As investors continue to look for opportunities during this challenging economic climate, multifamily investors from across the country descended upon the Gaylord Palms Resort and Convention Center in Orlando, Florida, this month for Jake & Gino’s Multifamily Mastery 6 event. Speakers included Chris Voss, Brad Lea, David Greene, and Chadd Wright, among others. Jake, Gino, and Co. shared their experiences in multifamily real estate, negotiation and persuasion, brand-building, ultra-running, and more.
Here are some highlights and key takeaways from the event.
Multifamily Fundamentals: Wheelbarrow Profits
Jake Stenziano and Gino Barbaro are multifamily real estate investors with more than $250 million in assets under management and one of the best multifamily coaching and apartment syndication mentorships available. As hosts of Multifamily Mastery 6, the duo shared their personal real estate journeys, including Gino’s early mistakes that became the foundation for their three-step framework for investing in real estate:
- Buy right
- Finance right
- Manage right
Think of them as the three pillars of a wheelbarrow, says Gino — buying and financing being the two legs, managing being the wheel. Buying right and financing right are the foundation, but equally as crucial is the ability to effectively manage (steer) the property. If any of the three pillars fails, your wheelbarrow (your deal) goes down.
“It’s not what you buy,” Gino says. “It’s what you pay.”
This boils down to finding the right value-add properties and not overpaying for them. Understanding your buying criteria and being diligent in sticking to them is crucial. Jake and Gino’s buy-right criteria today includes (but is not limited to) assets that are 1980s or newer, especially townhomes, that exceed the 1% rule. The opportunity, Gino says, is in the mom-and-pop operators, highlighting distressed properties, motivated sellers, and high potential to add value and drive NOI as key indicators.
Focus on long-term, fixed-rate debt. Non-recourse. No exceptions.
A key reason why Jake and Gino target mom-and-pop operators is the high potential to add value. Distressed or overwhelmed sellers typically have mismanaged properties with opportunities not just to add value through upgrades and renovations, but by optimizing operations, increasing occupancy, and bringing rents up to market value.
If you buy right and finance right, congratulations. You’re set up to win.
If you don’t manage well — either with an in-house team or by hiring out — you’re setting yourself up to fail.
Expert Negotiation: ‘That’s Right’ Is Better Than ‘Yes’
Chris Voss is a former FBI hostage negotiator and the author of the national best-selling book Never Split The Difference: Negotiating As If Your Life Depended on It, widely regarded as one of the best books ever written on negotiation. In 2008, he founded the Black Swan Group, which specializes in solving business communication problems using proven hostage negotiation techniques.
The theme of Voss’s talk was how to build trust and competence in a conversation or negotiation. You have 7–10 seconds before someone hangs up on you, he said. In that time, you must establish trust and competence. He highlighted a few tricks to help accomplish this feat.
Start With No
Let people know right from the jump that it’s O.K. to say no. Start the call with, “Is now a bad time to talk?” Since they’re likely primed and ready to say no anyhow, this gives them that opportunity while allowing you to have the conversation you called to have. (Worst case, they’ll give you a better time, and next time you ask, they’ll have to comply.) At the same time, they get to preserve their autonomy, which, according to Voss, is key to building trust.
Make Them Feel Seen
Stop saying, “How are you?” says Voss. Instead, he says, when you’re in person, take a moment to read the person’s face. If they look troubled, maybe start with, “Looks like you’re having a tough day.” This will allow them to feel seen — and understood. If they look like something’s weighing on them, try, “You look like you’ve got something on your mind.” The same works for the inverse. If they’re smiling and walking on air, call it out. Making them feel seen is the easiest way to bring their guard down within seconds.
Understand by Seeking to Be Understood
Listening and understanding are not enough. You must also articulate your understanding to the person with whom you’re speaking. When you can repeat back their biggest concerns, fears, etc., they will again feel seen and understood, and that can lead them to say the most magic words Voss says one can hear, which are….
Saying the phrase “that’s right” triggers an oxytocin release. Oxytocin is known as the “bonding drug.” It’s associated with trust and relationship building. “That’s right” is what people say when they feel seen and understood — when they feel like you get it. In negotiation, Voss says, every “that’s right” is solid gold.
Building Wealth: It’s a Lot Like CrossFit
David Greene is a former police officer turned real estate broker and investor. He’s also the co-host of the BiggerPockets podcast and the author of multiple books, including his latest, Pillars of Wealth: How to Make, Save, and Invest Your Money to Achieve Financial Freedom.
David’s three pillars are:
- Playing Offense: Earning money
- Playing Defense: Saving money
- Investing: Growing your money
He emphasized showing up daily. If you go to the gym every day, he says, it’s impossible to not get stronger. The same is true for building and preserving your wealth, especially in real estate.
He lives this philosophy, too. From blue-collar origins of working in restaurants in college to volunteering for overtime as a police officer, David established a strong work ethic before he became an investor. He’s also diligent about saving and not overspending (he still drives a Toyota Camry).
Despite the mastermind/mentorship ads you see ad nauseam on social media from people who have either never or have barely invested in real estate, there’s no magic bullet, Greene says.
It’s like that CrossFit guy you see with a great body and solid abs. If you’ve ever done CrossFit, you know how brutal it is. That guy didn’t get that body without putting in the work. Having that body is hard.
Building wealth is hard, too, Greene says. Don’t think you’re going to do it without putting in the work. And if that guy stops doing CrossFit, he can say goodbye to that body. So, too, will you lose your wealth if you’re not consistent in showing up every day to make, save, and grow it.
Building Your Brand: Post All Day, Every Day, Everywhere
Brad Lea is an entrepreneur, podcaster, speaker, investor, and the CEO of Light Speed VT. He is an expert in personal brand-building, especially in leveraging social media to grow a loyal following.
His No. 1 rule for building your personal brand is to post on social media all day, every day, on every platform. If you’re not on TikTok, he says … get on TikTok. In a world where it’s easier than ever to create content and optimize it for multiple platforms, there’s no reason you should not be everywhere.
“Be the content,” he says. “You are the brand.”
If you’re shy and you don’t want your face and voice everywhere, get over it. Allodoxaphobia is the fear of other people’s opinions. This fear will stop 90% of people from building their brand. Don’t be one of them, he says. Post three to four times per day, and over time, you’ll stop caring what people think because you’ll be too focused on creating the best content possible.
Mindset Pillars: Control the Output
Chadd Wright is a former Navy SEAL who served as a team leader on multiple deployments. He is now an entrepreneur, speaker, and ultra runner. A key theme of his talk was managing your input and controlling your output, but it truly boiled down to his three mindset pillars, which focus on output.
“Nothing worth having — no goal worth striving for — is going to happen quickly,” says Wright. “You will have to endure some kind of process.”
As an ultra runner, he says that the growth comes in the last 10 miles of a 100-mile race. The first 90 is to prepare you for the growth in the last 10. Whatever it is you want right now, he says … you’re not ready for it. You’re not prepared to receive those gifts or live the life that you want. The process — for investors, it’s finding deals, raising capital, obtaining properties, managing them properly, etc. — and everything you must endure is what will forge you into the person you need to be to receive and enjoy the rewards you seek.
Think about that whenever you think about giving up.
Hell Week is the defining event of SEAL Team training (BUD/S). During his Hell Week, Wright’s group was tasked with running a beach relay. They were on the beach in Southern California, and his instructors set up two cones one mile apart. They told the candidates to run between the two cones, back and forth, at their own pace. The instructors would tell them when to stop.
Heck yeah, Wright thought.
At his own pace? This would be cake.
So the whole time, he was chugging along at a manageable pace. Then, out of nowhere, he hears a bell ring.
In BUD/S, the instructors have a bell. If at any time you want to quit, you can go ring the bell.
Wright heard the bell ring. Then again.
And it kept ringing.
Over and over.
Nearly half the class quit that day. Wright couldn’t figure out why candidates were dropping. This is easy, he thought.
Later, after talking with some of those who rang the bell, he noticed a trend. Each of them had a moment when they became uncomfortable. And in that moment, they started to think about what was next. And if they were uncomfortable now, they couldn’t do it for another 12 hours. Or another two months.
The further they let their mind drift into the future, the faster they went to ring that bell.
“Stay present,” Wright says. Whether you’re in BUD/S or you’re investing in real estate, there will be uncomfortable moments. You can take each moment for what it is and bear the burden of that moment alone, or you can look ahead and bear the burden of days, months, and years all at once. In doing the former, you can work through the discomfort and reap the rewards that come in the last 10 of 100 miles.
The opposite of being deliberate is complacency, which is where many people live. There were thousands of times during his career in the Teams, Wright says, where he knew that if he made a mistake, it would cost him his life — or someone else’s.
Having a plan and thinking about his actions on a micro and macro level at all times became second nature.
As an investor, every moment wasted is an opportunity missed. In a climate where deals are becoming harder and harder to come by, those moments cost a lot more. In an environment in which competition is stiff, each moment wasted is ground (and money) lost.
“None of this works without your work,” Wright says. “You will never reach your goal without putting in the work.”
What do FBI hostage negotiators, influencer/entrepreneur hybrids, and Navy SEALs have to do with being a real estate investor?
They fill in the mindset and skillset gaps that can give you an edge against even the best and most informed investors.
As investors prepare to make a splash in the multifamily market in 2024, staying true to the fundamentals, getting better at having difficult conversations, leaning into discomfort, and refining and controlling your mindset are all key ingredients to success. Consistency is key — not just in showing up for your business every day, but in showing up for yourself, your family, and your investors.
About Jake & Gino:
If you’d like to learn more about Jake & Gino and their multifamily coaching and apartment syndication mentorship program, visit jakeandgino.com.
The views and opinions expressed in this blog post are provided for informational purposes only and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.