Have you ever wondered what it takes to build a real estate empire from scratch? Gino Barbaro, a skilled entrepreneur, joins us to reveal his fascinating journey, from his early days in his father's restaurant to managing over 2,000 multifamily units and 250 million in assets. Gino's story is not just about financial success, but also about the invaluable lessons he learned about hard work and financial literacy along the way.
We delve deep into the nuances of partnerships in the real estate industry, inspired by Gino's experiences, first with his brother and later with his business partner, Jake. Gino shares how these partnerships were instrumental in his growth, providing a support system during uncertain times and a sounding board for ideas. This resonates with anyone looking for practical advice on navigating the often complex world of real estate partnerships.
Finally, we tackle the art of creating wealth, beyond the numbers and balance sheets. Gino talks about his shift from a scarcity to an abundance mindset, suggesting that money is not just a means to an end, but a tool that can be used creatively. He offers invaluable advice on adopting prudent financial habits, understanding the significance of delayed gratification, and embracing the responsibilities that come with wealth. We also explore the pitfalls that new investors should avoid and how to leverage real estate to build wealth. Join us to uncover Gino's profound insights and wealth of experience in the real estate industry.
How to Contact Gino:
Jake and Gino Website: https://jakeandgino.com/
Gino's Email: Gino@JakeandGino.com
To Reach Jordan:
Email: Jordan@Edwards.Consulting
Youtube:https://www.youtube.com/channel/UC9ejFXH1_BjdnxG4J8u93Zw
Facebook: https://www.facebook.com/jordan.edwards.7503
Instagram: https://www.instagram.com/jordanfedwards/
Linkedin: https://www.linkedin.com/in/jordanedwards5/
Hope you find value in this. If so please provide a 5-star and drop a review.
Complimentary Edwards Consulting Session: https://calendly.com/jordan-555/intro-call
Have you ever wondered what it takes to build a real estate empire from scratch? Gino Barbaro, a skilled entrepreneur, joins us to reveal his fascinating journey, from his early days in his father's restaurant to managing over 2,000 multifamily units and 250 million in assets. Gino's story is not just about financial success, but also about the invaluable lessons he learned about hard work and financial literacy along the way.
We delve deep into the nuances of partnerships in the real estate industry, inspired by Gino's experiences, first with his brother and later with his business partner, Jake. Gino shares how these partnerships were instrumental in his growth, providing a support system during uncertain times and a sounding board for ideas. This resonates with anyone looking for practical advice on navigating the often complex world of real estate partnerships.
Finally, we tackle the art of creating wealth, beyond the numbers and balance sheets. Gino talks about his shift from a scarcity to an abundance mindset, suggesting that money is not just a means to an end, but a tool that can be used creatively. He offers invaluable advice on adopting prudent financial habits, understanding the significance of delayed gratification, and embracing the responsibilities that come with wealth. We also explore the pitfalls that new investors should avoid and how to leverage real estate to build wealth. Join us to uncover Gino's profound insights and wealth of experience in the real estate industry.
How to Contact Gino:
Jake and Gino Website: https://jakeandgino.com/
Gino's Email: Gino@JakeandGino.com
To Reach Jordan:
Email: Jordan@Edwards.Consulting
Youtube:https://www.youtube.com/channel/UC9ejFXH1_BjdnxG4J8u93Zw
Facebook: https://www.facebook.com/jordan.edwards.7503
Instagram: https://www.instagram.com/jordanfedwards/
Linkedin: https://www.linkedin.com/in/jordanedwards5/
Hope you find value in this. If so please provide a 5-star and drop a review.
Complimentary Edwards Consulting Session: https://calendly.com/jordan-555/intro-call
Hey, what's going on, guys? I got a special guest here today. We have Gino Barbaro. As an entrepreneur, he's grown his real estate portfolio to over 2,000 multifamily units and 25, 250 million sorry, I couldn't even read that 250 million in assets under management. Gino and his partner Jake run an education business. He's the best selling offer of three books and he currently lives with his beautiful wife, julia, and they're six children. Gino, how are you doing today?
Speaker 2:Jordan, I'm doing great. How are you doing, brother?
Speaker 1:I'm doing awesome. I'm excited to have you on. You have. We already were talking in the pre-show. We agree a lot about stuff regarding financial literacy and later in the show we'll talk about how to build wealth. But for you, where did your real estate journey start and where did you grow this impressive empire years? Everywhere I'm looking, you're all over the place.
Speaker 2:It started with two parents that were immigrants that came to this country, wanted to work hard and live the American dream. I was eight years old and I went to work with my dad. He had a restaurant. He had just opened it and I felt like the luckiest kid in the world Going to work with my dad. I thought everyone went to work with their dad. At the age of 15, I got my own paper route, so I understood the value of hard work. At the age of 22, I opened up a restaurant.
Speaker 2:I went to college for four years, didn't like working in a cubicle and I ended up opening a restaurant, buying a restaurant with my mom, and I think that's where the real estate bug started, because I realized real quick that the real estate was a good business, but it was also a job. I was making money every week and when I didn't make money because of a snowstorm or because of a holiday, I didn't make money that week. But my mom, who owned the building who I was paying rent to, had three apartments upstairs and every month she was getting rent from those apartments. So that's where the journey for me in real estate started. I was a tenant paying her and I owned the restaurant for over 20 years. So I paid her hundreds and hundreds of thousands of dollars. I retired, retired. I left the restaurant back in 2016,.
Speaker 2:But my very first property was a four unit in New York and then I met Jake in 2009 and Jake and I started partnering in 2011. And that's where you see those 2000 units. This was with me and my partner, jake. So I had a before life with Jake and then I had an afterlife with Jake, and the before life was I was all over the place. I was trying to do a mobile home park, I was trying to do single family homes, duplexes, you name it, until I realized this multifamily gig where people need a place to live. I like it because it's a business and I like to deal with residents. I liked all three of those and I'm like every month I'm getting rents. I like this gig. So that's where it started.
Speaker 1:That makes a lot of sense and I feel like many people because it's interesting from my perspective being like I own a property in Ebor in Tampa, florida, and it's interesting in my generation, where everyone's looking around and, like you said, they're trying to flip land, they're trying to get a mobile home park, they're trying to do a multifamily there. Everyone thinks it's better to have your hands in many pots. How have you found the success of honing in on one area this is in real estate, but also for the audience listening just focusing on one thing? How has that been a benefit for you?
Speaker 2:People with financial intelligence can change the world for the better. That's the reality and that's what I realized when I got into real estate and I wanted to become financially intelligent. It was 2006. I did my first real estate deal without my brother. I met a gentleman named Mike. I referred to him as Maserati Mike because he pulled into my parking lot one day driving a nice gold Maserati I'm like Mike, how you doing and he saw me as a sucker. And I was a sucker because I didn't understand the mobile home park space and he was not a good partner. But I ultimately understood that the responsibility fell on me. It's like you said a person goes to college when they're 18 years old and they accumulate a ton of debt. You can blame the system all you want and I'm not saying you're wrong but ultimately you made that decision. I made the decision to partner with Maserati Mike.
Speaker 2:172 grand 18 months later, buy money. Don't know what happened to Maserati Mike. All I know is it fell upon me to make a better choice. I understood that mobile home parks were not good or bad. I was the bad one in the equation. I didn't understand due diligence. I didn't even know what the property looked like. I never flew down there. It was in Florida back in 2006. And then when I did that, I'm like okay, you think I learned my mistake.
Speaker 2:A year later, I go and look at a strip center up in upstate New York in Dutches County, where people go to die. I don't know why anyone lives in Dutches County Sorry, if you live in Dutches County, but, bro, stay away. I mean, anyway, I put the property and I had it for 10 years. I lost a ton of money and it once again was not the property, it was my lack of financial intelligence. I had no process. I had no framework. I was going into the forest without a map. Do you need the map before you go into the forest? I didn't have a system and then I said to myself how do I get the system? Well, I did what you said.
Speaker 2:I decided to take $25,000 back in 2008 and join a mentorship program the best 25 grand I probably spent in my life, because I learned how to invest in apartments. I waited another year. I met Jake and then, when me and Jake started looking at deals, I understood how to invest in real estate. I had the framework and then we built our own process. I think we have to go through these pain points in life and we have to make these mistakes, but reflect back on it. And what's the opportunity from the problem? Well, the opportunity from Maserati Mike was OK, I'm not going to give anybody my money unless I do my due diligence and I understand what partnerships look like. Maserati Mike was a shiny object syndrome when I partnered up with Jake hard worker, ethics, integrity, smart all of that was what I wanted in a partner and that's what my values were. So we really lined up.
Speaker 2:And for you, specifically in that question, I would challenge everybody Become an expert in one area. If you like crypto and you like Bitcoin, crush it. You become an expert. You'll know how to trade it. But you just can't jump in and six months later, nfts, and then six months later I'm trying doing T bills and then six months later I'm going to oil and gas and then gold. Pick one of them. I'm not saying one is better than the other. I can tell you right now, multi-family is one of the best vehicles for long-term growth, for tax benefits, for people the residents are paying down your mortgage, for cash flow, for stability. It's a hard asset. It's a basic human need food, clothing, apartments, all of that I'm not here to convince you. But what I'm here to convince you is to pick one, become an expert at that one and Understand the vehicle. And once you understand that vehicle, then I'll give you permission to go look at another vehicle.
Speaker 1:Yeah, yeah, I completely agree. And the impressive part about that story I found was 2008. There's so much fear in the marketplace to invest that kind of money when everyone's like no, real estate's going to the ground, everything's going to the ground. We had a guy, tim Khalees, who came on and I'm gonna release his episode in, I think, next week or the week after, and he talked about how he was running a kind of a hedge fund, a venture capital hedge fund. Back in 2007. They raised crazy amount of money right before 2008. They gave it all away. They gave it all back to the investors because he's like 2008 is going to be bad. So I just prepped us that, because for you to go you know I'm investing a good amount of money into something during such an uncertain time I think that's, that's a decent risk. How'd you think about that?
Speaker 2:I had enough pain in my life and at that point my father passed away in 2007 and I saw the shift in the restaurant. I was working harder and I'm making less money. Yes, and I don't understand. And and I've got four kids at the time and I feel as if I'm letting my kids down. I'm coming home, I don't like my job, I'm not making any money, the market sucks. I need to do something different and I know this real estate thing is really good and I don't want to hold back the mistake that I made and make that as an excuse.
Speaker 2:So there's three types of people. The type of person who's crushing it, who wants to go to the next level. That person's all locked in. Then you have the person in the middle who's pretty, pretty comfortable. You know it's, life's okay. He's making a hundred grand a year. I'm pretty comfortable. I'm not saving any money. They're not gonna do anything.
Speaker 2:The person who's got the pain, like I did. I know that God created me for something better than making a hundred grand a year. I just knew that. I felt that right and I felt sinful, because I had two great parents. I was born in one of the best countries to be able to create wealth. Why am I using the recession as an excuse? Why am I using my father's death as an excuse? I felt as if I was letting myself down and letting my kids down, so I was wallowing in an off pain. So when that that pain translated into me taking action and fortunately I picked the right vehicle, I picked the right partner and from those experiences that I have and I think I guess the rest is history- yeah, no, it's awesome to see, because it right now is very uncertain time and a lot of people are struggling and they want to sit there and do nothing.
Speaker 1:But I think, like what you said, the market's not indicated of anything. It's our value that we can create. In the marketplace it's way more important. So the more information we get and the more applied information we utilize, it can change everything for us. So what was it about finding a partner that made you feel better? Why, jake? I know you mentioned hard-working, but a lot of people are like I'm a solo guy, I'm a lone wolf. What? Where did the value of a partner come in for you?
Speaker 2:When I was at the restaurant, I had my brother as my partner. He was working up front and I was working in the kitchen. So I saw the value that I can't do everything I can, but I'ma do this, i'ma do that. I'ma gets burned out and I'm getting burned out at the restaurant. And when I went to this mobile home park, I had a partner, but he's, we see, the right partner. No, then this strip center, it fell really upon myself. My brother was my partner in the venture, but not really. He really wasn't a partner. I did all the work and I saw the stress. And what I love about partnerships is I can pick up the phone right now and give Jake a call and say, hey, how are we doing? Can you help me out with the situation? Because real estate entrepreneurship is lonely. No one gives a crap about your problems. Maybe your wife does or your husband does, but they can't really relate if they're not in the business. And when I started talking to Jake back in 2011, we were getting on these calls all the time. It was a lot of fun, it was energetic, I could bounce ideas.
Speaker 2:I remember the first property we took over, the first year we took over. Jake was really a stickler about expenses and you know I remember one guy, one of his employees, one of the employees walking out. We paid him an extra day or so and he's fuming and hemming and hawing and like Jake, let it go. Brother, I just had somebody snow plow my driveway. He charged me four times. He only did it twice. Am I gonna lose sleep over the guy's gonna throw a rock in my window. There goes an extra 800 bucks. So you know you got that person. Let it go. And that's just an example of being able to talk to a partner. So I saw so much value in that and I think the two of us together can get so much more accomplished than doing it by ourselves. He's running the portfolio and managing the properties day to day.
Speaker 2:I'm doing the education business and it really melds over so beautifully and so well when we were raising capital. We're doing it together. So if you think you're gonna go out there and do it by yourself, you can. Number one it's lonely. Number two, you don't know everything. And number three, to have a partner to bounce off those ideas when you're having a tough day to pick up the phone, that's immeasurable. I mean like I don't know how you can quantify that, but to me when I was at the restaurant I had that accountability partner. When I was tired and it was 9.30 at night and I'm making chicken parms and I'm sweating my ass off, I'm like I don't wanna underwrite this deal. But with Jake there, I'm like I can't let him down. I gotta do it by feeding his family. And that accountability piece was so important for me to continue to grow into real estate.
Speaker 1:I love that, yeah, and I mean it's so important because I actually run a group on Monday nights and it's different people who are feel as if they are solo entrepreneurs. I mean they have small teams but it's still. It's a different dynamic than hey, man, that was a tough day, and you can't really go to the team and say, hey, that was a tough day. There's only a few people you can go to and they have to be outside of your network, outside of your group, unless it's your partner where it's like hey, that did not go as planned.
Speaker 2:You can't say that in front of the employees Like cause. They lose hope.
Speaker 1:And you wanna keep that in a positive method. So, for you, what was? Where did the real exceptional, where did the real growth come from? Where it was, you were seeing the compounding effect of your actions, where you're like, wow, we are really trending in the correct direction. Education's good, investing's good, cause I feel like that probably took a lot of time to get to.
Speaker 2:Yep, I'm gonna take you back to 2008, when I read T Harvecker's book the Secrets of a Millionaire Mind. It all starts with your mindset. It all starts with your beliefs. Behaviors are belief driven. If you don't think you can do something, then you're not gonna do it. It's just as simple as that. And when I read that book I had almost as a weight lifted off my shoulders because at first I wanted to punch T Harvecker in the face, cause I'm like this guy don't know me.
Speaker 2:But then I sat back and I'm like he's right the fruits are in your roots. I didn't have value, I didn't understand investing and I was blaming everybody else. Once I took full responsibility, my life started to change. If you've got student debt right now, you can be pissed off of the government, you can be pissed off of the college, but until you understand that you took those actions. And then the next step, once you understand that responsibility, well then you can start creating a plan. You can start getting out of that negative mindset, that catabolic energy, and start creating a plan. Sit back and start thinking about what's. Your next step is Once I realized that I'm like, wow, I don't have to be stuck here at the restaurant for the rest of my life, working 55 hours a week, being transactional week to week. What do I need to do? That's when I joined that mentorship, and then from there, it took me another year.
Speaker 2:I met Jake and then, when Jake moved down to Knoxville remember the depths of the recession, 2009, 2010, there were a lot of deals. There was no money when we bought our first property after 18 months partnering in 2013,. Ironically enough, the next deal came three months later and it was weird. And then the next deal came six months after that. So from 2011, we're in 2014,. Within three years, we have over 200 units. Wow, we could have stopped there. We could have stopped. I was making at that time more money than I was at the restaurant, but fear was holding me back. I'm like, I'm not in New York. I can't really leave yet. So I worked until October of 2015. I said you know what? I'm going to leave the restaurant during the week and I'm going to work on the weekends with my brother, and during the week I'm going to dedicate it to real estate, full time.
Speaker 2:The transition the transition and it was six months. And for those of you out there, you don't have to burn the bridges, you can wean yourself off and you can do your quote unquote. I guess the sexy word today is a side hustle. All I knew is that I had the real estate and I had the restaurant. I had to dedicate between 16, 70 hours early on. It was it, was it for me.
Speaker 2:I don't want to use the word grind because that may be a negative connotation, but I remember being at the restaurant during the day, working from 10 to 2 o'clock. I'd sit down, get my workout and everyone walked by to me and go hey, Gino, you're always working. Ok, you know you want to take a break. And when you hear people say that you're doing the right thing because you're doing what other people aren't doing, and for me, that point in my life I loved it. I love the real estate thing. I understood that that's where I needed it to be, so I leaned into it, Putting in those extra hours, underwriting deals and you know, the component with Jake is the partner really helped.
Speaker 2:And then, in March of 2016, I'm like Mark, I'm having my brother, I'm going to leave the restaurant. So, from meeting Jake to leaving the restaurant was a five year time window and I took a little bit longer. Because I had six kids, I wanted to make sure that I was financially stable. I was in New York so my expenses were a lot more, so I took a little bit longer than what I needed to. But I wanted to make sure that I don't leave my brother in the lurch and that I'm leaving on good financial footing.
Speaker 1:But I think that's so important because there's so many people who are like quit your job, just quit, go all in. And that mentality can work for some people. But for some, dude, you gotta build up the side, you gotta build up the income, or and the super important thing is to save it. It's like, okay, so now we're living on let's say, people are living on 50,000, right Now you make 100,000 one year. That does not mean we live on 100 grand. Now, that means we live on 50, maybe even 45, and so now we have more in savings Cause people wanna be like oh, I'm the wealthy guy, I'm the rich guy. No, no, no, no, no, you do not. No, you gotta save. And then, as you build years and years and years of expenses saved up where it's like okay, we could screw up for three years.
Speaker 2:What that allowed Jordan, what it allowed me to do on a personal level, was all the profits that I was making in the real estate. I was reinvesting into the real estate. I wasn't using it to fund my lifestyle. So I had and if you have a spouse, let your spouse work. I mean, let your spouse work if you wanna leave a little bit prematurely. But if you can hold off for a couple more years the money you're making from the real estate, you can fund it and put it into the next deal. And that's what I was doing. I had the restaurant that was paying for my expenses. My wife was staying at home with the kids. We homeschooled the kids, so she's staying at home with the kids While I'm working at the restaurant. That restaurant income is funding my lifestyle, my expenses and anything I'm making with Jake. As far as cash flow and as far as equity refinancing deals, selling deals, I'm taking that money. I'm not buying a Lambo, I'm not going on a huge vacation. That money's going back into buying the next property.
Speaker 1:Yeah, yeah, and people don't have that delayed gratification in their life.
Speaker 2:They don't have the understanding. It's difficult when you're younger and I mentioned to you off camera. For anybody listening to this, I would beg you, please read the Psychology of Money by Morgan Housel. It's such an important book because I think people need to understand the neurochemistry in their brain, why they don't have delayed gratification. Because nowadays we have so much that's afforded to us.
Speaker 2:We buy a purchase because it makes us feel good. We get a dopamine hit. So when we're having a tough day, what do we do? Well, some people like to eat, some people like to drink, some people like to smoke, some people like to go and shop. So you're doing things unconsciously, subconsciously. Once you have the awareness of why you're doing something, it's important, and once you have the awareness and the understanding of your relationship with money, that changes the game.
Speaker 2:Because once I understood that I was a saver. But why was I a saver? I was a saver because I had a scarcity mindset from my parents who came from Italy back in the 50s and 60s. Things were tough there. You've got to save money, you've got to well. Why am I saving money for a rainy day? Well, that was the bad idea. You should be saving money to buy an asset to pay for that rainy day. Once I had that little mind shift I was like, okay, I can still save money, I can enjoy saving money, but that money can leave my bank account, because I like to see money in my bank account. That's my relationship, that makes me feel good. But now I understand money is just a tool. Money is there to be utilized to invest in other things. Once I made that, for me it was game over.
Speaker 1:Yeah, yeah, and I think for myself, it's pretty funny when you're like, oh, people like to spend on this, they like to invest in this. I get a little rushed when I invest Like that little like, oh, what'd you do? Today I bought a little Apple stock. What do you mean? What did I do that? And that is, most people don't view it as that, but, if you can, it changes the whole game, everything, everything.
Speaker 2:You made such an awesome point. I used to have fun about making money and saving it. That was my thing. I used to like to see my bank account increase, and if you're like that, it'll be much easier for you to create wealth, because all wealth is the ability to save the money and then to reallocate it. So for you to do that, you've already see your relationship with money. Now just become aware of that.
Speaker 2:I want everyone to become aware of what their habits are and what their relationships to that money is, and I'm not saying whether it's good or bad. It's either empowering or disempowering. See the fact that if you're making $100,000 a year this year and you're at a base level, if next year you go to $140,000 and you can't save any money, there's something that's not right there. It's called Parkinson's law. Your income, your expenses increase with the amount of income you make, and it's something with the psychology and with the neurochemistry in your brain saying oh man, I deserve to spend more money. Or I'm looking at somebody else, the serotonin that we release in our brain because all of a sudden we feel prideful that we earn more money. So we have to show Jordan and Gino that I'm driving a nicer car, when in reality that doesn't make any difference.
Speaker 2:No one really really cares. But we don't know that, because all we're trying to do is to try to satisfy our brain, and our brain's telling us to do something, and we don't even know why it's telling us. Your brain's telling you to do something different than someone else. Your brain's telling you to do something that's empowering for creating wealth.
Speaker 1:Yeah, and the crazy thing is we were talking before and what I was saying is people in my age demographic 20s and 30s. It is so difficult nowadays to acquire this wealth due to the fact that there's so many minor mistakes you can make along the path. Whether it's you went to a school that you can afford, so the student loans are too high. Whether it's you've got into a house that's too expensive, but your mortgage is broken, your realtor pushed you in, or it's and I'm not saying that you're the victim, or it's I got a car that I can't afford and then you never feel that you can't afford it, but you just sit there and go. This doesn't make a whole lot of sense. I gotta get out of this. And it's just these massive mistakes that people make and it just it sends you backwards. It sends you years backwards.
Speaker 2:It's a mistake if you're trying to create wealth, and that's the thing we have to understand. If you're gonna try to create wealth and we had talked about this off camera when I was growing up we didn't have a lot to be able to buy, right, it wasn't like I could go on the internet Al Gore hadn't invented it yet, so yeah, so I mean like there was no internet back in the 80s and 90s, so it was a good thing, right. We didn't have all of these different subscriptions out there. We didn't have cell phones, so there wasn't that much that we could spend, although you still have to realize the delayed gratification. So for us it's a different generation.
Speaker 2:But don't use it as an excuse. Become responsible. I mean, dave Ramsey talks about budgeting. Understand where your money's going. Understand that you have the power to allocate your resources anywhere. Make a spending plan and make sure a part of that spending plan has savings in it. It's a muscle, you know. That's what I think everyone doesn't realize. You're not born with this and everyone is out there trying to extract the money from you. It's your job to understand that. Hey, if I need a new computer, okay, do I really need a new computer? Or is this new computer gonna make me feel good for a month or two and then after that I don't need it anymore? Once you understand that dynamic that's going on in your life, things will change.
Speaker 1:Yeah, and like you mentioned before and that's somewhat ironic because real estate guys Dave Ramsey always don't hit it off, always the best. So the fact that you're referencing him and I've been like watching his stuff a little more I'm like he makes a lot of sense and people are like no, that's for the broke people and it's like no, it's for the people who want to grow their wealth.
Speaker 1:Like obviously he invested and he did stuff and he delayed himself a little bit longer, but he eliminated a lot of risk. He eliminated a lot of risk. He's still got like half a billion dollars Like he's doing something right.
Speaker 2:I think with Dave Ramsey, he does work with a lot of people who have a bad relationship with money. That's why he tells them to cut up their credit cards because they're impulse. They're impulse spenders For me. I think debt is wonderful. There's business debt and there's personal debt. I don't have a mortgage on my house. I've got five cars, not one car payment. Every credit card bill that comes in gets paid monthly. So I have no personal debt. What I do have is I have business debt. I have mortgages on the 1800 units.
Speaker 2:You lever your business lifestyle to pay for your personal lifestyle. His level is base one. You have to understand the relationship that you have. Get rid of all your unnecessary expenses. Have a savings, have emergency savings of 500 bucks. Have three to six months of money set aside, because that'll give you optionality, and then start saving money. Now where I disagree with him is the debt part. And then also, dave Ramsey's not putting money in mutual funds. Bro, he's got businesses, he's got books, he's got other things but, and he's also got business coaching and all that. But to start out with, it's a great place to start if you don't know how to control a debt. Debt snowball is great. You have so many different debts, how do you attack your debt? You want to get rid of the smallest debt and go to the bigger debt. It does make sense financially, but from a psychological perspective, you see your conquering your things and you're going to take action. So for you, if you're having problems, read a little bit of Dave Ramsey. That Total Money Makeover book may change your life.
Speaker 1:Yeah, little habits that develop from that activity Of now I'm going to save 50 bucks a month and now I'm going to have this savings, no question. When you were leaving the restaurant, when you decided to do that, did you have all your debts removed, or how did you view that, or how did you think it was the appropriate time to jump?
Speaker 2:I was at the restaurant in my storage shed outside and in that shed we have bags of flour. I had to go containers and I'm doing the inventory and I'm putting it all away. And I've got my cell phone jammed up to my ear and I'm negotiating a deal with Jake. It's an $11 million real estate deal. And at that point it hit me I'm doing $15 an hour work and we're talking about an $11 million 100% seller finance deal, the deal of a lifetime. I'm like, what am I doing here? I've got enough where I can take the leap. And I made that promise from that day going forward that when we close this deal I'm gonna be gone in the next six months.
Speaker 2:And then when I left I had still a mortgage on my house, but it was more of a home equity line where I had borrowed money to put into real estate. So the real estate was paying that off and I was making enough cash flow from the real estate monthly to be able to be able to pay for my bills. So then when I left, I didn't take a buyout from my brother. I said, mark, you can't afford to give me 300 grand for what the business is worth. Give me $2,000 a month when you sell the business and then so he had helped that and it helped me pay for my health insurance and then I was making enough cash flow and then, at the time I had these properties for five years, they started to refinance. You start pulling out 300,001 property, 500,000 and another property. That's why it's time to get started today, because you start buying properties today, three or four years into the future, that equity starts to matriculate.
Speaker 1:I just wanna make up a big point where everyone's listening. Yes, gino did just mention the job that he worked for 20 plus years as a restaurant owner was 300 grand. Yes, a house that he bought four years ago was 300 grand as well. So it's not the Gino's not a hard worker, because everyone wants to go on the hard work. Right, Is there more? And it's like no, it's not about being a hard worker, it's about being in the right vehicle and it's about understanding that vehicle.
Speaker 2:That's an amazing point because I never built that business to sell. I built that business to be a solopreneur and I had no systems. I had no scale. When we send up selling that business, I thought it would be worth more. We sold it for $400,000. I owned half that business. I mean really my first property that I bought with Jake back in 2013,. We paid 600 grand for it. It's a 25 unit property. That property today, which we still own, is worth $2.5 million. That one property crappy little 25 unit property that I don't even manage Jake manages it. I haven't seen it. I've made more money from that one property on the sale of that thing than I made with a restaurant that I owned for 20 years. So, like you said, the vehicle is very important and understanding the systems. And when you're starting a business, don't start it just to be able to run it. Start it with the end in mind. One day you're going to exit that vehicle. Understand how to build that business to be able to exit that business.
Speaker 1:Absolutely, absolutely. So, gino, let's get into it, because we got like 10, 15 minutes left. What is the biggest way for people that are younger, that are like, okay, it's easy for this guy to say and he's already done it what should they be doing? How should they be thinking about this?
Speaker 2:We'd mentioned that term baby money soldiers. I'm going to go through it real quick because it's a very simple concept. I'm going to be writing a book about it. But envision a baby money soldier. I'm holding up a dollar here. Yeah, we all own a dollar. Jordan, you own a dollar, I own a dollar.
Speaker 2:The way we use this dollar will be it will show. It will become dependent on how we create wealth. Part of that dollar goes to operating expenses, part of that dollar goes to luxuries, part of that dollar goes to investing, part of the dollar goes to savings, part goes to charity and part should go to education. So you see how it's allocated. People who are poor are gonna have a lot going to operating expenses and luxuries. They're killing their baby money soldiers. What you want to do is you want your hat to have your baby money soldiers procreate. Doesn't matter how much you make, whether you make $100,000 a year or a million dollars a year. If you're making a million dollars a year and you're killing your baby money soldiers, you're not investing them. Then you will never grow wealth.
Speaker 2:So for us, when we started out, tried to cut my operating expenses to a minimum. Luxuries was really easy on the luxuries Cause I know when I went on a vacation or I bought a really fancy car or I bought a lot of jewelry or I bought furniture all the depreciating assets I was killing my luxuries. I was killing my baby money soldiers. I wasn't able to put that money into an investment. When we put our first money deal into an investment, that money went in. Baby money soldiers were coming out of it in the form of cash flow. After 18 months we refinanced the property. 164,000 baby money soldiers came out of that property. What do we do with it? We just procreated it. We put that money into another deal. We didn't kill those baby money soldiers.
Speaker 2:The idea is to continue to compound Part of your baby money soldiers, though it's very important that you need to have someone to reserve, because we're taught everything needs to be at risk. We need to have high yield, but at some points there may become an opportunity. An opportunity comes along and you don't have the savings, you don't have money set aside. I think the education component of a baby money soldier what you're putting in as far as personal development, personal growth you need to have some of that set aside and that really becomes an ROI return on investment because you're learning how to do it. So if you don't understand the concept of the baby money soldier and how to utilize your dollars and how to have to try to procreate them, doesn't matter how much money you make, it's not what you make, it's what you keep and what you grow. That will really make the difference. And then you throw in the vehicle, real estate and taxes game over, because my tax bill is a lot less with what we call cost segregation. I won't get into it. But that allows me to keep more baby money soldiers in my pocket because I'm not paying into the government because of the tax benefit that allows me.
Speaker 2:And once you're talking about certain vehicles, 401ks are baby money soldier killers. You're putting money into a 401K. You can't touch that money until you retire and if you do, 10% gets penalized. They're growing in there. They're growing tax deferred. But once you take out all the expenses, once you take out the limited ways you can invest, are you growing at 5%? I mean really 5%, I mean over the next 20 to 30 years.
Speaker 2:And then on the exit, when you retire, you've got to pay dollar for dollar, whatever you're taking out. If you have a million dollars when you retire, you don't have a million dollars. You probably have between six and $700,000. You've killed a third of them from taxation. There's other vehicles that you can use to plan for retirement that will not allow you to do that. I want the ability to access my baby money soldiers. A 401K does not allow me to do that to invest in real estate because it's locked in that plan. And the same with a 529 plan. I'm only able to use that for college. Once that event is over, the money's over. So understanding how to be able to utilize them and deploy them is important, but then understanding the right vehicles If you can couple the way to utilize them and deploy them and the vehicle, put those two together, give yourself several years you will undoubtedly become financially free.
Speaker 1:Yeah, yeah, no, it's absolutely incredible because we sit there and we don't realize a lot of these concepts because they're hard to conceptualize when we haven't taken the action. You've taken the action and you've seen it and you get a home equity line of credit and you're like wait, they're giving me access to how much money? What did I do?
Speaker 2:Yes, this is mine.
Speaker 1:I just have to pay a little interest. Okay, don't twist my arm, I'll keep it.
Speaker 2:And so let's keep that analogy real quick. The person who's wealthy Like gets that home equity line of credit, like I did back in 2014. I got $200,000. I put that $200,000 into a real estate deal. The person who's poor, with baby money soldiers, rehabs their basement, buys a new car and does whatever. So not only are they killing their baby money soldiers, they're adding more debt on and they're actually having to take money from somewhere to pay for that, whereas my money went to buy an asset.
Speaker 2:That asset is creating wealth and creating big money soldiers to pay off my home equity line of credit. When that property is sold or refinanced and I make a profit, I can pay the home equity line of credit off. That home equity line of credit only cost me the interest rate and what I call the cost of money is a mercenary. You're borrowing money from the bank, so think of that money as a mercenary. Where you're leveraging it, it's the cost of whatever the capital is. So if I can borrow money at that time 4%, but I was making 20% of my money I'm making 16% on bank's money it's not even my money and then being able to continue to put that money into the deal, pay that home equity line of credit off and have the asset. Now I have a house that has no debt on it and I have an asset that's continuing to create value for me.
Speaker 1:Yeah, and this is why I find Gino so interesting, because he's not so one way fits all for anyone. It's more of a strategic thought process, because a lot of people I have some real estate guys on sometimes and they're just all in baby and it's like no, no, no, you got to be a little protected and that's why I think it's cool that you have your six kids Like. It is not an easy process managing all of this. So how do you think about transferring it to the information of them? Because I mean, you have a lot of children, which is awesome, but how do they think about all of this?
Speaker 2:And the kids have. I have two different lives. I had the life of scarcity up until about 10, 12 years ago. So my older children have a different view. My 24 year old. She became a missionary, so she got out and I was.
Speaker 2:You know it was hard growing up with the kids, with a lot of kids Getting by. Yeah, we didn't have a lot of money. I have to save. Every time there was a different bill and that was my goal.
Speaker 2:For anybody listening to this, what's your goal of why you want to become financially free? For me, it wasn't to go out and spend money. I just didn't want to stress about dental bills. I didn't want to stress about going on vacation every now and again. I don't want to stress about oh gosh, they're going to college, it's going to cost me. That was my goal. I just just to make enough money to be able to become financially free, not to stress about that. That was my goal was.
Speaker 2:But for me, as I've done this process the last 10 years, part of it is creating Jake and Gino and having the YouTube videos, having the podcast, having the educational community where they come to the events and they're surrounded by this, and also at the dinner table. We talk about money all the time. Right now, money is a good thing Money. If you don't have money, there's no margin, there's no mission. You can't do anything without it. Now the goal is not to just focus on money. You focus on an opportunity, you focus on adventure and if you do really good, money is the result of it.
Speaker 2:That's what I think people don't understand. And as you make more money, you chase more opportunity and it comes full circle. So for me, it's just trying to be open with the kids, trying to make them understand that money is a resource. Money is a tool. It's not meant to be hoarded, it's meant to be really shared. And then part of what we're doing at Jake and Gino is trying to create impact for others. It's trying to make them see that if there's more abundance in the life and not everyone is hoarding their money, that's what happens. The government doesn't want us to hoard our money. When we have our money hoarded, it's not in the economy. The economy is not working, it's slowing things down. So I think the same mentality with us. If we're just trying to hoard our secrets and trying to hoard the money we make, we're not going to grow in abundance.
Speaker 1:Yeah, yeah, and I love that, the scarcity versus abundance, because I think about that all the time and it's like should you do it, should you not do it? And it's not saying risk it. It's not saying do this unthoughtfully, it's just hey, you just have to realize where you are on the trajectory. If you're not where you want to be, then you might have to take a little more risk. If you're where you exactly want to be, you limit the risk a little bit.
Speaker 1:And it's this learning experience of going in and taking different actions and you'll get different results, because there's too many of us that do the same thing and we're like, yeah, like today's going to be the day, and it's like no, like today is not going to be the day, like you have to do something different. There has to be a different action, there has to be a different result. Gino, you are the man. Where can people find you? Where can they learn more about Jake and Gino? Gino and Jake why is it not? It should be Gino and Jake.
Speaker 2:It's that Jake and Gino's rolls off the tongue, George.
Speaker 1:It does, it does, it does it does.
Speaker 2:Jake and Gino. We just go to jakeandginocom. I mean, we've got our books on there, we've got our podcasts on there, we've got blogs on there. We've got a ton of information on the website. Just go check out the website. If you want to email me, it's ginoatjakeandginocom. Do you have any questions? Just reach out to me.
Speaker 1:Absolutely Awesome. Thank you, thanks, brother.