Join us as we sit down with real estate expert Gino Barbaro to learn about his strategies for creating wealth and building a lasting legacy through real estate investing.
In this video, he shares his insights on everything from finding the right properties to managing your investments.
Whether you’re just getting started in real estate or looking to take your investments to the next level, this video is a must-watch.
Click the play button now to start building your legacy with Gino Barbaro!
Transcript:
Gino Barbaro 00:00
Let me let everyone in on a little secret. You don’t make money in real estate when you buy. That’s a fallacy. You make money when you exit.
Ben Deal 00:09
We’ve got Gino barbero. Gino is a real estate investor, business owner, author and co founder of Jake and Gino, a multifamily real estate education company. He has over 280 million in assets and resides in Augustine, Florida with his wife and six children. Gino, welcome to Real Estate hacking live.
Gino Barbaro 00:29
Ben and Chris, thanks for having me on how you guys doing?
Chris Bounds 00:31
Absolutely. Gino Barbaro. How you doing? Doing great. Building wealth, building legacy. You’re doing that personally, in your business. But you also kind of like Bill Allen, on earlier. You’re heavy in the education. You’re teaching folks how to do that, new and inexperienced. Your coaching experienced folks as well. I was really excited to have you on to get your unique perspective from both sides of that coin. How are you building wealth? How are you building a legacy?
Gino Barbaro 01:07
I think the first thing we should discuss or talk about is, mindsets about building wealth. The people think of wealth is just, I guess generating money becoming rich, becoming wealthy from that perspective. I’d like to cultivate the mindset first between what a poor mindset is middle class mindset and a wealthy mindset. For me, it is the poor mindset, you can be making $17 million dollars a year, whatever it is. It’s that person that doesn’t think about the future, the person that doesn’t have the growth mindset, the person that doesn’t save and thinks about their legacy.
The middle class mindset, that’s where I was for years, it was all about saving for the future, but not really building wealth and just putting it into certain vehicles. Whether it’s a 401 K, or there’s a 529 plan and let’s hope that works out I have no control. To me, the wealthy mindset is more about legacy. It’s more about that long termism. We talk about what we call the 100 year mindset. All the decisions that Chris and Gino are going to make today are not only gonna affect us, they’re gonna affect our kids and our grandkids.
You make a decision, whether it’s a partnership, whether it’s an investment, whether it’s where you want to live for the next 20 years, it’s not going to only affect you, it’s going to affect the rest of your generations going forward. When you think like that, everything changes all your decisions changed. When I got into multifamily real estate years ago, I was a solopreneur, I had one little restaurant. Within five years, I was able to scale up to 1500 units because I saw the power, I saw that long termism but being able to invest in these assets for the long term.
Chris has been difficult for the last couple of years, these deals haven’t been around for a fresh long term-ers, we haven’t found value in deals and not being able to buy deals and passing deals up has been very hard and building wealth, it really comes down to pretty boring thing. It really comes down to having certain certain skills having certain disciplines that you need to do. Once I realized that, I started doing it for myself and I saw that it’s not really taught in schools. Well, how do I teach my six children, I’ve got six kids, aged 23 to eight. They need to learn this stuff. I saw how much I enjoyed doing it. We just started the Jake and Gino education company and started pouring into that community as well.
Chris Bounds 03:17
A mentor of mine a long time ago, told me, always make long term decisions. With one exception. If you got a cash flow crunch, make short term decisions, solve that problem and then get back to long term. As long as you can keep that balance, then you’re going to do well. But like you said, it is boring. The rock star, the rocket ship stories are more interesting. But that’s the rarity that’s not the most common. Usually it’s very boring. There’s a lot of people that you’d walk by down the street and you’d never know they’re multimillionaires just for doing something very, very simple for a long, long enough time.
Gino Barbaro 04:03
In multifamily it allows you to do that. We bought our first deal, Mike, myself and Jake, back in 2013. When it’s very similar to what’s going on in this part of the market cycle, right. Our market cycles reverting back to them. Rents were $350 for one bedrooms back then, we still own that 225 unit asset. We still own it till today. those rents are over $1,100 right now. So talk about creating wealth. In the span of a decade, we’ve been able to triple rents, valuations have gone up threefold, tax benefits. I mean, that’s where it talks about really creating true wealth. When you speak to a lot of intelligent investors and people who’ve been around whether it’s a SAM Zell or it’s the same freshmen, their mistakes are real simple. They should have bought more, and they should have held on for a lot longer.
Chris Bounds 04:48
Your strategy is a little different than a lot of investors out there and multifamily investors. Most indicators, they’re in and out in 3,5, 7 years, maybe 10. You’re more of a buy and hold for super long term to maybe forever ish.
Gino Barbaro 05:04
Yes. Let me let everyone in on a little secret. You don’t make money in real estate when you buy. That’s a fallacy. You make money when you exit. Let me say that, again. You don’t make money when you buy. That’s great, you make a little cash flow. But where do you make most of the money, it’s when you refi the asset or you sell the asset.
Chris Bounds 05:23
It’s the equity capture.
Gino Barbaro 05:24
That’s the problem. I think a lot of syndicators, when they have investors, they’re forced to sell, that’s where they make unless they’re putting money on the front end, they make money on the back end. Jake and I, we like to syndicate, we’ve syndicated a couple of deals. I like to buy these assets for longer term, if I’m looking at an asset and I’m gonna say to myself, I don’t really want to own this asset in the next 10 years, then I’ll pass on that asset because I’m thinking to myself, I want to buy an asset in a good market, or there’s a path of progress, where there’s population growth and job growth. and I want to buy an asset that if it’s old and I need to really fix it up and put a ton of CapEx into it, I can do that.
At these prices of last couple of years, you were forced to buy newer assets, because the capital expenditure requirements were so great on the older assets. For us, it’s just shifted in from buying these assets for shorter term, and holding for longer term. I think what syndicators should really consider doing is, there’s nothing wrong with buying assets and selling, right, because there’s sometimes you get into a market or things change, or all of a sudden you have this 10 unit, you’re like, I don’t want to be with the small deals anymore. Let me repurpose that money and put it into another deal. That’s just really the business of real estate.
We call it the conveyor belt theory, put these assets on a conveyor belt, this imaginary belt that’s in front of you, let these assets start matriculating, then you’ll look back three years ago, I’m glad I got into it, I’ve got these assets. Now, what do I do? Now you have the opportunity to sell that deal and put that asset into another asset or refinance and pull that equity out, like you said, and continue to invest it. The strategy is, when you’re going into real estate, just understand what your exit strategy is. Most beginning investors, myself included. It’s not just buy and hold forever, you want to buy and hold the right assets forever. I think we need to get clear on that as investors.
Chris Bounds 07:02
Aligning the exit strategy with your long term goals and the long term goals of the investors that you’re partnering with, because the sell, even if you’re a long term investor, ultimately, the problem or the success of that event occurs with what you do with the money. You live like a rock star. Cool, you’ll have fun, but ultimately, you squandered the wealth.
But if you reinvest it, which is why I’m from a single family standpoint, I came with the slow flip strategy, instead of flipping over six months, flip over a three to five year period. That way, when you’ve accumulated the equity, when you’ve accumulated some appreciation, get some cash flow along the way, sell it, and then go out and buy not just one more, replace it by two or three more. You got more cash, just keep doing that. It’s very boring. But over a 10 year period, you’re a millionaire and you can keep your job doing this.
Gino Barbaro 07:53
Yes, great point. I love that.
Chris Bounds 07:57
You got six kids. Work ethic was brought up is a part of the legacy equation when it comes to family. I’m curious on how, you grew up in kind of an entrepreneur family, in the restaurant industry, now and multifamily coaching. How have you approached building work ethic with your kids to ensure that they’ve got the skills needed to also like, do what you’ve done, build wealth and build a legacy.
Gino Barbaro 08:30
I think the first thing that as parents, our job is to create a safe, happy, healthy environment. That’s the first thing. I think the next thing is you want to make your children as they grow older, give them the power to empower them to make the right decisions. My oldest child, she’s 23 years old. She’s not into building wealth right now. She’s a Catholic missionary. She went on her own route. My son is 20 years old. He’s going to be a senior next year in college.
He’s actually switched to accounting. He’s in invested in a few of our deals. For him, it’s a natural inclination to become an investor. We homeschool our kids. We basically teach them what we want to teach them and it’s worked really well for us. Every conversation we have, it’s about entrepreneurism. It’s about business, and I blend the business with the family. If you see behind me, those two kids books, we write kids books with our kids to sell out to the public and it’s about responsibility. It’s about long term-ism. It’s about creative caterpillar and responsible Rhino going out there and doing those things through stories and we actually have our kids in our videos as well.
For us, family life and business life, to me is merged beautifully. Where there was at the restaurant where my kids would come and work at the restaurant, they’d see that work in the kitchen. Some of them will be working up front with grandma and then it’s just into the Jake and Gino where they’ve been able to come to all of our events. They’re part of our content, they know our students and for me it’s been a great blend. Unfortunately, we’ve been taught this lie that the Four Hour Work week, work when you want to. You really need to grind it out. Chris, I’ll tell everyone a secret here. When you finally figure out work and becoming really good at something, you don’t really want to stop working, because it doesn’t become work anymore. I love doing this stuff. I love teaching. I love being a mentor, I love doing deals. Why would I stop now, it doesn’t make any sense. I work so hard to get to this point. Now, maybe I might not do some of the projects, or I might not pick some of this stuff.
But I enjoy what I’m doing so much and to answer your question to come full circle and your question, I want to be a role model as my kids. I want my kids to see that work can be a lot of fun, work can be empowering. Work is necessary to be have a fulfilling life, you just need to figure out what your sole purpose is. My daughter, 23 years old, her sole purpose maybe just to go out and be a missionary for the next couple of years and then figure out her next iteration. My son, it seems as if he loves numbers, and he loves investing and he loves doing real estate, we’ll see what happens with that. My daughter, she’s a senior in high school, she’s got to take that next step, and I’m battling with her right now. She doesn’t want to go to college, I’m like, you need to do something, I want you to go to college, figure out your vacation. There’s things in life when you don’t want to do it. As an adult, you’re gonna have a lot of those days, this is just the first start of becoming an adult doing something that you don’t want to do.
Chris Bounds 11:16
We can end up with this. I mentioned this earlier with Bill Allen. It’s something I’ve thought about a lot before. I don’t know if you’ve ever thought about this. I’m sure you have thought about hey, wouldn’t it be really cool to have really gotten to know who your great great great great grandfather was, grandmother. It would be cool to actually read a book that they wrote about their lives or watch a video. Will your 5th, 10th generation 7th generation down the line, they will get to do that about you.
This has never happened in human history before. Is it we’re in like this unique position to create the content through our work, have that ripple effect and be actually accessible to other generations. With that thought in mind is how does that resonate with what you’re doing now? Or how you’re shaping your legacy for those in the family, they’re going to look actually not even in the family, just people who are going to look back and say, Who’s this Gino guy?
Gino Barbaro 12:23
It’s empowering to think about. I’ve created something called a personal finance Academy to teach young adults about this and I hope that my grandkids and great grandkids will be watching that stuff and going that’s still pretty relevant stuff as what skills do you need, what habits do you need? What is money all about? I’m also setting my life up also where I’m creating your revocable trusts for the next generations.
I want to be a Rockefeller, I don’t want to be a Carnegie, I want to live that, the ability to continue to fund future generations and say you know grandpa was pretty cool. But I want the kids to be able to read, your other guests said Rich Dad Poor Dad, Secrets of the Millionaire Mind all those books that affected me and to be able to say, Hey, grandpa was there. He left all this money, he created this amazing legacy and I want to be able to continue to pass that on.
Chris Bounds 13:11
Love it. Love it. Thank you so much. Gino, appreciate having you on.
Gino Barbaro 13:14
Chris. Great day. Thanks, brother.