Get The Best Multifamily Secrets From Jake And Gino

In this episode, Kim Lisa Taylor interviews Jake Stenziano and Gino Barbaro, co-founders of JakeAndGino.com, a real estate education company specializing in multifamily apartment investing. Jake and Gino also are experienced syndicators themselves and host the popular podcast, “Wheelbarrow Profits,” among other ventures.

It wasn’t that long ago that these two were just sticking their toes in the water to test what this thing called real estate investing (and syndication) was all about. Now their aim is to share the knowledge they have accumulated on the road to success so you can avoid some of the pitfalls they encountered.

Some of the insights they share in their conversation with Kim include:

• How they discovered multifamily property and learned how to find deals
• How many LOIs they send out each month
• How they met their first investors
• Their process for getting to know investors
• How they communicate with the investors in their current deals
• How they delegate tasks among the members of their management team
• Advice for those just starting out
• Programs offered by their company

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Transcript

Edited transcript of the teleseminar, ‘Multifamily Insights With Jake & Gino’

With special guests Jake Stenziano and Gino Barbaro

Kim Lisa Taylor:

Welcome, everybody, to Syndication Attorneys, PLLC’s free monthly teleseminar, where we talk about topics of interest to real estate syndicators with the opportunity for live questions and answers at the end of the call. I'm attorney Kim Lisa Taylor. Also joining me on the call is Charlene Standridge, our law clerk and business development director.

Before we get started, please note that all of our calls will be recorded and may be used for future promotion, posted on our website, or broadcast in a podcast available to the public. If you don't wish to have your voice recorded, please schedule a one-on-one consultation instead of asking questions during the live call.

Information discussed during this free teleconference is of a general educational nature and should not be construed as legal advice. This is an audio-only conference. Today our topic is “Multifamily Investing Insights” with Jake Stenziano and Gino Barbaro. Jake and Gino are the co-founders of Rand Partners, LLC, a real estate syndication company specializing in multifamily apartment investing. They also are experienced educators.

They host the popular podcast “Wheelbarrow Profits,” among other ventures. It wasn't that long ago that Jake and Gino were just sticking their toes in the water to test what real estate investing was all about, and so we've asked them to share their knowledge. They are clients of our firm, and we've asked them to share some of the things they've learned on their road to success, so hopefully you can use some of their knowledge to help further your syndication business and maybe avoid some mistakes. Jake and Gino, thank you and welcome to the call.

Gino Barbaro:

Hi, Kim. Thanks for having us.

Jake Stenziano:

Thanks, Kim.

Kim Lisa Taylor:

We’re super excited that you guys agreed to do this call with us. You guys are some rock stars in the syndication world, and I know you've developed a really great following of people who are learning from you guys. You're so transparent. You love to share everything you've learned with all the people that want to learn it, and I just think that's so commendable. Thank you for doing that. It's helped the syndication world a lot, I'm sure.

Jake Stenziano:

It's our pleasure.

Kim Lisa Taylor:

Yeah. Let's talk for a minute about your backgrounds, because I think that the people that are on this call, there's certainly some people on this call that are seasoned syndicators, but there's also some attendees that are just wanting to get started and trying to figure out if this is even something they can do. Let's talk about what did you do before syndication?

Gino Barbaro:

Kim, I'll take that. This is Gino. I met Jake back in 2009 at our restaurant. I had a restaurant and Jake was a pharmaceutical rep. He was getting catering orders out and my brother was a really good friend of Jake's, and I'm in the back cooking, and I'm cooking a dish called Jake's Chicken. And I'm really annoyed, because he's got a dish named after himself at my restaurant and I didn't have a dish named after me.

I was a little annoyed meeting Jake for the first time. I'm back there cooking, and we had a great relationship that developed. I saw he was a hard worker. I mean, he was really structured. He really worked his butt off. So I said, "You know what? When you decide to leave ..." And he decided in 2011 to move to Knoxville. I said, "Knoxville? Why Knoxville?" He said, "Right-to-work state, great quality of life, no state income tax." I said, "Let's start looking at multifamilies down there," because in New York it wasn't working for me. The numbers weren't working. I just knew the demographic shifts, even back then people were leaving.

So when Jake got down there in 2011, I wanted multifamily. I wanted to do something "passively part-time," because I was still working full-time. I had, like you said, dipped my toe in the water. I had a four-plex in New York. So when Jake moved down there, we just set along starting to look at deals. We didn't even know what syndication was. We just started buying deals by ourselves, on our own, and the first deal took 18 months to get. It was a 25-unit.

Back in 2013, there were a lot of deals on the market … but there was just no money and there was no sentiment for business back then. If you remember 1% GDP growth, rents were really low. Everything was stagnant.

I guess we started at the right time, but like I said, there was no money, there were no dollars out there to raise like there are now. So we bought that first deal, and then from there we bought our second deal three months after that. And then six months after that, we got in for our third deal. And for us, we didn't know syndication, the model, really well until, I would say about two years ago, we really started looking heavily.

So our first 1,000 units we bought ourselves internally without the syndication model. I wish I had known it sooner; we probably would have been able to scale up, utilize other people's money even more efficiently. But for us, that wasn't the case. We bought everything internally for the first 1,000 units, just me, Jake, and my partner Mike.

And then after that, just started listening to podcasts. Started seeing what everyone that was out there was doing in the syndication space and were able to create Rand Partners. We brought on Dylan as a fourth partner in the venture, because syndication is a different business. It's a totally different model. You're dealing with investors, you're dealing with investor money, you're talking to them. You're out there underwriting these deals.

For us, it was just a whole complete venture with syndication. Jake, do you want to add a little bit to that?

Jake Stenziano:

Yeah, I definitely do, because to Kim's point, she was saying there's a lot of folks maybe on the call trying to find their way in the multifamily space right now. And the tip that I would like to share with everyone is that it's a business. Yes, you're looking at it as an investment. Yes, you're talking about investors that you may be bringing on, but I think the most important thing is that it became the business that we completely focused on once we got that first deal done.

And we've essentially looked to systematize everything that we've done and we focus on people, systems, and culture. I think to get into the game, to get into the multifamily space, you have to get educated. We like to say education times action equals results. We're big components of getting educated, but then taking massive action into getting into your first deal because it can be challenging.

It took us 18 months, as Gino said, to get that first deal. We put a lot of offers in. We put a ton of offers in and when you're starting out, it's that lack of credibility that everyone faces. You have to find something that ... many times you're going to solve problems, and that's what we did on our first deal.

Understand that you're getting into a business and you need to focus on the people, systems, and culture once you get that first deal done. And even if you're hiring a property management company, because we're vertically integrated. We have our own management, we do it in-house. Even if you're hiring a property management company, you need to be working with them on a weekly basis.

Again, going back to the systems, we have a cadence of accountability, I like to call it, which is essentially our meeting rooms. I'm touching base weekly with the property managers, with the area managers, throughout the portfolio and making sure those KPIs are being pulled through. If you're looking to get into the business and you're looking to really start a syndication company, you're going to have to be active, or someone on your team is going to have to be active with those property managers to ensure that you're pulling through those returns that you promised on the front-end.

Kim Lisa Taylor:

So I think what I've heard out of this is, first of all, you guys came from very ordinary backgrounds. And I'm sure there's people on this call that have other professions and are thinking, "Gosh, can I make this switch?" And so I think you guys are some examples of, "Yes, you can." Gino, you're a restaurant owner. Jake, you were a pharmaceutical rep.

By the way, Charlene Standridge, our business development director, is also a pharmaceutical rep. You guys share that background, which is interesting, because that means you've got some sales experience. 

Jake Stenziano:

Yeah, but Kim, let me touch on that for a second. Because I worked for a top three pharmaceutical company and what I did learn early on is what great culture looked like and then I learned very quickly after the Affordable Care Act what really bad culture looked like. And I learned a ton of business development strategies and things that worked going through and being involved in such a large corporation.

So it's interesting that she's involved in your business development, because I tell Gino all the time, some of the best things that I took from that was those business development strategies and what the good culture looked like before the healthcare reform came into place.

So there's a lot of good that people can pull from prior experiences and pull into multifamilies if they treat it like a business.

Kim Lisa Taylor:

Yeah, and I would agree with that. And one of the things I would suggest is that you got to create your winning team, and you've talked about that. How the two of you started and then you brought in Dylan. And you each have your respective roles, I'm sure. But having one of those people have some sales experience or having some experience with talking to people about money, that's a big boost to your business.

So if you don't have somebody like that on your team, it's not impossible to do a syndication without that, but if you can find people like that, that have that sales background and are interested in talking to investors and aren't afraid to do it, that's going to really just launch your business a little bit quicker. That's just something to think about.

Let's see. Well, I guess you mentioned that you wanted to do multifamily, but what made you decide to want to do multifamily as your focus?

Gino Barbaro:

Well, for me, it was basically working 50, 60 hours a week at the restaurant, not having time. I didn't fall in love with the HGTV shows of fixing and flipping and moving on, it was another job. I always wanted to create "passive income," where everyone thinks it’s mailbox money.

And honestly, that is not multifamily unless you're an LP investor in syndication. If you're actively doing the deals, it's not that. But I fell in love with that, I fell in love with investing, I fell in love with buying these deals, refinancing these deals. We've been able to refi over $9 million from the portfolio and that's how we continue to buy these deals internally ourselves.

For me, it was really just trying to create ... Kim, you know I've got six kids. I've got to feed a lot of mouths, so I was looking just for a couple thousand dollars a month additional income. I never thought it would turn into something like this. I always tell everybody, "Think big but start small." Don't be afraid to go out and buy ... If you're going to buy yourself internally a six-unit or a 10-unit to start out with, there's nothing wrong with that.

I mean, we just sold an eight-plex and we made a lot of money in the last four years holding a little eight-plex property. You hear a lot of the gurus out there telling you, "Go big. You got to go big." I say go as big as you can, as comfortable as you can. Our first deal was 25 units. We had the proof of concept, we learned the business. We actually property-managed that first deal. We learned the ropes on property management. We learned how to deal with QuickBooks. We learned how to deal with tenants. We learned how to deal with maintenance and resident managers.

If it was a 200-unit property on that first deal, I think we would've crashed and burned real quick. But that 25 units allowed us to fumble and mumble for a couple of months, and then another opportunity came back three months after that. That was the amazing thing, that momentum that gets created once you do a deal, it was really awesome for us.

Just want to tell everybody out there, you don't have to start really big. You can start wherever you feel comfortable. And you touched on having team members … really important when you first start out just to get that broker in the space, in the market. Really important. And for me, partnerships. Partnerships is really huge. I mean, when I met Jake, I knew he was going to be a partner for life. So that's what stood out to me.

And I think one other thing I would just like to mention to everybody who's starting out, we hadn't done this until recently, figure out what your core values are. Try to write up a mission statement for what you're trying to achieve in your life and if you're partnered with other people. Our core values are great. We hire and we fire on our core values and we try to live by those core values. If you're going to start your company, think about that. Think about what your mission statement's going to be and try to really dive into the core values of what you want to live by.

Kim Lisa Taylor:

Yeah, that's some great advice. Go ahead, Jake.

Jake Stenziano:

I was just going to piggyback off that, just from what Gino said, too. And you're talking wide multifamily, Kim, is that you're playing the correct money game right now, because the money's fake. It's not backed by gold any longer. You're essentially utilizing the debt that the current system is allowing for. You're able to get leverage, and you're putting it into a basic human need that's going to allow you to keep up with inflation.

I think that's some of the reason that I really love the multifamily space, because I see the demographic shifts for what they are. We're investing into areas with tremendous population growth. And this is something that people are going to need. I've always liked the idea of even getting into water, because I know it's going to be there, it's going to be something that folks are going to need to survive. And so this allows for that and aligns with what I'm essentially trying to accomplish from a financial perspective.

Kim Lisa Taylor:

Well, and I think one of the other things that's really attractive about it is that we've all had experiences with multifamily properties in one way or another. We've either lived in apartments, we've had kids that live in apartments. Somehow or another, we're familiar with that model. It's just a no-brainer. You don't have to go out and learn retail leasing how to get people to occupy those spaces.

Everybody needs it, like you said. It really is attractive to a wider group of people, which of course makes it a little bit more competitive, and that's always a bit of a challenge as well. 

Jake Stenziano:

That's a good thing, though. You want that. You want that challenge and that barrier for entry and that's why we tell people on the front end, "Look, it's going to take you a little while to get in the game." A lot of people look at it as this pie-in-the-sky, "Oh, it's not for me. It's not attainable."

I had that limiting belief starting out. I grew up in a smaller town in Western New York, there weren't a whole lot of entrepreneurs in my life. So I didn't think it was something that I could actually do. And partnerships are a huge part of it, we've touched on it a little bit earlier. Gino helped me with that early on in our career.

And it also allows for various streams of income. There's parts to being vertically integrated as we are, where you have the syndication business, the whole business. We're involved in media around multifamily, the property management. We're kicking around the idea of development. There's a lot of different ways to skin the cat, if you will.

Kim Lisa Taylor:

Sure. Well, how did you learn how to analyze deals?

Gino Barbaro:

You know what happened, Kim? Back in 2006, I decided to invest in a mobile home park and I should've known Kim Taylor back then, but I didn't. I invested with this gentleman named “Maserati Money,” that's my nickname for him. He created a syndication. Now that I look back on it, it was a syndication, but it wasn't a syndication.

I lost my hard-earned money on that and you think you'd learn your lesson once. I ended up going two years later and buying a strip mall. Made that mistake. I said, "Really, dude?" I'm a slow learner, but I finally said to myself, "I'm at the crossroads of the Great Recession." I'm like, "I want to get out of the restaurant business long-term." I actually went and found a mentor.

I went and got coached. I learned his underwriting and then I went to another coach/mentor and I learned their system, I learned their program. It's not really that difficult to underwrite, you just have to know basic financial skills and you really have to know how to use an Excel sheet and just really learn from somebody who's been doing it.

And that's how we started. We started out with a 25-unit property. It was easier to underwrite that because you're not talking about waterfalls, you're not talking about pref rates, you're just going income, expenses … basically what your cash in, cash return is. We started out with the basic, and as we grew, you get to learn your market, what costs are, what the price per door is, what your expense per unit is. You become more savvy, you're able to spot deals quicker.

But for us in the beginning, really, I mean, I had to get educated because I didn't know what I was doing. I didn't know what due diligence was, basically. That coaching really, really helped me, really propelled me.

Kim Lisa Taylor:

Yeah, and I'll tell you just from my own experience, I've been doing this now since 2008 pretty exclusively. And all of my clients that have gone on and done repeat deals and have really stuck with their syndication business have come out of a coaching program.

So having a coach for your first few deals is just critically important, and I can't stress enough how important that is. And I know you guys have a coaching program. Can you tell us a little bit about that?

Gino Barbaro:

Mr. Stenziano?

Jake Stenziano:

I'll be happy to jump in here because essentially, I think it was born out of our relationship, if you will. Gino and I basically started underwriting a ton of deals together and I had never bought a piece of property in my life before we got together. I don't know, Gino, what do you think? We probably underwrote, what, 100 deals? Before we got that first one.

Yeah, we did a lot. And so essentially we started documenting our process and what we realized is, especially on the front end, it's buying it right, it's managing it right and it's financing it right. And we essentially started documenting everything that we were doing.

I truly believe that multifamily is that three-legged stool because think about it, if you take out the financing component and you finance something incorrectly, and right now we're in a great interest rate environment. But say you have a three-year term with a community bank and then all of a sudden in the next four years, your balloon comes due and rates spike. Well, you have tremendous interest rate risk there. If you didn't finance the deal properly, you could get burned.

If you partner with a poor property management company and they run the deal into the ground, you can get burned. If you overpay on the front end, that's why we set up all of our parameters under the buy rate portion of our framework and we just realized it through this framework, we can take a lot of the risk off the table. And that's essentially where our coaching program was born from, it was born from doing. We proved our model. We even proved our model up to 1,000 units before we took any investor capital.

We just wanted to make sure that we were putting in the work, we were managing these things ourselves, we were documenting it, we wrote a book, “Wheelbarrow Profits,” back in 2015 that put everything out there. We started a podcast, and then from there, Gino went to coaching school. He touched on that a little bit, he became a life coach. And from that morphed our coaching business, which I think up to this date we've helped multifamily investors do about 5,000 units. Isn't that right, Gino?

Gino Barbaro:

Yeah, and you know this probably as well as anyone, Kim, when you learn something and you start doing it, the next transition is to teach. So you learn, do and teach, and the amazing thing is, once you start teaching it, you get to be such a much better investor.

You get to learn these concepts and you get to share them, and then all a sudden you start helping one person and you start helping another person. And then your partner says, "Hey, Gino. You want to write a book?" I'm like, "Sure." And then he says, "Hey, Gino. Want to start a podcast?" "Sure." "Hey, Gino. You want to start another podcast?" And the spiral keeps going on, it keeps getting bigger and bigger.

"Hey, you want to write another book?" And I'm like, "Yeah, I'll do whatever." It's just a lot of fun. It really is. And you've been and you spoke at our last two conferences, just getting people together who are like-minded, who want to get into the business, helping them out. And then the thing that's amazing to me is all the crossover. All the people we've had on our podcast, all our vendors, all our sponsors, we all work together, that symbiotic relationship where you're teaching somebody to do something, you're helping them out. Inevitably, it comes back to help you out.

I mean, just for example, our relationship with you. You've spoken at our events, but you're also our attorney, doing a fantastic job. You've actually introduced us to other people in the space. Creating a Jake and Gino community and the education and the syndication, they work so well together and it's really, honestly, truly so much fun being in the space.

Jake Stenziano:

I think the cool thing about it is we've kept the community aspect, and we've scaled a lot. We have a lot of coaches on the team now. But we've kept it small enough where we're not inaccessible to folks. We teach a weekly class every Monday to our entire student community.

We're looking to always systematize these things, but we've kept it family-oriented and community-based, unlike some of the folks that went out there and they got really big with it. We want to have those close touch points, because we want to ensure success for the folks that are within the community because we know that it's going to take time to get these deals done. But we also really believe in it, and it's what we're passionate about, it's what we do.

So every time that we're learning something new ... I'll give an example. We were on site just the other day looking at a new property we're going to contract and there was this type of text that we found during due diligence and it was basically staling and deteriorating. This is a two-year-old deal, keep in mind, due to the chlorine because it was coming through the waterlines. There's a small trace amount that is chlorine in everyone's drinking water. If we would've bought this deal, it would've totally killed us. But now we find this out, we document it, we add this, and this specific type of text to our document library within our online training center, and now on next Monday's call, we'll share this with everybody.

So as we're going through, and it's constant improvement on our end. We're learning. We're updating our folks so that the community can get smarter and we can grow as one. And it's been really great sharing the knowledge throughout the community.

Kim Lisa Taylor:

Well, so let's talk about your investors. I guess for you guys meeting investors was kind of born out of your education, or was there something else you did before that?

Gino Barbaro:

Yeah. Let me start from the very beginning on how you can actually start that whole process, and I think it's important. I think everyone needs to really write this down. The first thing, I think Kim would agree with this, is family and friends. Write your power base out. Who do you know? I will guarantee you everyone on this call knows dozens and dozens of people. Start writing them down.

Your brother, your brother's boss, your brother's friends, everybody down. Those are the first people you need to start discussing, and make sure you tell everybody what you do. I mean, we've got some resources we gave to Kim, make sure you have a one-pager. Make sure you have a credibility book. Make sure you have a website. Make yourself look presentable.

In the very beginning, that's what you need to start creating. The second thing is, start going to REIAs, start going to meetups, start going to events. NMHC just had an event back in January, back a couple weeks ago. Start going to these events and start talking to people, start introducing yourself. And Kim always said that word, that “substantive” relationship. You need to start creating these substantive relationships with people, letting them know what you're doing.

Now for us to continue it, we created a podcast. Maybe you create a podcast where you start talking to people and start getting investors to sign up to your platform, to your website. The next thing is, maybe create a blog. Start writing a blog. Start getting information out there. Start creating that in-bound marketing.

I know Kim, you do a fantastic job on your website. You've got so many amazing articles and so much stuff on there. They're going to come and sign up to your website and they are coming to get information, so it's signing investors up that way. I think the next thing is, live events. We had our first live event back in 2017. I'll never forget it. It was our first one.

I don't know how we got 175 people to show up. I still can't figure that one out, but we had 175 butts in the seats and when that event was over, probably 40 to 50 of those people signed up to invest with us. We didn't know what we were doing. We said, "Hey, we got them on our investor platform." So everybody out there, family and friends, number one. REIAs, meetups, number two. Podcast, blogging, number three. And live events, number four. I think those are the four things that everyone can do to start getting the investors.

Kim Lisa Taylor:

Well, and some of the people on this call will never want to do a podcast, they'll never want to do a live event. That's just not their style, but I will tell you that there's thousands of syndicators out there that never go there. They start by finding contacts locally.

We actually interviewed Sam Freshman at one point on one of these teleseminars and we have the audio archive for that on our website. I encourage every syndicator to listen to that. Mr. Freshman is in his 80s. He's been raising money since he was in his 20s. He told me he raised something like a billion dollars. And he talked about how he started out doing that, and he just said he joined every single group he could join locally and he started showing up every month.

And that everybody knew what he did, so when he got a deal, it was just a natural extension of, "Hey, what've you been working on?" To be able to tell people, "Oh, yeah. I got a deal." And then people are lining up to start investing with him. You've got to just get to know people, let them know what you're doing. Local events are a fantastic way to do that. And then maybe at some point, you're either educating people one-on-one, showing them a pitch deck over lunch or you might rent a little room at a college or university or even a restaurant and do a little presentation to five or 10 people or 20 people, just explaining how the process works.

It's not hard to do. Just got to figure out, what is your investor marketing and how are you going to meet people and how are you going to educate them and engage them, and how are you going to keep them engaged? So it really comes down to what your style is as to how you're going to do that.

Jake Stenziano:

Hey, Kim, can I chime in on that for a second?

Kim Lisa Taylor:

Of course.

Jake Stenziano:

Sure. I think one thing also is to utilize the technology that's out there, because it's an amazing way to get a lot of folks’ information and make it easy on them from a marketing perspective. If you go to RandPartners.com right now, which is our syndication website, you can click a link and you can start the conversation with us right now. And therefore we're making it easier for folks, so if you're out there and you're looking to partner or hook up with groups like this, make it easy.

And then to your point, how are you going to communicate on a monthly basis? We send out an awesome newsletter every month with touch points, new happenings. It is work, but remember we touched on it earlier, that people, systems, and culture, you have to really focus on systemizing the business, so as you're meeting folks out there, you're able to keep them updated, because it's a tough marketplace right now to find really good deals.

You may go three or four months without a new offering and you still got to stand in front of those investors and find clever ways to do that by adding value to them, to Kim's point.

Gino Barbaro:

I think one of the biggest things, Jake, that we've done, we're trying to get our net promoter scores with our investors. And one of the big feedbacks that we've had over the last six months that have been really positive is we do monthly webinars, monthly and quarterly webinars with our investors on our syndications.

They love the touch point. It's really open, it's transparent. And what Kim said is, instead of getting in front of one or two people, you can do a webinar, you can record it and then you can send it out to your list. It really makes you so much more efficient, and it makes you transparent and it educates the investors. So when the next deal is down the pipeline, they know it's coming. You've told them, they've watched the progression of the deal they're in right now currently. So that's really been a really big, huge bonus for us.

And we closed our first syndication back in November of 2018, that very first one, we decided to do a monthly webinar for the first year. And it just showed the progression from when we took over till a year later. So I would definitely advise everybody, "Hey, if it's your first or second syndication, maybe do that for your investors. Record those webinars." And then you look back at them and go, "Wow. I took that property from this to that." And it's a really cool process.

Kim Lisa Taylor:

Yeah, that's fantastic. I do want to make a little announcement right now, but Gino mentioned that there's some handouts. Those are actually available through GoToWebinar ... Charlene, can you tell us how people can get those?

Charlene Standridge:

Yes. If you're logged in on your computer, under the handouts section, they're right there and you can just download them.

Kim Lisa Taylor:

And if you're not logged into your computer, you can login later and still get them later. We'll leave those up. The other thing I wanted to mention is that in about 10 minutes, we're going to go to live Q&A, so if you want to start typing questions in, then you'll be able to do that. And we'll call on you when we get to that point.

Let's see. Just moving on. Tell me about how do you guys communicate amongst your team? I mean, do you have a file management system? Do you have monthly calls, your weekly calls with each other? What do you do?

Gino Barbaro:

Well, first …

Jake Stenziano:

I can, Gino.

Gino Barbaro:

Okay. Go ahead.

Jake Stenziano:

No, go ahead. It was just to extend the conversation earlier about the cadence of accountability that we have and essentially what we have cascaded across the company is something that's built out to scaling up. You may or not be familiar, Kim, it's essentially the Rockefeller habits.

We saw as we start to grow in the various entities that we have, because again we were in the management, the syndication space, we just buy and hold stuff ourselves and we have this family of companies being developed, we saw a need to make sure that our systems were tight.

We talked about coaching earlier, we actually invest, continually to this day, we spent over $300,000 in the last two years, Gino and myself investing back into education, into the company. So we actually get coached by systems coaches that meet with us quarterly to make sure that our quarterly priorities are in alignment and we're following these Rockefeller habits. I'll give you a couple examples of the habits.

The executive team is helping align, there's bullets underneath that to check in to make sure that you're nailing these. The next one is everyone is aligned (with) the number one thing that needs to be accomplished this quarter to move the company forward and then it gives you these action tasks below that. So that's one of the check-ins that we do at these quarterly meetings, and we set priorities for the quarter.

Because Gino talked about getting feedback from the team. Some of the negative feedback that we got as leaders was that we come out with a fire hose and blast the team with a million tasks, but it was too much. It wasn't easily digestible. So we started really systematizing how we added new priorities and new tasks to our company.

And then from there, we have as a family of companies, so you have Rand Capital, Rand Partners, Jake and Gino, Rand Property Management. We have a small Rand Cares team, which is our charitable arm. We get together every Monday morning and we do basically a family of companies huddle. And then from there, the different entities throughout the week have a morning huddle together where they're lining up their priorities, making sure that everyone is aligned and knocking them out.

This is for our property management back office, this is on slate for all the properties. And then in addition to that, we have what are called weekly “Level 10s.” … I'll give you a look into our property management company, for example.

I'll be on that Level 10 meeting with the area or the regional manager for the property and the property manager, and we have a document that we go over that talks on KPIs, which are key performance indicators, to make sure that, "Hey, is the leasing right? Is the delinquency correct?" We're nailing all of those. We're going over our quarterly priorities, making sure that everything is in alignment there.

And then weekly tasks. Maybe we're putting in a new dog park or maybe we're building a gazebo or a different amenity, where are we at with that? How are we pulling it through, to make sure that everyone's communicating really well and aligned, and it's been a phenomenal transformation of our business getting everybody on the same page, utilizing the Rockefeller habits.

Kim Lisa Taylor:

Oh, that's great …

Gino Barbaro:

I was just going to say, when you first start out, it doesn't have to be that complex. When Jake and I bought our first 25-unit property, we were basically just speaking to each other daily. I mean, three or four times a day. And I think the most important thing between partners, between entities is just to have that communication.

When you first start out, if it's only one or two or three of you, just be in constant communication. I really think with a property management company, if you're not managing it, you need to have at least a biweekly call on the management company, holding them accountable to the KPIs.

Jake Stenziano:

At least.

Gino Barbaro:

Yeah, and it doesn't have to be a three-hour call. A half an hour Zoom call … I really think that communication is key, because what happens is, if three people are accountable, nobody's accountable.

So to hold the property management accountable every two weeks to make sure. And you want to be proactive. You want to see if there's a slippage going on. You can catch that and if you don't do that and you don't get on these calls and you prolong it, it's just going to be more painful. I think when people start out, just to have that open communication with the partner, getting on at least the weekly call to figure out what's going on. And then from there, as Jake said, you just start adding on calls and calls.

And really, communication is key. Knowing what Jake and Gino's venture going on for the Rand Partners team to be able to book flights, to be able to get out there and to be able to be prepared for their speech and presentations is really important. That's just an example.

Kim Lisa Taylor:

Yeah, that's fantastic. Well, and I think you brought up some really important points. You guys have a coach, I have a coach. I have a law firm coach. And then we were talking about the exact same things you guys were talking about, setting up policies, systems, and procedures, paying attention to your key performance indicators, all your metrics. Making sure that you have the right culture, the right team, that you've got a way to track all of that.

And making sure that you stay focused on your longer-term goals and don't lose sight of those. I think those are things that coaches can definitely help keep you on track with in any business. It doesn't have to be just a syndication business or real estate syndication or a law firm, it's any business can benefit from having those kinds of things in place and someone to help guide you through that, so that's super important.

What about any kind of software? Have you guys found any magic answers with software that works for keeping in contact with the team?

Jake Stenziano:           

We use a few different things, but I think to your point before we get into the software piece, it's really interesting because you first need to learn multifamily and then have a ton of energy and go out and make it happen. And then from there, you need to make sure that you're focusing on the people, systems, and culture, and that's really where you're going to see the rapid growth. So I totally agree with what you're saying there, Kim.

We use various forms of software. We have Adfolio on the property management side. That's what we use for our property management software. We use Google Docs for various things, like our basic docs for our Level 10 meetings. On the Rand Partner side, we use Asana, basically to keep everyone up on your tasks there.

And then Gino, for the Jake and Gino site, we also use Active Campaign, correct?

Gino Barbaro:

And, we use CrowdStreet for our syndication …

Jake Stenziano:

Oh, that's right.

Gino Barbaro:

... the backend. We use Slack also. You try not to use too many different types of platforms, but we use Slack for communication amongst the entities. And also I think Buildium would be another good property management software. If you're just starting to get into multifamily. Don't use QuickBooks. Adfolio is probably relevant when you're probably over 100 units. For us, that was our biggest mistake. We actually used QuickBooks until a couple hundred units … We should've gone to Adfolio.

But if somebody's getting in, I would check Buildium out. They are smaller, but you can grow into them. They're very small. Adfolio, like I said, over 100 units. But when you start out, that property management software is so crucial, because it's really all about the numbers and it's all about the reporting, the job maintenance requests and just to diagnose and have everything in one area is truly important for your property management business.

Kim Lisa Taylor:        

You mentioned two things that I want to follow up on. We use Asana also for keeping track of tasks within our firm and delegation, who's doing what. And then we do biweekly meetings where we get all of our staff on a call and talk about who's completed what and what's next. And get through any issues that we have to deal with and just making sure that we're moving along with documents and the process and addressing all of our client needs.

But you also mentioned a CRM, and from a securities, legal standpoint, that's critical that you have, and that's just for anybody who doesn't know what that acronym means, it's customer relations management system. And there's a lot of them out there that you can choose from. The simplest one if you don't want to spend money on anything right now, because you just got a couple of people working on stuff, you can use Insightly. It's I-N-S-I-G-H-T-L-Y. That's a Google app. I think it's free for two people, and then once you start getting more than that, then you can add more to it.

But it allows you to keep track of all of your investor contact information and to take notes every time you have contact with them or to keep a record of every time you send them something. And that is actually a requirement under securities laws that you have a record-keeping system where you can demonstrate how you met somebody, what kind of conversations you had to qualify them and to make sure that they were suitable to be in your deals. And then when you started making offers to them and making sure that that all happens in the right sequence.

You have to have a CRM. And then the other thing you guys mentioned was having an investor management platform. I think you guys said you're using CrowdStreet; there's several other ones out there that are really good. If you want more information about that, just contact us and we'll make an introduction.

But it's a way for you to keep track of, for you guys when you have multiple deals, who's in what deal and to help track your financial reporting and things like that, any kind of communications you want to make with your investors. And they can actually log in and get all that information on their own.

As you grow, you're going to need to think about these things. You don't need an investor management platform for your first deal, but you might want to think about it by the time you get to your fourth or fifth deal.

Gino Barbaro:

I wouldn't even say by your fourth or fifth, I'd say by your second or third, because then you just start to get overwhelmed. You're hopefully going to have a couple hundred units that you're managing, not that they're all going to be in your deal, but you don't want to deal with K-1s. You want to have security there. You want to look professional. You want to be able to put it onto your platform there. We have it on CrowdStreet where you can log in and actually take a look at the deal. It just looks more professional.

I know it's more expensive, but like you said, it is part of the deal. And we're all here, we want to be able to scale up and to buy as many deals as possible. And it will make it so ... One thing I always made a mistake early on in my career in business, I always didn't think of the end in mind.

You want to be able to grow into these platforms. Think of how big you want to become and if you're going to do multiple deals, then you might as well just bite the bullet and start using that, whether it's CrowdStreet or Groundbreaker or any of these other platforms. And just think about it early on in your career, because it's going to be a lot easier for you to learn early on than if you have seven or eight days and then all of a sudden you have to migrate everything over. Just weigh the options. It does cost more, but I think in the long run, it will save you a lot of headache.

Kim Lisa Taylor:

Yeah, absolutely. And it makes you look so much more professional. The more professional you can portray yourselves in the beginning, the more credibility people are going to give you. And that's the whole reason why you do these live events and these educational events is to showcase yourself as an expert, because people look at it and think, "Wow, that looks complicated. I can't do that by myself, but you seem to know what you're doing, why don't I invest with you?"

You really just need to position yourself as an authority in whatever way you can, whether you speak in front of groups or one-on-one or you write articles on a subject that you just learned about so you can share what you've learned with others, any of that stuff.

I did want to mention one other thing, I know you guys have a really incredibly excellent underwriting template that I saw, you had posted some information about that on LinkedIn. Can you just tell us a little bit about that?

Gino Barbaro:

We call it the deal analyzer software. There's a couple different calculators on there. There's one that's just a simple analyzation and there's one that we use for our own underwriting for our syndications. And on top of that tool, we also have something where we have net worth sheets.

I think everyone who gets in the multifamily, the first thing that everyone needs to do is to take financial control of their own house. You need to have these documents in place when you start dealing with banks … The net worth is in there, the schedule of real estate owned is another calculator in there. Then we have lease audit calculator in there and an apartment turn calculator in there.

And also budget calculators. These are all calculators that we're using for our business. It's all in that deal analyzer software.

Kim Lisa Taylor:        

I thought that was excellent when I saw it. It had the whole package, everything you needed to do, even to present information to a lender. I just thought that you guys did a great job on that.

Before we go to Q&A and we do want to get there right now, let's go ahead and give out your contact information, so how can people get hold of you if they have questions or they want to know more about your deal analyzer software or your program, how do they reach you?

Gino Barbaro:

Go to JakeandGino.com. On the website, there's a button for “apply to work with us” mentorship, there's a button “to invest with us,” and Jake and I just launched a book three months ago, it's called “The Honeybee.” So if you want to get more information on “The Honeybee,” just go to JakeandGino.com/Honeybee and you'll get some videos on there. They'll give you an idea of what the book is all about.

Jake Stenziano:

Yeah, and just to piggyback off that a little bit more, you can go to Rand, R-A-N-D, C-R-E, dot com, and that's actually the website for our family of companies. So you can poke around and see how our investment process looks like. You can click on there, how we network with investors and the Rand capital side of things as well.

You can kick that around a little bit, in addition to that.

Kim Lisa Taylor:

That's great. So, Charlene, I think we have some questions. Do you want to go ahead and address those for us?

Charlene Standridge:

Sure, and if anybody wants to ask their question, they can also raise their hand and I will unmute you and you can ask your question that way also.

Kim Lisa Taylor:

How do they raise their hand?

Charlene Standridge:

They just have to click on the "raise your hand" button. It should be on their GoToWebinar page when they've logged in.

Kim Lisa Taylor:

Great. All right. So let's go ahead with questions.

Charlene Standridge:

Our first question is, what provider did you use to build the investor portal?

Kim Lisa Taylor:

And I think we talked about already, that was CrowdStreet. Okay, so let's move on to the next one.

Charlene Standridge:

And then what type of structure do you have to comply with regulations? Accredited investors only, question mark?

Kim Lisa Taylor:

I'll address that one.

Jake Stenziano:

Yeah, Kim answers all these questions.

Kim Lisa Taylor:

If you're starting out, you should be using family and friends, so that's going to be the Regulation D Rule 506(b) exemption, and that's going to allow you to bring in up to 35 non-accredited investors, unless you're just so fortunate that the only people you know are accredited investors.

You're going to want to start with 506(b), that requires that you have a substantive pre-existing relationship before you start making offers and telling people about deals. If you want to know more about what's required to create that substantive relationship, we have an article at syndicationattorneys.com in our library, and it's the first article that pops up if you select "Articles." It's the one called “Determining Investor Suitability.” That article explains what the SEC believes is required to have a substantive relationship and it talks about the fact that they want you to actually determine the suitability of that investor to be in your deal before you start making offers.

And that article will also give you some example questions that you might ask. And even if you're not doing 506(b) offerings, say you want to do a 506(c) offering that you can start advertising to investors, it's still best practice to take the time to predetermine suitability of your investors. Not just for their financial stability, but also are they compatible with you? You really want to take some time, have an actual phone call with them, talk with them about this stuff. They'll feel more comfortable with you and making sure that you understand their goals. You're going to feel more comfortable about whether they're a good fit for you. You just got to go through these steps.

You're never going to want to start out as a beginning syndicator doing advertised offerings, because the first thing people are going to ask you is, what have you done before? And if you don't have the right answer for that, they're just going to say, "No, thanks, and let us know when you've done more stuff." Just start out with your family and friends. They're probably not even going to think to ask that question, because they already know you. And hopefully they like you. If they don't like you, then don't ask them.

Gino Barbaro:

Kim, that's a great point, though. That's a great point with the investors. You have to speak to them, because half of our money we raised on our last deal was from IRA money. You have to ask investors, "What's your time horizon? How long are you willing to be in this deal with us for? We're underwriting for five to seven years. If that's too long for you then, hey, you may not be a good fit. Hey, where's your money coming from? If it's from an IRA, let's start to talk about the subdirector area, we can get money in there."

So it's really important that you communicate with the investors that you're speaking to and knowing what their goals are. It's always “What's in it for me?” They're always thinking, "What am I going to get out of it?" So you, as a syndicator, have to portray to them where they're getting their money from, what their time horizon is, what their investor goals are. Are they comfortable with multifamily? All these questions have to be asked before taking that certain investor's money.

Jake Stenziano:

I just want to piggyback a little bit as well there, because it is a team sport. You’ve got to have the right team in place and that's why we're on with Kim, because it's not just a one-off syndication. Now that we've gone through a bunch of these things, we're starting to look at a fund now, so it's great that we can grow with someone like Kim, because it's not just about doing a one-off syndication.

She's educated us on a fund, as Gino said, you're learning and growing earlier and we're really excited about that. I mean, that's what we're looking to get into next.

Kim Lisa Taylor:

Well, and then just for me to piggyback on what you just said, for you guys, a fund makes sense because you do have the track record and the experience. For people that are just starting out, a fund is the hardest possible way to raise money until you've established credibility and you've got a long list of investors that are just hungry for your next deal.

If you're not there yet, don't think about doing a fund. I mean, sure, we'd love to do a fund for you. It's a little bit higher price tag, but we don't want to steer you into a fund unless we think you're going to be successful at raising the money. So we'll probably try to get you to do a specified offering or a series of specified offerings before you start thinking about that. 

Jake Stenziano:

But that's exactly how it went though, Kim, with our conversation, because we asked you this early on in the relationship and you coached us through it. And we talked about coaching earlier on, and now we're here and we're growing. I think that's the possibility of the syndication model as well.

Kim Lisa Taylor:

Absolutely. Charlene, go ahead.

Charlene Standridge:

Okay, our next question is, what's the Rockefeller's habits that you talked about?

Jake Stenziano:

The Rockefeller habits, that's a big part of the coaching program that we're in. It was a book by a guy named Verne Harnish called “Scaling Up.” And this is kind of what we were talking about, after Gino really coached me heavily on multifamily investing earlier on in our career and we created our systems and framework, we knew it was all about people, systems and cultures.

So I started becoming a very avid reader on systems and business culture, and one of the books that I read was “Scaling Up” and we really liked the model that they're using. And that's where we got our meeting rhythm and our cadence of accountability from. And within the book, they actually touch on the Rockefeller habit, I'm sure people are very familiar with the Rockefeller fame and fortune. And they documented what they used internally.

And so there's 10 habits that we looked at in our quarterly meetings that are based within the book, that we tried to make sure that we're hitting on in terms of ... It's really systems, but those are the things we were mentioning earlier, like the executive team is helping align and then you're going through your checklist to make sure that you're not falling short on any of those or missing anything.

I'll give you an example. Your team meets frequently, weekly is best for strategic thinking. Then basically we take surveys on the quarterly meetings, are we meeting that? And then you get the feedback from the team to make sure that it's not being fluffed, and then we'll kick it around. If we're meeting it, great. If not, what can we do better? And always look for that constant improvement.

Kim Lisa Taylor:

Great. Hey, Charlene, we're going to skip a few of these other questions, because I can see that a lot of them have already been answered, but there's some people who are saying "Thank you." I think they're grateful for the information that you guys are providing, which I think is super valuable as well.

Here was one from Fred, what was the Google add-in to document contact with investors? I'm not sure you're using that. Which CRM are you using to document your communications with investors?

Gino Barbaro:

Oh, yeah. We're using Active Campaign. I mean, it's such a robust system. The great thing about having multiple companies, it does crossover. So Active Campaign acts to the CRM for our Jake and Gino students and it also acts as a CRM for our investors.

It's an easy platform, but it's really robust. It's a lot less expensive than Sales Force. It's very, very reasonable, very manageable up to like 10,000 users. It's only, I think, a couple hundred bucks a month. And it's really robust.

Like you said, Kim, taking the notes, making sure that you have investor's goals in there, so when you call somebody up, you know that Sally has a dog and she's got two kids and she's got $50,000 to invest with you. That's called document in CRM, and it's just easier for you as the syndicator to be able to build rapport and to make sure that Sally's a viable prospect to invest in the deal. And if she's not, taking notes and making sure that you document that is really important.

Kim Lisa Taylor:

And I think you just hit on something that we should cover a little bit. You're documenting personal information about these people, showing what you know about them, commonalities, things you can bring up in future calls. Make these calls with your investors about them, not you. And get to know them by asking the kind of questions you'd want to know of a friend, and you will develop friends and you'll develop long-term investors.

We have so many clients that just go back to the same group of investors again and again. If you're getting ready to sell something, try not to sell it until you got something else, because they're all going to want to get right into the next deal.

Well, Charlene, do we have anybody with their hand up?

Charlene Standridge:

We do. I do have one. Brad L, I'm going to unmute you now and let you ask your question. Brad, can you hear me? Doesn't look like it. He wants to know if Jake and Gino were available for mentoring?

Jake Stenziano:

Yeah, we're always open for business, Charlene. Always open for business, at JakeandGino.com and there's a quick and easy way to start the conversation right there at JakeandGino.com. And we'd love to speak to him.

Gino Barbaro:

Kim, I wanted to mention one other thing about building rapport with investors. Get investors’ addresses … simple thank you, hand-written cards to investors, it works wonders. And when you close a deal, to send out a little gift, we send out our Honeybee book, we send out a little monument, a picture of the deal, whatever it is, that starts rapport and that community building with that system and culture building.

When you're first starting out, you're not going to have thousands of investors. If you have 20 or 25 investors and you just spoke with somebody and they're going to decide to invest with you, you write them a simple thank you, hand-written card to them, that will really make a big difference. Because most people aren't doing that out there.

People like to text, people send email, but when you take the time to write a simple thank you card, it goes a long way.

Kim Lisa Taylor:

And I received one of those, and thanks for the cup of coffee at Starbucks.

Gino Barbaro:

Oh, you liked that?

Jake Stenziano:

Yeah, we got to keep you fueled up, Kim. You spend a lot of energy doing what you're doing.

Kim Lisa Taylor:

I still got that in my wallet, I haven't used them both yet. All right. I think that is important. It's good to stay in contact with people. I think we've covered what we wanted to cover on this call. You guys have been just a huge amount of information. I think this is going to be super valuable for anybody who wants to either get into this business or grow their business.

This policy, systems, and procedures, it's hard to write down every single thing you do, but if you do that on a regular basis, then pretty soon you're going to have a whole checklist of things that you can just share with new staff as you bring them on and make your life a lot easier and help you get out of running the business and let other people take that on, so you can go enjoy your life.

And we're all here to make a better life for ourselves. We're growing our law firm and we'd love to have all of you as clients as you start to grow your syndication business. We'd just love to be able to help all of you. I know that Jake and Gino share those sentiments. We'll go ahead and close off now. So do contact Jake and Gino at JakeandGino.com if you have any questions for them.

If you have questions for us, please go to syndicationattorneys.com and you can schedule an appointment there, or you can call. If you want to, you can call our phone number, which is 844-SYNDIC-8, which is 844-796-3428. All right, thanks everybody for joining the call. We really appreciate you spending your time with us today.