Gino Barbaro is the co-founder of Jake & Gino, a vertically integrated multifamily real estate company that focuses on assets within their Buy Right(c) Criteria. In this episode, Gino discusses the value of relationships and personal accountability when it comes to raising capital. He also shares advice for those looking to get into coaching as well as those seeking real estate education resources.
Gino Barbaro | Real Estate Background
- Co-founder of Jake & Gino
- 1,600 units
- $250 million AUM
- Based in: St. Augustine, FL
- Say hi to him at:
- Best Ever Book: Lead with a Story by Paul Smith
- Greatest Lesson: No deal is better than a bad deal. Focus on the long term.
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Ash Patel: Hello, Best Ever listeners. Welcome to the best real estate investing advice ever show. I'm Ash Patel, and I'm with today's guest, Gino Barbaro. Gino is joining us from Knoxville, Tennessee. He's the co-founder of Jake and Gino. They are a vertically-integrated multifamily real estate company that focuses on assets within their buy right criteria. Gino's portfolio consists of 1,600 units totaling $215 million dollars of assets under management. Gino, thank you for joining us and how are you today?
Gino Barbaro: Ash, I'm doing great. Pleasure to be on, and I am living in St. Augustine right now. The portfolio is up in Knoxville, Tennessee.
Ash Patel: Good for you, man. Living the dream in St. Augustine.
Gino Barbaro: I am. [laughs]
Ash Patel: I've gotta tell you, I've done a lot of background on you, I wanted to make sure you are the absolute real deal... You are a legend in this industry, and all of my fact-checking, background checking - people love you. They've got a lot of respect for you. You've helped a lot of my friends even, and everyone has just great things to say about you... So really honored to have you on the show. Thank you for your time. Gino, let's get right into it. Your students have raised how much money in capital?
Gino Barbaro: I've been able to calculate 325 million so far, but it's difficult, because once students have been in the business four, five years, you start to lose touch, and they sort of spread their own wings, and then they're gone, and then it's like, "Oh, wait, what did you do? You closed another 300 units?" So it's been really gratifying to see that happen.
Ash Patel: So what do you teach? Do you teach multifamily, or do you teach capital raising?
Gino Barbaro: Well, I teach them to pray a little bit... [laughs] It's a mixture of everything. I think the very first thing is I am not here to convince anybody that multifamily is the vehicle. To me, to Ash, to Jake, to a lot of our students, it is. That's the first thing. It really comes down to mindset, and it sounds a little quirky, but if you don't have the right mindset, if you don't have the right accountability, if you don't have the right community, if you don't have the right peer group... I just spoke to a student today - she's [unintelligible 00:03:48.07] on an island all by herself. You need to have all of those things in place. And then obviously, it's the education. And then, it's the action. Education times action equals results. And I think what we've been able to do with Jake and Gino is we've been able to actually add implementation. Because you can go online, you can go on Bigger Pockets, you can find the education out there; it's all out there. But if you don't have coaches to help you, if you don't have people who've done it to help you and actually implement what you're learning, then it's all a waste of time, and that's what I've learned. And listen, Ash, I've spent hundreds and hundreds of thousands of dollars on my personal education. I've lost at least a million dollars or more. We've just had a bootcamp this past weekend. I've lost a lot of money personally over the last 20 years in real estate. So it's not all sunshine and rainbows, but from that million-dollar loss, that's how I got into multifamily. I said "This is my vehicle. This is my niche. I'm going to become an expert in this", and for the last 15 years that's what I've dedicated my life to.
Ash Patel: Gino, a lot of people have interviewed you. Your story is really out there for anybody that wants to get your background; anyone that doesn't know this guy, you've been living under a rock. But there's a lot of information out there on Jake and Gino, and Gino in particular. But let's dive into the capital raising. What's the secret? You've got to know, like and trust people, they put money in with you... $320 million is not an easy feat. And how many people is that that raised all that money?
Gino Barbaro: Oh, we have over 600 students in the community. There's been a ton of them. And what I think is -- a lot of the students join our community not really understanding multifamily; thinking they want to do it on their own. And they partner up and there's a lot of joint ventures going on. But the capital raising aspect of it is, it's difficult in the beginning where you don't know what you're doing. I think the first secret to capital raising really is to learn the language, because your language becomes your experience.
If you're going to learn how to capital raise, you better learn how to buy right, you better learn how to finance right, and you better learn how to manage right. Even before you think about raising a nickel from anybody, because you're a financial steward of their money, you need to take that seriously, and you need to have some sleepless nights when you're first starting out... Because I know I had some sleepless nights, because I'm taking someone else's money. And that's why it took me several years to get over that limiting belief. Our first 800 units, 900 units, we didn't syndicate; we just refied money back into deals, and then all of a sudden we created the community, and I'm like, "Oh, wow, I've gotta start teaching capital raising." So we started doing syndications.
And I think the secret - if there is a secret - is people don't really care too much about the deal as much as they care about the individual, the sponsor. I'd rather be in a deal with an amazing sponsor, that's marginal, than be in an amazing deal with a marginal sponsor. Because when something goes sideways, that amazing sponsor is going to take care of it. He's gonna be in it for the long-term. He/she's gonna pay you back. She's gonna work. They're gonna be very transparent in the deal. And if you have that marginal sponsor, or the sponsor who hasn't been through a cycle, you're going to be in trouble.
I think the other thing people need to do is they need to create their own story. I've been doing a lot of work on story brand, storyboarding; thinking about your story. Everyone has their own unique story. And what capital raisers do when they first start raising money is they start focusing on the IRR, the cash on cash, and start focusing on all these metrics that their friends and family members don't even know what the hell they're talking about. And they get lost. Their croc brain is going "Hold on a second, this is a lot of BS. I don't really believe this."
What I think people should really start out with is "Why did I get into multifamily? I love multifamily. It's a basic human need. It's food, clothing, and apartments." Well, that's pretty interesting for somebody who doesn't know anything about multifamily. And then tell them the story of why I'm investing in multifamily. I don't want this person to be in the stock market. I like my assets better than an alternative asset. It's not correlated to any other market. That's another thing - create your story. Let it be interesting to the person that has never heard about multifamily. And once I tell people "Listen, I've had a restaurant business, I left the restaurant business because of real estate, it's afforded me an amazing lifestyle, and it's allowed me to do this", and you can get into it, what benefits it is. But if you don't create a story, or a narrative behind what you're doing, and how you're going to solve that person's problem that you're trying to raise capital from, it's all for naught, at least in my opinion.
Ash Patel: How the hell did we not know this before? This sounds so simple. All you see is the IRR charts, and x multiple... Yeah, man, that's great advice.
Gino Barbaro: So Ash, let me ask you - when you've seen these last couple of years, everyone's getting into it, all they focus is on returns. And I think people have been in the business a long time real estate - it's about relationships. You want to go back to that investor, you want to create a relationship with that investor, and say, "Your money safe with me. I'm going to take personal care of your money. And oh, by the way, I've got my money in this deal as well." I think that really caused a lot of anxiety for people. I think you need to have some skin in the game. You need to have skin in the game, and I think that really caused a lot of anxiety.
Ash Patel: That's really important, because it's become a sport. OPM, right? People throw those acronyms are out there... Like, again, it's a game. "Oh, don't worry, I've got OPM, other people's money." Get the hell out of here, man. Have some respect for the people's money that you're holding. Right?
You just gave us some amazing education here on raising capital... But how is it that you got into the education business? I would imagine when people interview you, it's all about how you got started, the latest deals, all the assets you have... But where did this education aspect come from?
Gino Barbaro: I want to tell you a personal story. When I was in the restaurant business in 2008, and the great recession came, my father just passed away. And I really didn't like the business anymore. I'd been doing it for almost 15 years. And I asked myself, "Am I livnig my dad's dream, or am I living my dream?" And I figured out that it was more of my dad's dream than my own. I had been an entrepreneur, quote unquote small business owner, my whole life. When I met Jake, we started buying these assets. And in 2016, I left the restaurant, and I was pretty much retired. Jake was managing the portfolio... I had just finished a life coaching training. I had just become a certified life coach. And all of a sudden, I realized I really like to help people. That's where I could create impact. That's where I could give back. That's where I really had a lot of joy and a lot of excitement. I'm like "This is pretty cool. But how do you monetize this? This is really hard." And I started out with the Wheelbarrow Profits book back in October of 2015. We launched the book, we launched the podcast, and we got on, as most educators do initially, selfishly. It's all about me; what's in it for me. When you start a business, you're the last person you should be thinking about. You should be thinking about the person you're serving. And I did that at the restaurant. "What's in it for me?" I started that business to pay my family, not to help out the customer coming in and getting a slice of pizza.
Once I changed that paradigm with the education, I'm like, "You know what? I'm not gonna make money for a couple of years here, but this education is really helping me, because how else can I interview Grant Cardone? How can I get Robert Kiyosaki on the phone? How can I get Ken McElroy on the phone?" The only way I did that was through the Jake and Gino education.
Then we just started putting out little courses here and there, then we started doing events, then we started writing more books, and it just started to grow, and then we started just putting together packages and programs... But it really started off selfishly, because I had nothing else to do, and I wanted to, quote unquote, start a business. And it's taken a good seven years, and results speak for themselves. Our students have closed over 67,000 units; they've done over $4 billion in transactions. And I can't say "Hey, it's me." It's more, like I said, that community and that peer group. And I guess to take this full circle, what I really ultimately wanted to create was a company Jake and Gino where my employees wanted to come in to work, where they just liked to come in to work. They liked the atmosphere, where I was able to share the success of multifamily, have them be partaking in investing in our deals... And ultimately, having people - when I go to these events, there are just amazing people that I can relate to, that I can create friendships with, and that I ultimately, like I said, I was impacting their lives. And I guess that's a little selfish as well, because when you go to these events -- we just went to one. There's some really amazing people out there that are just looking to get out of their jobs and to do something entrepreneurial, and I think that's what we've created.
Ash Patel: Thank you for that transparency. And let's circle back - you set out to do the education stuff, and you said, "How do I monetize it?" Where did you flip that switch into "You know what - wrong attitude. Forget about monetizing. Let's just focus on helping others."
Gino Barbaro: That is a great question. I'm trying to think exactly where. It was probably around COVID. Because what happened during COVID - things slowed down. But we still kept doing our events; we stopped coming out and going -- in July of 2020 we flew to Knoxville and did an event. And I saw the impact that it had. Because people up in New York couldn't get on planes and fly down to Knoxville. They literally got in their car, drove from New York to Knoxville to come to a bootcamp, on the weekend, wearing a mask. So I said to myself, "This is something bigger than just making money. We have something really special here. We have a group of people that we're committing ourselves to. We're spending a lot of time with them, we're spending a lot of resources to help them out", and I think from there, that really pushed me through COVID. That really helped me out through COVID. I'm like "If I make money in this business, great. If I don't, it's okay, because I'm still building the brand. Real estate investors will still know who we are. People in the community banking world will know. Fannie and Freddie - they'll know Jake and Gino." But at that point, I'm like, "This is something that's really cool. It's going to help me get out of it." And what Jake said at that event - he's sitting there and he's going, "I finally feel normal." Because you know, for those first few months at COVID, things were like all over the place. And we were sitting at that event in July, in Knoxville, "This is really cool. We've got something really special here."
Ash Patel: You were with your people.
Gino Barbaro: That's right. Yes.
Ash Patel: Gino, I've got to ask you... It seems like a lot of syndicators are getting into coaching because their wells have dried up. The deals aren't coming in, the fees aren't coming in... So it seems like a lot of people are pivoting into coaching. What's your warning advice to people that pay exorbitant amounts of money for coaching, and it might not be a good fit? And what's your advice to those people pivoting, simply to monetize a different avenue?
Gino Barbaro: That's a great question also. I think our motto -- I took this from another group; I forgot who the group was. They said "Community and culture over commissions." And we have a pretty strict vetting process. We don't want to just have anyone come in to Jake and Gino. We want people who are committed, they're entrepreneurial, they have a small business, maybe they're in the single family space and they want to get into multifamily, or they're multifamily and want to scale up. So we're looking for a specific avatar. We're not just going to take anybody's money and run a credit card. That's the first thing I would caution all people trying to get in education. Don't do that, because you're going to really damage your community and what you're trying to create.
The most important thing that I've learned - and we've kept it relatively small, and relatively cohesive, that when I go to an event, I practically know all the students. I've had coaching calls with all of them, and our coaches take over. If you can monetize it long-term, it's great. As a syndicator, I would use the education more to build my brand, more to get out there, more to interview people, more to possibly write books, write articles, get on Forbes, become noticed that way... And once you build that out, you start creating results, because money is just a result. The more money you make in coaching, it just means the more people you're helping, ultimately. And if you take a long-term approach to it, it can be a lot of fun, it can be really rewarding, you can build your business long-term, and you can help out people long-term as well.
I just caution people also from getting in the business just to start an education program to raise capital from their students. Never raised a nickel off my students. I think there's a little bit of a slippery slope there. I let the students do their own gig. They have their own platform where they connect and network amongst themselves. I will not raise a nickel for my students. I just don't think that's ethical. I want to teach them how to do it, but I just don't want to raise any money from students.
Ash Patel: Yeah, I like that. What about investing in your students' deals, or being a GP on your students deals?
Gino Barbaro: Another great question. That's one of those where we haven't done it. We actually partnered up with our first coach, he brought us a deal three years ago. We just partnered with him, we did a JV deal with him, and there was six or seven people on that deal. I'll do that; if a student brings a deal and we want to partner up on a pro rata share, let's do that. As long as we can manage the deal, within three hours in Knoxville... I haven't general-partnered a deal before. I think educators - why not; they can do that. I think they can lend their balance sheet. That's not my desire. That's not my goal to doing it. I don't want people to think that I have a conflict of interest, saying, "Hey, I'm just bringing students on so they bring me a deal. I'll sign on the docs." That's not where my ultimate goal is.
Ash Patel: Do you invest in your students' deals?
Gino Barbaro: Do not. Nope.
Ash Patel: Explain that mindset to me, because I almost think that would be pretty cool.
Gino Barbaro: It would be. It's one of those things where we're very particular with the deals we look at. And we want to really be able to control the deal ourselves. Like I said, we have over 70 people on our property management team. So how often is it that a student comes along with "I've got this deal"? It's happened once. Like I said, it's an amazing deal. Actually, the student's like "It's the most profitable deal I've ever done." It was just the right deal. If the opportunity presents itself, absolutely; I probably would do it. It just hasn't. And I'm not really looking for that.
Ash Patel: So you need to control the deal. You won't invest passively.
Gino Barbaro: There's no such thing in real estate as investing passively. You should know that; that's a myth. Because someone's minding the well over there; someone's taking care of that deal, correct?
Ash Patel: Yes. But I've gotta tell you, for all the Jake and Gino students that are out there, that's got to be like a trophy. Everybody should be pitching you guys their deals, right?
Gino Barbaro: Yes, they should. Because it's like, "I partnered with Jake and Gino. Great, you guys control the deal", but I got Jake and Gino to invest in my deal.
Gino Barbaro: That's right.
Ash Patel: That should be a trophy, right? So more people should be pitching you guys their deals. What a badge of honor.
Gino Barbaro: Yes. Thank you.
Ash Patel: You talked about vetting members in your education program. If I'm able to join a mastermind or a coaching program, and nobody takes the time to vet me, should I move on?
Gino Barbaro: Absolutely. You should be vetting them, and they should be vetting you, without question. First of all, if you're going to join somebody, do your values align? Do your goals align? Are they teaching you what you want? I don't want anyone to be joining Jake and Gino if they want to flip homes. That's not what it is. I'm a family person. I believe in God. There's certain unalienable rights that I believe in; if you feel uncomfortable with that, I may not be the person that you want to mirror, because I think of myself as a role model for my students. I think family is really, really important. I think capitalism, money is really, really important. If those aren't ideals that you're aspiring to, you probably are not a good fit with our community. And I think the educator - it's incumbent upon themselves; we have a set of closure models. Somebody comes in, they talk to somebody on the phone, making sure it's a great fit... If they want to continue the conversation, we send them to another salesperson, they have that conversation there, they see if it's a good fit, we go through fulfillment, we go through what the journey looks like, how we can help them out... But it's always asking questions, because we want to make sure that we can solve the problem that this person has on the phone. If they're 24 years old, they're broke, and they want to become a millionaire by 26 - probably not going to happen. I can't really help that person out. I'm not going to say "Yeah, give me your money, I'm going to put you into debt, and in two years I'm going to make you 30 grand a month in passive income." That's not going to happen. That's where we have to be very careful, and that's where I think education space has gotten a bad rep at times from doing that.
Ash Patel: Yeah. And I want to re emphasize that. So Best Ever listeners, what Gino said is if your education program, your educator, your mastermind leader isn't vetting you, move on, because you're just a number, and they're churning and burning. I love that, thank you. Now, back to everybody pivoting into education - should they educate people for free on the first round? What are your thoughts on that? Do it for free?
Gino Barbaro: That sounds so great in theory. And listen, I've done coaching calls for free. But unfortunately, people do not respect free. They will not take action for free. It's an amazing thing - when people start paying for something, they actually value it. And that's what I realized. And I can give everyone all the information they want. Here you go. Are they going to access it? Probably not. But if I say "Here's 10 grand. Take some action. And by the way, next week we're gonna get on a call, I'm gonna make sure you did something", that person is going to most likely think to themselves "I need to get some value out of this transaction, this proposition. I'm gonna be on the call next week. I need to do the work."
So if you're out there and just trying to help people just get going, [unintelligible 00:19:43.10] okay, just understand the irony of that. I can give people tickets for free to my conference. Most of them won't come. It's a free ticket! But the person who pays to go to the event, they show up to the event, they sit in the front, and they get more value out of it. Don't ask me why. I don't understand the psychology behind it, but that's just how life is.
Ash Patel: I agree with you. I've seen that time and time again. I had a bunch of friends that I let into free into a coaching program... They did nothing with it. These are friends of mine. But yeah, if they don't have skin in the game, it's not going anywhere for them.
Now, what's the right price point for somebody to charge? How do you figure that out?
Gino Barbaro: That's a great question. It depends where you're starting.
Ash Patel: That's a psychological --
Gino Barbaro: I'll give you our journey, full transparency. When we first started, I had no fulfillment events. So I went to a $1,200 online course. It was a great course online, it was on Kajabi. Our very first iteration of that we did a six-month monthly mastermind call, with an-onsite event. That was $6,000. Then from six, we went to a $10,000 product for two years, with the online, with three fulfillment events a year, and it had a little bit of coaching. Then from there, we went to $20,000, and now we're at 25k. But the 25k gives you coaching, it gives you the online, it gives you five events a year... So you can literally go to 10 events in two years with the program. And it really depends on what kind of fulfillment you're looking for. I've spent $25,000 on coaching for some sales, and it's just some online coaching. It depends on the value that you extract from it.
For instance, I had a student last month who was going through a community bank at seven and a half percent. I got [unintelligible 00:23:19.09] for 6% for the community lender that we're using. He saved $1,400 a month on his payment. I mean, if he holds the deal for the next three years, he's not only paid for his education, he's probably doubled what he ended up paying.
So I think when you're taking a look out there, see what fits. If you're just looking for a little bit of guidance, something a little bit cheaper, maybe between 5k and 10k. But if you're looking really for somebody to hold your hand, to have you do coaching, to get on calls with you, to come on site... Our students come on site with us and do bus tours on our properties. You're talking to our property managers; if you've got a property management company, or you're managing your assets, and you need to talk to [unintelligible 00:23:54.08] Jennifer, who's our property manager coach, how invaluable is that? All the systems, all the trainings, and [unintelligible 00:24:00.06] and accountabilities - all that stuff we have to offer. To me, it's a great price point.
Ash Patel: So looking back, were you undercharging for a long time?
Gino Barbaro: Absolutely. That is a scary feeling, because as an immigrant, as someone who wasn't raised with a ton of money, there's a point where you say to yourself, "I just want to get this thing going, and I don't want to overcharge, and I don't want to feel as if I'm charging too much." But then there comes a point with this fulfillment - you know, the tickets, the hotels, to get the coaches there, to do all the calls... It is a business within a business, and it is not cheap. And we really -- like you said, Ash, going online and not finding one negative review in education is... I don't want to say it's our hurdle, but it's really difficult, because I really pride myself on the customer experience and the fulfillment, and that takes a lot of manpower, that takes a lot of time, and a lot of effort. So for that, we want to call ourselves a white glove service in multifamily; we want to become the Chick-fil-A in apartments and multifamily with the customer service. We're gonna have to invest and we're gonna have to charge people to be able to do that.
Ash Patel: Now, look, there's a lot of forum internet people out there saying "Why would you pay for that? You can get all this from YouTube. You can just get this from forums." Common misconception, but what's your answer to that?
Gino Barbaro: It's a great place to start. And as I said before, are you going to get on the YouTube video next week? Are you gonna get on that forum next week? Are you just going to forget about it, and it's not there? I think most people will just forget about it. But like I said, if you've got skin in the game, and you're all of a sudden paying for this, and you've got a timeline, and you've got an action plan, and you've got a coach telling you how to do these things, and you've got homework, and you need to show up to the next call prepared, and you've paid for it - guess what? You probably will show up. And how do I know that? I was one of those people. I jumped on Bigger Pockets early on; we're talking mid 2000s. Didn't get much done. As soon as I joined that mentorship program, all of a sudden the lights came on for me. I'm like "Oh wow, I've got all this work to do. I've got a structure. I can see the path." You want that structure in your life. I think once you have clarity, all of a sudden you can start taking action, you know what the next steps are. And you just follow the framework of the next step, and the next step, and the next step.
Ash Patel: How important is the network? I get the coach, I get the education... Where does network rank in that hierarchy?
Gino Barbaro: That is the most important thing. I didn't even mention that. The networking is everything. The relationships are everything. That's where students meet. If you're living in New York and you're like, "I don't have any deals in my market." Well, guess what? You can partner up with somebody in Tennessee who has the deals. Or if you're somebody in Kentucky that's got a great 52-unit, but "Where am I gonna get 1,000,006, and where am I gonna get somebody to sponsor my deal?" Well, the network is there, because it's a big pond of people who are trying to do what you're doing. So you have so many different people, whether they're operators, whether the capital raises, whether they're boots on the ground, asset manager, property manager... That network is everything. And like you said before, you can't get that on a YouTube video, you can't get that on a forum. You can only get it when you join these groups, and you start attending other live events. Because I know you guys do a live event every February. I've had my team members go out. It's an amazing event. Once you go out there, all you need is one relationship. All I needed was Jake to start in this business. Once I had Jake, that's it. That was that relationship, and from there, we continued to create our network.
Ash Patel: Yeah, we could rabbit hole on the importance of having good partners as well.
Gino Barbaro: Yes.
Ash Patel: But I want to ask you a question... You, I'm sure, have people in your education program that just never move forward. And I would imagine maybe in the beginning you took it personally. It's like, "Why isn't this person progressing?" What are your thoughts on that? Because I think to some extent, people just feel good being part of this network, and that's enough satisfaction for them. But I feel like because you truly care about the success of your students, you would take it a bit personally. How do you deal with that?
Gino Barbaro: I still do take it personally. And I've tried to do a lot of reading on psychology. I just did a lesson this Monday for the students on this. The book is called "The psychology of money." And really, a lot of us get into that self-sabotage mode. The other book I would challenge everyone to read is read Tihar Becker's book, "The Secrets of the Millionaire Mind." We are great at self-sabotaging ourselves and limiting ourselves. Most people actually don't join a networking group or a community because they don't think there's value there. A lot of people don't join, because they don't think they can do it; they don't have the confidence that they can do it, and that kills me, because I know anybody can do real estate, anybody can do multifamily; it is not rocket science. If there's a pizza guy and a drug rep named Jake and Gino that can figure this thing out, anybody can. And that's why the life coaching aspect to me was so important. It was so critical, working on what we call our energy blocks, our limiting beliefs, our assumptions, our interpretations in life; those negative thoughts, or those voices in our head. That's why a network and a community is so important, because everyone thinks that we're all crushing it out there. Instagram is amazing. We're all struggling and figuring it out out there. We're all winging it. And I think once you get into a community, you're like, "Okay, I'm not the only moron out there. There's a lot of other morons out there. Let me partner with a moron like Jake, and we can figure it out."
I think the psychology of money is really, really important. To understand why you're doing something, and to understand your limiting beliefs, and your relationship with money. Because if you don't like money, but you're trying to make money - guess what? You're gonna repel it. It's really that simple, to be honest with you. If you have negative thoughts about money, and if you see somebody driving a great car, and you're jealous, you're not going to attract that. You're going to repel that. It's really, really important that you understand that relationship that you have with money.
Ash Patel: Gino, what about the people that are in your program, that paid for it, and they're not moving the needle?
Gino Barbaro: Sort of that as well. Life catches up to you. First of all, I think they think that it may be too passive. Like, "You know what - I'm going to put a load of money into this deal, and that's it. I'm going to turn it off." It's a business. Multifamily is an entrepreneurial adventure. It's a journey.
I think the other thing that happens is they quit too soon. They may go to market and they may say, "Oh, there's not enough deals in this market. I'm going to quit and move on." I think the other thing that happens is now that we're in a quote-unquote transitioning market, you have people who join when the markets hot, and there's no deals. Well, there's no deals, but there's a lot of money. Now we're transitioning into fear, and there's more deals, but there's less money. And I think it really comes down to psychology and saying, "You know what, I can't figure this out. I can't do it." It took Jake and myself 18 months. Let me say that again - it took us 18 months to find that first deal. And the only reason why we found that first deal is I had enough pain in my life, and I really wanted to leave the restaurant, that I stuck through it. I didn't know any better. I could have quit after month 14, after month 15... I didn't. I just kept going on. And that word "persistence" is so underutilized right now, I think, in our society, that anyone who's persistent and knows what they want, as long as they stick with it, they can achieve it.
Ash Patel: I love that, persistence. And let's circle back to capital raising. You just mentioned there's a lot of fear out there. How do you raise capital in an atmosphere with so much uncertainty and fear?
Gino Barbaro: To me, we have an amazing vehicle, which is multifamily. I don't want to be in banks right now, I don't want to be in the stock market, I don't want to be in crypto. I want to own a hard asset. That's a basic human need, that for the long term is going to perform. And I think be able to raise capital, you need to show your potential investors your team; who do you have on your team? Who are the people that are managing your properties? Who's asset managing your properties? Make sure that you have what we call some type of credibility book. And if you don't have that, go out and find a team that does, because you're gonna need to have to lean on their credibility going forward.
Jake and I, when we started, we had the Jake and Gino platform. So it's pretty -- I don't wanna say easy, but it was a lot simpler, a lot easier for us to raise capital on that first deal, because we already had a few deals that went full-cycle, we already had a real business plan meshed out. If you can't tell your investors where you're investing, why you're investing, what your buyer criteria is, how you're going to find this property, how you're going to return the capital, they're not going to have confidence in you. They're not going to want invest with you. So go out and find somebody who's done it, become part of their team and find out how they're doing it, and try to make sure that the people you're pitching to understand what they're trying to accomplish with their deals.
Ash Patel: I love it. Gino, what is your best real estate investing advice ever?
Gino Barbaro: Ash, that's another hard question. I would really say pick a niche and just stick with it long-term. Do you like self-storage? Do you like office? Do you like retail? Industrial's great, mobile home parks, multifamily - choose one of those, become really good at it, and find out your USP. For me and Jake, it was really that persistence and not giving up. We chose multifamily at a difficult time; in 2013, buying your first deal... There were tons of deals out there. The economy stunk... We just chose it, and since then we haven't veered off that path.
Ash Patel: You know, it's easy to talk about your success and pat you on the back... What's something that you regret that could have helped you grow faster?
Gino Barbaro: On that first deal that I did in New York, I wish I had known what the three pillars of real estate were; I wish I'd really been educated. I bought the deal at the wrong part of the cycle, the wrong market, I had the wrong debt on it, I didn't know how to underwrite, I didn't know due diligence... I just took massive action. And most people take massive education, but not massive action. I did the opposite. So I was all out there, guns blazing. I didn't really understand what the hell I was buying. And that was 10 years of soul-suck. I would always say to somebody, no deal is better than a bad deal. Passing that deal. It's okay. If you're 25, or 30, or 35 years old, you've got the next 35 to 40 years of investing. It's okay if there's one or two years of slowness in there; don't rush. Don't get that get-there-itis. Make sure that you can pass in a deal. If you lose a deal, it's not the end of the world. The next one will be coming sooner or later.
Ash Patel: What's a hard lesson you learned about partners?
Gino Barbaro: Values-based decision-making. You have to choose a partner based on values, and sometimes you're not a good fit as well. And I think what you need to understand is when you choose a partner and it doesn't work, you need to take responsibility as well. On my very first deal I chose a partner that we partnered up on a mobile home park. The deal stunk. I didn't understand. The partner stunk. It was a syndication, there was no papers on it... So I was really vastly uneducated. I shouldn't have done the deal from that standpoint, but that partner was terrible. But ultimately, for me to get over that failure, I had to understand that I was responsible, because I signed on the dotted line and I chose that partner.
So go out there, flesh out your values, see if your core values align with your partner, and make sure that your goals align. Let's say you're 35 years old and your partner is 60. Well, your partner may be want to be checking out in the next couple of years. Yu may want to scale and get to 5,000 units. That partnership is not going to work, because the values and the goals aren't aligned. So align your goals, and align your values, and your vision with your partner.
Ash Patel: Great advice. And how quickly do you jump in bed with a partner? Do you do it deal by deal, and then wait for it to naturally happen? Or -- we all know, if you want to go far, go together, so partner, partner, partner. What's the right answer on that one?
Gino Barbaro: There is no right answer. What I would say to everybody is I would do a criminal credit background check now. You just don't know what happens. Because if your partner had a bankruptcy two years ago, that may affect you going forward; you may get tied up. Like you said, Ash, I think deal by deal is great. Jake and I did our very first deal. Great, excellent. Three months later, we did our second deal. On our third deal, six months later, we're still partnering up. We brought in somebody else; guy's name is Mike, he was the balance sheet operator... As we needed to scale, we had to have those difficult conversations. "Well, Jake, you're managing these properties. Your property management fee has to come down." "Well, these are your responsibilities. We need to do this."
So for me, just start out deal by deal. See how it works. And set expectations. You have to find a partner that if they're willing to work hard, you need to be matching their expectations. None of this "I've got a W-2 job and I can't get on a call after 5pm." That's not going to work for partnership. I'm here, Ash, right now; Jake is on a property doing his property stuff. On the weekends, I was in Denver, Saturday, Sunday, with the students. Jake didn't come. That's how it works. You just work on your partnership, and you set those expectations, and expect to work hard for your partner.
Ash Patel: Gino, are you ready for the Best Ever Lightning Round?
Gino Barbaro: Sure. I hope.
Ash Patel: Let's do it. You'll be fine. Gino, what's the Best Ever book you've recently read?
Gino Barbaro: I'm actually reading a book right now, it's called "Lead with a story." I think it's a powerful book. I'm actually going to interview him... His name is Paul Smith. Anything with a story. I've read "Story Brand." Just pick a book on story and read it, because it'll make you work on your voice. It'll make you work on why you've gotten into real estate, even if you're getting into education; you'll understand how important story is to be able to convince somebody of what you're trying to accomplish.
Ash Patel: Amazing. Gino, what's the Best Ever way you like to give back?
Gino Barbaro: A couple of ways. We've donated so far 335,000 meals to Second Harvest Food Bank of East Tennessee. It's a great event. It's a great organization. 96% of the money that they raise goes to all their different initiatives. Jake and I were doing a podcast one day and he's hungry. "I mean, I'm hangry." And then he stops and thinks, he goes "Can you imagine all the kids out there that are hungry, and they don't have the choice?" An adult can get up and go to work. So we chose Second Harvest, because they do have they do an amazing job with feeding kids.
Ash Patel: Gino, how can the Best Ever listeners reach out to you?
Gino Barbaro: Just go to Jakeandgino.com. If you want to go check out stuff that we have online, JakeandGino.com/webinars, sign up for the webinar that we do monthly. If not, you should go check out all the different podcasts and different shows that we have online.
Ash Patel: Gino, what are the future plans for Jake and Gino?
Gino Barbaro: For Jake and Gino... That's a good question. I haven't thought that far. I really would love to expand the brand. I'd love to write more books. I'd love to have a publishing company at some point. Maybe a mini-Bigger Pockets, but just for multifamily. And to be able to help those that can't afford an expensive mentorship, and say "I can't afford 25,000 now, but I can afford this." And that's a really difficult pivot. It's a different sales process, a different avatar...But it's something that I want to do, because I know not everyone can afford that mentorship at such a high price point, but I'd love to be able to serve those who still want to get into the game and just want to start out with some education.
Ash Patel: Awesome. Gino, I've gotta thank you. You're a legend in this industry. It's been an honor interviewing you. Best Ever listeners, I want you to really listen to this episode a few times. It's amazing how much knowledge Gino has dropped. And they were maybe one liners here, and things about partnerships based on values... So important. And I promise you, if you relisten to this a few times, it'll give you a great foundation for future success. Gino, thank you again.
Gino Barbaro: Thanks, Ash. Appreciate it.
Ash Patel: Best Ever listeners, thank you so much for joining us. If you enjoyed this episode, please leave us a five star review. Share this podcast with someone you think can benefit from it. Also, follow, subscribe and have a Best Ever day.
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