Real Estate Underground

Money Reveals You: Gino Barbaro on the Mindset Behind 2,600 Units

• Ed Mathews • Season 5 • Episode 202

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Gino Barbaro is a best-selling author and co-founder of Jake & Gino, but he did not start there. He opened a restaurant with his family in 1994, lost money on his early real estate deals, and only found his footing when he partnered with Jake, set hard parameters, and built a repeatable process for buying multifamily from mom-and-pop owners. That framework carried them through the last cycle without the blowups so many operators are living through now. Today Gino has transacted more than 2,600 units, owns 1,900, and his students have closed over 90,000 units and raised more than $800 million.

This week on Real Estate Underground, Gino sits down with Ed Mathews to talk about the mindset underneath the numbers. His through line is simple and uncomfortable: money does not corrupt a person, it reveals them. And the reason two investors with the same deal get different outcomes usually comes down to what Gino calls financial flashpoints, the money memories each of us was raised inside. Save for a rainy day, money does not grow on trees, it takes money to make money. Gino spent years unlearning those beliefs before he could raise capital, syndicate, and build the portfolio he has now.

What you will learn:

Why your relationship with money, not your spreadsheet, decides whether you close deals, and how to spot the beliefs quietly holding you back. The mind shift from starting a business to make money to starting one to deliver value, and why Gino says it is the difference between one restaurant and six. Why the market moved from valuation through renovation to valuation through operations, and what that means for how you win now. The velocity of money, why you only make money when you exit, and the three things worth doing with capital after a sale. And why no deal is better than a bad deal, and how the ten-minute no became a superpower in a market where sellers still think it is 2021.

Gino also shares the money-coaching business he is building with his wife and son at Barbaro360, why he believes legacy is not something you leave behind but something you activate today, and the six-acre farm in Florida where he goes to get his hands dirty. As he puts it, if you want to learn from someone, just make sure they are still doing it right now.

If you are an operator trying to build something that lasts, this one is full of hard-won lessons from someone still in the work.

Chapters
00:00 Your relationship with money starts everything
00:59 Welcome to Real Estate Underground
01:40 The name, and using AI as a force multiplier
02:40 Life before and after Jake and Gino
03:40 Money does not corrupt you, it reveals you
04:40 Why you really start a business: value for the marketplace
06:00 A stuck market and the grit AI can cost you
07:40 No motivated seller, no deal
10:40 Financial flashpoints: the money memories that shape you
14:30 Wealth is an exchange of value
16:20 Valuation through renovation vs valuation through operations
19:40 Velocity of money: what to do after you exit
22:40 Paying down debt as a legacy play
24:40 Retail, industrial, and the discipline to wait
29:20 The final five: purpose, mentors, and the biggest mistake
35:40 This week's book and where to find Gino

This week's book: The Psychology of Money by Morgan Housel
https://www.amazon.com/Psychology-Money-Timeless-lessons-happiness/dp/0857197681?tag=clarkstholdin-20

More Real Estate Underground episodes: clarkst.com/podcast
Elevista: elevista.com/podcast

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Additional Resources:

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Gino Barbaro

We need to unpack this, 'cause I think this is such an important conversation to have. Because for me, it all comes down to a person's relationship with money. How they were raised around money. What did they hear ab- about money? What did they not hear about money? For me, a- and as I'm saying this, I want you as the listener to really listen to this and to dive into it, and to really think about your memories, what you experienced as a young person around money. We call them financial flashpoints.

Ed Mathews

If you're within three feet of me, we're probably talking about real estate, much to my family's chagrin. But here's the thing, most people see 7% rates and freeze. I see opportunity. They're waiting for the perfect deal, and well, I've analyzed thousands of them, and perfect just doesn't exist. So I talk to operators across every asset class, flippers, multifamily syndicators, note investors, and whatever else is working. No sales pitches allowed, just real lessons from people actually doing it. I'm Ed Mathews, and this is Real Estate Underground. Greetings and salutations real estate undergrounders. It is Ed Mathews again with the Real Estate Underground. Thank you so much for joining us today. Today is a treat. They say never meet your heroes, and I think it's total bunk because I have been a devotee of this gentleman for a very long time. And in fact, m- my one regret today was the first 20 minutes of this conversation that we just had, I forgot to press record. I didn't forget, I just didn't. And it was the pre. I was asking him some advice on a deal that we're talking about. And Gino Barbaro you set me straight. Thank you so much for that advice. Happy to share that on another podcast maybe, but right now I wanna talk about you. Sure. How are you, man?

Gino Barbaro

I'm doing good, but we're gonna first start off, because I don't really know, or, the name Real Estate Underground. Where did you get the name from?

Ed Mathews

I come from the technology space, and so I wanted to have a show where people could come to us and learn things that you can't learn anywhere else, and that's the challenge. And, we've been successful in many respects, and in others still work to do, we've been talking about other asset classes, as I was telling you before we hit record. And we've also been getting into the AI space and, a lot of if you're I don't know if you follow me, but if you see me on TikTok or YouTube or whatever, we're talking a lot about how real estate investors in particular can use AI to, as a force multiplier- to build their businesses. So that's the basic premise.

Gino Barbaro

It sounded a little bit nefarious to me. Like we're gonna go on the underground. It's almost dangerous. We're gonna, we're gonna, we're gonna, yeah, hide it from people because real estate's this risky, this scary, this bad investment. And, as you probably know, Ed, it is if you don't know what the hell you're doing. For sure. And I've learned that lesson, eons ago. And as my business partner Jake likes to say, there's life before Jake and Gino and there's life after Jake and Gino for him. I think he's the only real estate investor who never lost money. If you talk to a real estate investor, if you haven't lost money in real estate, that you haven't invested in real estate. His fortune is that he had me as a partner. I was the one who lost all the money before we- partnered up. And when we partnered up, I was scared crapless. I wouldn't do a bad deal. I had certain parameters. I learned how to do it, and I'm like, "This is what we're gonna do. We're gonna focus on multifamily in this market, and we're gonna buy these kinds of deals from mom and pops." Yeah. And we got lucky early on. You have to get lucky. But as time grew on, there was a framework, there was a process that we had, and that really kept us from really making these big mistakes that I think- people have made over the last couple of years.

Ed Mathews

Yeah so let's talk about that- Sure just for a moment. And then, one of the other things that you had mentioned that you want to talk about is- the whole mindset around money and how people look at money, how people learn to use money, which is something I know that you've been focused on ever since I've known you, frankly. But now I think you're teaching people this, so we're gonna pick your brain on that as well. So tell me about the challenges that you're seeing out there these days

Gino Barbaro

I think one of the bigger challenges that I'm seeing if we- let's take broadly speaking, I think the big challenge now is that you have a class of people that are demonizing entrepreneurs, demonizing money, and demonizing wealth. A- and obviously money can be bad. My whole through line or my, as they say, pull string kind of-

Ed Mathews

Yeah

Gino Barbaro

idea is money does not corrupt the person. Yeah. It just reveals a person.

Ed Mathews

Right.

Gino Barbaro

So if you're a good person and you make a lot of money, you could have a great impact.

Ed Mathews

Yeah.

Gino Barbaro

But if you're an evil person and you make money, it will corrupt you. So let's put that out there. You have the choice to do with what you want with money, and I think the big idea right now is that there's a lot less people right now really w- really don't understand what business is all about, really don't understand what money's all about. I made that mistake when I first started my first business back in 1994 with the family. We opened up a restaurant. Why did I open up this restaurant? It's because I wanted to make money for the family. That's what it was for myself and the family. Great. That's not really the reason why you open a business. You really open a business or you start a business because you wanna provide value for the marketplace. You wanna provide value for your customers. In real estate, you wanna provide value for your investors or your residents in the properties. That one little mindshit s- mind shift changes everything. If I had done that in the restaurant, I may have five or six restaurants right now. I only had one 'cause it was all about me and my family. Obviously we did a great job with the customers and all, but that's, that really wasn't the culture. Yeah. And it was more of "What's in it for us?" For Jake and myself I think we wanted to really create a cool portfolio. We wanted to really create a culture within the organization, have core values, have people wanna come to work, have nice properties. We don't wanna be slumlords. Yeah. We wanted to have a great syndication business where we really talk to our investors, and I think that's being lost now. I think when you look at entrepreneurship, money being demonized, and people just don't understand really what money is or what investing is, it clouds it. And then when you look at it from real estate from a whole, I think people are taking shortcuts now. I think AI has really helped a lot. It's an amazing tool. You can get on there in your underwear, and within 10 minutes you can know everything you want about Memphis, Tennessee. It's great. It is. Like 15 years ago you had to struggle. Yeah. But with that ease, you lose a little bit of grit and a little determination and a little bit of e- execution because it's so easy. And I think those of us who persist and really become clear on what we want, I think that's really important. So really to answer the question I think right now we're just stuck in a market. We're just, it's just, we're stuck right now. There's really no- it's really stagnant right now if you if I'm really being honest with what's going on in the market in my area, in Knoxville, Tennessee.

Ed Mathews

Yeah. Same here in the Northeast. I think that a lot of... I think a lot of it is that there's still some unrealistic sellers out there in terms of the their expectations when they put a property on the market. Particularly in multifamily. But also, I think that's also true across other asset classes as well. Medical industrial, flex industrial, self-storage, you name it. I think that the perception that it's still 2021 is, to a certain extent is still pervasive. I'm seeing some movement, but it's a real challenge to bring together the reality of, hey, this is my real cost of debt, right? It is 5.5, 6.5, 7%, whatever. And if you want me to buy at a, a four cap, five cap, six cap, that doesn't work. Doesn't work for us, right? And it's, you're setting yourself up for failure. And, I, I've made my own mistakes, right? I've gotten over-leveraged. I s- had to sell a property that, a f- bunch of years back that I really didn't wanna sell, but you know what? It is what it is. And- that lesson, like I'm sure the lessons you learned before you met Jake they hurt, but they also stick, and that's, that's real important. The,

Gino Barbaro

I wanna- And there's two... I wanna as- I really wanna piggyback off what you said. There's two things that I really wanna highlight. The first thing is, in real estate you have to understand, if there's not a motivated seller, you will not get a deal. You were a motivated seller. That person who bought the property, you probably may have made some money, but they, they actually had the ability to to really to get a deal. Right now, there aren't as many motivated sellers as there should be because they keep extending these loans. Banks don't want their properties back. I think they've learned they're really terrible at managing their properties. So they're extending debt. They're allowing these things. So there's not as many motivated sellers as there should be. And number two, what's gone on in the real estate industry over the last 10 years or so, when you look at family offices and high net worth people, their portfolios have gone up dramatically with alternative assets, and real estate is an alternative asset. The 2017 Jobs Act with cost segregation and the tax benefits have also poured a little gasoline onto the fire of real estate. So you have all these more sophisticated investors jumping into this real estate market, whether it's self-storage, whether it's mobile home parks. You could buy a mobile home park for a 20 cap back in- back 10 years ago. Good luck finding something that at a good six cap right now. It's because money has flowed to the industry. Cheap money has flowed to the industry, right? Now you do that. Now, I'm hoping that, I don't want to call it a dam, but I'm hoping that loosens up a little bit. So there are opportunities for people to get on and to sell some of these assets at prices that they can still make money, but yet are reasonable, where, Ed and Gino can actually buy these properties and hope to make a profit on them as well.

Ed Mathews

Yeah, that's why we've looked hard at land development. Exactly, exact that re- exactly that reason. The other part of it is that it's, there's something to be said for building something that's square and plum. It's way easier to take care of, right?

Gino Barbaro

Yes. Yes, but it's way harder to build it though, right? For sure. It takes a long time. So you have to understand the cash flow is not there from day one. There's a lot of risk there. It's more of a specialized... And it's a different mindset, and that's okay. It's a different vehicle. But if you can buy something, a piece of land, fix it up, and build it, obviously in the next three to four years, you have an asset that you can hold for the next 20 to 30 years. It's still brand new, a lot easier to manage, better kind of resident base. It's a really cool asset to have if you have the mental stamina and the wherewithal to put that kind of deal together. There's a lot of benefits to that kind of deal.

Ed Mathews

Without a doubt. Without a doubt. One of the things that that you mentioned that I want to touch on is the whole mindset around money, right? And y- there are people out there that as you said, stigmatize entrepreneurship, and then there are people that understand the value that these, that these- deals, the Amazons, the Dells, the Teslas, the, and the owners of those, right? And w- we can talk about the guys. But the values that they bring to our society. And I'd like to understand your perspective on that.

Gino Barbaro

We need to unpack this, 'cause I think this is such an important conversation to have. Because for me, it all comes down to a person's relationship with money. How they were raised around money. What did they hear ab- about money? What did they not hear about money? For me, a- and as I'm saying this, I want you as the listener to really listen to this and to dive into it, and to really think about your memories, what you experienced as a young person around money. We call them financial flashpoints. They are memories around money. They're emotions around money. They can be good, they can be bad. I was raised in an immigrant household. I was always told to save. My parents had a business, but there was scarcity and some fear around money. They grew up poor in Italy. They came here for a better life, so it was always save. Save for a rainy day. And that's how I was conditioned. As I got older, we ended up opening the restaurant, but it's always safe to stay small. Don't expand too much. And my relationship with money was a little bit of scarcity, a little bit of fear, maybe a little bit of shame at times. And then I end up investing in real estate, and I lose money on a couple of deals. There's some financial flashpoints for me. But I never had the idea that if Ed's making $17 million a year, I'm jealous of Ed. My idea was always like, "How does Ed do that?" I wanna be like Ed. I'm not jealous of Ed, I wanna be Ed. That's how I was raised. So when I hear these people saying you can't make a billion dollars, of course you can. And if I am actually thinking to myself unconsciously Ed doesn't deserve that," guess what? You're probably not going to make the money as well. If you're raised in a household that is constantly demonizing money and saying that money is evil and saying that rich people are evil... Now, I'm not saying it's right or wrong. As you get older and you wanna get into real estate and buy a 30-unit, and all of a sudden you may make some money on that 30-unit what is your family, your tribe gonna think of you? They're gonna think you're becoming this rich person, and you unconsciously start having those emotions and you're like, "Huh, should I put that offer in? Do I wanna become that real estate tycoon?" And there's a lot of self-sabotage going on. So people don't understand. And listen, this is after coaching thousands of people in real estate. I've coached thousands of students. Our students have closed over 90,000 units. They've raised over $800 million. A- And I'm talking about students who had no right closing deals, 20-year-olds. Like, how is that person closing a deal? Versus people like Ed and Gino, good-looking studs. We've got nice balance sheets. We, w- we got credibility, and yet we can't close a deal today. What's the difference? The difference to me, I always look back and peel young, it was that younger person had a better relationship with money. They understood what money was. They didn't have those limiting beliefs, those old patterns, those old behaviors that were really holding them back. They understood that. And for myself, I had that up until around the age of 40 when I realized, wow. I went to coaching school. I just saw all the holes in my plan. I saw all those beliefs and all those behaviors that I had. It takes money to make money. Money doesn't grow on trees. Then I start doing deals with Jake, and I'm like, "Holy crap, we're doing seller finance deals." Does take money, but it ain't my money. Then we start raising money and syndicating money. It takes money, but it's not my money. And as you start seeing that, all of a sudden your relationship with money starts shifting. The way you think about money starts shifting. And then you say to yourself, "Wow, all those thoughts that I had earlier on really held me back. And once I-" as they say, peeled the onion back or really shined a flashlight on them and said, "Are those actually true, or are those just things that I've actually created in my mind and have been holding me back?"

Ed Mathews

Yeah, I look at wealth... So I grew up in a, as a child or grandchild of Depression era. So you and I are roughly the same age, right?

Gino Barbaro

Yes.

Ed Mathews

And and so my people got off the boat one more generation before your people, it sounds but the fact is that, everybody lived through the Depression. And that whole concept of scarcity and being afraid of the rich and being even jealous of them is a real thing. And, here's the thing. Wealth is created by an exchange of value, in my opinion, right? The reason, and I'm gonna steal a page from your book. Y- the reason that Elon Musk exists isn't because he's nefariously stealing from people, right? He just delivers a really good car And people are willing to pay a lot of money for that car- Yeah at a high profit, right? That's

Gino Barbaro

right.

Ed Mathews

That's the exchange.

Gino Barbaro

That's right. And it's important to say that we are not here judging people. No. And we're not here to say if that's the way you think, you're right or you're wrong." That's your lived experience. I'm only here to say, let's challenge that lived experience. Do you wanna continue to think that way? And if you do, great. Or maybe you wanna tweak some of these thoughts that are empowering or disempowering. I just thought it was incredible that up about, till about two years ago, everyone, Elon was the paragon of success, and then all of a sudden, a year ago, he becomes a Nazi. This is the guy who had to actually go up and save astronauts. How many people on the planet can do that? He's catching rockets. He's doing things that other people have never done. Okay, so you wanna say the government's subsidizing him? What- whatever. I don't care what. You can make up any narrative you want, but that dude is incredible. Yep. I don't care any way you slice it. He's created a tremendous amount of value. Now let's translate that into real estate. If you wanna get into real estate, you need to find where your value is in real estate. For me, partnering with Jake, I saw the value in that I like to operate these properties. I like to be the numbers person. I like to talk to brokers. I like to talk to investors. So when we started scaling, it's okay, great, that's where my value is. Jake loved to manage. He was the operations guy. You put us together, great. As you're listening to this, what do you like to do? Are you the deal maker? Are you the capital raiser? Are you the boots on the ground? If you could pick one of those, and dude, if you are a property manager or you can manage properties, you can create so much wealth for yourself because most people don't know how to do it. Most people hate it, and that's the glaring view. That's why we are in the mess that we're in real estate r- right now. It's because it was always valuation through renovation over this last market cycle, and that works in a certain market cycle. But as the market cycle shifted, it's now valuation through operations. Real estate's a business, whether you're developing land, whether you're buying self-storage, or whether you're operating a multifamily business. And if you can operate and you have that skill set, you don't need money. You can get equity in deals without money and then start growing it and grow that business within there and continue along. So look at all the greats that have become entre- entrepreneurs in different businesses. They're using the same tactics and skills that we are talking about right now. In real estate, find the value that you can create, lean into that, and just go out there and see who you can partner up with to bring that value to somebody else.

Ed Mathews

Absolutely. The fact is that, y- I'll use me for instance, right? One of the things I'm really good at is finding deals, right? And so the next good thing I needed to be, or the next thing I needed to be good at was finding partners. Because I didn't come from wealth, so I had to find partners that would help me acquire these properties. And then we brought in a partner who was really good at operating, because I could do it, but I'm not as good at it as she is.

Gino Barbaro

Right.

Ed Mathews

And and so slowly but surely, we built a business. And but those three key roles are so important. And so what I'm hearing you say is you gotta find your superpower, right? Yes. And when you deliver, when you over-deliver on that superpower is when you start to create value.

Gino Barbaro

Whether that's- And, yeah, and I think, Ed, when you first start out, i- it's unfortunate, but you gotta do everything. You're a bootstrapper when you first start out. Jake and I, we were cutting the grass. We were doing the payroll. We were editing our podcasts. We were the salespeople. You have to do that in the beginning. But for you to grow and to become a legitimate entity... In in, in the country right now, 95% of businesses generate less than a million dollars in revenue a year. That's 95%. That's the vast majority. It's because we're mom and pops. And for you to continue to grow is what you're talking about, that value creation. Now, you don't have to if you don't want to. There's nothing wrong with having 20 units. Jake and I, we only wanted 100 units. That's all we were shooting for. It would've been great, 20 grand a month in, in income coming in from those 100 units. But once we reached 100, we were like, "This is not rocket science. How do we figure this out? How do we go to 200 units?" And then once you figure out the 200 units, it's "Okay, now we're at 200. What's the next leap?" And I think that's what life is all about. It's all about that journey, and it's all about those inflection points. But it really always comes back to what you said, that value proposition. It's really important to keep that in mind.

Ed Mathews

So now that you've gone through and... I, I think the last time we had talked, you were just maybe within the year or so, and this was a couple years ago, so three years ago, you were just coming off one of your f- first full-cycle deals.

Gino Barbaro

Oh, yes. And-

Ed Mathews

Yeah And one of the things that e- one of the things that I've learned from people who are smarter than me about this is that creating velocity within f- with your money is where real wealth is built. And so I'm curious about now that you've probably cycled through a handful of deals w- you know, what do you do with that money?

Gino Barbaro

Ed, that's a great question. It really depends upon the portfolio you have, where you are in the business, and ultimately what your goals are. We've transacted on over 2,600 units. We currently own 1,900 units.

Ed Mathews

Okay.

Gino Barbaro

We don't have any more syndications. We use syndication as a tool. We had three syndications from 2018 to 2020. We've gone full cycle on all three of those because- It really, when a syndication, when you're talking about a syndication, the investors are the important part. It's not what Jake and Gino want. It's what's to do best with the investors. Typically, they want their money back as quickly as possible. And that velocity money is great. I want you to hear this, everybody. You don't make money in real estate when you buy. Y- you may make a little with cash flow. You make money in real estate when you exit, when you crystallize the equity, whether it's through a refinance or it's through a sale. Now, the money is made. It's more important what Ed's talking about. What do you do with that money? I was fortunate when I started investing with Jake that I had my restaurant business where it was providing for my lifestyle. The real estate profits just kept going back into more deals. They kept going back into the business, and that's how you cut the timeline of going into real estate full time. But for us, those syndications, we just had money left on the sidelines. When a deal came, it allowed us to stopgap because 2011 to 2017 we were doing deals with our own money. We were fortunate enough that we were refied a lot of money out of those first few properties and went in. But at 2018 we ran out. We're like what do we do now? Oh, everyone's syndicating. Let's syndicate." A- and we liked it, but for us, we didn't wanna deal with investors. We didn't wanna have another business. And we didn't understand. We didn't think at the time like, "Hey, we want 10,000 units." That was never our goal. Our goal was always about PPU. That was our KPI. And if you're listening to this, what's your KPI, your key performance indicator? For us, it was profit per unit. When you syndicate deals, there's less profit for you as a general partner unless you're putting a lot of money in on the limited partner side. And we're like, "We have less control. We have bosses now. That works, but when we get out of these things, let's pull back. Let's reevaluate and reassess what's going on, and let's start buying deals with our own money." Now, we're obviously can only buy between $25 and $30 million a year with me, Jake, and my business partner, so we can't scale to, $75 million a deal in res- real estate deals. That's fine. Yeah, we didn't want that. So that's what the clarity allowed us to accomplish. And we're like, "Okay, we're good doing that." But it's important what you said to bring it home. What do you do with that money once you exit? Because that's where people become wealthy. You need to continue to invest that money in other deals. You need to continue to put that money to work, and if you pull that money out and go use it somewhere else, you're losing what you said, that velocity.

Ed Mathews

So I would offer a third scenario, and that is paying down debt. You know-

Gino Barbaro

Oh, yeah.

Ed Mathews

Yes ultimately keeping with the idea of keeping, having 2,600, now owning 1,900.

Gino Barbaro

Yes.

Ed Mathews

What are your thoughts on paying down that debt? And that's more of a legacy play, right?

Gino Barbaro

Yes. It's an interesting- question because for me, our portfolio is probably levered at 65 LTV, 60 to 65, so we're not we're not levered at all. My problem is... I'll give you, I'll give you an example. We bought a property back in 2000 '16. It was 156 units. We paid $7 million, $7.1 million on this thing. We refinanced it, and then we have about $6 million of debt on this thing right now. If you think about $6 million of debt back in 2016 versus today it's depreciated so much. I don't know if you wanna pay down your debt, especially if you're borrowing at three and a half to 4%. I don't think you should because you- Where else can

Ed Mathews

you... Yeah, where else are you gonna get that kind of-

Gino Barbaro

Yes. Now, if you are a single family homeowner and you buy a house every year for the next 10 years, and your plan is by year 20 I wanna have this debt paid off, I own these things free and clear, that's a great plan. That's a great strategy. 'Cause you can always sell those homes on seller financing and get mailbox money a- and get... earn 5 or 6%, don't get a capital gains hit, and make yourself 10 or 15 grand a month in revenue. So real estate's beautiful because there's so many different strategies. So if somebody comes on here and says, "This is how it's done to get wealthy," they don't know what the hell they're talking about, 'cause there's so many different ways to be able to make money in this business. I love the idea of buying these homes, paying them down. Year 20, kids don't want them? Great. I bought the house for 200 grand. It's worth 400 now, has no debt. I'm gonna sell it on a seller finance note. I want 50 grand down. I'm gonna take 350 for the note. At 6%, what is that? I don't know, two grand a month or whatever that is. You have 10 houses, it's 20 Gs. What's wrong with 20 Gs a month for doing nothing,

Ed Mathews

right? Not a darn thing.

Gino Barbaro

Right? That's a plan. That's a great plan. That's somebody who's focused, sat down, and said, "This is what I wanna do." So for that person, paying down the debt makes total sense.

Ed Mathews

So what are you guys doing right now? What do you see?

Gino Barbaro

We're struggling f- to find deals right now, and actually Jake whispered to me this morning, "Hey, maybe we should be looking at other opportunities." So we're looking possibly at some retail, smaller retail strip centers that have a barber shop, that are in a good location, great median income, great traffic. We're looking at that. We're also looking at industrial. I l- I've liked industrial for a couple of years. I know a lot of our students have been in industrial, where you have these 1,500 square foot little warehouse type office type scenarios where there's, the plumber who needs a place to go park his truck but wants an office. I love that type of stuff as well. Me too. So we're looking at that right now because the multifamily deals right now in our market, if we zoom out, they're crappy. They're 1960s. They still want five caps for them. Rents are s- flat in our market and, they're down actually .8% in our market that has population growth and job growth because there's so many damn apartments coming online, and it's not gonna wind down until probably be mid-2027, a year from now. So we're struggling to find actually pretty good deals. Occupancy's at 92%, and people are underwriting for 95. It's not 95, it's 92. So like you said, the sellers still don't understand or they don't wanna understand, so it's frustrating for us right now. So we're looking into these other avenues. But You have to be patient, and that's the thing. No deal is better than a bad deal, and we're not gonna overpay on an older asset in this part of the market cycle. We're just not gonna. We're just gonna have to be a little bit more patient.

Ed Mathews

Yeah. And that's the thing. I... There was a time where I was looking at, poof, 80, 90, 100, mo- 120 deals before I even found one that was worth spending some time on. And I got really good at the 10-minute no. And, and it's actually, if you go to our website, yeah, one of the things that I talk about on it is that most of the actions, activities that we take around property valuations is t- we kill deals. That's right. It's, that's... that is a huge piece of our success.

Gino Barbaro

That's

Ed Mathews

a

Gino Barbaro

superpower.

Ed Mathews

Yeah, we're really g- here's the thing. I'm, I, me as an entrepreneur, I am so good at talking myself into stuff that, I was like, "Ah, we'll figure it out. We can make it work." "No. No, we can't." And, fortunately, I have partners that can bring me back in and be like- "all right. Here are the words coming out of your mouth that, you're writing checks that I'm gonna have to cash, and I have-" Yes. no idea how to make that work." Okay." And so we've been looking at flex industrial as well. I personally am really interested in that here in the Northeast. Here in the Northeast, our economy is thriving, right? Absolutely thriving. And the the fact that people A I don't remember the number, but it's a gigantic number of people either have their houses paid off, which I think is around 35, 37%.

Gino Barbaro

Yes.

Ed Mathews

There is another gigantic number, and it's probably a similar size number or more that have their mortgage at less than 4%. And so why the heck would you move out of a house that costs you pennies? Because the other complicating factor here in the Northeast is you can't buy a house of equal value for the money you'd get from the one that you sold, right? You'd have to then spend more money to get the same house. Why would you do that? Yes.

Gino Barbaro

Yes.

Ed Mathews

And so here in this market if you want to if you want a nice new kitchen, instead of going and buying a new house, you just replace your kitchen.

Gino Barbaro

Yes.

Ed Mathews

And so plumbing, electrician, HVAC-

Gino Barbaro

Oh, yes

Ed Mathews

kitchen in contractors you name it. General contractors are thriving, and they need space.

Gino Barbaro

Yes. And it's the same down here in Florida. In St- I live in St. Johns County in St. Augustine. I'm about 45 minutes south of Jacksonville. The amount of building that's going on down here is just, it's mind-boggling what they're building down here. And you can't park your truck in the, in an HOA neighborhood, so you need to park your truck somewhere. There's are a lot of contractors down here. You got HVAC, you've got plumbing, you've got spray and foam. We got electricians. They need places to go. And to have a 1,500 square foot little office/warehouse/ s- showroom, it makes a lot of sense, and they're building them like crazy down here as well.

Ed Mathews

Yeah. No, I've got a buddy of mine up in New Hampshire, Brian Tully, and he's That's all he's focused on. That's awesome. And he's, he's, I think he's pretty close to getting a deal, which is great. I'm looking forward to the OM so that I can play along. That's great. But but yeah. He and his brother is a perfect example, right? General contractor, very successful, needs a place to park his truck, right? And to drop all the materials that he has and, be able to sit down with clients. And, flex industrial makes a lot of sense- Yes from a- I agree just a lifestyle perspective, n- as well as a, an investment. So Gino, we're coming up on the end of the show. I would like to get some insights and take you quickly through the final five. Sure. So you know, obviously you've been very successful and, thank you for all you do to give back to this community, you and Jake. And I'm curious about, now that- The mortgages are taken care of, right? Th- the kids' college tuition, good to go. Y- you're good, right? You're financially solid. And nevertheless, you get up on Monday morning and go to work. And I look at that as purpose, and I'm curious, how do you define purpose in your own life? What gets... What you, what gets you out of bed on Monday?

Gino Barbaro

Right now it's, to me, the legacy piece for the kids. I've got six children. My oldest one is 26 years old, so I really need to prepare them for the legacy. And I've said on other shows, legacy's not something you leave behind. Legacy's something that you activate today. So even if you're listening to this, whether you know it or not, you're creating your legacy today going forward, and that's what I do. When I get up Monday morning, I think about how can I prepare my children? What can I teach them today? What kind of stories can we go over, through with- whe- whether it's from the family or from whatever perspective. I'm really trying to prepare them. And for us, we're creating a business. I want to teach my kids about the business world, so we're starting a family business all around entrepreneurship and helping others so they know, wow, okay, in 10 years when they want to do their own gig, they understand what KPIs are, they understand what rhythms are, they understand what income statements and balance sheets are. So that is, to me, really important. And I think anybody listening to this, if you're in real estate is a legacy play. But, why are you doing the business? What are you doing it for? And if you're saying you're doing it for your family, ultimately you're gonna wanna teach your family about money and about responsibility, and about, once you leave that legacy to them, you wanted them prepared to receive that legacy.

Ed Mathews

Absolutely. Couldn't agree more and that's amazing. So tell me, just out of curiosity, tell me a little bit more about that business.

Gino Barbaro

It's called Barboro360, and, you know- It's one of those ar- avenues where my wife and I, we're both life coaches, we've both become money coaches. My son, who's 23 years old, is actually getting his certification to become a money coach also, because I want him to have a really healthy, strong, good relationship with money, a good understanding. I want him to be able to ask people questions, I want him to be able to connect with people. That's such an important skill that isn't taught, so I want him to do that. And the whole Barbara 360, that's what it's all about. We're trying to build a media company through our podcasting, through our blogging, through our workshops. Through all of that, where we're really getting couples and families to get together and to start having that difficult conversation around money. Like, where do you start talking about money? How do you get the family involved? W- what are some of the things that you need to start talking about? And that's what this whole company is really, is based upon.

Ed Mathews

Excellent. Wow, that's great. And I know y- you I asked you that question. That wasn't a plug in fairness. But nevertheless, I'm looking forward to learning more about that. I'm also curious about, obviously, Gino, you've had a tremendous set of experiences, and you've learned a lot on your own, and you're very generous with how you share those experiences with others. I'm curious about your mentors, though, right? I know you come from a strong family, and I know you've had success elsewhere in your life beyond this. I'm curious about the mentors you've had in your life, and what is the best advice you've ever gotten? That

Gino Barbaro

gave- What's really, yeah, what's really cool is I was listening to the mentors back in '04, '05. Right now, the internet has got a lot of people on the Gram and on TikTok. It's the Dunning-Kruger effect. There's just people who are really loud, who really don't know what the hell they're doing. I was really fortunate to really listen to Jim Rome, Zig Ziglar. I've actually interviewed Zig Ziglar's son, which was really cool. Tony Robbins. I was always a big Napoleon Hill fan. I really was so immersed in that. There wasn't as much noise 20, 25 years ago, so that's what I really gravitated towards. So for me it came down to that personal responsibility. And then obviously, you got into the real estate space. I was a big Rich Dad Poor Dad kind of guy. Did his coaching mentorship. I did a couple mentorships with gentlemen who were doing real estate or teaching syndication. So if you're out there and you wanna learn something, if you wanna learn about money, find people who teach about money. If you wanna learn about real estate and single family homes, go find somebody who is in the single family home space who has success. Success leaves clues. And try to gravitate with that person and learn what they're what, what they're doing. And what I would say is, if you're gonna find somebody, the last point, and I think this is the most important point, if you're gonna find somebody who's gonna teach you something, just make sure that they're still doing it right now

Ed Mathews

That is huge, right? And somebody that used to flip houses 20 years ago, yep, they can tell you the nuts and bolts of how to do it, but not in today's market. It's- It's completely different entirely different. Yes. The world's Yeah, the world's changed. World changes- every 18 months, right? That's right. So if you don't have recency it's gonna be really hard to be able to talk about how to operate in today's market.

Gino Barbaro

Yes.

Ed Mathews

So I'm also curious about, I firmly believe that we learn a lot from the mistakes that we make over time, right? And so that Lessons, right? So what is a decision that you look back on now professionally that you look back and go, "Man, I would love to have that one back knowing what I know today," and what'd you do about it?

Gino Barbaro

Oh, there's so many mistakes that I made in real estate. I think the one mistake that really sticks out above all the others is not understanding the market cycle. Buying a deal and not really understanding what cap rates were, what cash on cash was, and just buying in the wrong market cycle, buying the wrong, property, not understanding demographics, just really being uneducated about the market. I overpaid because I just didn't know what I was doing, and I think that's what people don't But I think the biggest mistake that I made in real estate, if I gotta sum it up, is I didn't think real estate was a business. I just thought it was a, just a collection of assets. I'm not gonna have to really run anything. I maybe need to be a landlord. That's the wrong mindset. Re- real estate, whether you're flipping homes, whether you're running a multifamily portfolio, whether you're doing land, it is a business. It's a future stream of revenue, and if you don't understand that and you don't know how to manage it, you're gonna go out of business real quick.

Ed Mathews

Quickly, yeah. So what's the book on your nightstand these days?

Gino Barbaro

Oh, I it's interesting. I interview so many really cool people. The one that I'm reading right now, God, there's so many. I'm I'm reading a lot of financial psychology books. I'm reading a lot of books on financial therapy. The Kinder Process. I'm reading a book called The Psychology of Money by Morgan Housel. I really wanna understand the behavioral psychology around money and why do people do certain things around money. So that's really what's been on my nightstand the last f- last few months.

Ed Mathews

Okay. I think I know the answer, but I'm gonna ask it anyway. How do you define success in your life?

Gino Barbaro

Success is, it's interesting. You do change it over time. Earlier on I thought success was making more money 'cause money's gonna solve all my problems. Doesn't really work that way. To me, success is just having fun and doing what you're doing and really learning. And when I get up in the morning, like you said on Monday morning, I've got purpose. There's something that I can do, something that I can have fun at. And to me, ultimately, success is getting really good at something. That is what success looks like to me.

Ed Mathews

Awesome. And so when you're not talking about real estate or helping people through their relationship with money, what else do you like to do?

Gino Barbaro

We-

Ed Mathews

What's fun?

Gino Barbaro

We just bought a farm. Yeah, about six acres, about 20 minutes from where I live in Florida, a little inland. And we have cows, we have donkeys, we have chickens, honeybees. I've got a garden there. So I'm out there three or four times a week at least out getting my hands dirty. Awesome. We all need to get our hands dirty. We all need to be in nature, my friend.

Ed Mathews

Yeah. A- as my daughters would say, "Touch some grass," right?

Gino Barbaro

That's right, man. Yeah. Right on. No kidding. Yeah.

Ed Mathews

So Gino, if people wanna learn more about you or wanna get in touch what's the best way to do that?

Gino Barbaro

The best way, if this resonated with you, if you are struggling with money, if you're saying to yourself, "I can't close deals. Every time I b- I feel that word money come along, I get this emotion. I get afraid. I'm a little, I'm a little f- scarcity. I feel a little shame around it," you're not alone. We've all been there. And just go to barbaro360.com. That's the website. If you wanna schedule a call with us, great. If not, just start listening to the podcast. We have two podcasts. My wife and I have one, and my son and I have one. We talk about money. We talk about the challenges of raising a family with money. We talk about all those things on the podcast. So if that resonates with you, just go to Barbaro360.

Ed Mathews

Okay. We'll be sure to put that in the notes. So Gino, thank you so much. Once again, my friend, it's good to see you. I'm glad you're well, and continued good fortune.

Gino Barbaro

Thanks, Ed.

Ed Mathews

Awesome. Hey I was trying to get you through 'cause I know you have a hard stop. I know. So I'm gonna let you go. I'm

Gino Barbaro

sorry. I'm sorry I went too

Ed Mathews

long. No, you're good. Yeah. Thank you very much. Good to see you.

Gino Barbaro

Thanks, brother. Ciao.

Ed Mathews

Be well.

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Ed Mathews

Host