All Forum Posts by: Gino Barbaro

@Alton Swann

@James N Sheils is the BTR guy.

Gino

@Beck DeYoung

I would try to stay away from properties that have negative cash flow. The real problem comes in when the unexpected happens, like a roof repair, or a boiler replacement, on top of the negative cash flow.

If it was me, I would try to save more, take out less debt, to help with cash flow. Real estate is a longterm wealth builder, but you need to be in the business long enough to reap the rewards.

Take it from someone who has owned negatively cash flowing deals, NO deal is better than a bad deal.

@Greg Kasmer

thanks for the shout out! I think the key word is community, and I've tried my best to cultivate a great culture and group of people. Power is in the community and the ability to network and learn from community members (BP is the perfect example)

Gino

@Brandon Craig

I would chalk it up as the cost of tuition. I wish that was how much I lost on my first deal. Needless to say, it was a lot more.

What I did do, thankfully, was try to find out what went wrong.  The list is endless, but, a couple of things that stood out:

The partner was not aligned with me in terms of values or vision. All I saw was easy money, not how unethical or incompetent he was. It was definitely his fault, but I have to own up that my due diligence was pretty non existent.

I should have flown down and inspected the deal, and his other deals. That would have stopped me immediately from losing my money.

I would let an attorney review the PPM and operating agreement. Possibly have an attorney draft a letter asking for info on the deal.

What do you think the deal is worth today? You can always go to them and try to make a deal to have them buy your shares at a discount.

The worst part of my deal was the mental energy I wasted thinking about losing the money. It took me a while to come to grips with my mistake, but once I did, I was able to move on.

Is your mental energy, and focus worth the 40k? If it is, then pursue it.If not, then hope for the best but just move on.

Hope that helps. 

All the best

Gino

@Greta Andrews

Buying and investing in real estate is very similar to buying a business. You are buying a future stream of revenue, but with some key advantages. Tax benefits are great, and the ability to extract equity without selling is very beneficial when trying to scale.

You don't have to BRRRR, you an always buy an apartment, fix it and flip it. I don't see why you can't buy a business, make money from your business, and role it into a real estate deal to create long term wealth with tax benefits.

That is what I ended up doing. The profits from my business were rolled into real estate, and then the real estate profit were rolled in to buy more real estate.

The key is to be consistent, and to have a plan with what you are buying, and have an exit strategy for each deal

Good luck

Gino

@Evan T. Ong

There are countless books on commercial real estate. Are you looking for a specific niche, such as self storage or multifamily?

I'm a huge fan of Ken McElroy and his books. He's a rich dad advisor, and has some great content

Gino

@Naveen kumar Vadlamudi

How many square feet for the building, and do you know replacement value? You're buying this for less than a 3 GRM? How are expenses so high on this property? The value in a commercial building is in the leases and the tenants. It appears you have several that have been there for quite a while.

@Kristian Orphe

You could always look for your dream in another city, if LA is too expensive.

Or, you could put your dream on hold while you save up enough money for the down payment. I would try to save as much as possible for the next 12 months.

Gino

@Zach Pendry

what is the unit mix of these apartments? What is the median income and can market rent be achieved? In the rent roll, are there any delinquencies? Can you bill back utilities to the residents?

Deposits are not classified as income. I would assume the actuals are not actual because it's showing 100% occupied for all 12 months.

Capital improvements fall below NOI, and do not affect property value.

And I think you need to have some type of debt to calculate a purchase price

Gino

@Eric Fichera

Almost any market is landlord friendly, compared to NY. I can say that jokingly because I used to live there and owned assets. When you're eviction attorney tells you that it's a nightmare trying to evict someone, it's time to pack it in, or at least consider another market.

I would say many of the South East markets, such  as TN, FL, and certain TX marketss, have fair laws for landlords. The goal is to provide safe affordable housing at market price, and if residents don't pay, you have the ability to get a judgment within thirty days.