1:59

multi-family units representing close

2:02

to $300 million in assets

2:04

under management, which is Phenomenal

2:07

and I'll tell you why I'm so impressed with him here in

2:09

a few minutes But he's also the best-selling

2:11

author of three books wheelbarrow

2:13

profits, which is his hardcore real estate

2:16

book He also has a book called the honeybee

2:18

and then one that's a little bit more about food But

2:20

family food and fryers or and

2:22

the fryers Interestingly

2:25

enough he lives in st. Augustine, Florida

2:27

Which is an area that I love and

2:29

I'm looking to potentially get a second

2:31

home in that area And he lives with

2:34

his beautiful wife Julia and yes

2:36

six children Geno welcome

2:38

to the show Marco when you said an interesting

2:40

I wasn't sure what you meant by that But it's

2:43

been an interesting life for me. How you doing brother? I'm

2:45

doing good. How are you? I'm doing good when you

2:48

said family food in the fryers your listeners must be like

2:50

what the heck is he talking about? I

2:52

was the pizza guy Jake was the drug rep

2:54

and I was in the restaurant business for years

2:56

and years and years and that Was my passion and

2:59

I know you're gonna get into this but real estate really

3:01

took a hold of me back in 2008 and 9 And

3:04

that's how I sort of transitioned out of the restaurant

3:06

industry And you're Italian and

3:08

you love food. So family food and fryers

3:10

completely makes sense To

3:12

you it does. Yeah. Yeah. No,

3:15

we live we live for food. We live to live

3:17

and we don't live to work I mean, yes

3:19

European culture and that's certainly the Italian culture, you know

3:22

We a lot of Americans interestingly

3:24

enough, you know live to work Whereas the

3:26

way we look at is we work to live, you know,

3:28

we don't want to just be working all the time We

3:30

want to live life. Mm-hmm. I agree 100%

3:33

Yeah, cool. Well, it's good having you back on the show

3:36

the funny thing I mentioned and for you

3:38

know Just kind of a little fun fact When

3:41

we originally had our first podcast

3:44

interview you and I both ways

3:46

you and your partner Jake were Literally

3:49

on a sofa in a room that had

3:51

a foosball table That

3:53

was your start you've come a long way

3:56

my friend. Yes, it'll mark. He

3:58

said something insightful on my show

3:59

you don't record it, go to the Jake and Genal channel. I

4:02

interviewed Marco. And what you said was ready,

4:04

fire, and aim.

4:06

And I think that's what Jake and I were doing on that couch. We

4:09

weren't ready to get everything right, the lighting,

4:11

the microphone, the

4:14

look. We just said, let's start. And what's

4:16

the worst thing that can happen? We have a terrible interview with Marco,

4:18

but we'll learn something from it. And it's the same

4:20

thing with anything in life, awkwardness. When

4:22

you feel awkward in the beginning, that's the sign

4:25

that you're doing something right, that you're stepping out of your comfort

4:27

zone. And I'm glad that you reminded me about

4:29

that, because it makes me feel good. We live

4:31

in the gap and the gain, as Dr. Ben Hardy says.

4:33

We're always thinking about, oh, what's ahead? What's

4:36

ahead? What's ahead? And you remind me of the gain,

4:38

how far I've come, and how clumsy

4:41

and how terrible I might have sounded five

4:43

years ago, and I've gotten a lot better. Now,

4:45

I have a long way to go as we like to, like

4:47

we live in the gap, say, well, what am I gonna be in the next five

4:50

years? But let's at least stop and appreciate

4:52

what we've done. You especially, for 20 years

4:55

you've been doing this, you're looking at your next venture,

4:57

but let's stop and appreciate where we've come

4:59

from and all the things that we've accomplished and

5:01

sit with that for a few minutes and enjoy the

5:03

day, and then let's conquer the rest of our tasks.

5:06

Yeah, no, that's a great point. You should look back

5:09

and recognize the accomplishments you've made,

5:11

and then congratulate yourself, appreciate

5:13

what you've done, recognize what you've learned

5:15

and accomplished, and then just continue moving forward

5:18

to your next goal and your next goal. I mean, that's just,

5:21

I think, what a lot of entrepreneurs do, so. But

5:24

all that, you know, is a good segue for

5:27

me to ask you to tell our audience,

5:29

our listeners, more about yourself.

5:31

Like, give us a bit of history and who you are and

5:33

what you do. The 30-second version,

5:36

very similar to your story. Two immigrant parents came

5:39

from Italy looking for a better life. My

5:41

dad got into the restaurant business, and I was a seven-year-old

5:44

going to work with my father. I remember him handing

5:46

me the Windex bottles, cleaning the baseboards,

5:48

going in the kitchen, filleting chicken cutlets

5:51

at seven years of age, having a knife, working

5:53

the fryer. I loved working

5:55

in the kitchen. It was just part of who I was,

5:57

that hard work ethic. I went to college.

5:59

hated working corporate, didn't

6:02

want the cubicle life, didn't want to, you know,

6:04

commute to New York City every day from

6:06

Westchester County. So I said, dad, let's

6:08

buy a restaurant at the age of 24 years

6:11

old, May 19th, 1994. That

6:13

was my D day. That's when I bought the restaurant. And

6:15

I

6:16

owned operated restaurant with my father, mom

6:18

and my brother

6:19

till 2016. But 2007

6:22

Marco for me was the turning point as my dad

6:25

passed away. And I remember when

6:27

he passed away, I remember saying myself,

6:29

am I living his dream or am I living my dream?

6:31

It was so the restaurant and me and

6:33

him were so intertwined. I loved working there. But

6:36

it really wasn't my vision. And I wanted to scale.

6:38

I wanted to create some type of financial freedom. And

6:40

I couldn't do that through the restaurant. I didn't know how to do that.

6:43

I read the book, T. Harv Ecker's Secrets

6:45

of the Millionaire Mind and that changed everything for me. I'm

6:48

like, I am that guy who's been blaming everybody.

6:50

Your fruits are in your roots. I don't have the skills. I

6:53

need to learn. I, you

6:55

know, went out, I found a bunch of mentors

6:57

in real estate. I had made a bunch of bad mistakes

6:59

prior. And I got into this multifamily

7:01

thing. I met Jake in 2009. He was the

7:03

pharmaceutical rep coming into the restaurant, getting

7:06

those orders, bringing him to the doctor's offices.

7:08

And he's like, I want to do real estate too. He

7:11

moves down to Knoxville in 2011.

7:13

We start the partnership. It takes us 18 months

7:15

to find that first deal. And we do in 2013. And

7:18

I guess the rest is history.

7:20

There's been a lot of bumps in the road. One

7:22

thing that you had mentioned, most of these assets, Jake,

7:25

myself and a partner, Mike own ourselves. We didn't

7:27

have the luxury of syndicating early on. There

7:30

was no money back in 2014, 15, 16 and 17. The

7:33

Jobs Act hadn't come and we didn't know what syndication was.

7:35

We were equity hounds. We wanted to buy these deals, refinance

7:38

these deals and continue to grow like

7:40

the small giants, the Bo Burlinghams. We didn't

7:42

want to be the next Facebook, the next PE

7:45

company. We just wanted to have a nice portfolio

7:47

that we could continue to grow and continue to

7:49

build and continue to live off of. And that's what

7:51

we've been able to do to date.

7:53

I'm curious, why did it take you 18 months

7:55

to find that first deal? I'm asking

7:58

one out of curiosity and two for the one. listeners listening

8:00

to this, you know, they're probably wondering, well, why did it take you

8:02

so long? I mean, back then, there

8:04

were a lot of deals, there was a lot more inventory

8:07

than there is today. That's a great question.

8:09

We didn't have buy right, manage right and finance

8:11

right. You know, Jake is a salesperson

8:14

sales guy. When you're talking to a broker,

8:16

the brokers are the gatekeepers, you're not

8:18

trying to sell the broker. So Jake would go

8:21

into these brokers and have these conversations and

8:23

they just he would just piss them off. He was like

8:25

a bull in a china shop. And

8:27

at one point, it's like, Jake, you got to calm down.

8:29

These are the gatekeepers. These are the guys are going to

8:31

send you deals. We didn't know how to underwrite feels

8:33

that well, it took us months to find, you know,

8:36

deals that made sense to us. It took us a few

8:38

months to actually get broker relationships

8:40

because we didn't know how to really deal with brokers. And

8:42

then in the meanwhile, Jake's fiance moves

8:45

down, they buy a house, all of a sudden,

8:47

there goes his capital. So he have to restart.

8:49

So there's a lot of things that were going on. And also

8:51

the fear factor deals weren't, were

8:54

good, but they weren't. And Marco, if you remember

8:57

back then, there were a lot of deals. But the

8:59

consumer sentiment GDP was 1% rents

9:02

were in the toilet, there was a lot of risk back

9:04

then. So for us, there was a lot of fear, the fear of the

9:06

unknown. But once you get that first

9:08

deal, all of a sudden, there's

9:11

momentum, there's motivation, you've

9:13

done it once, you're credible, you can

9:15

go out and you can start talking to people, you're a closer,

9:18

everything changes. After the first

9:20

deal, think big, start small.

9:22

That's what we did. We only started with a 25 unit

9:25

property. And for us, it worked out really

9:27

well. So if you had to summarize all

9:29

that into the biggest lesson you took from all

9:31

that, what was the biggest lesson you guys learned? Wow,

9:34

the biggest lesson. There's so many

9:36

for me, really understanding the market

9:39

and understanding that real estate is a business.

9:42

You're not just buying an asset in

9:44

its relationship, but the lessons are

9:46

on and on. Because that first broker that we had, he

9:49

brought our second deal, our third deal, our fourth

9:51

deal, our fifth deal. And we learned so

9:53

much from him, we learned seller financing, we had

9:56

seller financing on our very first deal. So

9:58

relationships really.

11:59

have that luxury, then choose a market,

12:02

as you said in our interview, with jobs,

12:04

jobs, jobs, jobs, jobs growth.

12:06

And hopefully, there's not just one or two employers

12:09

like Rochester, New York, where you have a Kodak

12:11

that decides to leave, right? Or you

12:13

have some markets. So you want to have jobs, but

12:15

you want to have a variety of different jobs. And

12:18

I would totally agree with the population growth. We're

12:20

all about renting apartments. And

12:22

if you don't have renters there and your population

12:25

is leaving, then guess what, you're going to be in

12:27

trouble. Now, there's a caveat to that. If

12:29

you're an investor

12:29

and you're living in a market like Cleveland,

12:32

Ohio, that doesn't fit the buy box

12:34

of a Marco and a Gino. But if that's

12:36

your backyard and you need to start, I

12:38

would start in your backyard, learn

12:40

it, there's still value there, you can still cash load

12:43

those assets. But once you understand that market,

12:45

you can always take that knowledge and move

12:48

to another market. Specifically, we love

12:50

the southeast, Jay called it the SEC, the

12:52

Southeast Conference. That's where people are moving.

12:54

It's more affordable down there. The quality

12:56

of living is better. The cost of living is cheaper.

12:59

And that's where the employers

12:59

are moving to. So we love the southeast.

13:02

And obviously in the Midwest, Kansas City, we

13:04

love those kinds of markets. We love the Phoenix

13:07

area, Tucson, Arizona is a great

13:09

market. Be careful with Texas because you have

13:11

property taxes, and you have insurance. That's

13:13

a big killer right now. But if you get on the right

13:15

deals to actuals in those markets, you want

13:17

people where they're moving to. That's what your focus

13:20

is in real estate.

13:21

Yeah, yeah, well said. I like

13:23

your comment about focusing on a particular

13:25

market, or maybe two, which kind of plays

13:27

into one of my 10 rules for successful

13:30

real estate investing. I know we touched upon it before.

13:32

This is more of a rule of thumb

13:34

than anything else. I just think that

13:36

real estate investors will succeed and do well

13:38

if they focus on getting three to five properties,

13:41

usually at single family homes, could be duplexes or four

13:43

plexes. And I'm talking, you know, in the non-commercial space,

13:46

you focus on commercial. But

13:48

you know, for most real

13:50

estate investors that want to build their own portfolio, if

13:53

they acquire three to five properties in

13:55

three to as many as five

13:57

markets, three to five in three to five.

15:29

What

16:00

is it you talk about when you talk about the psyche of

16:02

a real estate investor? So

16:05

when I talk about psyche, I mean I

16:07

could be referring to a lot of things But I think one of the most

16:09

important things with a real estate investor Is

16:12

this you your business gets to a certain

16:14

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16:17

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16:19

You have too many manual processes You

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17:34

estate

17:35

or any kind of investor is long-term ism

17:38

we would talk about speculation speculators go

17:40

in and out and in and out I Think

17:42

the psyche of a real estate investor you have to understand

17:45

the three pillars of real estate Which is market cycle

17:48

debt

17:49

and exit strategy? And I see when

17:51

people get into real estate all the successful

17:53

multifamily investors that I've spoken to have

17:56

that long-term ism and the psyche is the responsibility

17:58

when you make a mistake

17:59

You pick up a call and you say, Mr. Investor,

18:02

I made a mistake. You have to be transparent. So

18:04

that's the psyche that you need to have. And it's also the

18:06

psyche of the entrepreneurism. We create

18:09

multifamily entrepreneurs at Jake

18:11

and Gino, and you need to have that kind of psyche

18:13

continue to go on growth mindset. If

18:16

you have a fixed mindset,

18:17

everybody's fault. I don't want to learn.

18:20

I'm in a box. I know all I need to know the

18:22

psyche of a really important person

18:25

in real estate to be able to learn is that growth mindset

18:27

because things evolve, things change,

18:29

strategies change. When I first started, there was

18:31

no syndication. Now syndication is the rage,

18:34

but guess what? It's cooling down now and

18:36

seller financing is coming in right now. So there's

18:38

so many different things that you need to learn and

18:41

to understand. And if you're just pigeonholing yourself

18:43

and saying, I know it all, I don't need to

18:45

learn anything. That's not going to serve yourself as

18:47

an investor. Yeah. Psychology is

18:49

a huge factor in getting started, ramping

18:52

up, taking action. We've talked about

18:54

this before, maintaining

18:57

that momentum and following

18:59

through to succeed. You know, psyche,

19:01

you know, it's like that old thing. The best investment

19:04

you can make is an investment between your ears.

19:06

It's in yourself and in your mind,

19:09

because if you don't have the right mindset, if you don't have the education

19:12

and the follow through and everything

19:14

wraps around your, you know, the psychology

19:16

of it, but if you don't have the right mentality,

19:18

mindset and psyche, you're not going

19:20

to go very far. You might not even start. Yes,

19:23

I agree. Let alone finish. So

19:26

well, let's talk about these so-called

19:28

baby money soldiers. Pretty

19:31

funny visual. What are

19:33

they? What are you talking about? It's

19:36

one of those things, Marco, that I've got

19:38

six kids and I'm trying to teach them on

19:40

a basic level all about creating

19:43

wealth, all about finance, all

19:45

about money. These are things that were not taught

19:48

in school and you try to want to make them

19:51

funny, interesting, and you want to leave an impression

19:53

on somebody when you're talking about it. So if you look at a

19:55

dollar,

19:56

we call a dollar a baby money soldier.

19:59

Every dollar that comes into your life, you

20:02

decide how to utilize it.

20:04

And it doesn't matter how many dollars come into your life,

20:06

you can have $50 million a year coming into your life.

20:09

If you don't know how to utilize your baby money soldiers, you're

20:11

not going to create wealth.

20:13

What ways can you utilize those baby money

20:15

soldiers? You have operating expenses, your

20:17

living expenses, right? Those

20:19

baby money soldiers, they're dead, you're never going

20:21

to be able to redeploy them on the battlefield.

20:24

Luxuries,

20:26

you got cars, you got jewelry,

20:28

you got vacations, those baby money soldiers,

20:31

they're dead. Baby

20:32

money soldiers, you need them

20:34

in reserve. You can't send

20:36

all your baby money soldiers out to battle. Because

20:38

what happens when you have a capital call, or

20:40

what happens when one of your properties goes into

20:43

disrepair, or you need, you know, have a casual

20:45

problem. So have some of your baby money

20:47

soldiers in reserve. Then

20:49

there's the baby money soldiers that you send out to

20:51

battle.

20:52

They buy a property, you deploy your capital,

20:55

your baby money soldiers, you buy that property, you

20:57

fix that property up,

20:59

you can either sell that property and get more

21:01

baby money soldiers. What we like to say

21:03

is we like baby money soldiers to procreate

21:06

and have more baby money soldiers. That's the refinance.

21:09

All of a sudden, you've got more baby

21:11

money soldiers. But the problem is if you killed them

21:13

with the luxury and the living

21:15

expenses, you can't deploy them. So

21:17

the people who are able to save their money and

21:20

deploy them into assets and to let their baby money

21:22

soldiers recreate and

21:24

procreate, you're going to continue. It's like

21:26

the game of risk when you buy one property, then

21:28

you buy another property. And that's it's

21:31

a sounds like a very simple concept. But this is

21:33

what we've been doing for the last 10 to 15 years, Jake

21:35

and myself, we've been able to refinance over $20

21:37

million of baby money soldiers into

21:40

our properties. And

21:41

we've been able to put them into the next deal

21:43

and into the next deal and let them procreate

21:46

let them continue to grow. And then obviously,

21:49

as you get older, you need to stay planning,

21:51

you need baby money soldiers possibly for whole

21:53

life insurance, because as you become a real estate investor,

21:56

you're pretty illiquid. So if something happens

21:58

to you, you need those baby money soldiers. to protect

22:00

you in the end of something happening. So for you

22:02

to have that mindset of, oh, I just need to make

22:04

more money, I'm going to create more wealth. That

22:07

is rarely the case. That is not the

22:09

problem. The problem is not being financially intelligent

22:12

enough and not having an understanding of

22:14

the relationship that each one of us has

22:16

with money. I would highly recommend everyone

22:18

listening to the show to read the psychology

22:20

of money by Morgan Housl. Phenomenal

22:22

book. If you don't understand your relationship,

22:25

I was in, my parents were telling immigrants

22:27

like yours, my psychology drilled

22:30

into me was to save, save, save. I'm

22:32

a great saver, but at some point, it

22:34

was very hard for me to enjoy those savings or

22:37

to deploy those savings. And once I understood the

22:39

psychology, hey, I'm buying an asset.

22:41

I'm saving my money to buy an

22:44

asset to pay for an event.

22:46

I'm not saving my money to pay for that event.

22:48

So the very first property that I bought with

22:51

Jake in 2013, we still own it. It's a 25 unit

22:54

property. It's producing between eight and $10,000 a

22:56

month in cashflow. On average,

22:58

I'm getting between two and three grand a month because I own a third

23:00

of that. That one property has put

23:03

my two kids, oldest kids through college.

23:05

Now my third one is going to college. That

23:07

baby money soldiers are continuing to produce

23:10

cashflow. So don't save your

23:12

money for an event like a retirement

23:15

or like for college. Save it to

23:17

buy the asset, the single family home, the multifamily,

23:20

which will produce massive benefits,

23:23

capital appreciation, more baby

23:25

money soldiers every single month,

23:26

tax benefits. And when you really

23:29

think about it, you're going to a bank and you're borrowing

23:31

money.

23:32

Think about that money, the cost of the money. I call

23:35

that cost of capital mercenaries. So

23:37

you're borrowing money and you're paying money

23:40

from the bank and you're leveraging up and you're

23:42

utilizing other people's money. So when you take

23:44

that into consideration, that's why people who create

23:46

wealth utilize real estate and utilize

23:49

baby money soldiers to their advantage. Because

23:51

it's not what you make at the end of the day. It's what

23:53

you keep. And you by refinancing

23:55

these properties and by using a bank's

23:58

money, it really will add tremendous. Does

24:00

that make sense? Do you have a picture of what baby money soldiers

24:02

are out there, what they're supposed to do? Yeah, no, that was very

24:04

clear, very descriptive, colorful. I

24:08

enjoyed it. It's a great analogy. I mean,

24:10

it's a great way to look at the dollar bill rather than

24:12

a piece of paper. You

24:15

know, it's – you think of it as a soldier,

24:17

and how is that soldier going to go out and go

24:20

to battle and hopefully

24:22

win the battle, come back with more. It's basically

24:25

how to put your money to work. Yes. Yes.

24:29

And most people don't have that paradigm that we've been

24:31

taught over the last six or seven years that we need

24:33

to have every dollar at risk, and

24:35

all we need to do is to chase yield.

24:38

And that is not a good working

24:40

strategy because you have all your money out.

24:43

And then what happens when something goes wrong? I'm

24:45

a big proponent of whole life. I love whole

24:47

life insurance. I've got it on all my children because

24:50

it's a savings vehicle. The money is there. If

24:52

there's an opportunity, I can borrow from

24:54

the cash value. I've used it as far as collateralized

24:56

it. That's how I got into my

24:58

first couple of deals through that. But that

25:01

money is sitting there. That money is in reserve. If

25:03

I need it, I can tap into it. If not, it's

25:05

for my estate planning. So people need to understand

25:08

when investing because you had mentioned speculators. People

25:11

are trying to buy these properties and flip these properties.

25:13

It's great, but the capital

25:15

gains you're making on those properties, you're killing some of those

25:17

baby money soldiers. Why not try to buy this property,

25:19

hold it long-term, and access those

25:22

benefits and continue to let those baby money soldiers grow? I

25:25

think people kill their baby money soldiers too

25:27

early or they spend too much on

25:29

luxuries and living expenses and

25:31

don't give a chance for those baby

25:33

money soldiers to grow and to get momentum because

25:36

you need a couple of years. That very first

25:38

deal that Jake and I bought, after 18 months, we

25:40

were able to refinance it. So 18 months

25:42

of sitting there

25:43

and then being able to redeploy them into the next deal, that's

25:45

what ultimately creates true wealth because Marco, 164,000

25:48

bucks, how many pizzas that is? That's

25:51

a lot of pizzas to make because I was a pizza

25:53

guy. I got to make a lot of pies to

25:55

make $164,000. That's net. I

25:58

can't even imagine the gross, how many I needed. to do, but

26:00

I didn't kill those baby money soldiers. They went right

26:03

into the next deal. So that's

26:05

how you're able to expand and to

26:07

grow your wealth. Yeah. Everything

26:09

you just said has a lot that

26:11

we could potentially unpack. And there's just

26:13

not enough time today or

26:16

even in one episode to unpack all that.

26:18

The one comment I do want to make, which is

26:20

just one of many things that I was listening

26:22

to you say, is the whole

26:24

paradigm change. There

26:27

was a time before 1971 where

26:29

it actually made sense to save. You saved because

26:31

the dollar maintained its value.

26:34

It wasn't depreciating. You didn't lose

26:36

X percent through inflation

26:39

each and every year. But that paradigm

26:41

changed in 1971. So

26:44

now it doesn't make sense to save because

26:46

if you're saving for your retirement or saving for

26:49

the long term, you're actually losing

26:52

money in the sense of losing purchasing power as time goes

26:54

on. So the solution is

26:57

only to invest wisely

26:59

and prudently to take what you

27:01

call them baby money soldiers and have

27:03

them go out and procreate or multiply.

27:07

Because if you don't do that, if you don't

27:09

save to invest rather than

27:11

save to save, you're going to find

27:13

that you're going to become poorer and

27:16

poorer each and every year. So by the time you get to retirement,

27:19

you're actually going to be in a very, very poor position. Like

27:21

literally and figuratively speaking, you're going to be in a poor

27:23

position because you can't save

27:25

just for the sake of saving anymore. You have to save to invest

27:28

and invest in assets that generate

27:30

income. Can I make one comment to that? Because I think

27:32

it's important that people need to understand this. When we retire,

27:35

we don't have a net worth problem. We have a cash

27:37

flow problem. So you're building up your net

27:39

worth and I read Garrett Gunderson's

27:41

book Killing Sacred Cows years ago. It left such

27:44

an impression upon me because I was doing the 401k. I

27:46

was doing the 529. I was getting into business with

27:48

the government on these government plans. I'm like, what am

27:51

I doing? But for me, having $2

27:53

million in a 401k when I retire, all

27:56

of a sudden I have the scarcity mindset. I

27:58

don't want to touch that money. I'm afraid. saving

28:00

and saving and I'm trained to save for

28:02

the rainy day. Well, now the rainy days

28:04

here I'm retired, I'm too afraid to even enjoy

28:07

that money. So you have to think of it from that perspective

28:09

as well. But if you've got seven or eight single

28:11

family homes, you know, in Charlotte,

28:13

North Carolina, and every month you're getting $800 check from

28:15

those, you can spend

28:18

that money that money is coming in, you're looking

28:20

for cash flow as you retire. That's

28:22

the important thing. And the net worth is their net

28:24

worth makes you rich in real estate, you're going

28:26

to crystallize that net worth. But that's a great

28:29

retirement strategy to have that cash

28:31

flow coming in every once and not worry about

28:33

saving, saving, saving. Because like you said,

28:35

at 4%, you're losing money at 4%. It's a fiat

28:38

currency plus the debt. After

28:40

you look at it five or 10 years from now, you're paying

28:42

back in cheaper dollars. So

28:44

you're waiting in so many different things. And they

28:46

changed the ballgame back in 1971. I totally

28:48

agree with you. That wasn't fair.

28:51

But for those of those people who understand the

28:53

game, these are the rules. Let's play

28:55

by these rules. Marco is telling you on his show

28:58

every week what the rules are. Let's follow the

29:00

rules and you will get wealthy. Yeah,

29:02

money clearly is a game. I've said that for many years.

29:04

In fact, I'm actually working on a book

29:07

called Money is a Game. But

29:12

you know, that's your comment, your last comment,

29:14

you know, the problem, the way I look at it, it's a problem

29:16

of depletion when you get to retirement.

29:19

If you're saving to save, you're gonna have a lot of

29:21

money when you retire. But

29:23

then you're going to be drawing from those savings and

29:25

you're depleting your capital. The flip side

29:27

of that is if you save to invest in assets

29:29

that generate income, you will never lose

29:32

those savings because they're held in the form

29:34

of equity in those assets that generate

29:36

income. Now you live off the income and

29:39

you always have the assets forever.

29:41

And you can pass them down. It's the generational

29:44

wealth that you pass on. So you have the assets

29:46

from the savings that you use

29:48

to acquire the assets, but they're

29:51

kicking off passive income in perpetuity.

29:54

Yes. And that's a huge difference.

29:56

Like when you make that mental shift, everything

29:59

changes.

30:00

You know,

30:01

in my opinion, so you're

30:04

talking about these baby money soldiers and I know you've touched

30:06

upon several rules. I believe you have six rules that

30:08

apply to baby money soldiers. You don't have

30:10

to talk about all of them. You've touched on some

30:12

of them, but maybe pick a few

30:14

and let's talk about the

30:17

rules that apply to baby money soldiers. I

30:19

think a

30:20

couple of the most important rules are you

30:22

need to get away with the instant gratification. And

30:24

when you're first starting out, especially, you don't

30:26

want to kill your baby money soldiers early. You need

30:29

to redeploy. You need to save. For

30:31

me, it's from the richest man in Babylon. You need to

30:33

save at least 10% of your income, if not

30:35

more. And as you earn more, you'll

30:37

be able to save more. But you need

30:39

to save at least 10% to be able to redeploy

30:42

your baby money soldiers. That's so important. I

30:44

think the second component is when you're starting

30:46

out,

30:47

David Green has a big book coming out in bigger pockets.

30:50

He's got the three pillars and I agree with his first pillar.

30:52

It's defense. If you have no savings,

30:55

if you have nothing in reserve,

30:57

you need to set up a reserve for yourself

30:59

because if something goes wrong, like the pandemic,

31:02

and you lose your job for three months, you at least

31:04

have something to back yourself up with. So even before

31:06

you start thinking about investing

31:08

and chasing yield, have some type of baseline

31:10

because that will give you so much comfort. If you want to leave

31:13

your job, you hate your boss, you

31:15

have no money in reserve, that is a terrible life. But

31:18

if you can have that option to leave, that's the

31:20

biggest ROI on your return

31:23

on your money is having that optionality. And

31:25

if you have some of that baby money soldiers in

31:28

reserve and you're able to do

31:30

that, do that. I think for higher

31:32

level net worth individuals, start

31:35

planning your estate. I mean, if you don't have a last

31:37

will and testament, if you don't have a healthcare

31:39

proxy, if you don't have power of attorney,

31:43

if you don't have your trust, revocable trust, irrevocable

31:45

trust, whatever that looks like, start that today

31:47

because you never know what may happen.

31:50

You want to leave the legacy. We're building all

31:52

this wealth. We're making all this money and

31:54

then you don't have any control over it. Start

31:56

that. And for me, the whole life

31:59

policy for me,

31:59

And for my children to have that piece of mind

32:02

if something happens, I have the liquidity at

32:04

that event. I don't have to have the fire sale. I don't

32:06

have to go out and sell my assets so my kids

32:08

can pay me the taxes. Thinking long term

32:11

with your baby money soldiers is important. So I think

32:13

saving them,

32:15

utilizing them properly to go

32:17

into those deals and don't go out there and

32:19

go into 15 or 20 different ventures. Pick

32:22

a niche, pick single family with Marco, pick

32:24

multifamily, pick self storage, become a really

32:26

good steward of investing that asset

32:28

and deploy your baby money soldiers there. And

32:30

through thick and thin, you may have a couple of years

32:33

where there's no deals or less deals. That's

32:35

okay. Market cycle will change.

32:38

Keep those baby money soldiers in reserve because

32:40

everyone was telling me the last couple of years, cash is

32:42

trash, cash is trash. That's what the gurus

32:44

are telling you. Well, if you had cash now,

32:46

you're going to be in a great position because the deals

32:49

are coming now. Having those baby money soldiers

32:51

on the side, you're going to be able to redeploy them into

32:53

assets right now. Yeah, all

32:55

great points. I always like to say that you

32:57

want to save as much as you can, as fast as you can

33:00

and build up a chunk of cash so

33:02

you can deploy that chunk of cash

33:04

into an income producing asset and

33:07

then you rinse and repeat and you do it over and over and over

33:09

again. Marco, let me ask you a question. What

33:11

was the feeling you got when you were 18 years old and you

33:13

got that first rent check? Wasn't it like, I

33:15

don't see intoxicating, but wasn't it like, wow,

33:18

what have I come across here? That

33:20

was so long ago that I don't actually remember, but

33:22

if I had to think back and think what

33:24

did I think, I was probably thinking,

33:27

wow, this works. I

33:31

want the listeners to hear that because it's important.

33:33

If you've never done it before, Jake was a W2

33:36

employee. He never

33:38

experienced entrepreneurism. On that first 25 unit

33:40

deal, the first month we close, he

33:43

goes and collects cash from all the tenants. Not

33:46

things you're supposed to do, but they're weekly renters. He

33:48

goes home, puts all the cash on

33:51

his table and he says to me, the

33:54

cash smells of cigarettes and it's just, but

33:57

he says to me, at that point I was hooked.

33:59

I know. I knew it could work, I have people

34:02

paying me. And that's when the light

34:04

bulb goes on. Don't wait. We're

34:06

telling you right now that it works. And once people start paying

34:09

you, it's like game over. Your

34:11

mind, your paradigm completely shifts. Yeah.

34:14

And that's exactly the second thing I was thinking about is

34:17

that once you've done a deal, and I

34:19

tell investors this when I'm on a phone call

34:21

or at an event, when

34:24

they haven't bought a deal, when they haven't done

34:26

their first real estate deal, but they're thinking about it or they're

34:28

planning to do it, or they're working

34:30

with my team and they're on their

34:32

way to acquiring that first turnkey

34:35

investment property in whatever state

34:37

it is, I tell them, I said,

34:39

look, when you close escrow on

34:41

that first property and that first rent

34:43

check gets deposited into your account,

34:46

it's usually an ACH direct deposit. It's not

34:48

even a check anymore today. But when you get that

34:51

first rental payment and

34:53

then the second one, it becomes

34:55

addictive. You get hooked, especially

34:58

when you've done the second deal. Now it's

35:00

like you've got the bug. You're

35:03

going to keep going. You won't stop. Yes. And

35:05

look, if you had an extra million

35:08

dollars of investable cash in the bank

35:10

at that point, I guarantee

35:12

you, you would be investing at least half

35:14

of that right away into more

35:17

deals. You'd be buying as much as you can,

35:19

as quickly as you can, because you see it

35:22

happening. You see it works. It's real.

35:25

It's tangible. It's not a theory or a pro forma

35:28

that you're just reading the numbers and saying, yeah, this

35:30

is what could happen. No, it's actually happening. And

35:33

then you're going to look back a

35:34

year and two years and three and four and five years

35:37

and you're going to look at what you've accomplished and

35:39

you're going to say, yeah, I made X number of dollars

35:41

in income. Yeah, I took this much

35:44

in depreciation as tax benefits

35:46

to lower or eliminate the taxes

35:49

on that income. So now I'm getting that income

35:51

almost tax free or practically tax free.

35:54

And then third, you're going to say, geez, those properties

35:57

appreciated on average about four or 5% per.

35:59

year. Well, let's do some quick

36:02

math. You have $100,000 property, which is today, you know,

36:05

on the light side. If that sucker is appreciating 5%

36:07

per year over five years, that's

36:11

more than 5,000 a year because it, you

36:13

know, compounds, but that's like $30,000 in

36:16

equity on that one property in a five-year period.

36:19

If you have five properties, multiply it

36:22

times five, you're $150,000 richer. And

36:24

it's actually better than what I'm saying. It's more

36:26

than that. But, you know, when you

36:28

start to think about what can happen in five

36:31

years, it becomes

36:33

an addictive form of investing.

36:37

Marco, let me ask you also, for

36:39

the listeners, I've heard

36:41

with the JK Geno community over the last five, six

36:43

years, all the market's too high. The market's

36:45

too high. 2018, 2019, 2020, 2021, it's

36:48

too high. 2022. Well, right now, there's a full back in the market

36:50

right now.

36:54

Now is the opportunity. So if you're saying to yourself, is now

36:56

the right time to invest in real estate, interest rates

36:58

are high, prices are at all time high.

37:01

Well, Marco gave me an epiphany on

37:03

my podcast with him. He said

37:05

there's a, what did you say? 1.1

37:07

million homes that we're doing right now, but

37:09

we need over 2 million homes. So there

37:11

is a problem with supply.

37:14

So all that's going to happen is prices are going to continue

37:16

to rise because there's not enough supply of real

37:19

estate. So if you're sitting on the sidelines and saying yourself,

37:21

I don't really think now is the time, you know, there's a recession

37:24

coming on. The experts are telling

37:26

me their interest rates are killing the market. Don't listen

37:28

to any of that noise. You're investing for the long

37:30

term. So it might be bumpy for the next few months,

37:33

which is what we want because prices are going to come down. But

37:35

over the long term, like Marco just laid out to you over the

37:37

next five years, only these assets,

37:39

you're not only going to get wealthier, you have some tax benefits,

37:42

and it's going to change your mindset completely. Yeah,

37:46

Geno, you just reminded me of something too. You actually

37:48

asked me a question that I don't think I finished answering

37:51

on your show. And maybe we just skirted around

37:53

it. But you asked me the question of, you know, is now

37:55

the right time to buy something

37:57

like that. And I do talk about this on the phone.

37:59

my show.

38:01

And to answer that question, people

38:03

will ask my team and myself,

38:06

you know, is now the right time to buy?

38:08

Should I be buying right now? Should I be investing right

38:10

now? And you know, we've had a little bit of

38:12

a pullback, but now we're seeing things swinging back

38:14

the other way. Like, you know, real estate is becoming

38:17

hot again, although it never really wasn't

38:19

hot for a long time. It's just becoming

38:22

the right thing to do. But here's my answer to the question

38:24

of is now the right time to buy? My answer

38:26

to that is this. It is always

38:30

a good time to buy and invest

38:32

in real estate. It's not a question

38:34

of when it's a question of where

38:37

it's always the right time. There's always

38:40

deals and opportunities out there. It's just a question

38:42

of where, what market, sub market

38:44

area or neighborhood should you be buying

38:46

in where there's opportunity? Because

38:49

we all need a roof overhead. We all

38:51

need residential real estate because we need a place to

38:53

live whether we rent or buy. And

38:56

our population is growing. Demand is strong.

38:59

There's not enough resell inventory out there.

39:01

Builders are not keeping up with organic demand.

39:03

And so we have this great imbalance that

39:06

to me tailwind, not headwind. So

39:09

it just plays more into the whole thing that

39:11

I say that it's always a good time

39:13

to buy. It's just a question of where not when

39:15

but where. And I'll put a caveat

39:17

to that. It is always the right time to buy. It's

39:20

not always the right time to sell. But

39:22

it's always the right time to buy if you

39:24

learn the strategy that Marco is preaching and teaching

39:26

to his community. And he's buying in great

39:29

growth areas for the long term.

39:31

Yeah. So why don't we

39:34

do this? You have nine ways to deploy

39:36

baby money soldiers. Why don't you just hit on a couple

39:38

of them as we wrap it up here. So

39:40

deploying baby money soldiers. Listen, if you want to deploy

39:43

them 1031, you can 1031 your

39:45

baby money soldiers. That's a tax way. I

39:47

would deploy baby money soldiers into buying

39:50

assets into buying real estate. One

39:52

way to do it. You want to deploy baby money soldiers

39:54

into crypto. That's your thing. Deploy

39:56

them but deploy them into an asset that you understand.

40:00

crypto for the long term for the if you have a

40:02

long term horizon, you're not caught in the ups

40:04

and downs, it may work, but you need

40:06

to learn it. That's the thing. I love

40:08

self storage as well. I'm a big multifamily guy,

40:10

but I think any asset class pick anyone

40:12

mobile home parks, great self

40:15

storage, you have to be in the right area. Great,

40:17

single family. Great. I like

40:20

I said, one other thing, I want to put my baby money

40:22

soldiers in whole life insurance, not

40:24

my whole nest egg, but I'm going to have money there set

40:26

aside to deploy when I have

40:28

the opportunity.

40:29

I don't want to deploy them for luxuries.

40:32

What I would do is I would take the procreative

40:34

baby money soldiers and use that for luxury

40:37

and continue to have the baby money soldiers I have there to produce.

40:39

That's what I would do. And that's what I've been doing.

40:41

If you can't buy a luxury early

40:43

on, and that doesn't feel painful to you, then don't

40:46

buy it. You need that money. You need those baby

40:48

money soldiers to go into your, into your next

40:50

investment.

40:52

I like what Robert Kiyosaki says about that. He

40:54

says, you know, there's nothing wrong

40:56

with buying what he calls do dads, you

41:00

know, but it's better to have assets

41:02

like real estate that spits

41:05

off passive income and have your

41:07

real estate pay for the do dads that you want

41:10

the vacations, the cars, you know,

41:12

he went out and bought a Ferrari many years ago, but he

41:14

didn't go out and pay for it all cash. He basically

41:17

said, okay, how many properties do I need to

41:19

buy in order for, you know,

41:21

either an all at one time purchase or the monthly payments

41:23

on that Ferrari. So he went and bought, I don't know, three or

41:25

five houses that generated enough passive

41:28

income to pay for the monthly mortgage or lease

41:30

payment on that car. That just makes sense. Now

41:32

you've got the asset and you've got the income to afford

41:34

the do dad, the Ferrari, you

41:37

know, just makes sense. So you're

41:39

deferring your gratification on

41:41

those vacations and do dads temporarily,

41:44

you can still have them, but why not, you

41:46

know, have your assets pay for it? So have you paying for

41:48

it in cash and then not having the cash to invest? Yep.

41:52

Great point. I don't know what else you want to

41:55

talk about. We can go on for hours and hours and hours,

41:57

but do you want to have some final comments and takeaways?

42:00

before we wrap up, Gino? I mean, real

42:02

quick, Marco, I think for everybody

42:04

out there, when you're getting into investing, you

42:06

wanna get into a vehicle, I can tell you

42:08

wholeheartedly, I think multifamily is one of the best

42:10

vehicles. It works well for us, but it

42:12

may not work well for you. Figure out what

42:15

your goals are. Figure out what you're trying to

42:17

do. I think we jump into the stock market

42:19

or into crypto because it's the next quick fad,

42:22

and we're chasing yield. Understand,

42:24

you have to try to understand and learn what the investor

42:26

mindset is all about. Understand, like I said,

42:28

the psychology of money. What your relationship

42:30

with money is all about. If you're a risk taker

42:32

and you like that, well, whole life insurance

42:34

may not be the thing for you, even though I know it is, because it's

42:37

really slow, it's really boring. If

42:39

you like to take risk and maybe crypto's

42:41

right for you, there is no right or wrong answer.

42:44

But I know, and I'll leave you with this,

42:46

in the book, he talks about making money.

42:48

And money, all it does for you once

42:50

you become financially free is it gives you the autonomy

42:53

to do whatever you wanna do.

42:54

And that's truly powerful. That will lead

42:56

to happiness more than anything else.

42:59

So that's what the goal is. The goal is to buy enough single

43:01

family homes or multifamily to create

43:03

that financial freedom, which will give you the autonomy

43:06

to start doing Broadway shows, or to start

43:08

doing masterminds, or to start doing whatever you love

43:10

to do. That's what the goal is with your investments.

43:12

It's not just to go out there, sit and save money,

43:15

and wait until you get old. No, it's to make those

43:17

investments, to create the capital, and to create

43:19

the cash flow to allow you to do what you wanna

43:21

do today and not put it off for tomorrow. Yeah,

43:24

Gino, very well said, very well said. So

43:27

do me a favor. Tell our listeners how they can follow

43:30

you or get more information. Where can they

43:32

find you? Just go to the hub, jakeandgino.com.

43:34

You'll see the podcast, you'll see the books. We

43:37

got blog articles we're writing every week. Just

43:39

go to jakeandgino.com. You'll learn more about

43:42

investing in multifamily. Jake and Gino

43:44

sounds like two Italian paisans. Yeah,

43:47

they are. Well,

43:49

Gino, I appreciate you taking the time to come on the show

43:51

today. This has been great. I know we can talk for hours

43:54

and hours. Maybe what we'll do is we'll just schedule

43:56

a follow-up interview down the road here, and

43:59

maybe I'll see you. next week when I'm down in Florida. Sounds

44:02

good, Marco. Thank you very much, brother. Yep,

44:04

thanks for coming on. And for everybody else, remember

44:06

to get your free strategy session with my team

44:08

if you wanna learn more about what we talk about on the show,

44:11

or real estate investing in general, or

44:13

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44:15

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44:17

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44:36

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44:38

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