BP Podcast: Partnerships & Growing to 900 Units with Jake & Gino

25 Replies

We’re not going to lie: It was hard to come up with a title for this episode because we covered SO much—productivity strategies, morning routines, growing from zero to 900 units, partnerships, 1031 exchanges. Whether you are a top performing real estate expert or still looking for your first, you’ll leave this interview challenged, encouraged, and fired up to make some big changes in your life! Jake and Gino are full of energy and even more full of knowledge, so get ready for one awesome show.

Listen here or on your favorite podcast player.

Great podcast. These guys are hilarious. “How do you fix that? Blockchain.” 😂

Loved their takes on a morning routine. I really feel like the mindset that it brings can help you gain some momentum.

Jake and Gino are AMAZING!! I have listened to every podcast they have and highly recommend everyone listen to them.  Between Jake and Gino and the amazing people here on BiggerPockets, I am finding the motivation to pursue my dream of being a multi-family investor.

Jake and Gino are the real deal...genuine. 

Amazing podcast!  They were so inspiring, motivating, and entertaining!!!

Jake and Gino brought a ton of energy and useful information to the podcast! Look forward to applying some of the awesome information they were able to provide! 

I liked all of their ideas about creating cash flow from existing businesses. Keep building your business and investments

Very entertaining....But I must be the only investor that cringed at some of the things being said...The idea of justifying bad loan terms because they can refinance 12 months from now sounds dangerously like 2008...What happens if there is a downward turn in the market and the equity dries up?   What if you can't sell because the buyers pool shrinks because lending practices change? What happens when that balloon payment becomes due and you have to exhaust all of your financial reserves?  That puts you in a very dangerous place...I guess these guys don't realize the risk because they've only been in the game for 5 years...I love the guys and their personality...900 hundred units is freaking phenomenal...I have seven...so I'm a minnow in a ocean full sharks...But with the loom of a market correction, I want 50 percent of my units free and clear, so when all he'll breaks loose, I can thrive and not hope to survive...

They said they don’t sell, and markets are cyclical, and why would they tap reserves when there is cashflow. As far as notes being due, at that scale it’s a drop in the bucket. I might be wrong but I’m definitely just regurgitating BP nuggets

Hey Jorge...In a perfect world, you don't sell...But the guys said that they haven't syndicated any deals...They use all there own money and they've taken equity out to fund the next deal...So that means that 2 million dollar note on that 36 unit complex becomes a problem if the entire balance is due...yes it cash flows nicely, but that's based on paying down a mortgage...Those horrible terms can come back to bite you in the ***...One of the guys said we accepted those bad terms because they KNEW they could refinance in 12 months...Ask anybody that was investing in 2008 if they felt the same way...

Jake & Gino are rock stars! 

Professionals like them make BP even better than expected.

Thanks for the info...

Originally posted by @Anthony Silver :

Very entertaining....But I must be the only investor that cringed at some of the things being said...The idea of justifying bad loan terms because they can refinance 12 months from now sounds dangerously like 2008...What happens if there is a downward turn in the market and the equity dries up?   What if you can't sell because the buyers pool shrinks because lending practices change? What happens when that balloon payment becomes due and you have to exhaust all of your financial reserves?  That puts you in a very dangerous place...I guess these guys don't realize the risk because they've only been in the game for 5 years...I love the guys and their personality...900 hundred units is freaking phenomenal...I have seven...so I'm a minnow in a ocean full sharks...But with the loom of a market correction, I want 50 percent of my units free and clear, so when all he'll breaks loose, I can thrive and not hope to survive...

What "bad" terms are you referring to that are risky? 75-80% LTV at origination...3 year balloon...20 year amortization...low interest rate...gross rents $8,000/mth below market? Their terms improved with their track record but the terms in the early years were not bad in the risky sense. Even if their balloon hit during an economic downturn, they have both a healthy LTV at origination and an even healthier LTV after raising the NOI by almost $100,000 per year. That's the key...they are buying under-performing properties and adding value.

2008 was NINJA (no income, no job) and LIAR loans (no doc or low doc) and LTVs in excess of 100%. Buying at 75-80% LTV and then adding additional property value in the 1st year of operation is the opposite of 2008.

I feel their biggest risk is a general economic downturn and it's impact on blue collar jobs but that is a separate issue from modest LTVs.  Apartments have been the darling investment for a while now and they might not be given a life preserver like they were in 2008 by the housing crisis.  Who knows though...I can't predict that stuff and all cycles are different.  Modest LTVs, positive cash flow, and high vacancy break even points are a good hedge.

These guys are the real deal! If you are a mf investor you should be listening to their podcast from the first episode on. Very actionable, real information, and the best bang for the buck with limited amounts of time to try and listen/read everything. Also, @Gino Barbaro (the G Daddy!) is very approachable and willing to help out...A LOT...here and also through their website.

I agree with @Mike Dymski , you have to get into the game and start somewhere. What does that mean? I have yet to buy a building, but as I'm looking it comes down to:

-buy a building that is within your comfort zone and not going to kill you if the deal goes south

-underwrite conservatively, then go back and be more conservative

-has to cashflow from day 1

-plenty of reserves to cover the unexpected...both repairs and unexpected high vacancy

-ideally LT financing, if that's not available, then even more reserves

Originally posted by @Mike Dymski :
Originally posted by @Anthony Silver:

Very entertaining....But I must be the only investor that cringed at some of the things being said...The idea of justifying bad loan terms because they can refinance 12 months from now sounds dangerously like 2008...What happens if there is a downward turn in the market and the equity dries up?   What if you can't sell because the buyers pool shrinks because lending practices change? What happens when that balloon payment becomes due and you have to exhaust all of your financial reserves?  That puts you in a very dangerous place...I guess these guys don't realize the risk because they've only been in the game for 5 years...I love the guys and their personality...900 hundred units is freaking phenomenal...I have seven...so I'm a minnow in a ocean full sharks...But with the loom of a market correction, I want 50 percent of my units free and clear, so when all he'll breaks loose, I can thrive and not hope to survive...

What "bad" terms are you referring to that are risky? 75-80% LTV at origination...3 year balloon...20 year amortization...low interest rate...gross rents $8,000/mth below market? Their terms improved with their track record but the terms in the early years were not bad in the risky sense. Even if their balloon hit during an economic downturn, they have both a healthy LTV at origination and an even healthier LTV after raising the NOI by almost $100,000 per year. That's the key...they are buying under-performing properties and adding value.

2008 was NINJA (no income, no job) and LIAR loans (no doc or low doc) and LTVs in excess of 100%. Buying at 75-80% LTV and then adding additional property value in the 1st year of operation is the opposite of 2008.

I feel their biggest risk is a general economic downturn and it's impact on blue collar jobs but that is a separate issue from modest LTVs.  Apartments have been the darling investment for a while now and they might not be given a life preserver like they were in 2008 by the housing crisis.  Who knows though...I can't predict that stuff and all cycles are different.  Modest LTVs, positive cash flow, and high vacancy break even points are a good hedge.

As newbies, eventually, somewhere they had to take a risk. It was loan terms but could've been bad broker contacts , crappy property management or partnership rifts. I agree one has to be conservative but one has to get off their backside and do something. 

Lots of people would kill to have J&G's level of success. Will it continue - who knows? Have they done a great job? Yes!

Great podcast guys, I heard Jack and Gino mention they are originally from New York, do we know where exactly? Love to see fellow New Yorkers succeed with Real Estate investing in other markets that NY.

@Gino Barbaro what markets would you expand to in this Market?

Amazing podcast. Loved every minute of it. Learned a lot.

What a fun podcast! Sometimes I listen at 1.5x speed, but I didn't need to with these guys - they are quick talkers, and funny and insightful!

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Jake and Gino are doing it EXACTLY!! how I want to run my portfolio. Buy up everything, cashflow it, refinance and do it all over again!! Brrrrr!! I love it!  I love what he said about finding good multi- family deals. I have some capital I am trying to invest just need to find me a good broker feeding me!! great podcast! 

Awesome post.  Thanks for sharing.

Great guests.

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