How To Select The Right Partner To Invest In Real Estate

[00:00:00] Hello and welcome. My name is Gino Barber, one of the co-founders of Jake and Gino. And in this

[00:00:05] how-to lesson, we're going to be discussing how to start a business with a partner. More

[00:00:11] importantly, how to select the right partner for your business. I'd like to start out with a story

[00:00:19] on how I miserably failed at selecting my first partner. And in life coaching school,

[00:00:28] when I went to school, I learned what is called an energy block. An energy block is anything that

[00:00:34] holds us back, whether it's internal or external. Internal is our thoughts and believe it or not,

[00:00:41] 95% of what holds us back are our internal thoughts. 5% are the external. The economy,

[00:00:48] what's going outside, what other people are doing, things we can't control. But internally,

[00:00:53] we can control them if we learn how to and if we become aware. Now, there were four parts

[00:01:00] to the energy box. We call them gales in life coaching school at IPEC. Gremlin is the highest

[00:01:07] energy block. Gremlin is those inner thoughts that you think of. I'm not good enough. I'm too ugly.

[00:01:12] I'm fat. I'm stupid. Those really restrict you. Those are really, really challenging. The A for

[00:01:19] gale is assumption, which is what we're going to be talking about right now, specifically to the

[00:01:23] story for myself. Anything that's happened to you before, it's like, wow, holy, it's happened. I can't

[00:01:30] do it. For instance, getting into a partnership, it fails. Well, the next partnership is going to

[00:01:35] be marred in your thinking. The same thing with getting into real estate, losing money. Well,

[00:01:41] that's too risky. I can't do that again. The I is an interpretation. How we interpret things in life

[00:01:47] is so truly important to the outcome. If you're starting off in real estate and you're trying to

[00:01:53] talk to brokers and you're picking up the phone or you're emailing and you're texting and they're

[00:01:57] not calling you back, you can interpret it in one of two ways. They're either too busy

[00:02:03] or they don't want to talk to me because I'm a newbie. It may be a mixture of both,

[00:02:07] but how you interpret that really lends to what's the next action you're going to take.

[00:02:13] If you think that they don't like you or don't want to respond because they don't have time for you

[00:02:17] and you're interpreting it that way, well, guess what? You're probably going to say, I'm not going

[00:02:21] to reach out to them. But if you're persistent and you're not really sure of how to interpret it,

[00:02:26] well, let me reach out to them again and be a pest again. That's an interpretation. And the L

[00:02:32] is for limiting beliefs. Now, limiting beliefs are anything that you believe to be true,

[00:02:37] but does it have to be? And it's a lot stronger than an assumption. Once you've, you know,

[00:02:43] have that limiting belief for me, a limiting belief early on was it takes money to make money.

[00:02:48] And then on my very first deal with Jake, we use seller financing. Well, did it take money to make

[00:02:54] money? Yeah, I had to come up with some money, but 10% of the down payment was seller financing.

[00:03:00] So right away, right then and there, I realized it doesn't take money to make money. It takes ideas.

[00:03:06] It takes value. It takes commitment. It takes skills, other things than just money to make

[00:03:11] money. So let limiting belief was crushed, but let's get back to the assumption and picking a

[00:03:15] partner. This is challenging for me because I'm thinking back at 05 and I selected a partner.

[00:03:21] Moreover, this person who is going to do the deal for us, we're in essence going to be passive.

[00:03:28] Now I did a bad job in selecting him. I didn't even know what to look for. I want you to write

[00:03:33] this down because this is crucial. Whenever you select a partner, whenever you're making a

[00:03:39] decision, it should be based upon your values. And if you don't know your values, when you're

[00:03:45] done listening to this, sit down and reflect upon what values you adhere to or what you'd like to

[00:03:53] adhere to. Are you living those values? Back then I had 172,000 bucks. I found someone willing to

[00:04:00] take that money from me. He took it from me. 18 months later, that money was gone. If I had

[00:04:07] selected values based decision-making is what we're talking about here. Thanks to Rick Sapio,

[00:04:13] dear friend of mine and a mentor of mine. That's his terminology. Think about that. That really

[00:04:18] hits hard values based decision-making. If I had known my values and my values were responsibility,

[00:04:25] commitment, long-termism, integrity. These were all values that this gentleman did not possess

[00:04:33] in the slightest. Now, obviously there were other situation difficulties with the deal. I never flew

[00:04:40] down there. I never looked at the deal from an investor standpoint. I didn't understand how to

[00:04:45] invest. I didn't even know he created a syndication and that's what it was in effect. And I didn't even

[00:04:51] know that. So I need to bear the responsibility, the brunt of that. I need to understand that if

[00:04:56] I'm going to be a hundred percent responsibility junkie and that's one of my values, then I need

[00:05:02] to own up to that. And I ultimately did a couple of years after I became that responsibility junkie.

[00:05:08] And that's when I went out and I started educating myself. But those are some of the ways that I want

[00:05:13] you to think about when you're going to select a partner. Do your visions align? Do your goals

[00:05:18] align? For Jake, when I met Jake, it was pretty evident from the beginning that I had already

[00:05:23] been thinking about these values and that his values nicely aligned with mine. He wanted to

[00:05:29] invest in real estate, specifically multifamily. He wanted to buy and own these assets for the

[00:05:35] long-term. And as we're investing in real estate, he never got that shiny object syndrome where like,

[00:05:41] Gino, timeout. I'm going to stop here and couldn't do singles family or I'm going to do RV parks

[00:05:46] or I'm going to do mobile home parks. No, he was focused on that one niche like myself,

[00:05:50] long-termism. He was committed. These are some of the things how and how our values align and

[00:05:56] how our objectives align. And if they didn't, does a partnership work? It may or may not,

[00:06:02] but it's going to be a lot more challenging. That's what you're trying to do. You're trying

[00:06:06] to find out what your partner's goals are and how you can align with them. And I think more

[00:06:11] importantly, as you're listening to this, you need to take a deep look at yourself and how can

[00:06:16] you bring value to that partnership. For myself early on, I understood multifamily. I was the

[00:06:22] one who got educated. I was the one who went to mentorship. I was the one who knew how to

[00:06:27] underwrite a deal. Jake, his value was that he had moved from New York to Knoxville and he was

[00:06:33] in the market. He had boots on the ground. So do you see how beautiful that alignment was?

[00:06:38] Not only was Jake a hard worker, not only was he committed, not only was he a family man,

[00:06:43] all of the values that I possessed, but he was able to provide value to the partnership. And so

[00:06:49] was I. And that's what you need to look for when you're looking through the lens of trying to

[00:06:53] partner with somebody. They may have something that you need and you have something that they

[00:06:58] need. Now going back to that assumption, some of you may be saying right now,

[00:07:03] I can't get into partnership. They never worked for me. Do they never work for you?

[00:07:07] Have you ever looked at it from the lens, which I am presenting to you right now?

[00:07:12] Were you a little culpable? In other words, bear responsibility for the failure of that

[00:07:16] partnership. I could have said early on Maserati Mike, that's what I called him. It was all his

[00:07:23] fault that I lost the money and I'd probably be true about 90% of it, but I needed to bear

[00:07:29] the responsibility. And if I held on that to assumption or that belief, guess what? I may

[00:07:35] not be here right now because I made have said to myself, well, Maserati Mike was a terrible

[00:07:40] business partner. Jake's going to be the same way. I challenge you to stop thinking like that,

[00:07:46] to stop having those assumptions sway hold of you. I mean, I met Jake four or five years after

[00:07:52] I lost all that money. I had grown as a person. I had been working on personal development. I

[00:07:57] had been working on mindset. I had been working on my skills. So that's how I broke that

[00:08:02] assumption. And it is an assumption. Some partnerships work really well and some don't.

[00:08:07] I entered into a partnership back in 2015 and 16 with a couple of guys who wanted to build

[00:08:12] vacation rentals here in Florida. That partnership didn't work well. Why? Because of values. Don't

[00:08:18] beat yourself up. You're going to make mistakes. And I made a mistake on that deal. And fortunately

[00:08:23] for me, it was small. We only entered into building a couple of homes. And that's the great

[00:08:28] thing about partnerships. If you're afraid or if you're fearful, start with small one,

[00:08:32] start with one deal, get an operating agreement, layout expectations, get to know the partner.

[00:08:38] I think one of the things about partnerships is you tend to have to like the partner. It's called

[00:08:44] the, we call it the beer test. If you can't go out and hang out with your potential partner and

[00:08:49] have a beer and enjoy their company, it's going to be very difficult to have a long-term

[00:08:55] relationship with that person when it's just based on business. Listen, I was on the call

[00:08:59] with Jake literally five different times yesterday. We're talking about a deal. We're talking about

[00:09:05] employees. We're talking about creating a new program for Jake and Gino, all of these things

[00:09:10] that are going on. If I don't want to get on the call with Jake, what's the interpretation?

[00:09:15] I don't really want to talk to him right now because I don't want to do the business with him.

[00:09:18] So understand that you need to like it. And listen, as you're listening to this,

[00:09:21] if you want to reach out to us at Jake and Gino, I'm going to give you a phone number.

[00:09:25] You want to learn how to invest in multifamily. You want to learn how to partner. You want to

[00:09:29] become part of the premier multifamily community. The number is 865-800-3905, 865-800-3905.

[00:09:43] If you want to take that next step into multifamily, or even if you want to learn how

[00:09:47] to become a passive investor in multifamily, if you want to learn the systems, the processes on

[00:09:52] how to do that, the mechanics are all there. Understanding the nuances, understanding how

[00:09:57] talking to a coach about creating a partnership. Great. Now that we're partners, what's the next

[00:10:02] step? Well, the next step is the structure. Well, how do I do that? I've never done that.

[00:10:06] Well, we've done that countless times and it's so important. Let me end this by saying

[00:10:11] that you need to be 100% committed to your partner. No excuses. I can't do this. I can't do

[00:10:20] that. I'm too busy. You can never be too busy for your partner. If you let your partner down,

[00:10:26] not only are you letting him or her down, you're letting down their family. Let that stick for a

[00:10:33] second. That really hurts. And that's what keeps me going because I know if I don't get on a call,

[00:10:40] I'm letting Jake down and I'm letting his wife and his three kids down. And I think he feels the

[00:10:44] same way as I do be a hundred percent committed. And ultimately, as we're winding down, think about

[00:10:53] what your values are. Think about yourself as a little kid, nine, 10, 11, 12 years old. That's

[00:10:58] when you start forming your values for myself. When I think of something back when I was that

[00:11:03] young, I remember really going to work with my father at the restaurant, the values of hard work,

[00:11:09] the values of commitment to a family, the values of not giving up because I had to provide for the

[00:11:14] family, the values of creating a small little business, being responsible. I mean, loving this

[00:11:20] country. Those are all values that I learned from my dad and they've just carried on into my adult

[00:11:25] life, but I didn't really know them. I wasn't aware of them. I want you to start to become

[00:11:30] aware of them, write them down and start living them every day. And I will promise once you start

[00:11:36] doing that, it'll be so clear. A partner will just show up out of the blue and you'll say,

[00:11:42] wow, he just, or she just fell into my lap. It doesn't happen that way. What you focus on grows.

[00:11:51] I want to thank you for spending part of your day with me

[00:11:54] and I will see you on next week's how to take care of everyone.