Building Better Multifamily Operations Through AI, Data, and Operational Discipline

Drew Hall: Welcome back to the Peak Property Performance Podcast. I am your co-host, Drew Hall. And real quickly, before we introduce some interesting folks, let's talk about today's theme, getting multifamily teams past the AI resistance. Through an owner-operator lens so that the technology improves execution instead of just adding another silo, instead of adding friction and complication. So before we introduce our guests, as always, just want to remind listeners to do all the things like subscribe, share, every bit of it. The podcast here, it's how we're spreading the word on the Peak Property Performance movement and changing an industry is what our real goal here is. It's not just words for words' sake. And if you think that you would provide value as a guest here, we welcome CRE thought leaders from all stages of ownership operation.

Drew Hall: Just please reach out to us. The best way honestly is just right there at peakpropertyperformance.com. That's probably the best way 'cause everything is accessible through there. So with that, let me first introduce our co-host, Bill. Welcome.

Bill Douglas: Always a pleasure, Drew. And today we get to have Gino Barbaro on the show. Gino, say hi and then I'll read your intro.

Gino Barbaro: Hi, Bill. But Bill, before you read the intro, I'd like for you to say Peak Property Performance 5 times quickly. Go. Let's see if you can do it.

Bill Douglas: Peak Property Performance 5 times quickly. Well, You killed me.

Gino Barbaro: You beat me to it, brother.

Bill Douglas: We were laughing pre-show about being human and, you know, we're allowed to stumble and stuff. There's no way I could do it. So the acronym PPP tends to be said more than Peak Property Performance and those on the inside.

Drew Hall: That's like a rule of mine. You have to say the acronym, but you can't just start with the AFA, the TLA, sorry, the TLA, which is a 3-letter acronym. So once you say 3-letter acronym, then you can do TLA, but right, you got to say it. You got to say it first.

Bill Douglas: We actually maintain an acronym database inside the company just because everybody's like, what does that stand for? What does that stand for? So we actually put it up on the website too.

Gino Barbaro: I'm going to put you on, I guess I want to highlight it, ask a question. Where did the Peak Property Performance, like, where did the name come from? Because I love the name. It's just really hard to say Peak Property Performance, Peak Property Performance.

Bill Douglas: I don't know. Correct me if I'm wrong, Drew, but we had a slew of names and Fast Company Press was the publisher and they're like, no, none of those are good. Give us a week. And they came back with 2, maybe 3. And The 3 of us, because Ryan Goble wrote it with us, 3 of us looked at it and said, it's that one.

Gino Barbaro: It's great.

Bill Douglas: It's— we have no pride in authorship, but I love it.

Gino Barbaro: No, I love it too. It describes what you're— what you're actually trying to promote and to teach. I think it's great.

Bill Douglas: Well, kudos to Fast Company Press because they did it. The editors there came up with it.

Drew Hall: And I remember too not wanting to like guide readers to anything specific about performance because, you know, like sometimes people want to go down the tech road and others are like, ugh, tech, you know, or just a straight financial road and not talk about anything else. But you got to talk a little bit about details to talk about the financials. And so it felt like a really good, like succinct way to say it's performance overall. There are components. Where shall we start? How deep shall we go? So it felt like a good balance, I think.

Bill Douglas: A little bit about Gino. He's the CEO of Barbaro 360 and co-host of the Jake and Gino Real Estate and Multifamily Investing Podcast. We've enjoyed getting to know Gino and I'm glad he's going to be on the show today. He spent the last 15 years in multifamily, building around a disciplined buy, rate, operate, and exit framework with a vertically integrated model where his team manages his own assets. What makes Gino so strong a voice for this conversation is that he's not talking about technology from the sidelines. He's dealing with the real operator questions like, what do we actually do with our data? Do we have it? What do our teams use? Where does AI help? And why does adoption feel so damn hard inside property management? So Gino, welcome to Peak Property Performance, which I said one time. I'm looking forward to the conversation.

Gino Barbaro: Thanks, Bill. Thanks, Drew, for having me on. Appreciate it.

Drew Hall: Absolutely. Yeah. Well, okay, so we will inevitably get into AI, which stands for artificial intelligence, in the spirit of not using the acronym before you say what it is. We will get to that. But first, how would you describe the multifamily business that you've built and the operating discipline behind it?

Gino Barbaro: It's interesting because we are currently run right now by one metric we focus on, myself, Jake, and I, and it's PPU, not PPP. It's profit per unit. And And that's what our metric is. After all the expenses, what is left in the profitability of the actual performance of our property? It's a different model than what a syndication company would, would run because they're worried more about equity. They're more worried about investors. Jake and I, after $350 million in deals, after owning 1,900 units, we decided we're going to do things on our own. We started out with no investor capital. We grew to a certain point.

Gino Barbaro: Then we're like, everyone in 2018, everyone and their mother's doing the syndication. We're teaching it. We better start doing a couple. Like, you know, we're okay. We got phone So we did 3 syndications. And that's where you really need tech, you really need a property management software company, where we're using a company called Cashflow Portal. I mean, it was just a great place to have K-1s, to have investor relations, all that. But we didn't really like the syndication model because we were equity hounds, we like PPU.

Gino Barbaro: And we had to share these deals. Now, it was great because we did run out of money like that. So it was a bridge for us. So we're able to do 3 syndications. Then after we exited our third syndication in 2023, we just sat down and said, you know, what's really important for us? What what do we want to do at this point in our career? And we're not the type of guys that we, we need to have the biggest portfolio, or we need to be the loudest. We just said we want to have a great portfolio that we can control. We want to have a great small company, as Bo Burlingham calls in his book Small Giants. We want to really build a great product, have great employees, and yet still be profitable and control our own environment and not have bosses.

Gino Barbaro: Because investors are your bosses. You're there for due share responsibility. The deal doesn't matter what Jake and Gino want. It really matters upon the investors want and what's best for them. So you have to understand that there's pros and cons to that. And we went through that and we're like, we don't need that anymore. So this is what our portfolio looks like right now. We're funding our own deals.

Gino Barbaro: We're, you know, vertically integrated. That means that we can't go out and buy 8 or 9 or 1,000 units within 2 months because we have to hire property management, we have to hire maintenance techs. We can't outgrow our infrastructure. We've seen groups do that over the last 3 or 4 years, and we've seen the results. And I've learned that lesson. I don't want to repeat that lesson. So for us, it's really focusing our own capital, our own equity, growing ourselves internally. And ultimately, I think the catchphrase for us is we want to become the Chick-fil-A of apartments.

Gino Barbaro: We want to have that superior customer service. And what you guys are talking about and the book that you wrote, I've got it here. I think it can help a lot of groups out with that, with technology. Technology is not going to be the end-all be-all because you do need humans. It is a customer-centric and it is a forward-facing, you know, business. You walk into an office, there's somebody there. That person needs to be trained. But at the same time, you can still have technology in the background running and helping you out and optimizing what you have.

Drew Hall: Yeah, that's great. That is great. Okay. So are there any early mistakes that you could reflect on? Some things that you've learned along the way? I mean, a little bit of that you hinted on in terms of like fixing on where you wanted to go after you realize like, hey, let's do this on our own. I'll follow up on that as well. But any early mistakes that stick out?

Gino Barbaro: I think I can focus on just one. I think because we've made tons. I mean, like in this business, it's never ending and you just become resilient after a while. But I think the one big mistake that Jake and I made early on is we didn't treat it as a business as much as we should have. And that's what most investors do. They don't really look at it as a functioning business, as a future stream of revenue. And every time we bought our property, that's what we should have been doing. Hey, we've got this 25-unit, this is generating its own profit loss statement, is generating— it's a small little business here.

Gino Barbaro: If we had systems and processes early on, it would have been much better. I was like, I'm the I'm-a guy, I'ma do this, I'ma do that, I'ma get burned out. And at 100 units, we have to figure that out. We're like, how do we not burn out? And that's when we started, okay, we have to start going to a company that can help us scale our business. And we went to, you know, hire a company called Traction by Dino Wickman, we hired a company called Scaling Up by Vern Harnish. We invested a ton of money in those companies. And they helped us actually at a certain point, you know, you hit certain inflection points, they helped us, you know, optimize and scale our business. That was probably the biggest mistake that most investors make early on.

Gino Barbaro: They're like, I got 10 grand, where do I put it? That's, that's, that's the wrong question for any investor to be asking. It's like, I'm buying a business here, whether it's a single-family home, whether it's a 10-unit self-storage facility, or whether it's a 22-unit multifamily complex. If you can shift your mindset around, it's a business, there's value How can I optimize that value and how can I repeat that? Man, you're going to be much more successful quicker.

Bill Douglas: Well, Gino, hats off to you. Sorry to interrupt you, but hats off to you for implementing those processes. We implemented EOS here more than 5 years ago. And yeah, one of our advisory board members is an EOS implementer. So it couldn't say no. Right. And Vern Arnis is a friend of mine. So I go way, way back to the EO days with Vern.

Bill Douglas: And what he says is just as powerful and almost easier to understand, but doesn't have the structure of EOS. So same philosophy, different implementations, but I love both of those.

Gino Barbaro: And Drew, to answer your question about, about Vern, one of the things that his, one of his coaches taught us, and I still live to this by every day, and this is what I'm teaching my children, it's revenue is vanity, profit margin is sanity, and cash is king. I remember one of his coaches said that to me. I'm like, damn, my dad was an old school Italian who had a pizzeria. And he was, he said it a lot simpler. It's not what you make, it's what you keep.

Bill Douglas: Oh, that came from a guy in, uh, cause Vern was teaching at a class at MIT and I was attending the class. It came from a guy who was an Aussie, and Vern said, can I borrow that? I was standing there. Yeah, that is so cool.

Gino Barbaro: I didn't know that.

Bill Douglas: He actually said, sure, nothing's original, take it, use it as you wish.

Gino Barbaro: Yes, and I'm borrowing it from Vern, and I want to share with everybody here because we all get caught up on unit counts and how much we're bringing in. But remember, that's why we drilled it down and said, well, what's the PPU? What are we getting left with? And that's how we underwrite deals. We're going to underwrite deals for what we think the profitability May not be today, but at least 18 months or 24 months from now. And that's what sucked about my business over the last 2 or 3 years. It's gone away from that. It's gone away from, let me buy this building, let me put some lipstick on it, and let me flip it to the next person. I'm not buying it for operations. I'm not buying to optimize it.

Gino Barbaro: I'm not buying to build a business model around it. Who suffers? The investors suffer, but also the residents suffer because there's no real operating system in there. There's no maintenance in there. There's no management in there. They're just short-termers. They're renting this thing. And And that's not how you build long-term sustainability. That's not how you build value in an entity or in a multifamily.

Gino Barbaro: You build it by optimizing, by getting great income coming in, by focusing on the expenses, trying to run as lean as possible, trying to deliver superior customer service. And then it's all of a sudden what's left over. Like, I just hate the fact that people sell businesses on multiples. I'm fighting this with my son. He's got an e-com business. And everybody in the e-com space is like, I just want to pump it up to an X multiple and then sell it. 3 times multiple. I'm like, but what am I buying? Am I buying a business that's profitable? Am I buying businesses just generating revenue? I want something where I got money left over at the end of every month, or else what the hell am I doing here? Like, I don't want to take a risk because then if the market shifts, and all of a sudden, you're in a recession, how are you selling that business? It's not paying you.

Gino Barbaro: And you've got an albatross, you got to continue to feed that business. That's why to me, I mean, that slogan is my, is my go-to all the time. I'm teaching my kids that revenue is vanity, profit margins is sanity, and cash is king.

Bill Douglas: And that will really serve you well in this business if you can focus Alan said it first, but it was fun to be in the room when it happened. It was pretty cool. I have a complaint, Gino. You didn't bring enough energy and passion to the show today. Could you step it up a little bit?

Gino Barbaro: Sorry about that. You know what? If you want, I can start singing some opera too. No, no, no, no.

Bill Douglas: I love it. I love it. Sorry to— I'm sorry I commandeered your conversation, Drew.

Drew Hall: Keep going. No, I only had one other question in this area real fast, then I'll hand it off. Why did you decide to stay focused on the one asset class instead of chasing RV parks, self-storage, or any other opportunities for that matter? Was there something particular or was it focused for focus sake? It's what you understood the best? Or why, why that focus?

Gino Barbaro: You asked a great question a few minutes ago. What was one of my biggest mistakes? And I, if I have to reflect back upon that, it's probably that because when I started in 2005, I had bought and invested in a mobile home park that crapped out. Then I jumped into a mixed-use building that had retail, office, and storage that crapped out. And then I finally said to myself, I got to learn this business. Like, I don't know what a debt coverage ratio is. I don't know what a cash-on-cash return is. I need to go learn. I like multifamily because it's serving residents.

Gino Barbaro: The restaurant business is really customer-centric. And I think it's a basic human need. And at the time, I didn't know it, but it's monthly recurring revenue, which is really cool. I get paid every month with multifamily. So I just decided, let me stick with this thing. And then Jake and I started getting some— we started getting some real wins. And all of a sudden, we're into 2015, 2016, we're like, we're gonna stick to multifamily. Let's get really good at this.

Gino Barbaro: Now, Drew, to your point, in '21, it's getting a little lean. We're doing like 20 units, 10 units, and we're getting a little antsy. We need to hit the dopamine. There's no deals going on. And we thought about getting into RV parks, but we didn't want to deviate from that because you can't become the Chick-fil-A of apartments if you have to learn how to manage RV parks. And we didn't want to pull our whole model away from that. I'm glad we didn't do that. We almost got the itch again about 6 months ago.

Gino Barbaro: Somebody brought us a really great strip mall, great opportunity, 40,000 square feet, a lot of tenants. I don't really know that much about commercial leases. I don't want to start learning about how to renovate strip mall. There wasn't enough value there. I'm going back to the basics again. I didn't want to do that? I'm like, let's just stick with multifamily. We do really well. There are lean years.

Gino Barbaro: When the— when the years are lean, you can either be raising capital, or you can be working on operations, or you can be working on your brand. There's always something to do in the business. It's not always acquisitions. And that's what I learned. And I had made those mistakes early on. I'm like, you know what, I'm just gonna stick with multifamily because the vehicle, it really matches my psychology of my money, the relationship that I have with money. It's a long-term vehicle. It's not get rich quick.

Gino Barbaro: There's so many benefits to it. And it really fits my model where I don't have to get paid today. I can wait a couple of years, And I don't need to do 30 or 40 deals a year. I can do a couple of deals a year and it satisfies me. So that's why we ended up sticking with multifamily.

Drew Hall: Excellent. Yeah, gotcha.

Bill Douglas: I love the clarity of purpose. And School of Hard Knocks is a great teacher, isn't it? Oh, dude, you said it crapped out and I just had to smile because not every venture I've tried has worked in my history. Trust me.

Gino Barbaro: But you know what?

Bill Douglas: I have been a learning experience.

Gino Barbaro: I'll tell you what sucks. What sucks, which is actually great, is my business partner Jake is the only guy— and I'm being serious— that I know in real estate that has never lost money in a deal. I'm being completely on since 2011. And the caveat is that his business partner, Gino, lost all the money before we partnered up. So I was the one who made all the mistakes. I like learned everything. He gets together with me and I have all these scars. I'm like, Jake, no deal is better than a bad deal.

Gino Barbaro: Here's this framework: buy right, manage right, finance right. We're gonna buy only really good deals that cash flow and that we know that makes sense. And that's been our mantra ever since. And he's been a really huge proponent of that. So I tongue-in-cheek that he's never lost money, which he never has, but he's a big part of that. But I think the fact that I lost and I made all those mistakes early on, and I was able to, okay, I don't have a map or process, but we all need to have that map or process in business. And you've done it through traction. And we've learned it through our investing mistakes.

Gino Barbaro: That, that's a big help.

Bill Douglas: Well, shifting to another topic, and it's one you and I talked about a few weeks ago, Gino, and software is not the same as visibility. Just because you have a system doesn't mean you're gonna actually see what's behind that system or the data. So you told me the operations side is, quote unquote, still being figured out after 15 years. So what areas still surprise you?

Gino Barbaro: Well, it's interesting. It's just the people area. And I don't want to sound like an old curmudgeon. I think the workforce is different than it was 15 or 30 years ago. Like, it's not work ethic, I just can't put my finger on it. I don't think they're as emotionally prepared as they were a generation ago. I just don't. I think they're, they're more immature.

Gino Barbaro: They don't really know basic skills. They just don't know. And property management is a people's business. So you do You get some people who are really bubbly, who are really outgoing, but there's just a lot of people that don't have those skills. And you need to teach people those skills. And you can't assume that they know those skills. So I think the person side of the business is really, really challenging in ours. You know, we talk about the 3 pillars, it's people, it's systems, and it's culture.

Gino Barbaro: And I think the people part of property management is very hard. I have to give them some grace though, because if you're sitting in your office, and you're going through a rough day, and you have delinquencies, and you've got collections, and a tenant comes in and just starts screaming at you because her hot water heater has been off for a day, You can sympathize with that, with that employee. You have to sort of try to give them psychological training and have an open dialogue and be there for them. It's really hard. And that's where the emotional intelligence comes in to say they're not yelling at you. That tenant obviously has a situation going on and they're taking it out on you. And if you can teach your employees that your customers sometimes just want to be heard, that's really why they're yelling. And if you can understand that and flip the script and have the intelligence to say, okay, really tell me what's going on.

Gino Barbaro: I'm really sorry we didn't get to it, but I promise we're going to get out there. If you can empower your employees to do that, You're going to have a, you're going to have a great organization.

Bill Douglas: Well, something's telling me that you already do. So how do you decide which operational metrics are worth paying attention to? Because there's noise and every one of the systems you're paying for has a dashboard. And I'm sure you could, if you dug in, find whatever you want, but like you have your one KPI. How do you know which operational metrics drive that KPI?

Gino Barbaro: About 6 months, maybe a little longer, about a year ago, to become the Chick-fil-A of apartments, you need to have really good maintenance. And we didn't know our percent work orders completed. I don't know why we didn't know that. We just didn't track it. And all of a sudden, we started tracking work orders completed. And some of the properties were like 60%. It was, it was abysmal. We just, it was, it was horrible.

Gino Barbaro: But if you don't measure it, like I said, you can't manage it. So we started measuring it. And then all of a sudden, we set to 95%. We want 95% of our work orders completed at our 8 districts that we have. We had them compete. And within 6 months, it's amazing what ended up happening. 95% work orders completed. So now you can say to yourself, well, that metric important because we want to deliver customer service.

Gino Barbaro: We have surveys when they move in and we have maintenance surveys. We check those every week on our weekly huddles with our COO. And those have been, you know, between 4s and 5s consistently the last few months. That, that's a part of that managed maintenance. Now, I was talking to somebody in the business a few weeks ago and she asked me, what's your first-time fix rate? And I looked at her like a deer in headlights. I felt like an idiot. I'm like, what does that mean? How do I— and she's like, well, when somebody goes on, your work order is completed. Is it completed the very first time? We just call it callback.

Gino Barbaro: Oh, you got to call back and do it That's a great metric to start tracking because just because the work order is completed doesn't mean that the, you know, maintenance guy had to go back twice rather than the resident and then actually, you know, waste time doing that. So we're going to start tracking that as well. We want to have that first-time call rate as high as possible, and we're going to let them compete on, on see who has the highest first-time fix rate. So I think metrics, you just pick them out based on what the culture is, what you're trying to accomplish for us. And then obviously the other metric that we focus on is occupancy. Not just physical occupancy, but we want economic occupancy because 1 or 2 percentage points on 2,000 units, it's tens of thousands. It can be tens of thousands of dollars. So we need to focus on that as well.

Gino Barbaro: And I'm sorry, I'll give you one more that we focus on. We're focusing on retention. So right now on residents that we want to retain, we want to renew, we're at about 75 to 80%, which is pretty freaking good. You know, the average overall in the multifamily space is about 50% of residents turnover after a year, but that's just, you know, natural attrition. We're focusing on ones that we want to keep. ones that are qualified, ones that we're gonna, you know, review at a higher rate. So that's another metric that we're focused on. And to your question is we're focusing on those metrics because they really affect the culture of the organization and affect that overall, I would call it the BHAG, the customer service and being part of the Chick-fil-A.

Gino Barbaro: I think that's how you should end up picking what your KPIs are for your organization.

Bill Douglas: Well, all 3 of those indicators you're tracking drive your PPU, which is your one number. Like, it is your one thing.

Gino Barbaro: I think So, and it's interesting, Bill, 2 or 3 years ago, the market was different. We didn't have to track retention because rents were going up so high that you almost didn't want to retain residents. And that sucks to say that, but like, we're below market. And we're like, oh, you want to leave? Great. But now the market shifted. And that's why you need to have a pulse on the economy and on your market. Now the focus is, oh, let's keep these people in because we can't raise rents like we were before. And we don't want to incur the turn costs.

Gino Barbaro: And also for the long term of the community, you'd love to have people to renew and to start building community so you can retain them long-term as well. Because then they get comfortable in a place and they like it. That does affect PPU, that does affect culture, and that will help the, you know, that whole idea of being that Chick-fil-A, that customer service.

Bill Douglas: Well, that natural cap on rents just driven by the market is a lot of the reason why we're having the optimization from the operations side so much. Like, what are your utilities? What are your insurance? What is your operating technology saying about how this property operates and how could you improve it? Because if you can't go get more money from the revenue, you got to get it from the expenses. Otherwise, it's going to be upside down. You're going to sell it for not so much. We are seeing a lot more interest in OT optimization because of that.

Gino Barbaro: Yeah. So what you're saying is—

Bill Douglas: OT is operation and technology.

Gino Barbaro: 3 or 4 years ago, people weren't knocking down your door to cut expenses, right? Because revenue was going up. There was cheap money. Things were full. Like I had just said, these operators ruined the business because they didn't have to worry about optimizing and actually delivering a great product. So now that's where the market shifted, and that's where you guys are going to help people All right.

Bill Douglas: Thank you.

Drew Hall: Yeah. Okay. So Gino, we've alluded to AI a little bit. Let's dip in here just a little bit. Like from your perspective, how have you seen AI adoption really take place? What does that transition look like, especially in the face of maybe some operating teams that are a little bit skeptical or busy or maybe just afraid?

Gino Barbaro: Well, everyone is afraid, it seems, in the property management world and in our business, because the first thing I think that most employees think about is, well, if I use it, there goes my And it's you as a leader to say like, it's no, if you use it, it's going to optimize it and it's going to help you for your job. I'll give you a perfect example. Last quarter, we had a pool tech coming on. We've got about, I think, 15 pools in our property, in our properties. And we wanted to have a pool guy just to maintain all the pools and to do some light, light, light maintenance. And we had one of our head maintenance guys create a pool maintenance guide, a tech guide. Now, you both I'm a moron when it comes to tech. I went online, I went AI, with literally 7 minutes, I built this whole thing out.

Gino Barbaro: And I said to Jake, my business partner, I said, give it to the guy. And he gave it to the guy. And he was so resistant on trying to use AI and trying to optimize it that he sort of went his own route. And that's fine. It's one of those things where you can't really push your employees, you can only like lead them to water. And at the same time, we let him look at it, we let him build it his own way. But it's one of those things where if you're going to lead the organization, you have to be the first adopter. I think the way you have people use it in your company, you ask them a simple question.

Gino Barbaro: Out of every employee, what's the one thing that you hate doing today? Because you want to try to create small wins. I, you know, I overwhelmed this guy. I literally gave him the whole thing. I probably could have said, hey, let's build it together. I didn't do that. I probably should have done that. Let's spend a couple hours and we'll build it together and we'll do a good job together. That was my mistake.

Gino Barbaro: I didn't do that. But you can just ask your employees, well, what are you struggling with right now? And then see if AI can help with that. Because I'm sure if you have a problem, whether it's inputting bills, Whether it's creating guides, whether it's helping with marketing, whether it's with your customer service journey, whatever that looks like, I'm sure that AI has a way to help and to optimize you doing that. You're helping your employees optimize that.

Bill Douglas: You don't necessarily have to buy that way. You can build it. You can partner with it. Traditionally, commercial real estate liked to buy it, but we saw the PropTech wave come and largely go just buying it. So I commend you for trying to build it first and then more importantly, letting your To discover a better way. Kudos.

Drew Hall: What are some of those, those tasks? I mean, you mentioned like creating guides or marketing documents or things like that. Are there, are there quite a few things that are kind of coming out where people are like, yeah, if I could, I would eliminate this pain. Here's how we could use AI. Is it pretty successful pitching it that way or couching it that way for operations staff?

Gino Barbaro: Yeah, it's always unfortunately, and Jake and I come across this a lot. We've got these great ideas and we could just see the light at the end of the tunnel. But the, like I said, the employees are in a fog and it's unfortunate, but they're employees because they don't see what Bill and Drew and Jake and Gino see. That's the reality. They're living in a different paradigm. What we're trying to do is we're trying to optimize you. We're trying to save you time here. Yeah, I'll give you a perfect example.

Gino Barbaro: When we had 500 units, this was probably in 2015, we were on a company called RentPost. It was a horrible property management software. It sucked. We decided to go to AppFolio at that time, but it's like giving birth, trying to move from one property management software to the next. And it was the easiest decision to make, but to have all the property managers to be able to have that buy-in, it was Very challenging to do it. And like, literally, you have to sit down with everybody and basically tell them what's in it for them, how is it going to help them, and how is it going to, you know, save them time and save them money and save them effort. And that's what I think what a really great leader can do is to pitch that vision and to show them, dude, this is going to be a game changer. And it's funny, after 2 months of adopting it, it seemed as if it was their idea.

Gino Barbaro: Like, yeah, this is, this is great. It's like, dude, really?

Drew Hall: Seriously, bro?

Gino Barbaro: But it's like, you can't have any kind of ego when you're, when you're a leader. It's just like, it doesn't—

Bill Douglas: Who cares, Whose idea it is. They're furthering your company.

Gino Barbaro: Yeah, yes, I agree. But some people want to take the credit. I'm like, I don't really care. I don't really care. I mean, in the AI space with, with, with property management, you need to have that chatbot. If you're not getting phone calls, you need to have the AI pick up the thing and help you schedule appointments. That's one thing you need to do. One thing that I love to do, I'm trying to figure out how to do it with, with AI, and it's probably, probably a simple, simple function.

Gino Barbaro: I love for a maintenance guy to go into an apartment, probably take some pictures of a unit, right? Let's say he's fixing a dishwasher. Take a picture of a dishwasher before Before, after, and then do some notes and say, hey, I'm here at unit 315, it's 3 o'clock, fixing this dishwasher. Boom, 3:30, done. I love AI to freely compile the notes from the video or the pictures and put that up into AppFolio, make sure that work order is done, and have all those notes so we don't have to have a maintenance tech come out there with his thing and just type stuff out. He just voice records it. We're in the process of looking to do that, but I think if there's a tech out there who just had that and says, hey, I got the tech here. I can, I can, I can refer one to you after the show. Oh, good.

Gino Barbaro: That'd be awesome.

Bill Douglas: He's been on our show before. Happy to connect you.

Gino Barbaro: That's great. I mean, that, that, that's something where I think AI— because it's funny, because maintenance guys don't like technology. They're either good at software and systems, or they're really good at fixing hot water heaters. It's very hard to find that kind of skill set. So we want to make this technology not overwhelming, not difficult for them, easy for them to use. But dude, talking to a phone saying, I'm here, unit 350, It saves them so much time and it makes everything accurate. And it's just like, it's a system. They follow that system.

Gino Barbaro: It's not a hard system to follow.

Bill Douglas: Got anything else there, Drew? Follow-on questions?

Drew Hall: I think, no, I think that's good transition honestly into, because I'm, the way you just described that, it's, it's data. Like what you're saying is it's things that are happening in the field, but wanting to capture the data so that it can be processed, pushed into AI, and you could do so much more with it. So, I mean, I think that fits brilliantly into into this last little—

Bill Douglas: Yeah, we talk about this all the time. I'm going to, I know where Drew's going, but like, especially in the book and in the show, but everybody we talk to is own the data before you own the AI. Like AI is useless if you don't genuinely control your own data. Legally, you might own a lot of the data, Mr. or Mrs. Property Owner, but it might be in your 6, 8, 10, 12, 15 different vendor systems. And you don't really own your data. Like you don't have it.

Bill Douglas: So it's useless. It'd be like saying I own a car in California, but I'm sitting in Texas. I can't exactly go drive it to dinner, right? Yes, I own it, but it's, it's of no use to me. So for the owners who want benefits of AI, but don't want to become dependent on vendor-controlled silos, what should they be paying attention to now? You know, in your opinion, instead of the buzz around AI, what should they be paying attention to?

Drew Hall: Ready for it?

Gino Barbaro: If, as far as that's a, that's a really, that's a challenging question for me because for us, we drive everything through our AppFolio. Everything is on AppFolio and we're building, we're using their AI right now. So a lot of the stuff is being generated within there. So for us, I mean, a lot of the mom-and-pops are using the QuickBooks or are using other stuff. There's a lot of softwares out there that I think, for me, like a Doorloop, like a Buildium, like an Appfolio, I think that at the very least you need that. And that's where the data comes from. And I'm trying to think of any outside systems for us because I see in your book you talk a lot about elevators, you talk a lot about parking systems. We don't have a lot of those systems.

Gino Barbaro: We're more of a workforce housing, affordable housing. So we don't have a lot of those systems. I, I, I would say as far as for us, AppFolio is like, that's where we have a lot of our data, a lot of our information on there. And we go through that and—

Bill Douglas: Do you have a copy of that data or is it all inside of the PMS system?

Gino Barbaro: It's all inside of, probably inside of the PMS system. So—

Bill Douglas: Okay. So you can't use it through their tool?

Gino Barbaro: No, I, we have to use, we have to use their, their AI tool. That's what, that's what RealmX. Yes. Yeah.

Bill Douglas: Okay. Well, if you, when you hear vendors positioning themselves as your AI partner, what questions do you begin asking either verbally or subconsciously?

Gino Barbaro: That's another great question. I mean, it's— well, when I'm looking at their solutions, they're in beta. They're trying to still build their thing out, and they're literally using us as quote-unquote the beta testers. And it's frustrating, but it's one of those things where, do we go outside of that platform, and do we go out and have somebody help us build the systems? And then we have to go out and we have to try to have that system work with that folio. I don't know what the right answer to that question is.

Bill Douglas: What if you could use the best of your PMS system and have the data in your own house data warehouse that you could do anything you wanted with, especially when you had other data inputs from your system that are not in your PMS.

Gino Barbaro: How does that look? Can you—

Bill Douglas: how would that change your world?

Gino Barbaro: Yeah. Can you paint a picture for me how that looks? Because I'm trying to—

Bill Douglas: Like you said, pools. Is there a pool system that you need data from? Is there an access control system? Maybe you don't have elevators in their walk-ups. That's fine. Are there other systems? Is there, I don't know, Drew, chime in here. Is there video security systems.

Gino Barbaro: I'm going through the book. That's what I'm actually in the point of.

Bill Douglas: Any system has sensors and it's outputting data.

Drew Hall: Yes.

Bill Douglas: The PMS system you keep talking about is all around the tenant experience. What about the operating technology for the property itself? Are you able to do things with that data and optimize it? I'm not saying that the PMS is bad. You absolutely need it, but it's one piece of the overall digital infrastructure, digital strategy is our position.

Gino Barbaro: And that's a great question. That's why I started reading the book and I wanted to get on this and have this conversation because we're lacking in that. We're probably 90% of all commercial real estate operators are lacking in that because unfortunately, well, or fortunately, we have the older type assets where there isn't a lot.

Bill Douglas: It's a great asset. Yeah, there's nothing wrong with it.

Gino Barbaro: Oh no, but I'm saying like we don't have the tech. Like I love the ones, and you have ground-up construction as an example in the book. You have a newer office space downtown, so they have a lot of different, they have HVAC systems and all these different kinds of systems within it. And I'm trying to say, how does that work with us?

Bill Douglas: Yeah, we walk the workforce housing property, 240 units. Let's just call it in Texas, not to give away too many secrets, 2 weeks ago. And they said they had it all and they didn't need it. But by the time we left, there was 5 data silos they were unaware of. There were operating systems in that property. And then they were like, whoa. And the network that they thought they owned, they didn't even own. It was an ISP's network.

Bill Douglas: And, and, and, and, you know, we left after 1 day and gave them the report and it was astounding just from doing a digital infrastructure review, like what's there? What do you own? What do you not own? What do you know is there? What do you not know is there? That's basically the question I was asking. And then imagine if you add the data and then you would be AI ready for whenever your team, your company decides to do it. Can't really do AI without the data. So your vendor doing AI is not a bad thing. They're able to provide the same services or better for less cost. They're not going to make it less price. Trust me. So it's improving their margins and some support for But it's another silo, another dashboard, right? Another thing you have to log into.

Drew Hall: Yeah, Gino, as you keep going through the book, you'll see that, that, you know, and I won't even mention the vendor name. You've already mentioned it, but I don't want to call any vendor out in specific myself, but they may be doing great things with AI agents and an AI ecosystem. And that's fantastic. But the way I always think about it, I'm not sure if we mentioned it this way in the book, but if that vendor were to decide like, hey, we think we're pretty valuable, or for whatever reason they decide to triple their rates, you know, or they let go of the plan that you were on and now there's—

Bill Douglas: Or they went out of business or got sued.

Drew Hall: Exactly.

Bill Douglas: Or they got sued, right?

Drew Hall: The key is to have all of that data for yourself independently, always, always, always, always, so that you can decide which AI ecosystem you interact with on that data, but it's your data always. Even if it was generated by vendor A's system, you know, from 2018 to 2024, let's say, that's cool, but it's still data. And so that's a big part of the book as you keep going through is to make sure that there's that modularity data, sweet, sweet granular data. It's great. But the ability to extract it out and then just like virtually hold it and say, I can do what I want with this data. I get to choose who gets to interact with this data, but you always have that control.

Gino Barbaro: What you're saying is this data is so valuable that these vendors own it and they have the data themselves on all these different operators all across the country. And that data has got to be so valuable to them.

Bill Douglas: Wow. Well, it's actually your data, but you're giving them permission to use it, but you, you own it and it's, they need you. use it. We're not saying they don't need to use it, but it's a lot, it's a tremendous amount of value for you to use it too, especially between silos. You can see between silos, your vendors cannot. Your vendors, they're really good at their one thing, and that's why you hired them. But their one thing is totally different than this vendor's one thing, than this vendor's one thing, and all the data is siloed off in different, I don't know, silos, to use the word again. That, that's the premise of where I was coming with the questions is how do you use the data outside of your And it's there.

Bill Douglas: It is there. In due time, you'll, it'll start to surface.

Gino Barbaro: Yeah, that's a great question. Well, I guess I gotta finish reading the book and I guess give you guys a call in a couple months.

Drew Hall: That's right on.

Bill Douglas: In a forward-looking question, I'm not going to make a discussion. I just want it to be a Genoism. What would you say to the next generation of commercial real estate owners, operators, like given what you've learned in the past 2 decades, what would you share as a nugget for them?

Gino Barbaro: I gotta think about that for a second.

Bill Douglas: That's okay. Take your time.

Gino Barbaro: I mean, for me, you know, why are you getting into real estate? That's like the real question. Like, you can get into it and you can get rich. And I think get drilled down on what you're getting into. Like, I got into it because I just wanted to get into a business. I wanted to get into a business that I could build where I could create wealth. And I saw that with real estate. I saw that with multifamily. I didn't see that with the restaurant.

Gino Barbaro: I just, I just didn't, I didn't know how to scale it. But I'm like, this multifamily thing, this is something where I can scale. I just, I just need to learn a framework. And I need to learn where do I, where do I find the money, and I need to learn how to network a little bit. And then as you're getting into it, you don't have to do everything in the business. You can sort of learn how to do everything when you first start, but you may gravitate towards the management side of the business, whether it's property management or asset management. You may be, you may love to network and just start raising capital and helping people do capital. You may be that kind of person who loves to find deals and loves to bring value that way.

Gino Barbaro: I think to me is just to get clear on why you're getting into the business, learn every aspect of it. And then as you get older, going to gravitate towards, you know, what you like. And that's why I sort of got into the education space, education space of it, and the capital raising back in '18 and '19. That's what we use the platform for. We started the education to, you know, sell education, but also build a brand. So when we talk to brokers, they're like, hey, Jake and Gino, I got a deal for you. We've gotten a lot of deals because of the podcast and because of the events that we put on. And for us, it was like, okay, let's, let's do that.

Gino Barbaro: And I love the education part of it. So I gravitated towards that. And my business partner loves the property management side of the business. So I think that's what I would focus on if I'm thinking about getting into it.

Bill Douglas: Well, Drew and I talk all the time about staying in our lane. Like Drew runs the technical side and then what I do is completely different. Both are very necessary and we stay in our lane. Like if I step over that line, I'm causing friction in the business, not adding value regardless of anybody's title. Good for you. You and Blake, I mean, that's awesome.

Gino Barbaro: And it's hard because I may have these great ideas and I may overwhelm them. I hold them I'll text them out, or we have an L10 document like, you know, and we get on our weekly huddles and that's where we discuss stuff. And it's like, oh, how about this? But I also know that we do have quarterly priorities and that's what we're focused on for the quarter. So we try not to go and do too much more than what— unless it becomes a glaring priority where all of a sudden occupancy went from 92 to 88. Well, forget about all the other priorities. We've got a fire here. Let's worry about this. But I think what served us well over the last 3 or 4 years, it really is the quarterly priorities and focusing on them.

Gino Barbaro: And anything that's longer than 8 hours is a priority. And then we break those down into tasks and focus on those for the quarter.

Bill Douglas: You should go be an EOS implementer, Gino. You sound like you've got it nailed.

Gino Barbaro: Uh, it's a lot of fun. It's, it's so, it's so duh. It's like, duh, where you been my whole life? Well, you learn it, but it's, it's, it really does help because you know what? You guys, you're probably like, like Jake and myself, you probably like the machine gun things. Like you've got hundreds of ideas. Like you're just like spouting stuff. You're so much energy. You got so many ideas. Your team members are looking at you going like, what the hell is wrong with you guys? We can't do all this stuff.

Gino Barbaro: Yeah, exactly. Stop. So that's what happened. Like when you start going through that and you pick like 5 or 6 priorities, it's like, oh wow, now you can focus. And like you get the things done that are the most priority, the highest pain points. Once again, what are you trying to solve for the quarter? What's going to move the company forward for this quarter? And that's what you focus on. Then obviously you'll pick stuff as you're going through the quarter different, but like focus on those priorities.

Drew Hall: All right, Gino, this has been fantastic. Now, if you've heard any of our podcast episodes, again, that's the peak Property Performance Podcast, you know that the thing that we tie it up with every time we have a guest on is what we call the extra floor. In the spirit of commercial real estate, we call it the extra floor. And it's just, it's a shift from talking about the business and case studies and lessons learned, etc., etc., and just to get to know you. So we've got 3 quick questions here. And the less you think about it, the better. Just gut-level responses to these. Question number 1, what's a great piece of career or life advice that you have Oh, life advice.

Gino Barbaro: You better pick your spouse. You better pick a good spouse. I've been married 27 years, and I am a difficult person to get along with. So I won the lottery when it comes to that. It's one of those things where, you know, you're on the same team. I think when you get married, I think if you can think about that, there's always gonna be arguments and all, but you're never in competition with your spouse. You're never trying to one-up them. You're always trying to work together.

Gino Barbaro: And I think when you look at family, and you look at business, if you can run business in a certain way, there's certain systems and procedures procedures. Family's sort of the same way. You still have to have some type of governance. You have to have some type of mission statement and core values. You have to have some type of rhythm within the family. It's very similar to running a business.

Drew Hall: Yeah, that's nice.

Bill Douglas: That's awesome. What's one habit or practice that consistently makes you more effective?

Gino Barbaro: I think the habit is one of those things, you know, it's a hard way to label it, but I just want to get things done. I am, I am, I am a relentless executor. If I get something on my mind, I have to do it. And that can be good. And that can be bad, because it'll gnaw at me. But I just know that if we start something, I want to finish it, I want to be radically accountable, and I want to relentlessly execute on it. And in money coaching, that archetype is called the warrior. The warrior is the person who's discerned.

Gino Barbaro: You want to think about, you know, when you're relating it to spending money or having money, the warrior is the one who discerns, the warrior is the one who works really hard, puts in the effort and gets the job done. when you have to do something. I think anybody who's successful in life, there's really no analysis paralysis, there's no procrastination. You've already made up your mind. It's just we have to get this job done. And there's no excuses.

Drew Hall: All right, last one. Are you an early bird or a night owl?

Gino Barbaro: I used to be a night owl when I had the restaurant. But man, I'm— I got to be in bed by 11. And I get up around 7 in the morning. I need sleep. I don't know how people don't get— listen, I need at least 7 hours of sleep. I just do. I don't know why. I mean, that used to be like a badge of honor.

Gino Barbaro: People like, I sleep 4 or 5 hours. I'm like, bro, man, I wish I could. I just, I need sleep. I don't know why, I just do.

Bill Douglas: Oh man, sleep is not underrated.

Drew Hall: 100%. I totally agree. Yeah, sometimes I feel like—

Bill Douglas: This is not an extra floor question. How can listeners contact you, Gino? How would you like— because I know they're going to want to reach out with questions or—

Gino Barbaro: Oh yeah, just go to the— for the business side, just go to jakeandgino.com. That's our website. We have the, we have the podcast on there. If they want to learn more about family, if they want to learn more about money questions and relationship questions, just go to barbaro360.com. barbaro360.com. That's where I have my family company.

Bill Douglas: And we will put those in the show notes for all of you that want to go hit the show page for this. Well, Gino, thank you. This has been an awesome conversation. I'm sure there'll be a follow-up in 6 or 9 months when we see what else you've done with data and digital in your next portfolio.

Gino Barbaro: I'd like that actually. That'd be great because that will hold me accountable to actually tackling this topic because it's an important topic. And it's funny because it's probably a little hanging There's probably a lot of low-hanging fruit there that I don't even know.

Bill Douglas: Yeah. Well, you know your property better than anybody.

Drew Hall: Go ahead. You'll probably come back to us, Gino, and say like, I love 5 things about that book, but can I tell you about 2 that really stuck in my craw? I got some ideas for you guys.

Gino Barbaro: Book review. That's what you're telling me. You got it, brothers.

Bill Douglas: Right, right. Thick skin. Trust me. Well, thanks again, Gino, and thanks to the audience and everybody out there. Like Drew said at the beginning, the show, please like, follow, subscribe, forward the episode to a friend, say you should listen to this. If you or somebody you know wants to be on the show, please reach out. We love to have people that want to talk about what they're doing, what they wish they did, what they wish they didn't, but all relative to data and digital. And we're out to change the industry in that regard.

Bill Douglas: So again, thank you everybody, and we look forward to seeing you on the next episode of Peak Property Performance.