How to Scale from 1 Rental Property to 100+ Units

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Today on Commercial Real Estate
Secrets, most investors buy one

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or two rental properties and
then get stuck.

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Today we're breaking down how
investors actually go from one

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rental property to maybe dozens
or even hundreds of units.

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We have Mr. Gino Barbaro.
Gino is a multifamily investor,

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father of six.
Mr. Gino Barbaro, thank you for

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being on the show today.
Aviva, thanks for having me on.

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And the question of scaling
multifamily, let me jump in

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because it's an exciting
question.

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It's like scaling your family.
I've got 6 kids now.

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You start out with one, then you
go to the next and you go to the

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next and there's so many
similarities and parallels to

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it.
Maybe we should jump into that.

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I think it could be a little bit
playful, but it's, it's real

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life.
It comes down to to to to the

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real life aspects of it.
OK.

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I want to double click into that
because I'm on the other side of

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our first child, right?
And now we're thinking, oh,

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maybe we'll go for two.
And what's so funny about the

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first child is it's so shocking
the whole thing and there's so

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much work.
But then they say when you have

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the second one, it's easier.
So how does having children

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relate to investing in
multifamily real estate?

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When you have your first child,
there's no manual.

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You don't know what you're
doing.

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When you buy your first
multifamily, there is a manual,

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there is a coach.
You can learn these things.

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That's one of the big
differences, I think when you

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have children, it's a shocking
revelation.

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It's like what just happened.
We were all alone.

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It was just me and my wife.
Now it's I'm never going to

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sleep for the next 30 years.
And that's partly true, but it's

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exciting and it's something new.
And it's the same thing with

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buying your first rental
property.

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You don't know what the hell you
doing.

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You've never dealt with a tenant
before.

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You've never seen leaky pipes,
You've never dealt with mold

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singing with a child, you've
never changed diapers, you've

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never seen a baby get sick.
But you sort of figure it out

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and you have a spouse there
hopefully and you can work

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together to do it.
And then after a few months, the

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fear is over.
You know, for, for women out

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there, it's got to be
traumatizing for the body of my

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wife's been through it 7 times.
So she she seems like she

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forgets every time, but but it's
OK.

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But do you, it's the same thing
with the real estate property.

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Do you I still not forget my
first property that I bought.

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It was a traumatic experience,
but it didn't stop me from the

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second one.
And the reason why I wanted to

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buy that second property was
because I knew that was the only

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way ultimately that I would
create wealth.

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And I had a picture.
I was clear on that.

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And it was the sort of same
thing with my second child.

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I knew that I had a daughter.
I'm Italian, so Italians need to

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have a boy.
So I was gunning for the boy,

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right?
That's what I wanted.

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I needed a boy right 'cause my
grandma in Italy is like, oh,

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Gabriel is nice, but it's not
Gabriel.

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I'm like, I'm letting him down.
So I went for the second child

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and it's the same thing with
real estate.

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The first one was pretty good.
I had a taste, but I know that

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if I could buy the first one,
let me figure out how to buy the

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second one.
I had the second child.

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I bought my second property.
The second child was incredible

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because he was a boy.
My son now who's 23 years old,

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just, it was just an incredible
experience.

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We had him at home.
My wife gave birth within 4

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hours.
It was just amazing, right?

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It was just wonderful.
And after we had him, I sat

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there, I'm like, I couldn't
possibly see myself having a

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third.
The Italians were like, you've

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got two boy, girl, you're all
done.

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And I'm like, I don't know, it's
just, it's just an awesome

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feeling.
I like this.

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I like being a dad.
And it was sort of the same

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thing with real estate.
I got the real estate bug.

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I'm working at my restaurant.
I don't really like that

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anymore.
But these deals, I like these

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deals because they're sort of
producing some cash flow now.

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The kids are eating up the cash
flow.

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The real estate's producing the
cash flow.

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There's the difference, right?
We have our third child and I

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can say this in all honesty, I I
fell in love with her.

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I just saw her and I like this
girl is she's changed my life.

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There's something about her I
don't know.

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She's 20 years old now and we
bought our third multi family

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property, me and Jake, 136
units.

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That deal completely changed my
life, completely revolutionized

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everything that I thought about
with real estate.

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And after the third child, we
fooled around for a couple more

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years.
We had our fourth child and with

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Jake and I from 136 units, we
went back down to a 22 unit, but

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then we went up to a 281 unit.
So I guess the whole moral to

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the story is you just don't
know.

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But if you become clear and you
understand what your goals and

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then you understand what your
vision is and you understand why

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you want to scale.
I wanted to have a lot of kids

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because I thought that we'd be
amazing parents and I thought

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there's just, it was just a
miracle.

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And I thought that everyone's
complaining about size of

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families and family life.
I wanted to be that person that

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was an advocate for family life.
I wanted to get on a podcast and

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tell people being married is
awesome, having a lot of kids is

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awesome, but I want to live that
life.

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And it's the same thing with
real estate, multi family.

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I wanted to get out of my W2
job.

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I want to create an amazing
portfolio.

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I wanted to do all of that.
There's no manual and you just

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start to figure it out, but it's
one deal at a time.

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It's one kid at a time.
And I think as you have your

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children and as you put your
multi families, everyone is

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unique, everyone is different.
There's going to be a lot of

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pain in there, but ultimately,
as you look back on your life,

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you're the one regret Aviva that
people tell me is that not that

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they didn't buy more multi
families or they didn't have

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more money.
The vast majority of people

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honestly will tell me is they
wish they had more kids.

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That's what I've heard.
And I'm here to tell you it's

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not easy, but man, it it is
really it could be a lot of fun

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and it could be really an
amazing feeling being a being a

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dad.
I.

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Was to say I was humbled by the
experience of having a child,

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right?
My, you know, my whole existence

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was success and monetary
progress.

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And then I had a child and I
everything turned on its head

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and and that's humbling because
when you think that your

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fundamentals are AB and C and
then suddenly they're XY and Z,

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maybe there's more to life than.
The first.

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That's wonderful.
But the month?

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Certainly helps.
It's important.

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It's so important.
And I think people, I've become

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a money coach because of that
same example.

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I think there's such toxicity
around the conversation around

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money and around the emotions
around it, around having it

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around making it around spending
it, around saving it, around the

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fear, the anxiety, the scarcity.
And for me, once I started my

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journey, that's why I got into
multifamily because I was afraid

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of not having enough money.
And then I ultimately

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understood, well, OK, money's
great and all, but I don't want

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to be in this job that I hate
and having my kids see me in

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this job that I truly hate
coming home, being grumpy all

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the time and equating work and,
and, and money and, and not

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enjoying it.
That's sort of why I pivoted

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into multifamily.
I found the niche and I found

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the vehicle that I loved.
And I'm like, I like this

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vehicle.
This can create wealth for me.

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I'm creating great housing for
people, but I'm also creating

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great jobs.
We've got a vertically

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integrated company.
So it fit all of my values when

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I looked at, you know, investing
in multifamily.

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OK, so a little elephant in the
room.

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Just a little one.
Just a small one here on

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Commercial Real Estate Secrets.
We love warehousing.

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We're in.
We're warehousing folks.

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Tell me why you have chosen
multifamily over maybe something

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triple net if you will.
Excellent question.

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When I started out, I didn't
have capital or a lot of

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capital.
For people who invest in triple

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net, it's an excellent way to
preserve wealth and to get some

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type of dividend, some type of
yield monthly.

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I think the investor who has a
significant amount of capital

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and wants to diversify into
triple net, it's wonderful.

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But if you're starting out, you
don't have the capital to invest

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in triple net.
I I needed to create capital for

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me.
Multi family was comfortable

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because I was in the restaurant
business.

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I saw it as a customer service
experience.

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I like to deal with residents
and I like to deal with people.

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So it was a natural progression
for me.

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In my infinite wisdom.
It's a place where people need

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to live.
You can't buy it on the Internet

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yet, so it's a basic human need.
I just saw that years and years

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ago and I'm like, well, you know
what?

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I had already been stung by the
strip mall where you go into

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recession, you you lose space
and the Internet was taking that

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away.
Warehousing is phenomenal.

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If you come down here where I
live in Florida, there is so

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much industrial being built
right now and what Trump's doing

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with all this money coming back
in and manufacturing is going to

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come back in and we need to
control the supply chain because

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of what happened with COVID.
It's going to continue to grow.

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I think warehousing is awesome,
industrial is awesome.

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I just didn't get into that
niche.

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What I want everyone to
understand here is pick a lane.

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I picked multi family.
It was an amazing vehicle for

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me.
I became an expert.

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I'm here to say pick one.
Mobile home parks, self storage,

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industrial.
Learn it really well, understand

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it really well, get really good
at it, and then when you're good

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at it, you can dabble into other
other ponds.

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OK.
Well, I want to say something

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about your pond.
We do a lot of research on what

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people search on the Internet
and then we create content

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around it.
Multifamily investing is the

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most searched YouTube asset in
commercial real estate.

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Why do you believe that is?
Because it's gotten sexy #1 #2

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cost segregation has just
exploded this whole industry.

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Back in 2017, the JOBS Act came
out and you had bonus

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depreciation.
Everyone wanted the

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depreciation.
And that's when you saw assets

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start to really accelerate.
And I think #3 it's just when

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people look at it, it's sort of
tangible.

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They can sort of understand it.
And it's gotten a lot of great

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publicity.
Everyone's talked about renting

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versus buying.
And I think for, for our space,

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that's what's taken off.
I think it's those three

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elements that have really taken
off.

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And unfortunately, it's brought
in a lot of people into the

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space that don't understand that
you have a child, you need to

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raise the child.
We have six children.

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I just can't have them and say
bye bye, I'll see you in 20

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years.
You can't do that with multi.

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You can do that with triple net.
Maybe you can do that a lot more

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with warehousing, but you can't
do that multifamily.

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It's a baby.
It needs to be raised.

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It needs to be coddled.
You need to operate that

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multifamily.
You can't walk away from that

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multifamily.
You know, people on the Internet

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want to say triple net is, you
know, passive and, and and it

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certainly requires a different
level of, yes, filling.

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But I would be remissed.
Yeah, I would be lying if I said

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that it was passive.
And believe me when I tell you

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we still get the calls even
though it's net, net, net.

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It's really not, right.
It's like what you put a new

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tenant in and the HVAC unit goes
out and the lease says they're

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responsible for it and they're a
small business.

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You're not going to make them
pay for the HVAC unit.

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That's.
Right, I agree.

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Nurturing.
I agree.

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OK, so I want to talk about
scaling.

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Scaling can be sexy and I want
to talk about that, but I also

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want to talk about the other end
of the spectrum, which is it can

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be dark.
Tell me about your relationship

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00:11:48,560 --> 00:11:53,960
with scaling units and as it
relates to investing in

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multifamily commercial real
estate.

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I want to zoom out and I want to
share with you.

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Before I got into multifamily, I
was the quintessential mom and

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pop restaurant owner.
I had one restaurant for about

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00:12:07,960 --> 00:12:11,920
20 years with the family.
We did really well until we

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00:12:11,920 --> 00:12:15,120
didn't. 2008 comes around and
it's just we're not doing well.

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00:12:15,360 --> 00:12:17,360
That's when I got into the multi
family space.

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What I did wrong with that
business was I had no systems, I

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had no processes.
I had no core values.

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00:12:25,720 --> 00:12:28,400
I had no mission statement, I
had no vision.

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I was the technician.
As Michael Gerber would say,

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there's nothing wrong with that.
I just thought that I was the

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entrepreneur.
I created a business to support

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00:12:35,960 --> 00:12:40,920
myself, not create a business to
support for the employee or to

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00:12:40,920 --> 00:12:43,520
support for the customer or to
create value for the

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00:12:43,520 --> 00:12:45,320
marketplace.
That was the difference.

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I was it was all about me, me,
me.

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Nothing wrong with that, but at
the end of the day, you're not

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going to become super wealthy
doing that.

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00:12:51,560 --> 00:12:54,360
And it's going to become after a
while, you're going to become

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00:12:54,360 --> 00:12:56,920
the the I'm a person, I'm a do
this, I'm a do that.

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00:12:57,160 --> 00:13:00,640
I'm a gets burned out and I got
burned out and when I got into

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00:13:00,640 --> 00:13:04,080
multi family, I had a different
vision because I was already

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00:13:04,120 --> 00:13:06,440
skewed.
My dad was an old school Italian

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00:13:06,440 --> 00:13:08,080
guy.
We did it his way.

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You couldn't scale.
So I had that paradigm in that

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business.
That's just that was just my

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00:13:12,000 --> 00:13:14,200
limiting beliefs.
When I got at the multi family,

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it was sort of different.
Jake and I got together.

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We didn't know what we didn't
know.

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We started acquiring assets and
and what I did was I realized

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that that real estate and I
think every niche of real

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00:13:25,240 --> 00:13:27,080
estate, you have to view it as a
business.

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00:13:27,320 --> 00:13:29,760
It's not just accumulating
assets, You're not just being a

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landlord.
You need to have processes you

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00:13:32,280 --> 00:13:33,600
need to have, you need to have
systems.

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Every multi family that you buy
is a cash flow generating asset

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00:13:38,680 --> 00:13:40,800
business in and of itself.
Every single one.

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When you look at it from that
perspective, things start to

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00:13:43,560 --> 00:13:46,600
change and they started to
change with me when we started

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00:13:46,600 --> 00:13:49,800
accumulating different places,
different areas and Jake started

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00:13:50,040 --> 00:13:52,880
managing one, then the other.
Then all of a sudden we've got

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100 units and it's like, why?
We can't do everything

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00:13:54,760 --> 00:13:56,960
ourselves.
We need to hire and then we need

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00:13:56,960 --> 00:14:00,520
to bring out a maintenance tech
and then, Oh my gosh, HR and you

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00:14:00,520 --> 00:14:04,400
start growing and you don't come
out of the womb knowing these

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00:14:04,400 --> 00:14:07,240
things.
You have to invest in scaling

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00:14:07,240 --> 00:14:09,160
the company.
I, it's, it's a painful thing

283
00:14:09,520 --> 00:14:13,120
for people to hear, but that
aspect, just like buying a multi

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00:14:13,120 --> 00:14:15,760
family, I think people need to
invest in their education.

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00:14:15,760 --> 00:14:18,520
I know AI is going to help you
out a lot and all, but AI is not

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00:14:18,520 --> 00:14:21,200
going to hold your hand and tell
you to go to work that that's,

287
00:14:21,200 --> 00:14:24,000
it's not there's, it's just not
going to do that for you.

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00:14:24,200 --> 00:14:25,880
We ended up working with two
companies.

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00:14:25,880 --> 00:14:28,920
We ended up working with
Traction, Gino Wickman and we

290
00:14:28,920 --> 00:14:31,600
ended up working with a company
called Scaling up by Verne

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00:14:31,600 --> 00:14:34,520
Harnish.
For us, we started implementing

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00:14:34,520 --> 00:14:37,600
the tools and the systems and
the processes that you need to

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00:14:37,600 --> 00:14:42,200
start building a viable company.
Because ultimately I'm not of

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00:14:42,200 --> 00:14:44,000
the belief that I want to pull
myself out of the business

295
00:14:44,000 --> 00:14:46,040
completely and, and go to sleep
and go on.

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00:14:46,040 --> 00:14:47,920
I, I don't want to do that, but
I want to do things that I

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00:14:47,920 --> 00:14:50,160
really love to do.
I want to be on these types of

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00:14:50,160 --> 00:14:52,600
podcasts.
I want to write articles.

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00:14:52,800 --> 00:14:55,560
I want to talk to investors.
I want to really, you know,

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00:14:55,640 --> 00:14:58,200
engage the team, but I don't
want to lease units.

301
00:14:58,560 --> 00:14:59,920
I don't want to do a lot of that
stuff.

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00:15:00,160 --> 00:15:02,920
And and the systems in the
processes that you build are

303
00:15:02,920 --> 00:15:06,720
supposed to extricate you from
those, those tasks that produce

304
00:15:06,720 --> 00:15:10,240
less revenue and put you into
those tasks that A you like and

305
00:15:10,240 --> 00:15:12,040
that B can, you know, push you
forward.

306
00:15:12,040 --> 00:15:14,960
I love talking to brokers.
I love underwriting deals.

307
00:15:15,160 --> 00:15:17,000
That's where the value is.
So when you start building

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00:15:17,000 --> 00:15:20,280
processes and systems, build
them to help you to run your

309
00:15:20,280 --> 00:15:22,920
business and build them to help
you put yourself into a

310
00:15:22,920 --> 00:15:25,040
situation with jobs that you
like.

311
00:15:25,040 --> 00:15:27,840
And I wasn't doing that with
that one stop restaurant shop.

312
00:15:27,880 --> 00:15:31,360
I was every everybody, but as
Jake and I started scaling wow,

313
00:15:31,360 --> 00:15:34,280
there's a lot of things that you
can look at when you scale and

314
00:15:34,280 --> 00:15:38,000
core values and mission
statements and all of that.

315
00:15:38,000 --> 00:15:40,240
We started building within our
organization.

316
00:15:40,600 --> 00:15:42,680
The things that I lacked with
the restaurant, I started

317
00:15:42,680 --> 00:15:45,200
implementing in the restaurant
in the real estate business.

318
00:15:46,440 --> 00:15:51,760
It's funny, I also come from a
restaurant business background

319
00:15:52,400 --> 00:15:55,840
and I could talk to you about
that all day.

320
00:15:55,840 --> 00:16:00,800
But the point I'm making is it
is hospitality even you know

321
00:16:01,040 --> 00:16:04,400
what we do today, it's
hospitality tenant facing.

322
00:16:04,560 --> 00:16:08,960
I, I broker, it's hospitality
client facing, management

323
00:16:08,960 --> 00:16:12,560
facing.
And boy, I'm grateful I had that

324
00:16:12,560 --> 00:16:14,880
experience because of what I
learned.

325
00:16:14,880 --> 00:16:17,760
But I imagine now we're going to
talk about the dark side of

326
00:16:17,760 --> 00:16:20,560
scaling or maybe scaling too
fast, right?

327
00:16:20,560 --> 00:16:23,160
That, you know, there's a
downside if you are.

328
00:16:24,280 --> 00:16:26,800
OK, let me tell you something.
Here in town, there is an

329
00:16:26,800 --> 00:16:32,760
infamous landlord, so infamous
that during the presidential

330
00:16:32,760 --> 00:16:38,800
debate when Trump was running
for his second go, he brought up

331
00:16:39,320 --> 00:16:43,520
the Venezuelan gangs.
Oh, yes, yes.

332
00:16:43,600 --> 00:16:48,240
In this apartment complex and
that owner has a few properties

333
00:16:48,240 --> 00:16:53,360
around town and yeah, he's let
him just, it's just horrendous.

334
00:16:53,360 --> 00:16:57,040
It's horrific, right?
It's a Shonda, as we would say

335
00:16:57,040 --> 00:17:02,240
in Yiddish, so talk to me about
the dark side of scaling

336
00:17:02,640 --> 00:17:05,359
multifamily or even scaling too
fast.

337
00:17:06,079 --> 00:17:09,760
I just think people when they
scale, they outgrow their

338
00:17:09,760 --> 00:17:12,640
infrastructure and, and and
that's that's the issue.

339
00:17:12,839 --> 00:17:16,520
When you have 100 units, you
have enough infrastructure and

340
00:17:16,520 --> 00:17:18,720
you have enough systems and
processes for that.

341
00:17:18,880 --> 00:17:21,880
Now we're vertically integrated,
which means that we have our own

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00:17:21,880 --> 00:17:24,319
property management team, we
have our own asset management

343
00:17:24,319 --> 00:17:25,640
team.
We buy, we do everything

344
00:17:25,640 --> 00:17:28,319
internally.
So if we decide tomorrow to put

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00:17:28,319 --> 00:17:31,600
on another 1000 units onto our
portfolio, well then all of a

346
00:17:31,600 --> 00:17:34,200
sudden we need to hire another
10 property managers.

347
00:17:34,840 --> 00:17:37,160
Try doing that during COVID.
Good luck.

348
00:17:37,320 --> 00:17:39,920
We need to turn all those units.
We need to get you anything.

349
00:17:39,920 --> 00:17:43,000
We need to have CapEx.
It just puts a lot of stress on

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00:17:43,000 --> 00:17:44,800
the system, especially when
you're younger and you're

351
00:17:44,960 --> 00:17:47,200
smaller.
So what I want anybody listening

352
00:17:47,200 --> 00:17:50,200
to this right now is ask
yourself number one, why are you

353
00:17:50,200 --> 00:17:53,720
scaling and #2 actually, what is
scaling?

354
00:17:54,160 --> 00:17:56,880
I heard it from Mike Mccallowitz
from Profit First.

355
00:17:57,160 --> 00:18:00,720
I think he said scaling very
similar to when you grow a

356
00:18:00,720 --> 00:18:03,800
business, you're scaling it.
You're not actually adding any

357
00:18:03,800 --> 00:18:07,000
other employees or you're
actually adding systems to

358
00:18:07,000 --> 00:18:08,920
scale.
You're not just growing revenue

359
00:18:08,920 --> 00:18:12,320
by just adding, you know, use.
You're literally adding systems

360
00:18:12,320 --> 00:18:15,560
and processes within it.
If you can do that and scale,

361
00:18:15,560 --> 00:18:17,480
that's great.
But if you're talking about

362
00:18:17,600 --> 00:18:21,120
scaling and adding additional
units, you need to slow yourself

363
00:18:21,120 --> 00:18:23,600
down.
You need to understand what your

364
00:18:23,600 --> 00:18:26,640
revenue goals are, what your
profit goals are, and then you

365
00:18:26,640 --> 00:18:29,760
need to start looking at what
your KPI's are, what your key

366
00:18:29,760 --> 00:18:32,560
performance indicators are.
And I'll give you a perfect

367
00:18:32,560 --> 00:18:34,760
example of this.
For us, our key performance

368
00:18:34,760 --> 00:18:37,400
indicator that we've been
tracking for the last three

369
00:18:37,400 --> 00:18:41,760
years is profit per unit.
We don't care about anything

370
00:18:41,760 --> 00:18:44,160
else.
What is the profitability of our

371
00:18:44,160 --> 00:18:46,840
company?
Now that drills down into if I

372
00:18:46,840 --> 00:18:49,640
want to scale, I can't buy every
deal in the market because

373
00:18:49,640 --> 00:18:51,800
there's very few profitable
deals in the market.

374
00:18:52,120 --> 00:18:55,520
I'm not buying deals for asset
management fees or for

375
00:18:55,520 --> 00:18:58,000
acquisition fees.
I'm buying deals that's going to

376
00:18:58,000 --> 00:19:01,440
put money in my pocket.
So all of a sudden the scaling

377
00:19:01,440 --> 00:19:03,640
slows down.
So understanding what your KP,

378
00:19:03,640 --> 00:19:06,320
Rs are and what you're trying to
accomplish is important.

379
00:19:06,520 --> 00:19:09,000
Now, if you're younger and
you're saying to yourself, I

380
00:19:09,000 --> 00:19:11,640
need to scale because I need to
create equity and I need to

381
00:19:11,640 --> 00:19:14,400
create momentum, different,
different conversation that

382
00:19:14,400 --> 00:19:16,880
you're having in me, then it's
probably appropriate for you to

383
00:19:16,880 --> 00:19:19,080
go on the scale.
But then you need to understand,

384
00:19:19,080 --> 00:19:21,560
you need to align yourself with
people who have done it before.

385
00:19:21,720 --> 00:19:24,600
Because once you start adding
units and start adding

386
00:19:24,600 --> 00:19:27,240
infrastructure, there's going to
be a lot more problems.

387
00:19:27,240 --> 00:19:29,440
There's going to be a lot,
you're going to be a lot more

388
00:19:29,520 --> 00:19:31,360
support.
And if you haven't built it,

389
00:19:31,360 --> 00:19:33,800
it's going to be challenging.
And it's interesting.

390
00:19:33,800 --> 00:19:38,560
Viva I, when I say 1900 units
that we own, if you go back to

391
00:19:38,560 --> 00:19:43,680
2011 when we started, that was
15 years ago, that's 100 units a

392
00:19:43,680 --> 00:19:45,120
year.
If you think about it, it, it,

393
00:19:45,120 --> 00:19:47,840
it's not an overwhelming or
daunting number, right?

394
00:19:47,840 --> 00:19:50,600
You don't have to go, you know,
it takes you a couple years to

395
00:19:50,600 --> 00:19:53,080
get some units down and it takes
you a little, a little bit of

396
00:19:53,080 --> 00:19:55,560
time.
But for us coming back to it,

397
00:19:55,600 --> 00:19:58,400
it's our KP is, it's our profit
per unit.

398
00:19:58,400 --> 00:20:01,640
That's what we're focusing on.
So the dark side is scaling is

399
00:20:01,640 --> 00:20:04,160
if you scale too quickly and you
don't have your systems in

400
00:20:04,160 --> 00:20:07,320
place, things will implode.
And you're seeing that going on

401
00:20:07,400 --> 00:20:09,480
specific.
And multi family when it comes

402
00:20:09,480 --> 00:20:11,960
to operating these assets, they
don't have the operational

403
00:20:12,040 --> 00:20:15,240
efficiencies of the operations
built to be able to manage these

404
00:20:15,240 --> 00:20:18,880
properties.
OK, say I'm a broker and I'm

405
00:20:18,880 --> 00:20:23,000
going to toss you over an OEM
not for memorandum.

406
00:20:23,360 --> 00:20:27,480
What are you looking for as a
professional multi family

407
00:20:27,480 --> 00:20:29,600
investor?
Love that question.

408
00:20:30,040 --> 00:20:32,120
It depends on where you are in
the market cycle.

409
00:20:32,400 --> 00:20:36,680
When we started back in 2011,
we're buying old crappy

410
00:20:36,680 --> 00:20:38,800
properties.
They were trading at 20% of

411
00:20:38,800 --> 00:20:40,960
replacement.
Our first property we bought at

412
00:20:40,960 --> 00:20:45,800
$25,000 per unit.
There's a lot of upside now

413
00:20:45,800 --> 00:20:47,560
where we are on this part of the
market cycle.

414
00:20:47,800 --> 00:20:50,920
The old assets are still trading
at pretty low cap rates compared

415
00:20:50,920 --> 00:20:53,840
to the newer assets.
So for us and for any

416
00:20:53,840 --> 00:20:57,760
professional investor out there,
the question is I'm looking for

417
00:20:57,760 --> 00:21:00,040
a deal.
The question should be what's a

418
00:21:00,040 --> 00:21:02,840
deal for you?
I want anybody listening to this

419
00:21:03,040 --> 00:21:05,640
to start creating a buy right
criteria.

420
00:21:05,800 --> 00:21:08,800
So when I speak to Aviva, the
broker, I'm going to go Aviva.

421
00:21:09,120 --> 00:21:10,840
We're within three hours in
Knoxville.

422
00:21:11,200 --> 00:21:13,880
We're looking for median incomes
of at least 50,000 bucks.

423
00:21:14,120 --> 00:21:16,360
We're looking for two bed
townhomes if you have them.

424
00:21:16,360 --> 00:21:18,960
We love that vintage is really
got to be a little bit newer,

425
00:21:18,960 --> 00:21:22,960
hopefully 1980s and newer.
We're looking for assets that

426
00:21:22,960 --> 00:21:25,240
are maybe the 1% rule.
If I can get an asset that's

427
00:21:25,240 --> 00:21:29,280
trading for 1200 bucks in rents
for 120A door, we're looking if

428
00:21:29,280 --> 00:21:31,320
they have washer dryer hookups,
we would love that.

429
00:21:31,400 --> 00:21:33,480
We love this part of the town,
not this one.

430
00:21:33,640 --> 00:21:36,440
You see how crystal clear I'm
getting now this doesn't mean

431
00:21:36,880 --> 00:21:39,680
that I'm not going to look at a
1960s asset, but if I'm going to

432
00:21:39,680 --> 00:21:42,200
look at older asset right now I
have to make sure that that

433
00:21:42,200 --> 00:21:45,920
price point is really
inexpensive and really where I

434
00:21:45,920 --> 00:21:48,360
can hit my target.
That's what you need to do as a

435
00:21:48,360 --> 00:21:50,480
professional investor.
You need to be able to create

436
00:21:50,480 --> 00:21:53,840
your own buy right criteria
depending on where you are in

437
00:21:53,840 --> 00:21:57,240
the market, because Denver's
criteria to buy assets is a lot

438
00:21:57,240 --> 00:22:00,000
different than Knoxville.
Your price per unit is a lot

439
00:22:00,000 --> 00:22:02,320
more.
Your tenant base is a lot more

440
00:22:02,360 --> 00:22:04,120
median incomes are a lot
different.

441
00:22:04,360 --> 00:22:06,160
The the city itself is
different.

442
00:22:06,160 --> 00:22:07,880
So that's she need to
understand, you need to

443
00:22:07,880 --> 00:22:11,240
understand your market, then
create specifically a criteria

444
00:22:11,360 --> 00:22:14,360
when you're looking for assets
and then conveyed that to the

445
00:22:14,360 --> 00:22:16,440
brokers.
And then when one deal comes up

446
00:22:16,440 --> 00:22:19,400
like that, Aviva is going to
remember Gino and go, oh, there,

447
00:22:19,440 --> 00:22:23,840
I got a 72 unit in Knoxville.
It's medium comes like 54.

448
00:22:23,960 --> 00:22:26,160
They do have washer dryers, one
beds.

449
00:22:26,160 --> 00:22:28,200
They got 21 beds and 42 two
beds.

450
00:22:28,200 --> 00:22:30,480
I'm not sure if you like that,
but this deal looks like right

451
00:22:30,480 --> 00:22:31,760
up your alley.
What do you think, Gino?

452
00:22:32,080 --> 00:22:34,360
That's what you should do when
you're looking for, when you're

453
00:22:34,360 --> 00:22:35,880
looking to buy assets in
multifamily.

454
00:22:35,880 --> 00:22:39,320
I I think any asset itself
specifically, but multifamily

455
00:22:39,320 --> 00:22:41,640
for by right criteria is you
need to really become crystal

456
00:22:41,640 --> 00:22:43,160
clear on what you're trying to
buy.

457
00:22:43,880 --> 00:22:47,400
Yeah, of course, right.
If you don't have a path, if you

458
00:22:47,400 --> 00:22:50,240
don't have a goal, how could you
achieve it?

459
00:22:51,480 --> 00:22:53,640
It seems pretty, pretty logical,
doesn't it?

460
00:22:53,640 --> 00:22:57,720
But you'd be surprised at how
many people don't have that set

461
00:22:57,760 --> 00:22:59,560
up.
I was at an event a couple years

462
00:22:59,560 --> 00:23:01,280
ago with with a bunch of
syndicators.

463
00:23:01,560 --> 00:23:05,520
How many I show hands, have a
buy right criteria and everyone

464
00:23:05,520 --> 00:23:06,680
looked at me like deer in the
headlights.

465
00:23:06,680 --> 00:23:09,000
They didn't know what I meant
because they're just looking for

466
00:23:09,000 --> 00:23:13,840
deals that fit a certain IRR.
But when you when you become and

467
00:23:13,840 --> 00:23:16,800
you're looking at these deals
and they all look similar, but

468
00:23:16,800 --> 00:23:18,560
you're not becoming an expert in
any one of them.

469
00:23:18,800 --> 00:23:21,480
Why do we like 2 bed townhomes?
It's because they're an

470
00:23:21,480 --> 00:23:23,680
apartment home.
Those residents stay longer.

471
00:23:23,800 --> 00:23:26,880
It's a much nicer unit.
Why do we like washer dryer

472
00:23:26,880 --> 00:23:28,520
hookups?
Because it's a great amenity.

473
00:23:28,680 --> 00:23:31,400
People want to have washer
dryers and man, if they have

474
00:23:31,400 --> 00:23:35,200
garages, it's another 50 bucks a
month and they love it.

475
00:23:35,200 --> 00:23:36,360
They'll put their stuff in
there.

476
00:23:36,360 --> 00:23:38,760
They'll stay longer.
Why is the newer vintage?

477
00:23:38,760 --> 00:23:40,600
Newer vintage?
Because I want to have less

478
00:23:40,600 --> 00:23:43,120
CapEx.
I hate aluminum wiring and I

479
00:23:43,120 --> 00:23:45,800
hate casting and plumbing.
So the newer assets, I don't

480
00:23:45,800 --> 00:23:47,440
mind it if I get it for the
right price.

481
00:23:47,560 --> 00:23:49,160
But these are things that you
need to think of.

482
00:23:49,160 --> 00:23:51,600
Now I know in Denver, you know a
lot of older assets.

483
00:23:51,600 --> 00:23:53,160
So you take that into
consideration.

484
00:23:53,320 --> 00:23:56,200
You have to put that into your
CapEx budget and say OK, I have

485
00:23:56,200 --> 00:23:58,920
to budget for this because these
assets are older.

486
00:23:58,920 --> 00:24:01,800
But understanding that and going
in eyes open is going to make

487
00:24:01,800 --> 00:24:03,880
you much more successful
investor in the long run.

488
00:24:03,880 --> 00:24:06,200
Sure.
OK, it's interesting.

489
00:24:06,200 --> 00:24:09,440
This is a kick I've been on last
week.

490
00:24:09,440 --> 00:24:12,800
I get all these calls about all
these different scenarios and

491
00:24:12,800 --> 00:24:17,640
when I start to hear the same
issue, I, you know, I start to

492
00:24:17,640 --> 00:24:21,280
think, OK, what's going on here?
An issue we're having in town.

493
00:24:21,400 --> 00:24:26,240
You're talking about vintages.
There are an abundance of C

494
00:24:26,240 --> 00:24:30,520
Class warehouses in town. 20,000
feet for lease.

495
00:24:31,080 --> 00:24:34,760
OK, so it used, you know, you
used to not be able to get a

496
00:24:34,760 --> 00:24:38,960
20,000 square foot warehouse for
lease in this town because for a

497
00:24:38,960 --> 00:24:42,720
ton of reasons all of a sudden
there's a ridiculous amount of

498
00:24:42,720 --> 00:24:46,400
inventory for lease.
And I think to myself, OK, why

499
00:24:46,400 --> 00:24:52,360
is there so much C Class 20,000
square foot inventory and go, oh

500
00:24:52,360 --> 00:24:57,280
wait, they have built an
unbelievable amount of A class

501
00:24:57,320 --> 00:25:00,800
and the smallest unit you can
get in these A class units

502
00:25:00,800 --> 00:25:04,120
because of the column spaces is
20,000 feet.

503
00:25:04,360 --> 00:25:09,480
You know, landlord A in C Class
and landlord B in A class,

504
00:25:09,680 --> 00:25:13,240
they're asking the same rent.
So why would the tenant go to

505
00:25:13,240 --> 00:25:19,000
the C Class facility?
And you know, they're, you know

506
00:25:19,000 --> 00:25:21,600
that that's my answer to the
problem.

507
00:25:22,480 --> 00:25:26,160
What are we going to do with
these C Class facilities?

508
00:25:26,160 --> 00:25:30,440
These at as we continue to
develop newer product, what

509
00:25:30,440 --> 00:25:34,000
happens to the older product in
multifamily?

510
00:25:34,280 --> 00:25:37,240
It's crazy that you asked that
because that's what's happening

511
00:25:37,240 --> 00:25:38,640
right now in a lot of the
markets.

512
00:25:39,080 --> 00:25:43,000
Rents are going to drop
ultimately until the A classes

513
00:25:43,000 --> 00:25:45,720
get filled and there's a ton of
concessions.

514
00:25:45,720 --> 00:25:48,920
There's average of like 5 weeks
of concessions across the United

515
00:25:48,920 --> 00:25:51,240
States.
The problem is when that

516
00:25:51,320 --> 00:25:54,600
delivery gets absorbed, which is
probably by the end of this

517
00:25:54,600 --> 00:25:55,960
year.
You know, I love experts.

518
00:25:55,960 --> 00:25:57,520
Experts have been wrong about
everything, whether it's

519
00:25:57,520 --> 00:26:00,480
inflation, whether it's jobs.
We have no experts in this

520
00:26:00,480 --> 00:26:01,720
country.
We just have people who like to

521
00:26:01,720 --> 00:26:03,720
spout bullshit.
My opinion, like they've been

522
00:26:03,720 --> 00:26:05,960
wrong about everything.
Like I mean like you what you're

523
00:26:05,960 --> 00:26:08,120
following the war right now.
Everyone has an opinion.

524
00:26:08,320 --> 00:26:10,160
Give me facts.
No one can give you facts about

525
00:26:10,160 --> 00:26:12,160
anything.
So you know, the whole delivery

526
00:26:12,160 --> 00:26:13,640
was supposed to be done.
We're supposed everything was

527
00:26:13,640 --> 00:26:15,720
supposed to be absorbed now, but
there's still delivery coming

528
00:26:15,720 --> 00:26:17,280
online.
But we know there's no nothing

529
00:26:17,280 --> 00:26:19,320
getting built.
So when all of this gets

530
00:26:19,360 --> 00:26:22,840
absorbed and by the end of the
year when those people's leases

531
00:26:22,840 --> 00:26:25,680
come doing the A's, they're
screwed because they're going to

532
00:26:25,680 --> 00:26:28,560
go back to market and they're
going to go, oh, it's not 1800,

533
00:26:28,560 --> 00:26:31,120
it's really 2300.
So they're going to have to drop

534
00:26:31,120 --> 00:26:33,920
back down to the C's and the C's
are just going to go going to go

535
00:26:33,920 --> 00:26:36,400
back up on rents.
But right now the C's are having

536
00:26:36,400 --> 00:26:39,560
an issue.
And if you bought AC to four

537
00:26:39,560 --> 00:26:42,960
cap, you have problems.
That's the issue you're buying

538
00:26:42,960 --> 00:26:45,520
it with with negative leverage.
And that's where the issue is.

539
00:26:45,520 --> 00:26:48,240
That's why a lot of these assets
are coming online and they're

540
00:26:48,240 --> 00:26:50,240
thinking that they're going to
get four and five caps when

541
00:26:50,240 --> 00:26:53,200
really it's like 8 and 9 caps
right now because rents are

542
00:26:53,200 --> 00:26:56,280
stagnant, if not dropping.
That's the issue that we're

543
00:26:56,280 --> 00:26:57,880
seeing.
And the market will correct

544
00:26:57,880 --> 00:27:02,000
itself at some point as as
building slows down and as

545
00:27:02,000 --> 00:27:05,240
everything gets absorbed, those
A's in in the warehouses will

546
00:27:05,240 --> 00:27:07,240
get absorbed.
And once they get absorbed,

547
00:27:07,240 --> 00:27:08,680
there's no more space.
They're going to have to go to

548
00:27:08,680 --> 00:27:10,000
the C's.
And what's going to end up

549
00:27:10,000 --> 00:27:12,920
happening is those landlords in
the C space are going to sell at

550
00:27:12,920 --> 00:27:16,680
a discount to Aviva or to Gino
and Gino and Aviva's going to

551
00:27:16,680 --> 00:27:19,920
go, OK, we need to really
massively upgrade this place to

552
00:27:19,920 --> 00:27:21,840
an A style place.
They have to spend a ton of

553
00:27:21,840 --> 00:27:23,840
CapEx and then they're going to
have to do that.

554
00:27:23,840 --> 00:27:27,960
Then they can match and or we
buy them at a material discount

555
00:27:28,120 --> 00:27:31,360
and drop the rents and we can
continue to survive that way.

556
00:27:31,560 --> 00:27:33,360
That's the only two scenarios
that I see.

557
00:27:34,400 --> 00:27:37,800
No, I I agree it's a fascinating
time.

558
00:27:38,160 --> 00:27:40,680
It is.
And I don't know if if this is

559
00:27:40,680 --> 00:27:45,720
like just the natural cycle of
real estate or if this is, you

560
00:27:45,840 --> 00:27:51,840
know, specific to today, but
fascinating nonetheless.

561
00:27:52,560 --> 00:27:54,240
I think there's so much noise
out there.

562
00:27:54,440 --> 00:27:56,040
They were so hypersensitive to
everything.

563
00:27:56,040 --> 00:27:59,200
When I started back in 2011,
there wasn't that much.

564
00:27:59,520 --> 00:28:02,880
There were no mentorship groups.
There was no multi housing news.

565
00:28:02,880 --> 00:28:05,480
There just wasn't.
There's a few publications, no

566
00:28:05,480 --> 00:28:08,760
one was.
All I hear is CPICPICPI.

567
00:28:08,760 --> 00:28:10,280
Everyone's talking about
inflation now.

568
00:28:10,280 --> 00:28:13,240
When I was growing up, no one
know what the hell inflation was

569
00:28:13,240 --> 00:28:15,000
like.
We're so sensitive about every

570
00:28:15,000 --> 00:28:18,000
single thing and I think it
moves the needle and I think

571
00:28:18,000 --> 00:28:19,400
that's what I love about real
estate.

572
00:28:19,440 --> 00:28:22,160
I can't make a snap call.
I'm in this deal.

573
00:28:22,360 --> 00:28:25,320
I, I once I bought it, there's
no liquidity and that's a great

574
00:28:25,320 --> 00:28:28,640
thing because most people left
of their own devices, left of

575
00:28:28,640 --> 00:28:31,360
their emotional problems,
they're going to hit the button

576
00:28:31,360 --> 00:28:33,480
and exit when they probably
should have stayed in that deal.

577
00:28:33,600 --> 00:28:37,880
So to me, if you can just cut
out the noise, buy a good asset

578
00:28:38,480 --> 00:28:42,240
with a pretty good vintage that
has the possibility for you to

579
00:28:42,240 --> 00:28:46,200
add value to cash flow to get
some type of long term debt over

580
00:28:46,200 --> 00:28:48,560
the long run, you will make
money with that model.

581
00:28:48,560 --> 00:28:50,040
You just will.
You're just going to need to

582
00:28:50,040 --> 00:28:52,080
take a little bit of time and
you're going to need to be able

583
00:28:52,080 --> 00:28:56,240
to operate that asset.
Yeah, my dad is in the real

584
00:28:56,240 --> 00:28:58,440
estate business also taught me
everything I know.

585
00:29:00,120 --> 00:29:04,400
He always says the most you can
do in real estate is nothing.

586
00:29:04,560 --> 00:29:08,480
And and by that he doesn't mean,
you know, let it deteriorate,

587
00:29:08,480 --> 00:29:13,480
but he means be patient.
Just hold it and be patient and

588
00:29:13,480 --> 00:29:15,840
weather the storms.
And you know, today it might

589
00:29:15,840 --> 00:29:18,640
feel like it's all time highs
and you might want to sell.

590
00:29:18,640 --> 00:29:21,920
And tomorrow might be like the
bottom and you might really want

591
00:29:21,920 --> 00:29:25,520
to sell.
But you just act level headed.

592
00:29:25,520 --> 00:29:28,880
Like you said, remove the
emotion, stay level headed.

593
00:29:28,960 --> 00:29:32,240
You will win.
It's just there's no party at

594
00:29:32,240 --> 00:29:35,360
the end of it.
It's interesting that you say

595
00:29:35,360 --> 00:29:39,120
that those C Class operators in
industrial, if they were true

596
00:29:39,120 --> 00:29:43,200
investors and true at business,
they would have seen the A class

597
00:29:43,200 --> 00:29:45,640
coming online and they would
have sold a couple of years ago

598
00:29:46,360 --> 00:29:47,920
and now they could have bought
back, right?

599
00:29:47,920 --> 00:29:49,920
But if you're operating it and
it's your business, you'll put

600
00:29:49,920 --> 00:29:51,880
on a hold on.
That's part of the business

601
00:29:51,880 --> 00:29:54,280
cycle With real estate,
understanding the market cycles

602
00:29:54,280 --> 00:29:56,680
and understanding that if you
don't have long term debt, if

603
00:29:56,680 --> 00:29:59,040
you didn't buy it a good basis,
there's a certain time that you

604
00:29:59,040 --> 00:30:01,920
do exit these assets and say,
let me take some equity off the

605
00:30:01,920 --> 00:30:04,120
table and we put some equity on
the sidelines.

606
00:30:04,120 --> 00:30:06,840
I think that's the emotional
component, the real estate where

607
00:30:06,840 --> 00:30:08,720
people are like, oh, I got to
buy and hold forever.

608
00:30:09,160 --> 00:30:11,640
You don't have to buy and hold
for every unless you're buying

609
00:30:11,640 --> 00:30:15,560
an asset in a good market that's
a stable market that's growing

610
00:30:15,640 --> 00:30:17,720
that you can see yourself while
rents are going to be

611
00:30:17,720 --> 00:30:21,200
accelerating into the future.
That's that's not something

612
00:30:21,200 --> 00:30:24,800
that's truly old that you can
actually operate.

613
00:30:24,880 --> 00:30:27,160
That's where people don't
understand what the different

614
00:30:27,160 --> 00:30:29,200
market rate cycles and interest
rate cycles.

615
00:30:29,440 --> 00:30:31,600
That's where people get mixed up
with real estate.

616
00:30:32,040 --> 00:30:35,600
Speaking of getting mixed up
with real estate, what's the

617
00:30:35,600 --> 00:30:41,360
biggest mindset shift you see
investors need in order to scale

618
00:30:41,560 --> 00:30:47,600
their portfolio?
Well, it's I'm a do this and I'm

619
00:30:47,600 --> 00:30:50,760
a do that.
What gets you to 100 units will

620
00:30:50,760 --> 00:30:54,040
not get you to 500 units.
And that's really hard because

621
00:30:54,480 --> 00:30:56,840
I'm sure you've been through it
when you started your business.

622
00:30:56,840 --> 00:30:59,160
You have to bootstrap.
You have to do everything

623
00:30:59,160 --> 00:31:01,640
yourself.
And your ego gets in the way.

624
00:31:01,640 --> 00:31:03,640
And you say that I can do it all
by myself.

625
00:31:03,680 --> 00:31:06,120
It's all me.
No one can do it better than me.

626
00:31:06,560 --> 00:31:08,520
No one can cook that chicken
parm better than me.

627
00:31:08,520 --> 00:31:11,040
I'm the best chicken.
I can make meatballs like you

628
00:31:11,040 --> 00:31:15,200
would not believe.
And the problem is you're

629
00:31:15,200 --> 00:31:17,280
probably right, but you're,
you're the one going to be doing

630
00:31:17,280 --> 00:31:19,280
meatballs.
I could only make 30 or 40 lbs

631
00:31:19,280 --> 00:31:21,560
of meatballs a week.
But if I get married to help me

632
00:31:21,560 --> 00:31:23,560
here, I can make 300 lbs of
meatballs a week.

633
00:31:23,560 --> 00:31:26,200
I think that's the mindset right
there where you need to let go.

634
00:31:26,280 --> 00:31:28,720
You need to have some type of
trust, but you also need to

635
00:31:28,720 --> 00:31:31,160
learn how to sort of train
people and sort of create those

636
00:31:31,160 --> 00:31:34,160
systems and with baby steps.
And I think that's the problem

637
00:31:34,160 --> 00:31:36,720
with Jake and I hit 100 units.
We just realized we can't do

638
00:31:36,720 --> 00:31:39,600
everything.
I mean, a quick example, we

639
00:31:39,600 --> 00:31:45,040
started a podcast back in 2016.
Jake abhorred editing.

640
00:31:45,160 --> 00:31:47,440
He edited those podcasts for
like 2 years.

641
00:31:47,560 --> 00:31:49,680
It's not like it is now.
It was really hard to find an

642
00:31:49,680 --> 00:31:52,840
editor, but he just hated it.
We couldn't scale.

643
00:31:52,840 --> 00:31:55,640
At some point, he had to let it
go.

644
00:31:55,720 --> 00:31:58,560
He finally let it go.
And it's the same thing in in in

645
00:31:58,560 --> 00:32:01,080
the scale of business.
He hated bookkeeping.

646
00:32:01,400 --> 00:32:04,520
At a certain point, you have to
let it go and you have to say to

647
00:32:04,520 --> 00:32:08,320
yourself, is it a cost or am I
recouping some of my time and

648
00:32:08,320 --> 00:32:10,560
isn't an investment?
I think that's the mindset shift

649
00:32:10,560 --> 00:32:12,800
right there.
Cost for its investment.

650
00:32:14,560 --> 00:32:18,360
Yeah, it's interesting.
I you know my my video editor

651
00:32:18,360 --> 00:32:22,280
Bruno will be smiling when he
hears you say that because we're

652
00:32:22,280 --> 00:32:25,280
in the same camp.
Bruno's my paisan, Bruno

653
00:32:25,280 --> 00:32:29,920
understands.
So I have to ask you, you know

654
00:32:29,920 --> 00:32:32,560
our last question here on
commercial real estate secrets

655
00:32:32,560 --> 00:32:36,320
is what is your commercial real
estate secret?

656
00:32:37,160 --> 00:32:40,280
My secret is you need to connect
with people.

657
00:32:41,400 --> 00:32:45,880
I love AII love texting, I love
emailing.

658
00:32:46,600 --> 00:32:49,160
But I need to connect with
Aviva.

659
00:32:49,160 --> 00:32:51,960
I need to get on the phone, I
need to go meet her.

660
00:32:52,320 --> 00:32:55,800
I need to tour properties.
I need to build a relationship

661
00:32:57,040 --> 00:33:00,280
to me, and that's in any
business, whether you're raising

662
00:33:00,280 --> 00:33:03,680
your six kids, whether you're
talking to your wife, whether

663
00:33:03,680 --> 00:33:06,640
you're talking to your team.
I think that's the secret of

664
00:33:06,640 --> 00:33:09,200
life.
I think we crave connection and

665
00:33:09,200 --> 00:33:12,480
we just what we crave a bond.
And imagine if you could create

666
00:33:12,480 --> 00:33:15,640
a connection in a bond with two
or three brokers in the Denver

667
00:33:15,640 --> 00:33:18,760
market that will call you every
time a deal pops up or let you

668
00:33:18,760 --> 00:33:20,200
know.
Or you can reach out to them and

669
00:33:20,200 --> 00:33:21,760
say, hey, I'm looking for a
credit union.

670
00:33:21,920 --> 00:33:25,520
You have one for me.
I mean, that is incredible if

671
00:33:25,520 --> 00:33:28,680
you could do that.
So to me, the secret is just try

672
00:33:28,680 --> 00:33:31,680
to create connection.
Try to do as you say and say as

673
00:33:31,680 --> 00:33:34,680
you do.
Be honest, be transparent, but

674
00:33:34,800 --> 00:33:37,600
create a connection with other
people in the industry.

675
00:33:38,840 --> 00:33:40,680
The more you give, the more you
get I.

676
00:33:40,680 --> 00:33:43,000
Feel that's right?
I agree.

677
00:33:43,720 --> 00:33:46,920
And I have been reminiscing
over, you know, I'm, I'm

678
00:33:47,320 --> 00:33:49,200
eclipsing 10 years in the
business.

679
00:33:49,200 --> 00:33:54,480
We've done a lot of work.
The absolute best part of my job

680
00:33:55,040 --> 00:33:58,680
is the connections I make with
people, these weird friendships

681
00:33:58,680 --> 00:34:02,600
that make no sense.
And right, it's like, why do I

682
00:34:02,600 --> 00:34:04,440
connect with this person so
much?

683
00:34:04,440 --> 00:34:09,400
So, and then you figure it out
eventually, you know, I, I

684
00:34:09,400 --> 00:34:14,520
connected with a landlord here
in town and a very, very Long

685
00:34:14,520 --> 00:34:17,800
story short, we come to find out
our family came over on the same

686
00:34:17,800 --> 00:34:23,000
boat to America 75 years ago.
Really, yes, and we we knew we

687
00:34:23,000 --> 00:34:26,440
were like, oh, we're there's
something weird here.

688
00:34:26,440 --> 00:34:31,400
We know each other and then we
after spending time figuring it

689
00:34:31,400 --> 00:34:37,360
out, so Oh my God, we've been
our, our blood has literally,

690
00:34:37,800 --> 00:34:41,520
literally sailed across the
world together only two

691
00:34:41,520 --> 00:34:43,199
generations ago.
So.

692
00:34:43,199 --> 00:34:45,679
That's so cool, isn't it?
Really cool.

693
00:34:46,159 --> 00:34:50,360
But yeah, it's it's the and it's
like that, like money can't buy

694
00:34:50,360 --> 00:34:52,440
that and money can't replicate
that feeling.

695
00:34:53,239 --> 00:34:55,199
And AI can't replicate that
feeling either.

696
00:34:56,880 --> 00:35:00,960
And you know, you talk about AI,
it's like AI is amazing.

697
00:35:00,960 --> 00:35:02,440
It's going to underwrite your
deal.

698
00:35:02,520 --> 00:35:05,760
But when something falls out,
when the shoe falls on the other

699
00:35:05,760 --> 00:35:08,720
side because it missed something
or somebody missed something,

700
00:35:09,520 --> 00:35:11,040
it's not going to take the
punch.

701
00:35:11,960 --> 00:35:14,360
It's not.
Is AI going to, is AI going to

702
00:35:14,360 --> 00:35:17,600
tell you it's a 1985 build worth
his 1965 build?

703
00:35:17,840 --> 00:35:21,120
Is there the little nuance where
all of a sudden can rents really

704
00:35:21,120 --> 00:35:25,640
go up 3% or can they go down 1%?
Like AI can really do a great

705
00:35:25,640 --> 00:35:29,000
job, scrape a lot of the data.
But to be honest, a lot of the

706
00:35:29,000 --> 00:35:31,280
data is they're just aggregating
data.

707
00:35:31,280 --> 00:35:35,160
Is the data even correct online?
So if you're using AI, just make

708
00:35:35,160 --> 00:35:37,960
sure that the data is accurate.
Make sure that the median income

709
00:35:37,960 --> 00:35:41,200
is accurate, Make sure that the
rental comps are accurate, Make

710
00:35:41,200 --> 00:35:43,600
sure that the expenses they're
pulling are accurate.

711
00:35:44,160 --> 00:35:46,040
That's there.
There's, there's truth to that.

712
00:35:46,040 --> 00:35:49,120
So AI is great.
It can help you brainstorm.

713
00:35:49,120 --> 00:35:52,560
It can give you ideas, but it
doesn't come up with this ideas.

714
00:35:52,560 --> 00:35:55,000
All it's doing is it's
aggregating data from elsewhere

715
00:35:55,000 --> 00:35:56,880
and bringing it together and
presenting it to you.

716
00:35:57,160 --> 00:35:59,680
You're the one who's supposed to
go on, say, is that true?

717
00:35:59,680 --> 00:36:02,400
And where can I poke holes in
what it's giving me?

718
00:36:02,840 --> 00:36:06,400
Yeah, well, Gino, nothing like a
little human connection.

719
00:36:06,960 --> 00:36:09,560
Yeah, I really appreciate your
time today on the show.

720
00:36:10,200 --> 00:36:13,240
Thank you, had a great time.
For all the listeners, where can

721
00:36:13,240 --> 00:36:16,160
they find you, follow you,
connect with you, etcetera?

722
00:36:17,280 --> 00:36:21,640
Two places, Jake and Gino, and
we have a family company called

723
00:36:21,640 --> 00:36:25,600
barbaro360.com.
I'm working with families on

724
00:36:25,600 --> 00:36:29,840
money, coaching on teaching them
to buy real estate, and the Jake

725
00:36:29,840 --> 00:36:32,040
and Gino channel has all of our
podcasts as well.

726
00:36:32,960 --> 00:36:35,840
All right.
Well, for the listeners, head

727
00:36:35,840 --> 00:36:43,040
over to Jake and Gino after this
episode or to barbaro360.com.

728
00:36:43,400 --> 00:36:46,600
Gino, thank you for being on the
show today and for everybody

729
00:36:46,600 --> 00:36:48,800
listening.
We'll see you next week.

730
00:36:52,120 --> 00:36:55,880
That's a wrap for this week on
commercial real estate secrets.

731
00:36:56,440 --> 00:37:00,440
If you found value, do us a
favor and subscribe, leave a

732
00:37:00,440 --> 00:37:04,080
review and share it with a
fellow commercial real estate

733
00:37:04,080 --> 00:37:06,640
lover.
For brokerage services or to

734
00:37:06,640 --> 00:37:09,040
connect, visit
warehousehotline.com.

735
00:37:09,800 --> 00:37:12,000
I'm Aviva.
We'll see you next week.