[RWS #747] Passive Income: Ditching the 9-5 Job for FT Real Estate Investing

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Passive Income: Ditching the 9-5 Job for FT Real Estate Investing,Real Wealth Show Podcast Episode #747

Today’s guest ditched his 9-to-5 job 15 years ago to became a full-time real estate investor. Augustino Pintus says the standard 40-hour-a-week job gave him a false sense of security about long-term wealth, and by giving that up, he’s been able to take control of his time, and his finances. 

His motto: “Decide, Commit, Succeed.” He is currently in charge of strategic partnerships, capital development, and deal sourcing for multifamily investment firm Realty Dynamic Equity Parties. 

Podcast Transcript

Kathy Fettke: Agostino, welcome. It’s great to have you here.

Agostino Pintus: I’m so, so pleased to be here. Thank you.

The Workweek Before Real Estate

Kathy: I’m so happy to have you here too because you’ve had a journey, so let’s talk about it. What was your life like before you discovered real estate?

Agostino: I’ll tell you. I’ve been an entrepreneur my entire life since I was a kid. I used to sit there and write code, and that was my thing at nine years old. 10 years old, I was working on computers, and I was determined to have my own IT company, my own software company, that’s what I wanted to do. I wanted to be an entrepreneur. Instead of going the entrepreneur route, I ended up going to corporate America. I did okay in corporate America. I was eventually rising to become a CIO, Chief Information Officer, running large enterprise IT, global IT teams, everything was going great. Up until my boss comes to me and lays me off, and that’s it.

When you have a whole family relying on you, and you’re basically being told we don’t want you anymore by some company, you can’t help or feel that you’re a failure. For many people out there, I’m sure that if they were to rely on that one stream of income, and their boss walks in one day and just hands you the box and say, “Pack up your stuff and get lost,” it’s not a good feeling.

From Corporate Success to Pink Slip

Kathy: I can’t even imagine it. Especially when you’ve put in all your time, and effort, and passion, and just in one day, that can all end against your will. I’ve never experienced that because I’ve always been self-employed. Take me to that moment, what did you do? 

Agostino: I’ll tell you what. So this company, when I first started with this company, they were fairly young company. There’s more like, I don’t know, 400 or 500 people working there, but their tech was a complete mess. At that point, I was a young, IT executive that was still at the director level at the time. I basically rebuilt their entire IT infrastructure. Now, I rebuilt the whole thing. My old boss, the old CIO, he ended up leaving the company, and then I rose to become the CIO because I built and designed all the tech.

Much of it is still in place today. This is a global publicly-traded company. They would never been able to get to where they got today if I hadn’t come along and created all this technology, much more from scratch. There was no technology on the market just up and buy, I had to develop it. I had to hire people, develop all the tech, build it and–

Kathy: All for somebody else.

Agostino: All for someone else. Exactly. At the same time, when I was doing all these, it wasn’t like I was doing it for free. Obviously, when you’re at the C-level, you’re earning, you’re making bank, I had the fancy cars, I had the big houses, and I had bonuses. What I did with my bonus money was I bought single family homes. That’s what I did. This is 16 years ago, just a little bit–

Kathy: How old were you?

Agostino: Right now?

Kathy: No. When you started buying homes.

Agostino: I was 32. 31, 32, yes.

Real Estate as a Side Hustle

Kathy: What prompted you to take– At 32, making a bunch of money, most people are spending it. What prompted you to buy single family homes?

Agostino: No, Kathy. I was spending it, make no mistake. [laughs] I was spending on a lot of dumb stuff. I had Corvettes and Hummers and all kinds of cars. Yes, I was dumb-dumb. But I was buying the single-family homes because another executive, he had said, “You know, you should buy real estate.” I just said, “Okay, I’ll just go ahead and do that.” There was no other logic aside from that. It was more like, it seemed like a good idea, so I’m just going to go ahead and do it. This is what happens when you have all this money coming in. I had so much money didn’t know what to do.

Kathy: You got to put somewhere. [laughs]

Agostino: Yes. You got to put it somewhere, right? So that’s what I did it. I started buying real estate. I recognize, “Wow, there’s cash flow here. This is awesome.” I was self-managing at the time. I was still very, very conservative with how I picked my deals and how I ran them. I was personally managing them too while holding a full-time executive job, which was a little tough at the time. I would also underwrite my tenants too, to make sure I wasn’t getting into the wrong deal with a tenant as well, which is a big deal in this business. Underwriting a deal, underwriting a tenant, both are critical.

Learning the Ropes of Real Estate

What I did was, I learned the ropes, especially around conservative underwriting, which to me is the best still to this very day. I still look for some key aspects around jobs, around growth, around population, demographics, all these different things. I still look at the same things today, only on a much bigger scale. Now, all I do is multifamily. I don’t do any single family at all at this point. But learning the ropes early on is what ended up eventually rescuing me. Because what I discovered is that I was vulnerable. As long as I put my future in someone else’s hands, I was vulnerable.

Not to say that everybody should up and quit their job. This is not for everyone. But for people that are on the fence, I would say you have to do this. This has completely changed my life for the better.

Creating Passive Income

Kathy: Whatever you get into that allows you to free up your time, whether you want to build businesses, because building businesses can create passive income as well if you do it right. If you’re not just giving yourself 10 different jobs under one hat of CEO, but you’re doing everything, that’s not what I mean. When you’re a CEO, and that means you’re actually executing and having people do the work and freeing up your time that way. There’s lots of ways to create passive income. But for sure, if you’re trading time for dollars, there’s only so much time, therefore only so much dollars, and until you can get past that.

Like you said, the idea that someone can just determine your future in one second by firing you, that’s a terrifying situation. I don’t know how people– People come to us and they think that real estate is risky, and I think having a job is way more risky, now that you mentioned it that way.

Agostino: Absolutely. When I was doing some consulting work with a group just before I went all in with real estate. The company is still around, they were floundering. They brought me in to help build their business and didn’t want to listen to what I had to say, and that’s fine. They’re still floundering, they still don’t know what to do. To me, it’s a colossal waste of time for that group anyway to just sit there for four years trying to figure out their business and– You know what, Kathy, I’ll tell you. We often live like we have infinite amount of time. I think the older you get, you realize that that is absolutely not the case.

Be  Your Own Boss with Real Estate

I know your story as well. We’ve spoken in the past, and I know what happened in your family. You know that time is extraordinarily valuable, and people don’t realize that. It’s like we’re here on this planet for a certain amount of time. We’re actually very fragile beings. Do you really want to spend it working at a job you hate with a bunch of people that don’t want to be there either? It sounds terrible to me, I don’t know why. [laughs]

Kathy: Hopefully, people do love their jobs, but it’s important to remember what you just said. Time is what’s limited, not money, and yet we spend most of our time chasing money. Why not create different streams of income, different ways to bring that money in, and acquiring assets that do that for you? I don’t know any easier way than real estate, certainly cash flow, residential property, or commercial property. Either way, if you’re leasing out to a business, or you’re leasing out to a homeowner, either way, they’re living there.

They’re using the property, and they’re paying you for that, and you’ve borrowed the money to do it. It’s an incredible way to free up your time. And the more you can buy that, the more free time you get, basically, the more income.

Agostino: That’s it. Ultimately, I know what’s your point about this business being risky. I’ve created companies because I guess I’ve been on entrepreneur since I was a kid, and I’ve done mobile app companies. I’ve done, let’s see, debt collection companies, call center companies, other tech related companies, data companies, online payday lending companies, finance companies. I’ve created all these companies, every single one of them. Almost every single one didn’t do so well. Now, the majority of them didn’t do so well. But real estate is the only thing, it’s the only one that works.

It’s the only one when your experiences too where the lenders are calling you, and they’re hitting you up on LinkedIn and Facebook. They’re saying, “Please take our money, invest it in a deal.” There is not a single other business where this is happening.

Kathy: Yes. They’re not saying, “Hey, go start a business and let me lend on it.”

Agostino: Right. Nobody does that. [laughs]

Kathy: They’re saying, “Go buy some real estate, let me lend on that.

Agostino: Exactly. It’s like if you know what you’re doing, and you study, and you train like crazy, there’s nothing else like it. There’s nothing else. If there’s someone else out there can find something, please let me know. [laughs]

Kathy: Yes. Again, there’s risk to everything. I’ve been in this business long enough to know that the sure thing isn’t always the sure thing. We’ve had property managers embezzle our deposits. We’ve seen projects not get built that we thought would. There is risk, but you can mitigate that risk in so many different ways in real estate. If you want to be a lender, or if you want total security, then you’d be a lender at a really low LTV. Make sure that you’re on title and first position on a good property.

That’s a pretty safe bet for the most part if you do it right, but you’re going to get a lower return because it’s so safe. Now we’re in development projects that come with much higher risks, because you’re dealing with politicians who have to give you approvals to build, but the returns can be much higher. Somewhere in between there, between private lending, which again is pretty safe. It’s secured to real estate or land development, which again comes with more risk, especially entitlement. There’s something for everybody in between.

Agostino: Yes, absolutely. Even now, we’re getting into some of the land development projects as well. So very, very excited about that too. It’s been a very, very long road. But I’ll tell you what, Kathy, you know what? I’ve been at real estate for 16 years on my own for just over three now. I just focused on multifamily. There’s nothing like going to Columbia for instance, I’m going to be leaving next week. I’m going to be there for almost six weeks, I’ll be working remotely.

80 degree weather all year around. It’s beautiful. I get to skip out on the winter time. The winters in Ohio are brutal. All that means is that I get to control my own time. Ultimately, that’s what I’m pursuing right now, I want to be able to control my own time, and do what I want, when I want, with who I want to, including business, including who I do business with. When I want to do business with somebody, I just go and do business with them. That’s it.

Kathy: It’s funny. We are just about to break ground on our Costa Rica residential development. It’s going to be a work live space. It’s a 100% organic foods.

Agostino: It’s going to be awesome.

Kathy: Pure water, clean air, waterfalls. It’s amazing, we’re so excited.

Agostino: Yes. Costa Rica is an absolutely stunning, beautiful place.

Kathy: Yes, it’s so beautiful. In the time that you have been investing in real estate, which I think you said was 16 years?

Agostino: Yes.

Biggest Tip for Investors

Kathy: What would you say are the biggest tips for new investors getting started?

Agostino: I would say the very first thing they have to do is– it’s going to sound very simple– is to focus. What I mean by that, when I first started in this business, I had to really decide that I was going to do this. Once I decided, I was going to focus and study and train. What that means is not going after every single podcast under the sun, read a hundred different books all at the same time, or do anything else like that.

Pick two authors, and go train everything you possibly can on that one person. I don’t care who it is, maybe it’s me, maybe it’s Kathy, maybe it’s someone else. I don’t know who it is. My first ones are were Sam Zell and Robert Kiyosaki. I trained on everything I could find on these two guys, then I went to my next ones. I listened to everything that these two people have to say. Once I decided that, then I decided the asset that I was going to go after. Now I didn’t know about multifamily. I didn’t know you could even syndicate deals, I didn’t know what that was.

In syndication, just a quick 10-second description, is I basically use other people’s money and every one of us co-invests in a deal, basically. I find a deal, I source the deal, I pitched a deal to these friends, family and other investors, and we all put money into the deal, and we all get the returns. I didn’t know what that was. But once I understood what it was, I honed those sales skills, those marketing skills, and I became very, very good at delivering deals to people.

Now, I don’t do single family anymore. Not there’s anything wrong with it, I just don’t do it. I don’t do land, I don’t do commercial spaces, like retail and things like that. Right now, currently, it’s all multifamily, the new development stuff I mentioned is all multifamily. It’s all I do is multifamily. I focus. At some point, I’ll do some other stuff. But for the time being, no. I decided, I focused, and that’s how I’m able to see the success through. You’d be surprised. I’m sure you’ve seen it too.

So many other people that get into this and they’re trying to run around and try and do a bunch of different things. If you try to do that, nothing’s going to come of it. It’s going to be very, very difficult. The focus is what matters.

Focus, Learn, and “Dive In”

Kathy: Yes. I cannot agree enough that learn everything or dabble in all of it, and then choose the thing that interests you the most and dive in. And follow people who have been successful at it at that one thing, and learn it from beginning to end, and then you dive in. It’s very confusing in the beginning. There’s so many different ways to make money in real estate, and they all seem exciting, but you got to pick one, get really good at it. Until you’re really good at making money at it, you shouldn’t move on to the next. That’s where I’ve made my biggest mistakes,

Agostino: That’s right, 100%. One other thing I did is once I understood that syndication was, just like I said, go all in, I sold everything I had, everything. I sold my cars, I sold the stuff I had that at the house that I sold everything just so I can start buying my own deals at first. I can show investors I am dead serious about doing this. Now, I don’t recommend everyone has to do that, that’s just how I did it, I had to do it that way. If you can’t believe in yourself, no one else is going to believe you either.

Kathy: Yes. Very good, okay. What was your best deal?

Agostino: Let me see. You know what? There is so many of them. I have one closing this week. It’s 148 unit, and we’re already getting a great deal on it. I hope the seller doesn’t hear this until after we close. [laughs] It’s a sweet deal. It’s already worth more than what we paid for, it’s beautiful. I’d say right now, there’s a deal that we bought. It’s three minutes away from an Amazon distribution center up in Cleveland. We pay just over 4 million for it. About three months later, we’re getting a phone call from some investors out of New York.

They offer some million more than what we paid for it. And we’re renovating it, and we’re actually doing a lot of work to improve the property. I turned them down immediately, they have to think about it. We know there’s a lot more value there. Just on that alone, I’m not going to say it’s the best deal in the world. But you know what? A million dollar increase in three months, that’s not bad.

Learning From Other People

Kathy: That’s pretty good. I think you should be proud of that. Your biggest challenge, your biggest lesson learned.

Agostino: One thing that I tried to do is I try to do all these things on my own. I think that it’s going to sound very simple. VAs, virtual assistants. When I say on my own, I don’t mean buying deals. I always use partners for deals. I partner up with people to take down these big deals. There’s always something that I can learn from other people, and I’m always happy to talk for confirmation. You can’t do this business on your own, for sure, for sure. What I mean is that from the operational perspective, the leveraging virtual assistance, that is absolutely huge, I totally underestimated it. Totally underestimated it.

Maybe it’s because I went through a bunch of bad ones that I figured out through all this stuff myself, I’m not sure. Once you find some good ones, you take care of them, you pay them well, and keep around because they will do things right, they’ll change your life.

Kathy: Awesome. Thank you so much for being with us here today on the Real Wealth Show. Do you have any plans for what you’re going to do next?

Agostino: I think for 2020, we’re going to be getting into some development projects as I mentioned earlier into the whole multifamily development. Goals to get another thousand units in 2020 as well on top of that. It’s going to be a very busy year. We’re going to try to stay up in Cleveland for the time being, and Cleveland-Akron area, that kind of thing, just because it’s where the operation is. Eventually spilling over markets as well. It’s going to be an exciting year. Looking very much forward to it, it’s going to be great.

Kathy: Awesome. Thanks so much for being here on the Real Wealth Show.

Agostino: Yes, thank you. Thank you.

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