Agostino Pintus joins host Jim Pfeifer on the Passive Investing from Left Field podcast to detail his journey from a lucrative tech career to thriving real estate entrepreneur. Read on for key insights he shares on leaving corporate life, vetting partners, preferred investment strategies like adaptive reuse, and his outlook for commercial real estate markets in 2024.
Saying Goodbye to the Corporate Grind
Early on, Agostino Pintus envisioned having a career in the technology sector. He had a knack for computers and software, which eventually landed him a senior executive role at a publicly-traded firm.
However, after nearly 20 years climbing the corporate ladder, frustrations emerged. He recalled instances of leadership changes resulting in shifting dynamics and uncertainties surrounding job security. By his early 40’s, Agostino explained, “I’m thinking to myself, how many more times can I possibly go through this and put myself and my family at risk?”
The lack of control and whims of corporate politics had worn thin. Moreover, Agostino’s side hobby investing in real estate had shown promising signs of stability and income. Initially he focused on single family and small multi-family properties.
Ultimately in 2019, he decided to make the leap and leave his corporate position to pursue real estate investing full time. As Agostino puts it, “It was scary, man. I was scared to death.”
Stepping into the unknown without a steady corporate paycheck created understandable anxiety. However, the lure of betting on himself and his own business won out. Now, he applies lessons and skills built over nearly 20 years in real estate. This includes overseeing a portfolio of commercial assets and also managing an education company for aspiring investors.
Vetting Partners: Look for Signs in the Little Things
Given his operator role, Agostino gets frequent pitches for investment opportunities and prospective partnerships. When assessing potential partners, he pays close attention to subtle clues in their communication and professional conduct.
In one instance, he scheduled multiple calls with an individual to discuss projects. However, the person routinely showed up 15-20 minutes late without notification or apology. After the fourth occurrence, Agostino terminated the discussions, seeing the tardiness as a red flag.
As he puts it, “If the guy is late for just showing up to a meeting, and it’s shrugged off as no big deal, is it also okay if they skip on a mortgage payment? Who cares if they don’t return a phone call to an investor?”
Essentially if someone does not value others’ time for simple introductions, Agostino has doubts about their ability to honor commitments when real money is on the line. Responsiveness and punctuality speak volumes.
He also vets potential partners on their technical skills and track records. Can they speak credibly about projects and structure deals advantageously? Or do they demonstrate gaps in experience that require hand holding?
Ultimately for Agostino, partnerships need to be with professionals that pull their weight and share his standards. Otherwise, it introduces unnecessary risks and headaches.
Vetting Operators as An LP
On the flip side, passive LP investors also need to vet sponsors and syndicators diligently before investing capital. Agostino stresses investors should look beyond just the lead sponsor they interact with initially. They should make an effort to understand their key partners and leadership team too. While full transparency into backgrounds, capabilities, and track records takes concerted diligence, it’s vital for limiting downside risks.
Additionally, Agostino advises examining how operators communicate with investors and handle issues transparently. Sponsors that provide portfolio updates, educate through webinars, and share their expertise generously tend to take investor relations more seriously. Essentially, LP investors should evaluate operators on their communication, governance, transparency, and technical competency. LP’s need to conduct due diligence and reference checks to ensure their interests will be well-represented.
Navigating the Operating Agreement
Since partnerships formalize through legal agreements, Agostino covers several key considerations when negotiating operating agreements.
One aspect is ensuring language exists that permits seizing control of assets if severe issues emerge with certain counterparties. He wants to avoid scenarios where dysfunction by others puts his own investors and credibility at risk.
Agostino also notes delineating clear roles and economics interests based on involvement levels. Ultimately, legal provisions need to align with the spirit of partnership, not introduce mismatched expectations.
While getting favorable legal protections matters, he believes finding shared vision and complementary skill sets with partners trumps all. As Agostino notes, issues in operating agreements can be remedied – but only before the investment is made.
Capital Calls – A “Necessary Evil”
Tying back to investor relationships, the podcast discussion addresses the controversial subject of capital calls. Many passive investors expressly try to avoid deals that require participation in capital calls but rather prefer operating agreements that make them optional. On the other hand, operators argue that funding reserves are necessary to remedy problems and preserve equity value.
Agostino structures deals to require participation in capital calls. In his view, this prevents those who choose not to participate in the capital call from benefiting from the capital other LP investors choose to contribute.
Ultimately both sponsors and limited partners need alignment on the treatment of capital calls written into the operating agreement prior to investing in the deal.
Adaptive Reuse Targets Urban Infill
Diving into Agostino’s investment strategies, he covers an intriguing asset play – adaptive reuse projects. This involves converting obsolete commercial buildings into residential apartments, hospitality, or mixed use.
Agostino favors redeveloping outdated downtown office spaces into multifamily. By locating in urban infill areas, proximity to infrastructure, jobs, retail, and entertainment drives leasing demand.
He also targets cities with tax incentives, economic opportunity zones, and friendly zoning policies to spur revitalization. For instance, Cleveland offers robust developer perks relative to other regions.
According to Agostino, the math can work more attractively for urban adaptive reuse than ground-up construction. Repurposing standing building frameworks reduces costs compared to new builds. And any discounted basis gets boosted by rising area rents and property values.
For investors though, lengthy development timelines for adaptive reuse pose a key risk. Cash flow and capital events can take years to develop while property is being retrofitted, leased, and stabilized.
Yet for sponsors with specialized expertise managing this asset class, it introduces opportunities beyond traditional value-add multifamily plays, and LP investors enjoy participating in community progress.
2024 Market Outlook – Cautious Optimism
Assessing prospects for commercial real estate in 2024, Agostino remains upbeat about net lease properties. He believes high quality tenants signing long-term leases will continue benefiting from inflationary rent bumps.
However, headwinds endure for multifamily investors facing maturing debt, especially on recent purchases with variable debt. Agostino thinks class B/C apartment plays offer stability with room for operational improvements and gradual value gains.
Office properties also face lingering uncertainty until remote work preferences stabilize and jobs fully rebound. Yet for experienced sponsors, distressed office acquisition opportunities may emerge, primed for adaptive reuse conversions.
On the upside, Agostino sees inflation driving more retailer interest in single tenant net lease properties. And he expects community bank appetites for construction financing to recover gradually.
Overall commercial real estate appears set for tempered growth, rewarding knowledgeable sponsors that control risks. But larger forces like interest rate moves could quickly change investor sentiment.
The Journey From Specialist to Visionary
Agostino Pintus delivers multi-faceted insights bridging his experiences as a corporate executive, real estate professional, and entrepreneur. He took difficult steps leaving a lucrative career path to tackle new endeavors in real estate ownership and education. Now Agostino combines specialized expertise with discipline, vision, and communication fluency to drive his successes.
Tax advantages attracted small-scale investing initially. But a bigger purpose emerged to teach and empower others to take control of their financial destinies.
Today Agostino oversees $100+ million in commercial real estate assets under ownership and management. Yet he still makes time to produce educational content and individually mentor new investors.
Balancing these priorities while living fully aligns with his concept for purposeful success.
For investors and sponsors interested in connecting with Agostino and tapping into his knowledge, check out BulletproofCashflow.com. And take a listen to the full Passive Investing from Left Field episode for more great insights.
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This article is for educational purposes only and is not to be relied upon as the basis for entering into any transaction or advisory relationship or making any investment decision. All investments involve the risk of loss, including the loss of principal. Past performance, and any performance results reflected in this article, is not an indication of future results.