Are you looking for a way to build wealth? Agostino knows the importance of cash flow. He started with single family and has scaled to fifteen multifamily properties with 1,600 units. And he is the host of the Bulletproof Cashflow podcast. He lives in Cleveland and knows all about fear but also knows the importance of cash flow and pushing past that fear. His story will inspire you!

Table of Contents:

• Where To Listen To The Podcast
• The Importance of Cash Flow in Scaling a Business
• Learning the Importance of Cash Flow and Wealth Building
• Things That Come Into Play When You Learn the Importance of Cash Flow
• If You Want to Raise Your Lifestyle, Learn the Importance of Cash Flow
• How Much Money Can You Earn When You Know the Importance of Cash Flow
• Living Life On Your Terms
• A Cash Flowing Asset
• How to Reach Agostino Pintus

The Importance of Cash Flow in Scaling a Business

Darin: Agostino Pintus lives in Cleveland. He was a C-level technology executive before becoming a full-time real estate investor. Like many, he started with single family and then he scaled up into multifamily. Achieving one goal after the next and knowing the importance of cash flow has kept him focused on scaling his business and building generational wealth.

Agostino: I'm super excited to be here. Been looking forward to this all day.

Darin: I was a guest on another podcast and the host, after we stopped recording, he was like, "Look, you got to get in touch with these people." He pointed me to a number of friends of his and Agostino was one of them. So we connected a while back and he's just doing phenomenal things. We ran into each other at a multifamily conference in Houston, we talked last week and got reacquainted. Agostino, can you share how many properties and how many units you're currently invested in?

Agostino: As far as units, we're getting another deal under contract right now. We're going to be at about 1600 units all here in Cleveland. For the number of properties, it's probably about 15, maybe a little more. I track more units than anything else. Aside from actually buying stabilized multifamily, we're also into development and we have currently three projects underway.

We have a ground-up development here in Cleveland. Another ground-up development is going to be kicking off in Q1, also here in Cleveland and in a very hot part of the market. Then, of course, where I'm sitting right now, the Rockefeller building in Downtown Cleveland.

A Monster Redevelopment Deal

Agostino: This deal alone is $135 million when it's completed, that's what it's going to be valued at. It's going to be a monster redevelopment deal. Over 430 units just in this building alone. It's going to be wild, it's going to be crazy.

Darin: What were you doing before you got into real estate?

Agostino: I was working in corporate America, large enterprise IT.

Darin: So you were an IT manager?

Agostino: More like C-level, CIO, CTO, that type of person. I was doing that for the longest time. I'd say about 18 years ago when I first got into this whole real estate thing, I started with single family. The only reason why I did it, a friend of mine says you should do real estate. It's great, passive income, it's super. That was the decision-making process.

At the time, the company I was working with was doing very well and I was doing very well, so I had extra cash. I knew nothing about anything, I just started buying single family homes and small multifamily assets. It was funny, when I bought my first house, I was scared to death. I was like, "What did I do? I just bought a single family home. Someone's going to pay me rent? For real?" They did. I'm like, "They paid me! I can't believe it."

Darin: This works.

Agostino: I was so surprised. This is a $100,000 house, 110, maybe something like that. We're not talking about anything big here. It's wild how fast I've progressed from doing that. I went through really rough times. I call it the 10 dark years after getting laid off from that company. Gone through a bunch of bad things in my life, with divorce and other bad relationships.

A New Found Goal

Agostino: But really, I'd say, only the last four years now have things really corrected themselves. Now I'm doing what I'm meant to do. I'm supposed to do it with a new found goal set in my life.

When you try to live your life without any specific goal, you're going to have a hard time. But it's amazing, when you have that goal defined and clear in your mind every single day. Life is much easier that way, it really is.

Darin: Goals, it sounds so easy. You hear it all the time, "I set goals and go after goals." But a huge percentage of the population does not take the time to write down their goals. So what happens is life just pushes people into certain situations. Think about college. How many kids go to college and maybe they know they want to do business or they want to do engineering. But they don't really understand what kind of job they can get afterwards.

Then, senior comes up. They put in their resume to the companies that show up, and get a good-paying job. Something that their parents are proud of. They start working. The next thing you know they may not be doing what they really want to do. But each year they get a raise and they don't know what else to do?

Agostino: They're stuck there.

Darin: One thing that was cool about what you said earlier was that you had a friend that told you, "You got to get into real estate." That friend took the time and energy to try to pull you in. Secondly, you took action. You were scared, but you still bought that single family house and that started everything.

Setting Goals Around the Importance of Cash Flow

Agostino: That's right, the one single family. By the way, that friend, he's not in real estate anymore. I don't know why. He got in. Part of it is that he kept on buying. He bought some single families. Then he bought a Corvette, a Viper, a hopped-up Hummer, a motorcycle, and a giant house.

Darin: Lots of toys.

Agostino: Then he bought a bar and then he went bust and he lost it all, including the houses. Now he just chills, that's it.

Darin: I was thinking that you were going to say, now he's one of your investors.

Agostino: No, but he really is good. I do thank him for putting me on the path. When I was growing up, my parents did not tell me about the various ways of earning income. The various ways of setting goals, about keeping a map around what you want your life to look like. All these different things are elusive.

A lot of people think it's a bunch of foo-foo nonsense but it's not. It's all real. The most successful, wealthiest people on the planet do this every single day and people need to be doing this too. But part of it is just the way that we're raised. It's unfortunate because there's generations of these people and they're suffering, they're suffering right now.

What they do rather than taking action themselves is, they blame other people, and they're miserable, they live a very miserable life. This is how they're suffering, rather than taking responsibility, they blame it on someone else. They blame it on capitalism, they blame it on the rich, they blame it on whatever. It really is sad.

When You Realize the Importance of Cash Flow, You Take Action

Darin: They're scared and fear is real. The people that I've talked to who have been successful, the difference is they still had fear. You talked about your first single family, you were scared, but you still took action. I know for me, my first investment was a new construction duplex. It was 300,000, my wife and I had to put in 50K and we got a loan for the remainder.

But I was scared on that deal. I had plenty of the capital, it wasn't like it was going to change my life if it went sideways. But people don't want to lose. That's ingrained in people that "prevent yourself from losing" more so than what would happen if it's successful.

Agostino: What’s more though, it's funny you should say that. We're afraid to lose and you don't want to ask for help. Because if you lose something, you're an idiot, you're a loser, get in the corner, put on your dunce cap. I don't even know if they do that anymore. Maybe I might be dating myself. But it's like you're an idiot if you do that. If you ask for help, you're a bigger idiot.

That's the education system at work because growing up, you weren't allowed to ask for help. You weren't allowed to ask for any type of assistance. Today, that's all I do. I call my lenders all the time, I call my inspectors all the time. "Help me out with this deal, I don't know what to do with this. What do I do? How do I fix this?" This is why you have a team.

Learning the Importance of Cash Flow and Wealth Building

Agostino: We were discouraged from taking risks, we were trained to be employees, and this is 100% incorrect. It's an antiquated, obsolete idea. People will get killed out there. They'll get slaughtered because they want to build wealth using the old-fashioned techniques. I was one of those people, it doesn't work. It takes an element of risk. Believe me, it isn't like I just woke up one day and decided I was going to do all this.

It took some training, it took a lot of mistakes and it took some faith that I can pull this off. And it also took commitment. I had to really, 100% commit. The last time I had an actual "job" with a real company, they handed me the GTFO box. So here's your box, pack up your stuff and get lost. I'm like, "Here I am." I was in my mid-40s. Now, what am I going to do?

I have my family that depends on me and I have no job. How many more times am I going to put my life in the hands of someone else that doesn't care anything about me or my family? I remember, I would go back on that treadmill again about sending out resumes. Finally, I decided, "You know what? I'm going to stop this, I'm going to get off this treadmill. I am going to focus on real estate."

When I bought that real estate at that time, I was probably 13 or 14 years prior. It was still giving me money. I still own some of that real estate. Even today, I still own some of those houses, I still have them and they still roll off money every month.

Understanding the Importance of Cash Flow and Passive Income

Agostino: I still get a check from that every month. I'm like, "Why am I killing myself with this earned income, which is the highest taxed income, by the way. It's only going to go higher, whether you believe it or not. I could either keep doing that nonsense or go get more passive income. But this is where the pain comes in because now I have to learn how to buy real estate. That's the hard part because people don't want to commit to doing that kind of work.

Darin: It's because the country, the education system trains us to be employees. I was one of those, I was in a number of different industries and I got paid very well. But I was trained. Put 10 or 20% away into 401Ks, into buying stocks and ETFs and that is just going to grow. But what I learned from other real estate people is, "You know what? We are all accountable for our assets. We can't just push money aside and then hope that somebody is going to take care of it."

So when you said you need to learn, what you did was you got educated. All of a sudden, you said to yourself, "You know what? I'm going to try this." Then you saw that he was making more money. So you started allocating more time and resources to that type of investment.

Agostino: I set myself a goal too. I was doing these sheets. And I would write out all the goals, I was typing them all up. Like a little poster, just a regular old piece of white paper.

When You Learn the Importance of Cash Flow, You Can’t Ignore It

Agostino: I printed it all off and had colors around the big goal and the weekly goals. Then I took these sheets and I put them all over my apartment. I hung them in the bathroom, the kitchen, I had three of them in my bedroom, everywhere. No matter what room I was in, I saw it. It's a big red square with all the stuff in there, so you can't ignore it.

There was no time to chill and watch Game of Thrones or whatever is on TV. If I'm going to hit these goals, I have to block out everything to focus on that stuff. I remember, one of my goals was to buy a 20-unit apartment building. It's funny because now I won't even look at that kind of stuff anymore. 200 is probably the minimum at this point. It's just funny how that works, how big your mind expands as you take down more deals.

But it's a matter of trying to break the spell that's been cast on us from when we were kids. I'm not about to tell anybody that that's super easy, it's not. It's very hard. But the way you break it is to educate yourself and take action. Be around people that have already broken through. That's the secret.

Darin: That single family home, you said it, your goal at one point was buy a single family home. Then it was to buy a 20-unit apartment building. Prior, you never could have even thought about buying a 20-unit apartment complex. That's what happens when you set goals and then you achieve those goals. Naturally, we push the boundaries. The next goal, typically, is a bigger challenge. You wouldn't have gotten there had you not taken the first goal.

The Questions That Define the Importance of Cash Flow

Agostino: Part of it, too, is the questions that we ask ourselves that determine what happens next. Let's say, for instance, I'm working on a huge deal right now. It's a really big deal, like $40 million big. I got to close up by the end of the year and it's mid-October right now. The question now is not, "Oh, I can't do it. It can't be done. Sorry, I can't do it." No. The question is, "How do I do it? What needs to happen? How do I get this organized?"

These two very different things will determine whether you're going to have success or whether they're going to have failure. What you speak becomes truth. If you immediately say, "I can't do it," your mind shuts off. It's already defeated, it's done, it stops thinking about a solution. But if you say, "How can I do it?" your mind starts opening up. It tries to determine ways of getting a deal done.

Darin: Even when you're sleeping.

Agostino: Most people get their ideas in the shower. I don't know what it is. Maybe it's the soothing water. So many of my ideas come to me in the shower. But at any rate, we've been conditioned to immediately just shut it down. "Oh, sorry, I can't do it. Next." It's always the case.

Darin: I would add to "how do I do it?" One of the components in "how do I do it?" is thinking about who? You talked about having relationships that you can call up and say, "Hey, you've been through a lot. Have you seen this? How'd you do it? Is there somebody I can call to help me with this?"

There Are Stupid Questions

Agostino: There's so many people that sometimes reach out to me. Sometimes I watch them reach out to other folks. The thing is, what you say and what you ask people tell a lot about you. There's that saying about, "there are no stupid questions" and that kind of thing. No, there are stupid questions. I'm here to tell you that there are stupid questions. If one of your questions is, "What cap rate are you buying these days?" That's a stupid and a dumb question.

Cap rate doesn't matter, it's NOI that matters. If you're in the real estate game, buying multifamily assets, you're going to know that. And if you're saying that you're in the game, there's plenty of material out there. It's totally free that anybody can learn. You need to be learning this information before you go and talk to the heavy hitters as a new person and as a newbie. These are things that you just need to know. You need to understand ahead of asking those questions.

Darin: You can leverage other resources. Surround yourself with other people that have broken through, that have already done it. If you're a newbie, you can ask somebody that's successful and say, "What questions should I ask the broker? What questions should I ask the lender?" They have already been through it, they can coach you on some of the good questions to ask. The questions that you ask will help develop your credibility with that broker or with that lender.

Agostino: Here's the thing many people don't realize.

When you speak something, the person receiving that information is going to make a determination about you as an individual.

Things That Come Into Play When You Learn the Importance of Cash Flow

Agostino: What question you ask, how you ask it. What’s the temperament of your voice? What words do you use when you form that question? All these different things come into play. If you're not asking the right question in the right fashion, you're going to sound and look like a newbie. The chances of them helping you, long-term anyway, decrease significantly.

It's like being armed with information, even upfront, doing the work upfront, which is what I did. I studied like a maniac. Learning everything I possibly could to know the business before I even opened my mouth and talked to anybody. At least get to a point where there's so much free material out there, you can learn it, you can speak it. Then when you do get ready to speak it, you can speak confidently about what you've learned.

Many people expect to be spoon fed. I know it sounds terrible, but the thing is, there's a lot of competition out there. There’s a lot of people out there that are very bright. Even though this is a team based type of business, there’s still competition out there. You got to be good.

Darin: I would layer something on top of what you said. There's also a lot of people that get into, "I want to be involved with multifamily". Then they do spend the time on educating themselves, listen to a lot of podcasts, read a lot of books. They underwrite a ton of deals, but they can't get over the ledge. You want to act credible and you want to come across as professional.

Go Out and Do It

Darin: But the first time you talk to a broker, the first property tour you go on, you're not going to be as confident and as skilled as the 10th property tour. You have to go out and do it and then you learn each time. Maybe you call some junior brokers, go on some tours with some brokers.

You don't want to hurt your reputation in the beginning but you want to develop that skill set. But you have to get out and start doing stuff. You got to get on the phone and talk to people. You’ve gotta get out and visit properties.

Agostino: Something you mentioned there is very important. Let's say for instance, you go through all the books, you learn all the information, you know the terms. You speak confidently, you find a deal, you go walk the property. But you know what though? You still don't have the means to take it down. Maybe you don't have the net worth, you don't have the banking relationships. You don't have the cash in the bank or whatever, but you have a deal.

Then, your next step is to try to find a local syndicate or some other syndicator interested in that market. You have to be able to convince and sell that deal to that person. If you're unable to sell that deal to that person, the deal's not going anywhere. That's the thing. Your ability to know and understand how to pitch that deal could make all the difference in the world. But, none of this stuff happens overnight.

It Takes Years to Learn the Importance of Cash Flow

Agostino: We're living in a world today where there’s instant gratification. It's taken me years to learn all this stuff. I'm fortunate in a way, going through corporate America. I had the raw skills on how to do this stuff. In terms of selling, in terms of numbers and Excel sheets, I was familiar with that. But when it came to the pitch, the psychology of who I'm speaking to, and why they should listen to this pitch, that's proven to be very helpful to me.

Darin: I advise people when you're going out and doing this. You're talking about the pitch to the actual GP that may partner with you. Newbies have to develop relationships with four or five people that are senior. People that have done this before agree ahead of time, "If you've got the right deal, I know you, like you, trust you. I would consider doing business with you."

That's not a hundred percent guarantee that they're going to. But because not only do you have to pitch the deal to the GP, but if you really have a good deal, you got a pitch to the broker that you're aligned with somebody senior that has experience that you could actually close this deal.

Agostino: All that stuff you just mentioned, everything we've been talking about here involves a lot of work. It's not easy.

Darin: Time and effort. But the difference is, you were C-level on the IT side. I was making really good money in sales in different industries. But I've met people from all walks of life that have been successful in real estate. You don't have to come to it with a huge bank account and a ton of C-level experience.

Living Out the Importance of Cash Flow Requires Commitment and Focus

Darin: You can actually do it by learning from others. But there's a lot of hard knocks along the way and you have to be committed and focused. They say, "burn the ships." You have to really believe in yourself that you're going to make it happen.

Agostino: Part of it, too, is that there's an element of what sort of life do you want to live? I have a friend, he's in the real estate game and he buys multifamilies. But he's in the smaller stuff, 20, 30 units. His whole thing was, "How much money do you really need?" You know that kind of thing. That's okay. I'm not knocking the guy at all. He's perfectly fine. He's got a couple of a hundred units.

He uses his own money to buy all these things. So, he is not syndicating anything. He does fine, he wants to be able to go on his hunting trips and he's got a nice car. That's it. He's perfectly happy. If that's the vision for his life and he's perfectly happy, mazel tov, great, super. If your vision is to have a billion dollars of assets under management, it's a whole different mentality. There’s a whole different scenario for that. It requires a lot more work and a lot more sacrifice.

That's what it comes down to, it’s how much do you want to sacrifice? It doesn't have to be one extreme or the other, it can be somewhere in the middle. But it does take sacrifice, it does take a lot of work. I didn't get to where I'm at easily. Nothing was handed to me.

Knowing the Importance of Cash Flow Leads to Progress

Darin: Let's talk about how you started with one single, then you ended up with the 20-unit. Now, you're working on this Rockefeller building which is going to be valued at 135 million, it's 430 units. Talk about that progression. How did you get there, how long did it take?

Agostino: I'm going to try to condense the story because there's a lot that took place. When I was first exposed to this whole real estate game, it was single family, small multifamily.

Darin: When was that?

Agostino: This is probably 2004, 5, 6. I had a condo. We ended up renting it out and then moved to Virginia. I started buying houses and small multifamily. After that, I went through a divorce. Right after 2008, things were starting to get really dicey. The relationship at home was going really bad. About 2010, things finally fell apart and I was basically coasting, my whole life was on coast mode. I wasn't doing real estate, I wasn't doing anything. Just trying to keep any type of job in IT that I possibly could. That's how bad it was in my life.

I’d go from job to job, I had no "why?" I had no focus. I had no vision for what I wanted my life to be like. It's like I was working, I was scrambling to find the paycheck. Every single week, that was my goal. Very different from what's going on today. You don't know that when you're experiencing it.

Darin: A huge portion of the population lives that life.

Agostino: Maybe they're not panicking the same way I was, but that's how they live their life. They live their life praying for Friday and dreading Monday.

If You Want to Raise Your Lifestyle, Learn the Importance of Cash Flow

Darin: Even if they're getting raises and bonuses and climbing the corporate ladder. Maybe they have a happy family life. They weren't going through a divorce like you had gone through, but they're raising their lifestyle. Nicer cars, nicer homes, nicer vacations, and doesn't give them the flexibility to do anything. You're in this tough stance back in 2010, how do you change it?

Agostino: Just before 2010, things were going really bad. 2010 was finally the last straw, I went through a divorce. Then, I would just coast from job to job. Part of it too, it's like you might work at a really crappy company. You can't say that you worked at a crappy company, unfortunately. It looks really bad to the guys you interview. Isn't that funny how that works?

I worked for a lot of crappy companies, a lot of bad ones. The more crappy companies you work for, the worse off you become. That goes back into managing your career, which I was not doing very well. I had great opportunities that I'd landed. It's like, I know you, you worked at Ernst & Young for a while.

Darin: Price Waterhouse.

Agostino: It's like you go work for PWC, go work for Ernst & Young, go work for the top-tier shops. Then, all of a sudden, you go to work for some crappy company and start doing all that. Next thing you know, your reputation is tarnished. It's like that, only I was doing it in the IT world. That really limited what I was able to do and pull in the type of salary that I was accustomed to. I was living a very terrible life.

Mindset Shift

Darin: What did you do to shift your mindset?

Agostino: I started befriending other C-level executives and getting to know them a little bit. I got to know one guy. He's a really nice guy from New York. I was able to land a job as a VP of technology for a very large company in New York City. Once I was able to do that, I still wasn't happy, but I was at least able to at least get a solid paycheck. It took almost eight years for that to happen, from the time the divorce was about to happen to actually landing in New York. It took a long time.

Darin: 2010 to 2018?

Agostino: I'd say '16, so it's probably maybe six years. But then, after dealing with all that, I still wasn't happy. The IRS was still after me from a whole bunch of other tax issues that were brought on by the ex. All kinds of other problems. My life was still a complete mess. I still had some real estate assets, they were still throwing off money despite all these issues.

But then, I got a real big break with this gentleman that lived in New York City too. He was running a company in Indianapolis. And he said, "Listen, I know you're really good at what you do." He could tell that it's really good. So he wanted me to come on board for this company in Indianapolis to fix their IT. I left New York to go to Indianapolis. And I basically worked on fixing that business. This is where the heroine of money comes in, the heroine of a paycheck.

When You Don’t Know the Importance of Cash Flow, You Keep Blowing Cash

Agostino: Now I'm back to earning tons of money and I thought about doing real estate. I did think about it. I'd look at these deals and I'd be like, "Huh. I could buy a building but I'm getting a huge paycheck on Friday. Do I really want to mess with all this? Uh, forget it."

Every two weeks I'd be going through this. "Should I go, or forget it?” Then, what do I do? I go out drinking, go to parties, hang out with friends, and waste money. Blowing cash, as fast as I can get it. That's the point I got fired, eventually.

Darin: The Indy company that you fixed the whole IT thing, and then you ended up getting canned?

Agostino: The guy who hired me quit. Then, the new guy comes in, hates me, and wants to bring in his guys, and I get canned.

Darin: Is that 2017, 2018?

Agostino: End of 2017. It wasn't that long ago when you think about it.

Darin: So now you're into 2018.

Agostino: What do I do? I start focusing on rebuilding my life, cleaning everything up, getting rid of all the distractions, and really fixing my life. So I decided to make real estate the center point for everything. Real estate was going to be it. The shift from doing the party time, the drinking, all the bad stuff I was doing. I had to basically cut all that out and decide, "I do not want that life anymore. I want to see a big shift in my life." It took a while to do that. A lot of self improvement.

Focus On What Matters

Agostino: That's the thing, when I was working at this company, I did some partying and drinking. But I started exposing myself to self development and self improvement. It wasn't all of a sudden, I'd already started down that path. By the time I left, I was already thinking, "Okay, I really have to fix my life here." So by the time I did leave, now I had a bunch of free time, I could focus on what matters.

That's when I decided real estate was going to be it. I just happened to meet a friend who was also in Indianapolis who's an attorney. He told me about syndication. I had no idea what that was. He explained it to me. I'm like, "Oh my God, I could do that. I could do that again."

Darin: How would you define syndication in your own words?

Agostino: Syndication is basically pooling the money, pooling the resources of other people. Sharing the risks to go buy a large cash flowing asset, that's how we do it anyway. Or invest in a deal that's going to one day throw off a whole lot of money. Then it gives a return back to everybody that invested in it. It's very simple, it's very easy.

Darin: It's simple, but the word is intimidating. Until you understand it, "Syndication? That sounds like something from some finance book. I'm not even going to touch that." Really, it's just a bunch of people coming together to buy an asset they couldn't buy on their own.

Agostino: The funny thing is, so many people do it all the time. Companies do it all the time. To make a big Hollywood movie, those deals are syndicated. They do it with real estate.

A C-Level Executive Who Knows the Importance of Cash Flow

Agostino: It's crazy how that is, but once this attorney friend explained it to me, the light went off. I'm like, "You know what, that's what I'm going to do. That's what I'm doing from now on. I'm quitting it and I'm focusing on this one thing." And I've been doing it ever since.

Darin: Don't you wish that when you were a C-level executive making great money? That you actually knew a syndicator, you could have been siphoning off a piece and giving it to them to provide you with better returns? When I think back, I'm like, "I made some great money. I kept putting into the stock market, into ETFs, 401Ks, IRAs, and SEP IRAs.” I'm like, "I wish I had known about this." Even if I wanted to stay at my job, I could have been making great money by partnering with somebody that went out and found the deals and managed them.

Agostino: I remember when I was 19, I was working at this electrical distributor. HR would bring in somebody and they would say, "If you sock away a hundred dollars of paycheck, then by the time you're 65, you'll have $1 million." I remember being 19, I was like, "Wow, a million dollars! How awesome would that be?"

Now, a million dollars is nothing, it wouldn't last you. It wouldn't get you past two years with all the taxes you have to pay on it. It's ridiculous. But back then, it seemed like a lot. In reality, that deal never worked. By the way, that deal never worked.

How Much Money Can You Earn When You Know the Importance of Cash Flow

Agostino: Back then, when I was earning all that big money in my early 30s, working at that company I was telling you about, I could have done the deals myself. That's how much money I was earning at the time. I could have done those deals by myself and bought these properties. If I would've just opened my mind and learned about this stuff, I would never have used 401Ks.

I would've used maybe a self-directed IRA. I’d still take that company money, the matching that they do, of course. I always take that, it's free money. But I would've just taken it, put it into a self-directed IRA and used it like that instead. But that whole thing's a giant scam. People are convinced that that's what you have to do, it's totally incorrect, totally wrong.

Darin: You said you educate yourself. I've asked so many people that come on the show, "What got you started?" So many people have pointed to the one book, Rich Dad Poor Dad by Robert Kiosaki. That book alone has changed so many people's lives. A light bulb went off in people that there is another way. I remember I gave it to my kids to read.

My son read it over summer, he was in high school. The next year, he ended up starting his own business. He did very, very well for a high school kid and he took it into college. It's probably not something scalable that he'll do forever. It was reselling limited edition sneakers. But for a high school kid, I'm like, "Look, you sold that one pair of sneakers."

The Mentors Who Are Teaching the Importance of Cash Flow

Darin: He also umpired, "How many games would you have to umpire to make that same amount of money?" But he read that book and it kind of changed his mindset.

Agostino: That book changed so many lives. It's funny, I didn't even know about that book. I didn't have a mentor. If there was a podcast about real estate, I wouldn't know about it. I was nowhere in that circle, I was still escaping the corporate world. I’ve learned about real estate from Sam Zell. I wouldn't say it's the best when it comes to how you structure a deal or anything else like that.

But as far as the money to be made in real estate, guys like Sam Zell or Grant Cardone, they would talk about real estate. Robert Kiosaki came after, but it was real estate stuff before Rich Dad Poor Dad, believe it or not. Rich Dad Poor Dad was also, of course, the thing that put it over the top. But I already had the entrepreneurial spirit.

I basically shut it down because my parents always told me, "Entrepreneurship is risky, don't do that. Go work for somebody because it's less risky." That's a bunch of crap. It's like, "I don't understand." Now I don't get it. It's like, you go work for somebody. The biggest risk is them handing you the GTFO box at any given time.

Darin: When you're in your 20s and 30s, it's probably pretty safe. If you get let go, you're going to find another job. But when you get in your 40s and 50s, you're competing against those in their 20s and 30s. You make too much money so when you go looking for another job, that's risky.

Bulletproof Cash Flow

Darin: In 2018, you started fixing your life, going after real estate. You have your own podcast called Bulletproof Cash Flow. Why did you start that? What's your "why?" related to your podcast?

Agostino: The reason why I started all this, the whole movement was around giving my son a future. Giving my son something that I didn't have and building wealth that can last generations.

I wanted my son's kid's kids to know my name. To have something that big, you really have to build something huge that's going to be fairly indestructible. But aside from building that, he would also need an instruction manual. How cool is it that when my kid is my age or even his kid's kids are my age, they can still go to YouTube. Listen to me, their great-grandfather, explain to them how to do a real estate deal. How cool is that?

Darin: I never thought about it that way. I think it’s very cool.

Agostino: And that's why I do this.

Darin: I wasn't on Facebook or Instagram or any of that until I got involved with real estate about four years ago. I was a part of a private Facebook group and I saw the power of connecting with people all over the country. Then I went to entrepreneurial conferences.

People were telling me, "You got to get on Instagram." I was like, "I don't even know how to do that." So I hired somebody to teach me and one of the things he told me, "Look, you got to post every day." I'm like, "That's so uncomfortable."

How to Teach Your Children the Importance of Cash Flow

Darin: He said, "Your kids, when you talk to them," because my kids were teenagers, "a lot of times they tune you out. But I guarantee you, they’re looking at your Instagram because that's where they spend their time."

If you want to get a message across, you put a message out on Instagram, and then they see that, they may not come to you and talk to you, but it's another record just like you're talking about with the podcast. That's pretty cool, I like that.

Agostino: That to me is the best way to educate your kids and build a legacy. Part of it is I want to build a legacy for them, for my kid. I also help people because I truly believe, you know what? For some people, they're okay working in corporate America. I'm not saying corporate America is the worst thing ever. For some people they enjoy it, they like it, they're happy. Great, good for you.

But there are people out there right now that are doing stuff that they don't want to do. They're not using their gift that's been given to them. Instead, they're waking up every morning, living a terrible, horrible life instead of doing what they're meant to do. Our time here on this planet is limited and people seem to live their life as if we have an unlimited amount of time. But every day, we're getting a little bit older, our bodies are decaying just a little bit. You don't feel it, but it is, it's true.

Darin: My kids are like, "Dad, your hair is white."

Living Life On Your Terms

Agostino: I go to the gym twice a day, I do CrossFit. I do the hard stuff and it's like, even I feel it. If you're going to leave a legacy, you have to be in good physical condition. You have to do what needs to be done. More importantly though, it's living life on your own terms. That's really what it comes down to. My life's not perfect by any stretch and there's still a lot for me to do. But I'll tell you what, I wouldn't have it any other way.

Darin: People talk about financial freedom and time freedom all the time. What's your zone of genius, your area of expertise? What gives you passion? All of those things. I heard a story recently about somebody. He told me he was in a scene where there was an accident and he was talking to one of the police officers. This gentleman happened to be a firefighter.

The police officer said, "I know you're in real estate." And they started talking. Well, the police officer owned 40 or 50 homes, a crazy amount. So, the firefighter's like, "You must make a lot more money off of that than you do being a police officer." He's like, "Oh absolutely. I could retire at any moment but I love what I do."

That is a guy that knows what he wants to do and he's in the right spot. But there's other people that are doing it and feel like they're forced to do it. If you're a doctor and you make great money and you love being a doctor, fantastic. But know that there's other options to grow your wealth.

Learning the Importance of Cash Flow Requires a Lot of Introspection

Darin: You could be a passive investor in real estate transactions. Have somebody else manage it for you, and then you do what you like to do. Be a doctor, rather than be sold that you have to put all your money in the stock market.

Agostino: Part of it, too, is that this requires a lot of introspection. Sit down by yourself and really think, is this the best you got? Can you do more? Maybe it's, can you make more money, help more people? Can you help your church, help your faith? What can you do to be bigger, to help more people if that's what you want to do? Can you do better? If the answer is yes, then you're short-changing yourself just by doing a forty-hour thing.

Darin: Not only yourself but other people. I had somebody take me out to breakfast, like the guy that you were talking about earlier. "Darin, I don't need that much stuff. I don't need that big of an income. I'm here right now, I just need a few more clients. Then I'll have the lifestyle that I want." I'm like, "You're thinking too small. You can help so many more people. And you don't have to go out and buy a Ferrari. You could give tons of money to your church or to some other organization. But you have talents that I feel are not being leveraged to their full capacity."

Agostino: It's going to sound terrible, but people like that are greedy, if you think about it. They're greedy in the sense that they're capable of doing more, they have the formula.

You Can Be More if You Choose To

Agostino: They only have just enough for them and their families and that's it. If you really want to, you can go ahead and make more. Once you're at that limit, give the rest of it away. Go buy a Ferrari for someone else then. They could do more, but they choose not to.

Darin: They don't look at it that way. Some of the listeners, they're trying to get their first deal. We were both there. You with your single family, me with the duplex. If I have not done the duplex, if you have not done the single family, not only would you not be doing the Rockefeller deal right now, a $135 million deal. But you wouldn't be on this podcast teaching other people.

There are listeners right now that have not done their first deal. What I'm here to say is, if you go out and do it, three years from now, you’ll be helping your friends and family figure out how to do it. You can't see that right now, but it will happen.

Agostino: All you gotta do is make a deal. I remember I was running a local real estate group, and the same people would always show up. This husband and wife were showing up and it was a multifamily focus group. This couple would show up and they'd say, "Oh, we really want to do a multifamily."

I just said to them, "Next time you come out here, next month, you better have a house, have something. Buy something or don't come back." They bought it, they came back. They're like, "Oh my God, we're so happy you told us that." Because they needed a kick in the ass to move.

Taking Accountability

Darin: Some people need a little kick in the ass, some accountability.

Agostino: What was great about it is that they bought one and then they bought a second one like two weeks later. They started buying a portfolio. It's like, "Awesome. I'm glad you did something."

Darin: Did you make a dollar off of that?

Agostino: No, nothing. It cost me money to drive an hour each way to get to this event.

Darin: There are things that we do in this world, in real estate, in other industries that make us money. If we partner on a deal, we're going to make money. But then there's another piece that is just about helping the next guy. You don't get paid for that. But there's good karma and it makes you feel good as a human being to help somebody else's life.

Agostino: This couple had a young daughter, she might have been 11 or 12 years old at the time. She got to see this happen. Hopefully, their kid will get into this game too. This is not for the faint of heart. If anybody says it's easy, they're lying. It's not easy. It takes effort, it takes continuous learning.

But once you get started and you do what you're supposed to do, you're not a jerk to people. You're not a slum Lord. You do an honest living, helping other people with putting a roof over their heads. You're going to be just fine. We help thousands of families, we literally have thousands of families living in our homes right now, thousands of them.

A Ripple Effect

Darin: The impact is huge because it's all the tenants and all your properties. Then it's all the investors that have invested alongside you. You have a profitable property and then all of your investors make money. Some of them, that money's going to college, some of them for a car, some of them for retirement. They all have different uses for that.

Then, their family sees. It's all those investors. But then, they tell their kids or their aunts and uncles and it just has such a ripple effect, which is amazing. $135 million Rockefeller building, what's next for you? How do you keep pushing the boundaries? What's the next big stretch goal for Mr. Agostino?

Agostino: Usually, I go down to Florida. When I'm down there, I spend pretty much December thinking about what the next 12 months are going to hold. I'm a little bit early right now, but I've already been kicking it around. I feel the way that the market is going, we're still looking for stabilized assets.

Although the valuations of stabilized assets have gotten to a point where it doesn't make any sense. In some markets, depending on the market, depending on the tax credits and opportunity zone credits. Things like that that you might get access to. But it's looking like development is going to be a bigger part of the portfolio going into the next year.

Doing more development deals, try to pick up assets where we can. I'm thinking, it's going to be more development and a more net lease type of stuff. More cash flowing, net lease type of assets where we are buying assets and just cash flowing them. These are guaranteed, corporate guaranteed assets, Starbucks, Walgreens, Advance Auto Parts, things like that.

More People Are Talking About the Importance of Cash Flow

Agostino: Like setting up a fund to acquire these sorts of things. Then we're probably going to make a move back into the single family space. You can believe that. But buying large portfolios of single families, not just onesie-twosies. We're talking like 10, 15, 20, 30 at a time, plus, so bigger single family stuff.

Darin: I've heard more people in the syndication space talk about trading up. Whether that's B, C to move into A properties, or start focusing on development. The gap between that B, C value add, the basis, the cost per unit is getting up there. It's very close to A properties so people are like, "Well, why am I going to keep paying for that?"

Agostino: The key is to realize that the guys that are getting into the A class stuff right now, in order to hit those return targets, there's a lot of number-massaging going on. Just what I think, I don't know for sure. I'm not accusing anybody of anything, I'm not insinuating anything. But whenever we buy a property, I'm always super conservative, very careful. That's just how I buy stuff.

How I get involved with a development deal, I'm very conservative. I have a high degree of confidence in the deal. The way that the market is shifting now, even on an A class asset, it's like I have grave concerns about those, number one. Number two, if I can develop it, I'm probably just going to straight up develop it as opposed to even trying with an A class.

A Cash Flowing Asset

Agostino: I'd love to have an A class cash flowing asset. At the same time, if I can develop it for the same amount of money, I know that that market is strong for that development deal. I'll do that all day long as opposed to trying to squeeze out a small profit on an A class asset.

Darin: I'll just highlight a couple of things there. One is on existing A class. I've recently looked at one that the current rents and leases being written today are significantly higher than they were 12 months ago. What that shows is, even without pushing rents at all, there's a lot of loss to lease that can be recouped if the market doesn't go backwards.

The guy that rented 12 months ago, when his renewal comes up, if you're in high 90s occupancy, you're most likely going to get close to your latest lease. That's assuming that the market doesn't go backwards. That is almost proven because you're seeing the new leases today. You know what the loss to lease is with older leases.

A new development deal is going to take 12 months to two years, depending on the property, to go through the process. You have risk in that time period, materials cost could change. Lumber went crazy 6, 9 months ago. The economy could be different when it comes to lease up time. I understand it, but both still have risks.

Agostino: The difference when it comes to development is the market you're developing. Everybody's got eyes on Florida right now. It's a great market. There are no tax incentives to build anything there. You're taking on the full brunt of everything, including the taxes and everything else that goes along with it.

An Opportunity Zone Opens When You Know the Importance of Cash Flow

Agostino: You can still do very well there. Here in Cleveland, you get an opportunity zone. You get some sort of deferred tax credit as well, for up to 15 years. Tax abatements for 15 years, you get TIF, you get PACE loans, you get all kinds of other huge incentives here. There's still demand, not Florida-type demand, but there is demand here. It's just you have to know your market.

It makes sense when you understand it. I'm not saying I'm just developing here either, we do have three projects here. We're going to be looking at Florida as well to try to take part in some of the upside there. But again, it just means that we got to be very careful about what we're getting into down in Florida, that's all.

Darin: I love what you said, "Know the market."

Agostino: That's everything. We have strength here too because we have so many units, we have so many projects going on here. And we know the market, the market knows us. That's important. It can't just be a one-way street. If the market doesn't know who you are, you're going to have a hard time.

Darin: What do you like to do outside of real estate? Fun?

Agostino: I CrossFit, I go to the gym twice a day. I literally go to the gym twice and I'm going in three hours, actually.

A Tough Old Guy

Darin: CrossFit's tough.

Agostino: Especially, when you're an old guy like me, it's going to be tough.

Darin: That says a lot that you're even doing that. You've got a wealth of knowledge, a wealth of experience. This guy, he's got a podcast called Bulletproof Cash Flow. Definitely check that out. How else can people reach out to you?

Agostino: We have a Facebook Page, we're on LinkedIn. We're on all the social media channels. Also, Realty Dynamics, RDYNE.com is the actual website.

Darin: I appreciate you coming on. Wish you much success. I look forward to seeing you at another conference coming up here shortly.

How to Reach Agostino Pintus

• Realty Dynamics Website
• Bulletproof Cash Flow Podcast Website