that was my first partner. And I saw how powerful that is. I could not accomplish 20% of what I do if it wasn't for her. She stays home with the kids. We homeschool the kids. So that is off my plate. I don't have to worry about a lot of the things. I can go to work and focus on work. And I saw the power of the partnership, how I support her and she supports me in my very first real Estate partnership. I partnered up with a guy named Maserati Mike. I call him Maserati Mike. Cause one day he shows up at the restaurant driving a gold Maserati and he's like, hey, you wanna invest in a deal? And I had met him through a mutual friend and my friend was partnering with him. And the story doesn't end well. I lost $172,000 to Maserati Mike. And it wasn't Maserati Mike's fault. Ultimately it was my fault. And I can't blame partnerships because I didn't know how to vet a partner. I didn't understand the power of partnerships. And I made so many bad decisions with that partnership. And when I met Jake, unconsciously I think our values aligned. I think he was such a hard worker. He was taking pharmaceuticals, he was a pharmaceutical sales rep. He was taking orders out of the restaurant and bringing them to doctor's offices. He was showing up prepared, he was young, he was hungry. He wanted to invest in real estate. He had the long term ism. So for me, all of our values really align and what we call it is values based decision making. From there on, our goals are very similar. Maserati Mike and myself, we're polar opposites. He was looking for the shiny object, he was looking for the rip. Jake was not like that. Jake wanted to invest in that. Jake was a family person. He was working for his family. And he was a hard worker. And I think ultimately I liked him as well. You got to sit down and you'll have a beer with your partner. I think that's. I think people don't understand that I'm on the phone with Jake two, three times a day talking about deals, talking about education. He's in Orlando right now. I'm going to be there tomorrow. We have the event this weekend. So we spend a lot of time, our families spend time together. And for you to make a partnership work, I think both of you have to have clear expectations of what is going in. You both have to be willing to work harder than the other person. Because I'm feeding his family and he's feeding my family. And for us there's no excuses, oh, I'm sick or there's no excuses for us. We need to really try to make things happen for each other. And I think if you look at that that way from a partnership, I think it'll be easy to choose a partner. I mean, you'll have that gut feeling when you see somebody like, ah, if you have that feeling, don't go into Partnership, you may do one deal, James, with the person, and then after that one deal, you don't have to continue, because Jake and I, we did our first deal. After that, we could have just parted ways and said, hey, one deal is enough. But for those of you out there that think you're gonna grow an enduring, amazing multifamily organization or all by yourself, it may be challenging because there's so many different functions that you need to do to grow an organization like this. You need investors, you need to be boots on the ground, you need to asset manage, you need to property manage, you need to raise capital. There's a lot of different functions. And when Jake and Gino are the IMA guys doing it all by yourselves, in the beginning, it may be okay. But as you grow bigger and bigger, just through the scalability and through that infrastructure, you're going to need more help.

Yeah. Once again, you said so many good things. And first and foremost, you have to like the people you work with, especially if you're going to be spending that much time. And certainly you have to have that trust. Right. And you have to be able to complement and be there for each other. So that was really good to hear from you. And it's been an amazing partnership, and I'm glad you brought up that partnership. It's not just in business, but also personal life. And. And certainly I could agree with that as well with my wife and with family. And so I know how important that is. In fact, why don't we touch a little bit on that now, Gino, because I know you even have a show with your wife, and maybe you could talk a little bit about that and how you are helping women mothers as well, inspiring them to invest. Maybe you could talk a little bit about what you're doing on that side. On the Julie, Julia and Gino show.

I remember about four years ago, my wife got into life coaching because she had seen what. What I was doing. I was. I was helping out other people. And it's not like I was doing anything magical. I was just asking people questions. I was giving them a space. I was letting people think and come to a place where they could just have a conversation. And she got into it. And then one day I just said, hey, Julia, you want to do a podcast together? I'd love to do a family show because that was really important to us because I think family and business, I think they're so similar. When you're trying to grow a business, like we said, you need the core values, you need the mission statement, you need to put in the hard work. And growing a family is so similar. I mean, like, you need to have the vision and the values and the hard work. And it's such. It can be such daunting work, challenging work, but it's so worth it. So we started the podcast, I think, back in 2019. We were just interviewing ourselves. And then from there, I had a breakthrough, and we started interviewing Dr. Gary Chapman and all of his authors. I had never heard the five Love Languages. Once again, Jake and Geno strikes again. Personal development. I'm learning about the five love languages. I'm like, Dr. Chapman, where you been my whole life? I could have used this like 15 years ago, bro. But it's just. It's been amazing. And for me to have that space with her and to be able to have her, as, you know, people say, well, how can you work with your wife? I want to be with my wife now. I want to be able to share the day with her. When we have these podcasts together, we reflect upon them, we work on them. I think the kids see us have that kind of relationship where we can share business together, because I want my children to be part of the business at whatever level they want. This weekend, they're going to be at the event. They come to our fulfillment events as well. So I want them around the business because I want them to be in that atmosphere, and I want them to see the struggles that we have as parents, but also to enjoy that, hey, mom and dad love each other. They can work together. And I hope I am the model for what they do when they start having their own kids and start having their own families.

I love that. That is so fantastic. I love getting the kids involved as well. And I've tried to bring my older sons, even just coming into the office and just kind of seeing what it's all about and exposing them to that. So really important. So let's talk what happens at your summits or talk about through your real estate education community. I mean, I know, and I'm reading here that your students have now closed on 71,000 units, over $4 billion in deal volume. So clearly it's working. But maybe when someone signs on to your program, maybe walk us through what happens and how they get involved and how this. This training takes place.

James, I think, to me, what really changed my life. Ron, early on, when I, before I met Jake, I went into coaching. I mentored with a couple different companies, and I saw the power. I mean, remember, I'm the pizza guy. I Didn't know how to underwrite deals. I didn't know what due diligence was. I didn't know any of this stuff. I was taking massive action, but I had no education. Most people probably do the opposite. They have massive education, but not the action. And I saw that coaching for me was awesome because I started to learn how to implement all these different strategies and techniques that you need in real estate to become successful. But also the accountability piece because I was on a call every two weeks with the coach. Well, what was your progress? Did you research the markets? Did you get deal flow? Did you go on any property tours? And if I'm all by myself sitting at home in my underwear watching YouTube videos, it ain't happening. But if I've got skin in the game and I've actually paid to to be part of this program, I'm going to want to get results. I'm going to get my money's worth. And I saw the power of that. And when I started the Jake and Gino education company, I said we need a couple of things. We need coaching, personal one on one coaching. The second thing is we need weekly lessons because I want weekly touch points with the students. And the third thing is we need between five and six events every year so students can come together every, you know, it's about every two months we get a weekend where we meet at different, various events. Whether it's Denver, whether we're going to Tampa. They need to come to these spaces because I need to meet with them individually and I want them to see that hey, it's not just a figment of their imagination. I'm this person that's hiding away. I want to get them in a room. I want them to meet and network. And that's the power. All of a sudden you have a doctor in California who's got money and you have someone in Tennessee who has a deal. You put them two together, man, magic happens. Or somebody's trying to raise capital for a deal and they don't have the deal, but they have capital. You partner that person up. But the most important thing I think that we teach, it's education, but it's also implementation. It's buy right, manage right and finance right. And understanding that those three pillars are really important to make any deal successful. And if you want, I can just break them down real quick just to give you a general idea of what they are now in the buy right. When I first started out, I had no criteria. Like I said, I was buying duplexes in Rochester I was buying strip malls in Dutchess County, New York. I was buying a mobile home park in Florida. I had no criteria. I didn't understand what a deal was. So the first thing that you need to do when you're looking at any investment, pick your market. Select a market. And I know in your book you do a phenomenal job about talking about becoming an expert in the market. So if anyone hasn't read James's book, the Insider's Edge to Real Estate, go read that section where he talks about and I heard the story at Ryan Serhant's office, becoming an expert, spending a month in a market, you can do it. Right now. You don't have to be, James, 30 years ago, actually walking these markets. Right now you can actually be on Google looking at FEMA flood maps. You can be looking at median incomes. You can be doing a lot of this work before you even visit the market. But you need to be an expert in the market when you're setting up your buy right criteria. When you're beginning, please don't select more than one, maybe two markets, but become an expert. The next thing that you need to do with your buy right criteria is understand what your goals are. If you're looking just to become a passive investor, great. Understand the whole business and then go out and find sponsors or syndicators who are doing that. If you want to do it on yourself and start investing in your own deals, well, select the market and then start learning what your criteria looks like. And a buy right criteria could simply be the market. What kind of asset? What's the age of the asset? What's the build of the asset? Is it brick? Is it two bedroom townhomes? Is it garden style apartments? What kind of amenities are there? The age of the asset? These are all criteria that you need to start building up. Because like I said, I bought a 1960s mobile home park, I bought a 1980s strip mall, I bought a 1920s duplex. As you see, there's no focus there, it's all over the place. And that's why I was going into the forest without the map. And I always refer to the process that the buy right, managerial finance, right as that map. Before you even start looking at deals, understand that this is what you're trying to build up. And then once you have your buy right set up, understand the finance lever. And that finance lever is really important because James, as you see right now, there are a lot of operators out there in trouble because they didn't finance their properties properly. Because that finance Leg we want longer term fixed rate financing. That bridge debt is very, very tricky. And as the cycle got longer, everyone thinks that rates aren't going to go up. Well, there's a big risk when you have rates at three and a half and you're saying, oh, you know what, it's not going to happen. Well, that's not financing your deal properly. We use loan to cost, we use credit unions, community banks on the front end where we have a longer term instead of two years or three years, we've got five years out. And then obviously we go to agency when we refi or if we're using agency on the front end, we want to have a longer term that bridge debt. And it's hard for anybody out there because I know they've been trying to do deals and wanting to do deals the last couple of years, but if you just slow down and I'm not an expert, I'm not a genius, I've just made that mistake already. So I already saw it coming. So that's why it's buy right finance. Right. And that third wheel is on the wheelbarrow is the manageright, the systems, the processes. How to actually take a look at that asset and think that you're going to become a multifamily entrepreneur by building systems and processes in that asset.

Yeah, I love how you've broken it down and simplified what's important here and the wheels and the wheelbarrow and I think it just makes so much sense and there's no question that the only thing you can't change about an investment is what you paid for it. So, you know, doing that research, becoming the expert like we both said, and buying right, super important, but also matching up that debt so you're not getting yourself in over your head and then making sure that you really can operate and add that value. So maybe Gino, talk about your own portfolio. So I realized from the the start you were kind of buying all over the place. Like you said, you didn't have a focus. So what is your focus today? Maybe you can talk about the units that you've amassed.

Yeah. And when Jake and I started in 2011, like I said, it took us 18 months to find that first deal. It was a 25 unit deal, which we still own today. As a matter of fact, we have two models. One of our models is buy right and sit tight. We really want to buy really quality assets and we want to hold them for the long term. Because that deal back in 2013, the rents in Knoxville, Tennessee at the time for the. That asset were 350 bucks. The rents now are $1,100. I mean, think about the. And it's only been a decade. It's only been 10 years, right? Think about it. Because everyone's going to say, oh, asset prices are, you know, are really high. And rents. Well, think about where rents are going to be ten years from now. It's very hard to extrapolate that, but that's. We've seen the power. Our second deal was 36 units. And we've been blessed because we were able to refinance a majority of that portfolio and continue to buy our assets. And that's what we ended up doing. I think it's over $20 million that we were able to refinance. We only syndicated three deals. We only had syndication on three deals. The rest of all this capital, the 1800 units that we currently own, we were just smart enough to say, hey, we don't need the Lambo, we don't need to go on vacation. We've got jobs. Let's just continue to reinvest the proceeds. Because I think people make a mistake when they say, you know, you make money in real estate on the buy. You sort of do, but I think you make money in real estate on the sell or the exit or the refi. That's when you really crystallize that equity. And what you do with that equity is just put it into another deal. And we were able to continue to do that as the market was going up. And for us, the three syndications were phenomenal. We've sold two full cycle on two. We're looking to exit the third one. It just doesn't fit our model right now because we'd rather own less units. Our, our. One of our big key performance indicators is the ppu, our profit per unit. We'd rather own less deals, less units, but we'd rather have those units be a lot more profitable. So for us, early on, trying to grow and grow and grow, you get to a point where, wow, you've got to continue to add on employees and can you add on infrastructure? We'd rather grow a little bit slower, but really focus on the assets that we have and buying. Like you said you wanted to know the quality of the type of assets we're buying. We're buying assets right now that are a little bit newer in this part of the market cycle. We love two bedroom townhomes in our market. If they have garages, even better. We love median incomes of at least $50,000 in the Knoxville market, you know, some markets that might be extremely low, in New York City, that's not great. But in Knoxville, that's. That actually works. If they have washer, dryer, hookups, amenities, awesome. We love those. Brick, you know, we don't. We're not really crazy about flat roofs, but if it has a flat roof, we'll take a look at it. As you can see, we're drilling down our criteria. Anything 100 units and above is great. If we have smaller deals, we'll look at those as well. But as you can see, when we bought our very first deal, it was a C property in a C minus area back in 2013. The market cycle has completely shifted since then, and it's going back to it a little bit, but you have to know what kind of assets to buy in the part of the cycle. And if you're buying, you know, B assets now, they're very complimentary in price to C assets. So why would I buy an older asset with more capex when I'm going to want to hold it for the next 10 to 20 years? When I can buy a B asset, pay a little bit more, but there's a lot less work on the, on the, on the front end and I'm going to be able to hold it for the longer term and, you know, tenant base is a little bit better. When those prices that delta gets bigger between Bs and Cs, then we'll say, hey, let's go back to the Cs.

Great point. And I love how you continue to refine your strategy and figure out what works best. And I would imagine you'd also tell us it's not set in stone because you're also opportunistic and looking to see what's out there. So, Gino, you did say that you've syndicated on three of your deals, so maybe talk about why you did that again. You love the goal of owning for your own account. It's just you and your partner, Jake. But you did syndicate three deals. So how. You know, what prompted that? Maybe tell us how that worked. And are you going to do more syndications or are you going to focus on your own portfolio?

That's a great question, James. When, you know, the Jobs Act, I think in 2017 really blew syndication up. I think all of a sudden people realize that there's capital out there. Remember when Jake and I started, there were deals, there was just no money out there, and the financing was tough back in 2011 and 12. And when we did our first syndication in 2018. There was two reasons why. Number one, we wanted to try it. We'd never done one. And number two, if we're going to teach it, we better execute on a couple of these things and see what it looks like. And I remember our very first deal we did was in Louisville, Kentucky, and it was a two and a half million dollar raise. And. And we were scared. Like, we've never raised money before, we've never raised capital before. We could have funded it ourselves, but we didn't want to fall flat in our faces. And thankfully, within 48 hours, we just put it out to our network. We had done a couple of live events, we got the investors, we were able to raise that money. A year later, we did our next syndication. And then a year after that, we did our third syndication. And then at one point, I remember Jake and I, we read the book Small Giants by Bo Burlingham. And to me, that was an revolutionary book. Paul Spiegelman runs the Small Giants Group. And for us, what we really wanted was we didn't want to become the next Facebook of multifamily. We didn't want to own 20,000 units or 30,000 units. We really wanted to grow an enduring organization, more or less like Chick Fil A. Take our time, grow it. You know, develop that superior customer service that we're trying to achieve in the B and C space and multifamily, which is lacking. Right? That was our focus, to become a small giant that has great culture, that has great core values, that is people coming to want to work at the company. And for us, the vision of just continue to syndicate deal upon deal upon deal. All of a sudden, that's another headache. You have hundreds and hundreds of investors, you've got employees, you've got more headaches. So we're saying to ourselves at that point on our third syndication, you know, I don't know if we want to continue to syndicate. We've got enough capital on our side to do our own deals. Let's continue to do our own deals. Now, there's a caveat. Now, our syndication model can become a little different where right now, if you're part of the company and you've been with us for over two years, our employees are investing dollar for dollar in our deals. So that's quote, unquote, a syndication, right? Because we're getting our employees to invest. It's one of our, what we call our 401K. And then if there's a huge deal out there, we may bring on a couple of Partners as syndication partners, where there's maybe two or three people with significant net worth investing in a deal, where we have to make up the difference. Those are two avenues, I think, where we'd be able to be really comfortable in syndicating. But other than going out there and getting retail investors at 50,000 a clip, it's just a lot of work. You need to have infrastructure, you need to have employees reaching out to those, to those investors. And there's, there's significant amount of work in there. So we just said to ourselves, you know what, let's go the bigger route if we need to syndicate the deals. And. But James, all that being said, syndication is, is just one amazing tool in the toolbox for real estate. Is that going to be, are there going to be challenges going forward with syndication? I think there are. I think people are having capital calls and all now. Guess what? Seller financing is coming into the, into the forefront. So understanding all these different strategies and knowing when to use them and how to use them, and some deals may work with this strategy and some deals may work with that strategy, I think gives investors who are experienced a leg up.

Gino, I really appreciate how you said acknowledge the amount of work that goes into syndication, because I think people hear about it and crowdfunding, all this money that's out there, and it's like you just snap your fingers and people want to invest in your deal. And you're right. I mean, it's not just work to onboard those investors, but to do the proper reporting to keep them informed, the compliance. I mean, the legal aspect to this is massive. So I really appreciate you're not just minimizing that because it's a real consideration. Now, again, it's, as you mentioned, it is a tool in the toolbox. It might be right for some who are looking to grow. And many of our listeners, you know, also tap into institutional capital. So. But Gina, what would you say to the listener right now? And we found also that we get a lot of students, whether in college now, thinking about buying their first property or a master's student. Maybe they're a real estate broker and they want to buy their first deal. But let's say they don't have the equity to put into the deal, so they found the opportunity. What would you say to that person right now?

I would go out and find the James Nelson or a Jake and Gino and say, hey, I've got this great deal and there's wholesalers out there and I've got this great deal. I'm Going to try to put in the contract. But here I want you guys to buy it. Give me a little percentage, give me a little. Get a little bit of equity. If I had to get a broker and broker is getting 1%, can I possibly get that? Can you roll it into me? And I'll do anything you want for me. I will go out there and I will be your deal dog. I'll go out and find deals for you. That is a true value nowadays to be able to find those deals. And there's a lot of people out there doing it. And if you want to start out, start out and learn the wholesale model through the residential. And then from there, as you're scoping out, you're going direct to seller and all that. Start looking at duplexes and then quads and then 10 units and then 20 units and you'll be able to find those deals out there. If you're starting out, house hacking is a phenomenal way to do it. Buy a duplex, live in one unit, rent out the other. Phenomenal way. If you want to start another thing, go work for James, become a multifamily broker, jump into the business itself and see how the business runs from the, from the broker's perspective. Now, some brokers don't have an investor's mindset. That's okay, because they're salesmen. It's a difficult job to be able to get an om. Put it together. You have a buyer, you have a seller, they're fighting and you're in between as the broker, you're just trying to complete this sale. But it's really an amazing way to get experience on how a transaction works from the start to the finish. And as you said previously or a little while ago, understanding the seller's motivation and the buyer's motivation and the psychology and the negotiation behind it, those years that you spend working and doing that are going to be. Are going to be. They're going to be so valuable when you ultimately do become an investor.

Wonderful. Great advice. So, Gino, I want this episode to be timeless so someone could be listening to this years from now. And we're here in October of 23, recording. But just before this, we were talking. It was funny because I had just written a post saying why I thought this year was going to be the best buying opportunity since 2009. And then I was listening to one of your podcasts and you were talking about the opportunities that were out there. So that does beg the question. And yes, we're in this certain situation right now with a lot of loans coming due. So maybe talk about that. And then also in context of your, I believe it's your latest book and I hope I'm getting the title right. Is it, is it Creative Cash?

Yes.

Yeah. So tell, tell us a little bit about that because I think that certainly applies now, but I think this is a creative structure that applies in any market.

James, you remember 2008 and 2009. All of a sudden the sellers, the buyers are checking out, there's no buyers around, the sellers are getting desperate. And I love what you said. You have to understand that there needs to be motivation on the seller's side to get a deal in real estate. I don't care what you think. Has there been motivation over the last three or four years as a seller? No, there has been no motivation. Brokers can go out there. They're not calling you back, they're just saying, hey, you know what, I'm going to go, I want 17 calls to offer. They get 30 calls to offer. What we've seen over the last year has been the total opposite. Brokers are now calling up, they're actually calling you to put in an offer. Whereas a year ago you don't even know the deal sold because there was 20 people ahead of you. And by the way, we just got a million dollar concession on a deal that we're looking at right now. Try doing that a year ago. Not only would they laugh at you, they say, I'm never going to call you back. I got three people that are willing to overpay. I've seen all this happen in the last year. And in our deal we closed in January, we got seller financing on that deal. You wouldn't have gotten seller financing on a multi family back in 18, 19, 20, 21, 22. Wouldn't have happened. So all of the things that you're seeing happening right now and get away from the high interest rates and all the nonsense that they're talking about, it's actually a good thing because they're slowing the economy down. You want the economy to slow down. Prices have gotten this, this, this, this kind of craziness where you have interest rates so low for so many years, private equities, cost of capital has been so cheap they need to place it. Now the cost of capital has gone so high that these wind farms and all these other investments are starting to crap out because it doesn't make sense. And that's going into the debt markets in office and retail that's pulling them down. And now you have Less sellers. And when there's less, there's. I'm sorry, when you have less buyers and when there's less buyers, there's less demand. When there's less demand for an asset, prices drop. And we're seeing that happen right now. Don't be afraid. It's the long term when you're investing in any asset. That's why people don't get rich with crypto and with stocks, because they buy high and they sell low. They don't hold on long enough to see that growth. And with real estate, you can still make a mistake and hold on as long as you can have your debt payments, as long as your financing is okay, you can weather the storm and come out of the storm on the other side and see growth the next four or five years. So for me right now what you need to be doing is calling brokers, understanding the market, getting those relationships, lining up, your investors. It's all about deal flow and investors. Those two things you need to be focusing on and start doing property tours. You need to meet the brokers right now because the deal flow has been down dramatically. But I think it's going to, there's going to be a major uptick and when those brokers are out there, they're going to be calling people who they've had contact with over the last six months to a year. So make sure you start opting into brokers lists and start understanding the lingo and start understanding the market that you're investing in.

I hope everyone's taking notes because you just gave so many great observations and points there and certainly sellers motivation. And with, especially in this point in the market, loans coming due, owners not able to refinance their existing debt, a lot of them would be forced to make decisions. But I also liked how you talked about, okay, well how are you going to find those opportunities? You've got to get in the game. You need to be doing that outreach. You can't just, this is an active occupation. You can't just sit there and wait for things to show up. So maybe Gino, I mean you're the master at creating this network and these relationships. But again, for those listening who maybe don't have brokers on their speed dials, how does that first conversation work? Especially if they're new to the market, they don't have a track record. I get those calls. I know the broker's first question is going to try to qualify, try to get a better sense. So for someone again new trying to make those connections, what would you Say to them, what would be some advice there?

Oh, when Jake and I started and Gino and Jake were a nobody, I at least had a business. I at least told the broker that, hey, I own a restaurant. I've got a four unit up in New York. Remember, this is Knoxville, Tennessee in 2011 with Jake Stanziano and Gino Barbaro. Where y' all ain't doing business down here. And that's the reality. It was really not an easy thing to break into that market. But I had a credibility book or we had a one pager just diagnosing what we owned. I did have a business. Jake was a professional salesperson. So understanding and giving them a little bit of a bio and letting them know why we're in multifamily, why we're going after these assets. But you need to know the lingo. You know, if you're asking a broker, I want a CAPS in Knoxville, Tennessee, they're going to laugh at you. They're going to hang up the phone. So you need to understand the market. You need to understand valuations. Go into that meeting prepared and then always talking about, you know, they're going to. They may ask you, hey, where are you getting the equity? Hey, I've got equity partners on the sideline waiting to go into a deal. And don't overreach. If you are, if you're looking for a 20 unit, don't call a broker up about a 200 unit deal. Don't do that. And what I would do also is just Google Multifamily Brokers, Daytona, Florida, and they're all going to pop up. And as they pop up, start opting into all of their lists. They're going to start sending you offering memorandums. You are on their brokers list. Don't call up James and say, james, man, I'd love to take you out for a cup of coffee. James is too busy to do that. What you do is, James, I see you got a listing on 134 Main Street. Can we go take a look at that property? Now? You go on the tour with James, you bring your sheets and you start walking the deal with James. And James has got other deals and other listings in his pocket going, I like this guy. Gino, Gino, this hasn't hit the market yet, but when this does, maybe I'll share this one with you. That's how you create rapport. Don't fake it till you make it. Let them know what you're doing, let them know what you're about. Don't Overreach. Be honest. You have to meet them. This whole thing with the zoom thing is great, James, but how was it when we were together in New York, shaking hands, talking real estate? We go look at a deal. That's where the magic happens. The magic happens when the rubber hits the road. Cause we have too many people in California calling up brokers in Tennessee going, hey, can I look at that deal or are you gonna get on the plane or you're tire kicking? They'd rather go to somebody who's gonna tour that property, you know, put some skin in the game and make that relationship. That's what real estate's all about, that relationship based, that relationship that you can create with that broker.

Do you know, I love that answer and could not agree with you more that this is an in person business and to go it makes such a difference to make that personal connection. But I also like that you said don't jump right for the coffee or the meeting. Do you work? And I love the specific advice that you're giving to follow to get in the flow. Gino, how else do you find opportunities besides brokers? I'm sure in the course of your investing career you found off market. What are other ways that our listeners out there can find great opportunities?

Well, right now property management companies are a pretty good way to go. Look at a property management company is another thankful business. If you're doing a bad job, you're going to get fired. If you're doing a kick ass job, you're going to get fired because you're going to sell the property so you can't win, right? So property management companies really have a pulse on the market and they're the ones that if you're looking for, you know, for advice or you're looking for some kind of metrics, interview some property management companies, ask them about valuations, ask them about what's going on in the market. That's one place. The second place is other professionals. We've gotten deals from our community banks. When our community banker's got a loan coming due, he's like Jake and Gino, I got this hundred units, you want to buy it. Excellent. Title companies, CPAs. Any professional within the industry in that market is going to know and I mean this may seem a little too simple, but go to meetups, go to events, I mean that's where the deals are. Go to nmhc, go to these events where the brokers are, where people are talking about it. I mean if you're just starting out and you're going to go direct to seller, that may be challenging in the beginning. Do you want to pick up phones and, and get phone slammed down? You know, I never did direct to seller, but I had people doing direct to seller for us. So that's another, that's another alternative. The direct to seller works for, I think up to the 50, 60 unit mark. After that, sellers, I mean, sellers are a little bit more sophisticated. Although the market's changing right now. They can't just call a broker and say, hey, I want to sell my property. Right? Those times are changing a little bit. So you may have luck with the bigger ones, but the smaller ones, the director sellers are not as challenging. Go to these wholesaling groups and start asking them, hey, put me on a list. If you find any kind of multi families in my market, call me up and let's make a deal.

Great advice. So, Gino, we talked a little bit about this before, but I want to flesh it out a little bit more about creating a brand for yourself. And a lot of this is coming up with content. So you said with Jake, very early on you put your thoughts on paper in a book. You said it was more for you than it was for anyone else. So for someone who's listening to this right now, who is, let's say they have a deal or two under their belt and they're looking to grow this and really scale. Okay, so what's the next move? Should they get active on social? Should they start a podcast? Should they write a book? Should they start an educational course? What would you tell that person?

I was fortunate to interview a guy named Dre Baldwin yesterday, and I asked him what brand is, and his definition of brand actually got me thinking and I thought it was amazing. I wanna share this with your listeners. He said brand is the space that you occupy into the mind of the consumer. The space that you occupy into the mind of the consumer. And I was like, that is freaking. I never heard anyone explain it that way. I was on a podcast with a gentleman the other day. He's a chef and he's doing multi family and he resonates with other chefs. So his brand is about creating passive income for chefs. For me, I could have gone that route because I owned a restaurant. So I have a lot of restaurant owners who are attracted to me. And believe it or not, Jake has a lot of pharmaceutical sales reps that are attracted to him. But what do you want to be known for when somebody thinks about James Nelson or Jake and Gino? What are your brand? What do you want People to think about, what's the first thing that they think about? And as far as creating the content, I think just pick one medium. When you're first starting out, do you like to write articles? Do you feel comfortable in front of a camera? Nobody does. You should hear our first 20 or 30 podcasts. They were awful. They're horrible. Get over it. Everyone sucks. But that's the medium. Video is the medium nowadays. And I think just try to be entertaining, try to have fun. I think that's the important thing. But for me, you need to start building some kind of content. Listen, I wrote a book. I mean, it's so easy to write a book with ChatGPT nowadays. I didn't use chat, but everyone's using chat right now. So create content and try to focus on something or someone that you really resonate with and speak to that person. Because like I said, this guy Hannes the other day is a chef who's traveling to Germany right now. And he's like, well, I want to talk to other personal chefs and other. He's talking in that realm where these people are actually going out there in this, I guess, would you call it a secondary economy where there's nurses. He was talking about airline pilots. All these people that are catering to the super wealthy and they're making six figures income themselves, but they don't know what to do with it. They've got money sitting around and his story resonates with them. So find somebody that you want to speak to and start focusing on that person and start building your brand with that space that you want. Every time they think about you, what.

Comes to their mind, I love that explanation. And for us, it doesn't matter what business you're in, being top of mind, right? And so, you know, back in the day, if it was cigarettes, it was Marlboro. I mean, these are just the immediate things you associate with. And you know, we talked to our sales team, you know, and I say when we have each have our top 125s, who are the 125 clients that you're really cultivating relationships with? And the question is, you know, if you ask one of those people, real estate broker, are they going to say your name? In other words, you know, better yet, not just for their own needs, but are they going to refer you to someone else? I mean, that's the real test. And the way you do that is really to provide value and put out great content. And I'd love to, hopefully. I gave, I had a bunch of Colgate Students in my office yesterday, my alma mater, and was giving some career advice, and they were asking me this question about, you know, should we be doing content, what should we put out there? And what I told them is, you need to be authentic, right? Don't try to write an article on something where you're not the expert. But I said, do something that really hits home from your perspective. And I just threw out a recent conversation. You keep hearing all this return to office, it's so slow because the young professionals are just lazy and they don't want to show up to work. I said, why don't one of you write a letter to the editor and say, hey, I'm not lazy. I'm ready to show up to work. I want to work hard. There's not as many of these opportunities today to work full time, but whatever it is to do it in your voice. So would you think that's important to be authentic in that regard?

I love that. And by the way, James, you're the smart guy. I went to Fairfield. You went to Colgate, so good for you.

Fairfield's a great school. Turned out okay to 2100 units and counting. I think you did okay. Fairfield might be calling you now if they haven't already. The advancement office is probably listening.

Bro, I get stuff every month. Where are you? Fairfield. When I needed you, when I graduated, bro, you weren't there for me. But that's another story. I think someone said it to me best. It's not what you say, it's how you make them feel. And that authentic, that self. And that transparency is so important, to be able to build a story and a narrative. And like you said, if you're an expert and you really have emotion behind what, what you're saying and what you're doing, people. People resonate with that. And we can complain on here about the short term mind span, short time span that people are thinking, oh, you need to hook them. That's where we're living right now. So understand that that's where it is. And understand that you need to elicit emotion with your message. And it takes practice, it takes time to be able to do something like that. So go out there and work on that. Because if you can do that, you will be able to really capture the hearts and minds of a lot of people.

That's wonderful. So, Gina, with only a couple minutes left. So the name of the show is the Insider's Edge to Real Estate Investing. So what does the inside edge mean to you? And what would you say is your inside edge to real estate investing.

So the inside edge is to have a process or a framework. We've created our framework. And the inside edge also to me is not to have that get there itis or the shiny object syndrome where you're jumping around every couple of years to a different asset class because it appears to be performing better than the other one. Become an expert at one and when you're the expert at that one, then you can venture out and go to another one. And I think the other part of being an insider's edge is being out there and networking with other professionals in your industry. And like you had mentioned earlier on building out the team. If you can focus on building your team and getting people on your team that are air players that can help you to grow, man, the sky's the limit for you.

Well, that is phenomenal, Gina. Just so much incredible information here. Really appreciate your sharing your story and everything that you're doing for the community. So tell our listeners if they want to follow you and Jake, tell them where to find your materials, your site, your courses, your books. Where can they go to find you?

Just go to jakeandgino.com I mean, if you want to get a free copy PDF copy of the Wheel of Our Prophets, just email me ginoakeandgino.com and I'll send you a copy.

Awesome. Gino, thank you again for joining us. This was a lot of fun. I love the collaboration. Every time I speak to you, I learn a ton as well. So really appreciate it. And thank you everybody for listening and spreading the word of the show. And if, if you liked it, if you haven't subscribed already, please do. Please give your rating. That's what helped gets the word out. And we're here to give you the inside edge to real estate investing so you can gain the advantage and outperform the market. So until next week, this is your host, James Nelson. Thank you again for joining.

Thank you for listening to the Insider's Edge to real estate investing. We appreciate your subscribing and sharing with your friends. If you haven't already, please connect with James AmesnelsonNYC on LinkedIn, Instagram and Twitter. Please also visit jamesnelson.com where you can find the show notes and other episodes along with an exclusive video series and other helpful resources so you can gain the insider's edge to real estate investing. Until next week.