All right we are live with the investor Thrive Payneless Wholesaling podcast where my goal is to make investing in real estate as painless as possible because we all know that if you don’t know what you’re doing in real estate, it can be pretty painful. Right you can have some ups and downs so I have Gino on here with me. And you know, he’s been investing for a while. He’s got some awesome stories. He’s a great guy to work with. So I’m glad to have you on here. Gino, how you doing?
Nathan? I’m doing great. And last name was really appropriate as hopefully we can bring some pain today. Yes, yes. The pain that analogies I think really for life, isn’t it if we don’t know what we’re doing, if we don’t educate ourselves, if we don’t take the time to get clear on what we want to achieve, then we’re going to have a lot of pain. But if you sit down, you create a plan and you try to follow the plan. And you need to be disciplined and determined to do it. That’s the problem. I see people posting on social media and your ad doesn’t work it because you did it six weeks. I mean, try to do it for six months, you’ll see a little bit difference.
Oh, yeah. It’s so amazing. Because I’ve learned throughout my life, like the power of the power of consistency, right? Like, I started jujitsu, for example. Like a year ago, I sucked, I was the worst I was getting choked out. But I just kept going every month. And now I’m choking everybody out. That’s at least in that class, right and go against the black belts. I’ll get wrecked, but it’s just the power consistency is just that’s what it is.
I agree. And it’s funny. I started seeing opera about a year and a half ago. And when I first started, I sounded horrible. I didn’t know what I was doing didn’t have technique. I was fortunate I speak Italian. So just I’m singing in these areas. And I can I can read music. But in the very beginning, it’s painful. Talk about getting up there and feeling having a complex of hearing your own voice and that holding you in your tracks. But basically, like you said, every Friday, I’ve got a lesson this evening at five o’clock every Friday. I’m at that lesson. Sunday we sing at church Wednesdays we got choir practice. So if you don’t have that consistency, and the reason why why was I doing this, I was holding back did not want to do this, but my kids like Dad, you got to do it. So it’s a family thing. That’s the reason why I put in the effort and the struggle. And you know, for those of you listening out there, why real estate? I mean, that’s the biggest question, we can answer that Nathan and myself why real estate for you, we can tell you unequivocally without a doubt. It is one of the best vehicles, it will make you wealthy, I think over 90% of the people on this, at least in the United States, I don’t know about the rest of the planet have become wealthy because of real estate. Either you’re in a business or in your real estate. Or if you’re a real gangster, you have a real estate that is all about business. I mean, that is that’s the true thing is we’re gonna talk a little bit about multifamily today and people who are in the single family space like I want to get into multifamily. And I don’t know if they understand the true power of buying a few multifamily buildings, and then all of a sudden, St. Joseph, I can scale this, I can hire people to help me I can start diversifying, I can start raising capital, I get into different areas of the business and then all of a sudden your investment becomes a business and then you’ve got multiple streams going on.
Is that Is that what happened with you? Did you just kind of get into it little by little? And then you’re like, Well, why don’t make this into a business?
And well, it’s the pizza guy and the drug rep. I mean, that’s basically Jake and I started back in 2011. And people may say it was lucky Hey, there were deals back then. I mean, crap was in a loop then for two years. There’s a reason why no one had money. I mean, GDP was 1%. We’re in a big recession, there was no appetite for investing. And you’re going out there, if you could raise money and you had the stomach to say I’m going to buy these deals, go ahead, do it. And it took us 18 months to find that first deal. And for us it was just calling brokers up getting constant rejection and understanding that you are the salesperson you’re trying to actually sell the broker to show you that listing. You’re actually trying to sell the Community Bank to give you the financing. You’re trying to sell your investors why they need to give you the money for this deal. And once you realize that I was like, okay, gay man, I understand this. And for me, I had a little luck. I had started years years back on a four Plex with my brother up in New York and met Jake through the restaurant. He was a pharmaceutical rep he saw the writing on the wall like it is now all of a sudden layoffs sunshine that comes in he’s getting cut. He’s like I don’t want to be doing this. I don’t be working for the corporation, where making six figures but up in New York, six figures is really not that much. So I moved to Knoxville, Tennessee back in 2011. And like I said, it really took us about 18 months to find that first deal where you were you just spoke speaking about having the the consistency, the discipline. I had pain points. If you don’t have any pain points in life, you’re probably not gonna take action. I had enough pain points. When I had five kids at the time. I needed to make more money and I hated what I was doing. So like it didn’t get any better. It’s only gonna get worse as time goes on. What do I need to do?
Well, what were you doing at that time that you hated?
I owned the restaurant. So that’s why I always call myself a pizza guy. And listen, Nathan, I’ve been around for a while I bought the restaurant back in 1994 May 17 I bought the restaurant I was little family play 70 See place we crushed it. We made a ton of money. The first 1215 years and when 2008 came around, it’s very similar to now with a disruption in markets. You know, the economy really took hold and slow down and all of a sudden the internet and technology took over. You have all these use apps, whether you’re delivering food or the mom and pop the economy slows down. People all of a sudden think Panera is good foods and they stopped coming to the restaurant because chicken parm is not healthy anymore, bro. So they’re gonna have a salad at Panera. So that happens. You get Taco Bell delivered for four bucks. How can I compete with that things change? And I’m like, What the hell am I doing here? You know, I’m working harder. I’m making less. So many people out there feel like that. And I’m like, it’s all about me. It’s my fault that I read the book, Secrets of the Millionaire Mind by T Harv. Eker. And what I love about the book is it’s really about responsibility. I mean, the fruits are in your roots. If you don’t like your results, well, what is what are you doing, wherever you are today is the accumulation of all the things you’ve done in your past. And that’s hard to swallow. Because if some of us aren’t where we want to be, we just have to look in the mirror and take notice of that. And I say that because the recession is coming. We know the recession is coming. How are we planning for it, there’s three things that you can be doing right now you can be working on your skills, you can be working on your habits, and you can be working on your mindset. If you’re working on all three of those things, you’re not only going to make it through the recession, you’re gonna prosper right through the recession, and you’re gonna crush it on the coming on the other side. But unfortunately, what most people are doing is they’re on Netflix, they’re getting distracted, they’re hanging out going drinking with their friends and all nothing wrong with that. But remember, we have choices to make, you can either choose what I said, or you can choose the latter. And then you’ll see the results come from either one of those.
Well, it’s very true. So let me ask you this for people that are watching this that maybe haven’t taken any action at all towards wholesaling real estate, being an agent, anything in real estate and in the recession coming right? What would your recommendation be for people like that, that maybe were in a situation like you and Jake back and they were you see it coming, but you don’t know what to do? What would your recommendation be for them?
That’s a great question. If I could spend three hours on a question, but really to chunk it down for the individual listening to this, you know why real estate you have to understand what what’s it going to do for you, I can tell you wholesaling is probably one of the best best thing to do to get into real estate, it’s a lower barrier to entry, you get into one of Nathan’s products, you spend a few 1000 bucks, you do one deal, it’s paid off, but then all of a sudden, you have some success, and you can replicate that success you got you can do another deal. But the education doesn’t stop there. Because then from there, you’re gonna want to buy some single family homes. And then when you get into single family homes, you’re like, that’s a lot of work. Let me go multifamily. So I think just understanding what you’re trying to accomplish as far as your goals, because everyone’s like I said, you can be 23 or listen to this. Someone who’s 44 years old and has three kids, there is a there’s a really, really big gap into what each person’s goals are. But right now getting into the recession, I would say there’s gonna be a lot of opportunity, select the market, choose a market right now where you want to invest, learn that market. And I think whether it’s multifamily or single family or it’s wholesaling. I think real estate is really a team sport, you need to have vendors out there, you need to know real estate brokers, you need to know lenders, title companies, CPAs attorneys go out there and start selecting the market, learn the market that you’re in, and then understand what strategy you want to choose starting with wholesaling is great buying single family homes is great short term rentals are great. Self Storage is great. Just pick one of them and become a master of that.
That’s awesome. So you, you’re you’re investing right now, do you have a market that you’d recommend that for people that are maybe having to pick one?
That’s awesome, great. I mean, great question. For us. It’s the southeast. And this is not a political statement, I just want to stay away from any of the states that are blue, Illinois, New York, California for I think two reasons. Number one, the population decline is pretty stark, and not only the decline in the population, the people who are leaving are wealthy, and those are going to be the people who are renting your apartments and driving revenue for the state. That’s a big thing. We don’t want population loss and job loss number one number to the landlord, the landlord laws, I don’t want to be burdened by rent control, you know, something that’s placed in there to be able to control rents, when in fact it does the complete opposite of it. So I don’t want any kind of state regulations. Right. That’s where I’d rather be in more more, I guess, landlord friendly states and states that are attracting the population. So Florida, Texas, Tennessee, South Carolina, North Carolina. I mean, Phoenix is still booming out there. There’s some states in the Midwest, and I think one that’s under the radar, a couple under the radar, Kansas City phenomenal market. You got the World Cup going there. They’re building out that airport. I mean, I shouldn’t be saying it, but if you’re around there, it’s it’s the Knoxville of the 2015 and 16. It has not emerged and I’m telling you people living in that market are like Gino, you’re crazy. These prices are crazy. It’s like Indianapolis five years ago, back back five, six years ago indies was at eight nine caps. Then all of a sudden people saw the value of that like I gotta get to Indiana. Kansas City is the same exact thing and I think other markets like Omaha, I think Omaha Nebraska is another great market, Oklahoma City, Oklahoma. These are markets that have still the ability do you raise rents and there’s still a run up in valuations, you’re not a three and four caps, but you still have population growth, you still have jobs growing. And for the most part, the government is pretty good. They’re they’re pretty good with their landlord law. So I think those three markets, right, there warrants a look for a lot of your listeners.
So I’m curious with the regulations that you’re talking about in the blue states, do you feel like those are maybe easier to find deals now, because a lot of people are avoiding those.
It could but just understand that if you’re in New York, and they’re going to pass laws that you can’t evict people, it’s very difficult. I have an island couple of properties in New York, and I left five years ago. And when we left I had a laundromat building up there. My attorney basically told me, he’s an eviction attorney, he has a property in Schenectady, New York, he’s got a tenant who has been paying for the last 12 months, he does want to go through the eviction process, it’s a nightmare out there. So if you’re buying, and you’re in a business where your job is to collect rent, and you can’t collect rent, any evict a tenant, you really you know, what are three things, you need to get the price at a material discount, or you need to write that into your business plan and say, every time I need to evict somebody, I’m going to lose at least six months worth of rent, and I’m going to have to pay an attorney to get that person out of there. So understand that that’s the model. And I think you may be right, if it’s your backyard, and you can you can control it, I would absolutely say stay in that market. But if you’re let’s say living in Ohio, and going I’m gonna go to New York, I probably would skip that. But if you’re in New York, yourself, or you’re in California, and you’re doing business there, and it’s your backyard, I would absolutely take a look at it. But I’m not going there if I’m not living there. Does that make sense?
Yeah, this makes sense. And I’m curious of like, how they even how their mindset of the lawmakers have come to this point where they don’t let you evict people are paying to stay in your place. Like, do you know much about that? Like of how that even came to pass like that? That’s even a good idea.
When we get into politics? What’s the job number one job of a politician?
So how do you do that? You do that by talking to the masses? And how do you talk to the masses by being by playing the victimhood? Yeah, most of the people listen to the show and listen to the podcasts on entrepreneurship and onto business would think that’s the stupidest thing in the world. If somebody’s not paying, you get them out. But for people who are trying to get elected and trying to play on fear and sympathy, will those dirty landlords I can’t believe they’re raising rents when they see what happened to, you know, a dozen eggs, six bucks, you go to Starbucks, it’s five bucks for cappuccino, really, no one’s complaining about that. But if rent goes up, they’re complaining. So I think that that’s what drives it. And I’m not saying it’s good or bad. But as a business owner, as someone who’s buying an investment property, you’re buying a future stream of revenue, right? And if you’re living in New York, is it more likely and more difficult or more difficult to collect a future stream of revenue than it is for say, in Nashville, Tennessee, I think it’s a lot safer and a lot less risk in a city like Nashville than it is in a city like New York City. So that’s how you have to look at that lens where you’re investing in real estate.
Wow, that’s, I appreciate that answer. That was really good. Because I’ve always thought like, why why? It doesn’t make sense. But you’re right. If you’re appealing to the masses, then that that sounds good to the masses that don’t want to work right? Or don’t want to take it. They’re not listening to this show.
Because yeah, they’re blaming responsibility. Listen, it’s amazing how you know, the government can create a problem, then they can come solve the problem, like the 2008 debt crisis, they created the debt crisis, then they solve the problem with the bailouts. I mean, it’s it’s genius. If you think about it, well, the COVID created the problem COVID, let’s have the problem. Let’s pump all this money into the system. That was the solution. Well, there’s another problem now with inflation. And we’ve had inflation for Lesko. So let’s try to solve the inflation problem. Let’s raise interest rates, and really raise them really too quickly to give a shock to the system. And that’s the problem. So solve his problem and solve the problem, the problem and solve the problems like they’re creating all the problem.
Sounds like they are they are the problem.
But let’s step back and say, once again, Nathan and Gino cannot control that, let’s just understand that Nathan is, you know, can see history and can see the patterns. And how do we take advantage of that as an investor. And I would say right now we have market cycles. But I think more importantly, we have what’s called an interest rate cycle. So as they’ve been raising interest rates, what happens as the economy slows down, what they’re trying to do is they’re trying to slow the economy down so they can control inflation, inflation is actually an increase in the supply of money, the cause effect of that is rising prices. So they understand that so how do you get prices on the control, you raise interest rates, you try to slow down the growth of the economy once you do that, all of a sudden, things start slowing down? I’m selling less you’re looking at used cars are down massively Tesla just cut 20% on their pricing. Why? Because Because Elon is gonna give shit away. I don’t think so. Elon is not selling cars and a lot of other stuff. So things are starting to reset. It’s great. We can start hiring people again and I think follow the pattern. You get to a certain point where they have to stop raising rates because all of a sudden the economy is crashing or it’s in a deep recession. And recessions are less than shorter because politics because the politicians need to get reelected. And there’s another there’s an election coming in 2024. So by 2024, March, April, May of next year, rates will be dropping again, economy really picking up. So the question is, what are you doing as a listener out there right now? Are you preparing for the opportunities that we’re seeing in this market right now? And we’re gonna see for the next 18 months, if you aren’t, now’s the time to get into real estate, because everyone out there that I’ve spoken to we have the education for the last four years has been complaining to me, gee, no, there’s no deals, we’re about where to high 2019 2000 22,021. I know we’re at a high. But now what’s the excuse the highs past this? Oh, now we’re going into recession, you can’t have it both ways. The only time you can get into real estate is when you’re ready. And there’s never a good time. You can always buy real estate, you can always sell real estate, but you can always buy real estate, you just need to know what strategy to buy.
So with you buying, we talked about your $9 million complex, right, you bought something 9 million? Are you? Are you using bank funding for that? Or are you raising the money and then refinance, refinancing out of it in the future.
The deal came to us literally from the seller walking into our office and saying I want to sell and the reason why he came to us was the property was next door to one of our properties. He had a broker who wanted to charge them an astronomical price for the deal. I mean, the broker fees was ridiculous. So he had a number in his head. He said, I want to sell for this. So we knew right away, it was right next door our properties 120 units, they were renting for an average of 700 bucks ours right next door is an average of 1100 bucks doesn’t take a genius to figure out that this guy’s leaving about $400 a month per unit on the table of value, and the true Mom and Pop and you’ve dealt with wholesalers before, people, they don’t know the value number one, they want to keep everything on the under the wraps, they don’t want their tenants to know, they don’t want their partners to know, they don’t want their employees to know. So it’s like make it as painless as possible for me. And we did that Payneless. And it’s not and you have to understand, people don’t always want the highest price. They want what they want. They want so many different things. This guy they want Max price, he wanted an easy deal. He didn’t want any problems. He had some some illness come out as we’re doing a deal, he got better while we did it. But there’s a lot of motivations. And you as an investor has to know how to create the value for that deal. creating value for that deal was executed for the guy making it easy for him and getting the deal done in like 45 days. And as far as us we used to syndicate properties, we raise money for a lot of our deals, the last seven or eight deals we’ve just continued to do by internally. So that’s me, my partner, Jake, and another partner. And we’ve opened up we open up 15% of this deal tour and to our employees. So our employees invested in this deal as well. So it’s it’s awesome. We use seller financing on the deal as well as guy comes in and goes, I want to sell the deal. You guys want to do seller financing? We said why not, of course. So it’s a 15% money out of pocket for us. And 5% is a seller finance note we didn’t even ask for it. That’s the other opportunity to do right now. Because these deals I think is going forward, they’re gonna be harder to finance banks. When banks start seeing the recession coming on. We say banks are like the circulatory engine of the economy. As banks start pulling back and loan to value start getting higher or lower, you have to start putting more money down there criteria is getting more more difficult all of a sudden becomes harder to finance these deals. So your seller financing in the next 12 to 18 months is going to be a huge opportunity.
Wow. That’s amazing. That’s all amazing information. I appreciate you sharing that. So with this deal, this guy came in no prior communication with him. He just randomly because he saw yours He came in or did you did you chat before have you
Nathan when we bought our third property Jake and myself in 2014 was 136 units. We bought a 25 unit that first deal in 2013. Three months later, we had bought a 36 unit. Six months after that was our third deal. We finally met our partner Mike, he had the balance sheet. He was able to lend us some money we scraped every dollar we could we actually had a fight we had one of the brokers note we actually had a seller’s finance note for the broker’s commission. I mean, we did everything we could to get this deal. And the guy next door to this property is the same seller from 10 years ago, he met us rents were 450 We went the 595 right away this guy had love this. He’s like guys, I don’t have to do any work to buy property, you guys raise rents. I’m raising rents too. So he saw that. And it was just in the market. And then you know, through the years you build reputation, people talk. I mean, that’s why just be careful for your reputation, your brand, because that is everything. Especially if you’re young out there. Don’t cut corners. Don’t be a conniver don’t rip people off, do what you say and say what you do. And then one year one day, somebody’s gonna walk into your office and go here I want to sell at this price. You’re gonna go How did that happen? It happened because people know that you can execute that you can close and that you can say what you know, whatever you saying you’re going to do, you’re actually going to do it. And that’s really, I mean, sorry, it’s not really sexy, to be honest with you. He saw that over those years. We had our properties and literally his property is right next door to ours. His rents are $700 for two bedrooms, ours are 1195. Do you think that Mom and Pop went next door and said, How are you guys achieving 1195 He was happy with 700 bucks. He was making money. He had no debt on these things. He built these things himself. So he has a different business plan, different mindset. And for us huge opportunity.
That is amazing. That’s awesome. So yeah, again, the consistency thing that we talked about it was through your consistent action. He saw that over the years, and then you know, it’s probably a decision that he, he didn’t even have to think about if he knew how to sell it in this broker had all these fees. He’s like, I know who I needed to go to go to Gino and Jake, those were the guys.
Right, right. And you got to remember, as brokers brokers have a tough job because they have to actually sell the seller on a price, they’ve got to sell the buyer to buy it, they’ve got to create marketing packages, they’ve got to do property tours, and this seller is gonna be like, Oh my gosh, another, I gotta show this property again, I got all these renters breaking my chops, I don’t want to deal with any of that. Let me show to one person that I know that will execute and that one person happened to be us?
Do you find a lot of deals that way that like maybe get the sellers get approached by brokers? And they’re like, I don’t want to deal with that. But they know about you, you guys, does that happen a lot.
It just hasn’t happened as much in the in the in the last two to three years of the market cycle. Because you have to remember when you’re in a seller’s market cycle, they know what they got, they can go and go to market and put a crappy property on the market and get asking what I’ve seen in the last six months is brokers are starting to cold call us. And they’re starting to actually, you know, send us emails and they’re starting to say, Hey, do you want to come look at this property because the demand isn’t there like it was six months ago, raise rents rising, people don’t understand when right run rents go up, I’m sorry, when interest rates rise from three and a half 4% to 6%. That prices out a lot of deals, the cost of capital has gone up tremendously. And I think sellers haven’t really grasped that brokers understand that. And brokers like your property is over overpriced. And sellers are like, Well, I remember what it was six months ago, we’re not where we were six months ago. And I think right now as that opportunity comes, get yourself out there, go to the meetups, talk to the brokers, because a lot of these sellers, when they come to the realization that yeah, they need to sell, you’re going to be there to be able to have that conversation with them, because they’re not gonna be able to go on LoopNet or CoreXY, and throw their property out there and get 15 people calling them asking them for that deal. That’s not going to happen. And especially these prices, and the kiss of death is the sellers who don’t understand that they put a property in the market for $2 million. That’s really worth 1.2. They keep it there for six months. And then they’re like, oh, man, I gotta sell this property, then they get desperate, then they dropped the price. So beware of that also, that’s going to happen that’s that’s it’s an inevitability because going from a seller’s market to a buyers market. It’s just like history going from the 2005, six era to 2009 10. We’re seeing that happening right now. That’s happening right now, as we speak.
That’s awesome. I think that all this information that you’re given out is is, you know, super knowledgeable about this stuff, is it? Do you feel like for someone that’s brand new, let’s just say like a lot of the newer investors that watch the show, they go into single family, right, that’s really started. Do you think it’s that much of a difference? If someone’s like, Hey, forget the single family route. Let me just go right into finding deals for investors like you right off market and multifamily, big units? Do you feel like that’s a too big of a jump for someone to do or do you feel like that some people could start off with?
That’s a challenging question. I’m for me, it’s all about mine belief. If you can believe you can do something, then there’s nothing holding you back and you’re willing to put in the work, then you can do it. I was just interviewing a student this morning. We and we had toured his properties. Last week in Dallas. Daniel joined the community back in 2018. He had five units. And what Daniel realized was that he had to provide value for somebody and he was asking people, what’s your pain point in multifamily? What’s your pain point in multifamily? I can name two right off the top deal flow and property management and asset management. So Daniel’s like, I’m gonna be a property manager. I’m gonna start my own property management company. I’m gonna add Matt asset managers. Well, he did his first deals, 160 units. He’s 31 years old when he did the deal, syndicated raised capital. And he partnered up with people, if you’re willing to do that, to actually step out your comfort zone and provide tremendous value for people, then I say you do that I would challenge all the wholesalers out there. If you’re finding small multifamily deals, instead of wholesaling them, try to find a partner who’s got capital, say, hey, instead of charging me a fee, give me 10% equity in this deal. If you can do one or two of those a year, in four or five years, you’re gonna look back and go, I’ve got four or five deals here, when they refi out, I’ll get all my capital back, but I’ll still own the deal. And it’s very challenging because I know a 20 or $30,000. Payday can change somebody’s life drastically. But the hardest thing to creating wealth is those transactions that pay the bills. It’s just equities. What makes you rich? I mean, remember Jeff Bezos, when he started out in 96, or 97, with Amazon, how many years did it take him before he actually had a paycheck, nine years of working and then one day, all of a sudden, all that equity, bam, it hits and I think for those of you You’re out there that are starting. If you’re starting in wholesaling, it’s a great place to start, you’ll understand the real estate, you’ll understand how transactions work, you’ll understand all of the different functions, all the different duties. And if you’re telling yourself I can’t, I can’t do a multifamily, do a house hack, you know, do a burr buy a duplex, live in one side, rent out the other, buy a triplex with another partner and try to try to work that out. Because like I said, I started I bought a four Plex, early on with my brother. And that was one of the best things that ever did. Because I sold the business, I manage the property myself. So I got I got to understand the whole property management side, we actually refi the deal a couple times, so I understood the finance side of it. And it was just a great way for us to start. So for anybody out there, I liked the wholesaling. I just never got into it, Nathan, because I was working full time in the restaurant, I probably would have started with a single family, but I already had the job, I was already working 50 hours a week, I’m like, let me see if I can buy something with you know, multiple units in one area, it’ll be easier for you to manage it easier for me to take care of, as opposed to doing these ones at a time.
Yeah, and I believe that wholesaling is a job, it’s very active income, you have to be consistently doing it. So you are pretty much replacing anything else you do with a job. But it sounds like with the path investing the you do it truly is passive, right? Like because you you find the properties, you you put the management in place. And that’s what everybody wants, eventually, I think every wholesaler does not get into real estate because they want to a job wholesaling, they want to get into what you do, right, which yes, you’re talking about. So I had an opportunity like that I had an eight Plex that I was going to have ownership in. But because of the interest rates, it freaking priced us out and the person I was working with and most of us, but we found a buyer who wanted to buy it, and he just needed to place his money for tax purposes before the end of the last year. So that was what I was gonna keep. But again, it didn’t really make sense of someone that bought it didn’t really buy it where it made sense. He just had to place his money. Well, it’s
Nathan, you making bring up a great point. And this is one of the things that has frustrated me for so many years until I understood that that person had a different set or a different ideal for what a good return was for him. You know, he had capital there, he had to utilize his capital, he wasn’t going there and trying to get let’s say a 10% cash on cash return he used probably may have been doing a 1031 and had to put that money into deals. So he’s overpaying as far as what you’re doing with your underwriting, it’s you you’re like, You’re nuts, if you’re buying this deal, how are you making work, but for that person, maybe he had $2 million in the bank, all cash, he’s making point 2% on his money he’d rather put into a multifamily where he’s gonna get cost segregation benefits, those tax benefits, he’s gonna get a little bit of cash flow, he’s getting a physical asset, and he’s getting inflation hedge against inflation. And oh, by the way, the residents are paying down the property. And every year it’s going up in value. So really, like I said, What’s his goals, his goals is more for capital preservation, your goal. And my goal is for capital appreciation, we want that appreciation. So a person who’s already got the money is not so concerned about getting a return, they’re more concerned about preserving the capital in a nice stable asset. So if they take a little less on the return, and they’re willing to pay more, that’s okay. And that’s what happens when you’re in that used to fork kind of market, people keep bidding up assets and keep putting up assets and keep bidding up assets at a certain level. When the when that level hits. And I think it’s already hit, that demand starts going down. And all of a sudden you have more supply on the market. And prices start readjusting
So would you say right now we’re we’re going to be for the next year, year and a half until before the elections, you believe that this is the perfect time to get real estate now. Right?
Yes, I always think it is. And I made the comment. You know, you can always buy real estate, you can always sell it. If you’re trying to sell a deal right now, it’s a lot harder, you’re going to take a good haircut on a deal right now. But I think if you learn how to creatively finance a deal, if you learn how to do master lease options, seller financing, if you learn how to do syndications raise capital on deals, if you know the right now the strategy is to buy these assets and to hold them for a little bit longer, because the market cycle has changed. So you have to understand, Okay, I’m not buying a deal today and flipping it out in 12 months, that’s past that part of the cycles pass. So understanding what type of strategy you’re going to use in this market cycle you can buy, you can buy deals all the time. It’s just like a savvy stock investor. Anyone who understands the stock market makes money when stocks are going up. And they make they make even more money when stocks are going down. Because they can buy puts and calls. They understand how to trade and how to think of it as an investment. And I think most people get into real estate only look at it as buildings and only look at it as like landlording. But if you could pull yourself out and think of yourself as I’m buying an asset here, and every single little building that I’m buying as a little cash machine, it’s got revenue coming in, and it’s got income and it’s got expenses, and oh, by the way, those tax benefits are amazing. So I’m able to keep more of my own money on top of that. I mean, why don’t businesses can you do that? And then 10 years down the road, the property is depreciated your residents have pay down your mortgage and your property is appreciated in price and you’re still cash flowing every month. I mean, it’s just an amazing business.
No, I I feel your love for it. And I think I think everyone can tell like how much you really love real estate. That’s amazing. So Do you do malt sorry single family at all or is it all multifamily now
I’ve got an office down here in St. Augustine I’ve got another house next door as far as cottages go if an opportunity will present itself in the next 1218 months where I can buy another home and I’ll buy all cash, I’m trying to I have six kids so I’m trying to stock up units down here so when they graduate college they want to come back I could put them in a house rent free so that’s that’s what I love to do and it’s a great it’s like I said, it’s a hedge against inflation if you buy a house for $500,000 and you have nowhere to place the capital I’d rather buy a home and let it sit there and get the the tax benefits and then if I need that I could always pull a line of credit from that house and pull the money out and go invest in another deal so that’s where I am in my life. I don’t like personal debt. I love business debt to understanding how to lever my business side of my life to pay for my personal to me that’s important.
So Gino, this has been awesome. I’ve had a really good time chatting with you it what? For anyone that’s really listened to this and enjoyed what you’ve had to say and talk about talking about multifamily. What What would you like them to do? Like do you want them to go to your website? Is there something that yeah, some call to action that you want them to do? Because I know a lot of people are listening or probably want to learn more.
I think there’s two things number one, check out our social media profiles, go to Instagram, go to my LinkedIn page. Geno barber love to connect with anyone on LinkedIn. I think LinkedIn is an amazing platform for business owners. I think Instagram is great for real estate you guys can get some real great picks up there. Just go to Jake and gino.com and as far as the pockets we have podcasts we have five different shows. But if you’re just getting into it you see right behind me It says the how to go to the How to show in the YouTube channel with Jake and Gino their 10 minute little shows where we’re talking about different topics in multifamily. Whether it’s market cycles, whether it’s raising money, whether it’s managing a property, how to buy different markets, all that just go to the YouTube channel, and you’ll get a ton of value from those videos.
Awesome. So we got a YouTube channel, the How to YouTube channels. Yep, you got Instagram, you say LinkedIn? Those are the three places that are good, good to reach you.
Absolutely. Yes.
And how can you help out my audience if they reach out to you? Or are they learning to do get into multifamily? Is that what you would teach them? Yes.
So Nathan, you know what, email me Gino at Jake and gino.com. We wrote a book two years ago with our coach Bill him on creative financing. It’s called Creative cash. And we talked about the different negotiation techniques, Master lease options. We talked about seller financing, we talked about the three pillars of real estate market cycles, that resource is going to help investors for the next 12 to 24 months. It’s just a perfect time to read that book.
I love it. That’s exactly what we needed to hear. Well, I appreciate your time. You know, this has been great. I’ve learned a lot and I’m really excited just from chatting with you like with all the opportunities that not only you have that I have that we all having real estate. It’s super exciting.
Thanks Nathan, I want you to keep bringing the Payne keep doing these shows. People need to hear this. And that’s the thing right now. There is an opportunity don’t listen to all the fear. The fear is what I think when we when we when we hear all the negativity, we hear the recession or a lot of us just freeze up. There are those out there that are getting excited about this time because all of a sudden when people start running for the exits, that’s when prices start dropping, and that’s where the opportunity presents itself.
Alright, we’ll be ready for him when we genome and for sure will, bro. All right. Well, I’ll catch you later. I appreciate you coming on. Thank you. Thanks Nathan.
