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Interview with Rod Khleif

Interview with Rod Khleif

Rod Khleif Shares How He Went From $50MM to Broke and Back to 2000 Houses and Apartment Buildings

Video Replay of Interview with Rod Khleif

Podcast Replay of Interview with Rod Khleif

Show Notes:
Coming Soon

00:00 Hey everyone, thank you for joining us for today’s episode of real estate disruptors. So we’ve got rod Khleif. Am I saying that right? Khleif, yes. Wave, yes sir. The king of multifamily and is here to share how the build lifetime cashflow through real estate investing. I don’t know about that whole king of multifamily business, but you’re doing pretty good from the research I did. So if this is your first time tuning in, I’m Steve Trang, broker, owner of Stunning Homes realty, founder of the offer fast homes app, the only app you need for wholesaling. And I’m on a mission to create 100 millionaires. So please private message me if you ever need any help with any of your business. And if you’re excited for today’s show, please give me a wave. Give me some thumbs up. And as a reminder, I don’t charge anything for this show.

00:38 I don’t make any money doing this. So here’s all I ask this all the costs for you to listen to this show. If you get value out of the show, please tell a friend. Either share this episode right now, tiger friend below, or telling your best take away later on. That way we can all grow together. And don’t forget this is a live show, so please do not hesitate to post your questions were. Ought to be happy to answer them for you. Are you ready? Are you ready? I’m ready. You’re ready? I’m ready. Okay. So what got you into real estate? Well, let me go back. I immigrated to this country when I was six years old. My brother Albert, my mother’s Avantia, and um, we ended up in Denver, Colorado. Didn’t have a lot of money. Uh, in fact, uh, for the first 10 years here in the United States that wore clothes from the goodwill.

01:26 Um, my, uh, my mom Babysat kids, so we had enough money to eat. And what got me into real estate was she used her babysitting money to buy the house across the street from us when I was 14. And when I was 17, about to graduate from high school, she told me she’d made 20 grand on a house while she slept. She didn’t do anything. It went up in value $20,000. I’m like, what? I’m getting into real estate. So I actually got my real estate brokers license when I turned 18. So you’re able to do with education back then you didn’t have to have experience. So I became a broker at 18, not just an agent and you know, I was going to be rich in real estate. I got a bus bench and put it down on the end of the street with my picture on it and didn’t give me any business of course, but it made my mom proud.

02:12 And so I made about 10 grand my first year in real estate. Now my second year I made maybe 12 to 15 grand, but my third year I made over 100 grand, which back in 1981 was a decent chunk of change. So what happened between year two and year three? And what happened was mindset. Um, you know, I am on my podcast, I talk about the psychology of success. How 80 percent of your success in anything is your psychology or your mindset? Only 10 to 20 percent is the actual mechanics. Like real estate or entrepreneurship business, whatever it is you’re interested in, but it’s, it’s, it’s primarily mindset. And so I’m, I met a guy that I started working with that started to teach me about mindset, uh, and um, you know, so fast forward to today, I’ve owned over 2000 houses that I’ve rented out longterm multiple apartment complexes in three states and you know, I’ve had a lot of ups and downs and we’re going to talk about the US now.

03:08 We are, you’re going to, you will have to go there. Okay. Well, uh, I’ve had a lot of ups and downs and uh, I’ve learned from them. I call them seminars. They’re never failures. Uh, excuse me. Only a failure if you don’t learn anything and you typically always learned something. So I’ve had plenty of seminars, um, some have been bigger than others, but um, in fact we can get right into it if you like. So let, let, let me back up before we talk about 2008, the big seminar. Let’s talk about what happened up to that point because in 2006, my net worth went up $17 million dollars while I slept a little more than my mom’s 20 grand. If you want to do the math on that, it’s a little over $8,000 an hour for the whole year and you know, which is great and when, when they feel pretty good, you get a big head, you think you can conquer the world.

03:58 No everything. Yeah, you know, everything. You’re a real estate God and uh, and then you know, whenever you do that life, the universe, God, whatever you believe in will give you a smack down. And that smackdown, for me, it was 2008 and I ended up losing that 17 million in a whole lot more. I ended up losing $50 million dollars in 2008 for a lot of reasons and I’m happy to get into them. But the real message here is that I’m back. Now I’m back and I’m back very, you know, I came back very quickly because there are seminars and you should never. Those of you listening should never be afraid of failure. I’ve, I’ve built 24 businesses. Several have been worth tens of millions of dollars, but most have been spectacular flaming seminars. Okay. And so, you know, in fact, I met a, I’m a member of several masterminds.

04:49 I’ve been put on my own mastermind now, but uh, in one of the masterminds I was in, I met Sara Blakely, the billionaire owner of spanx. She started with $50,000. Now she’s a billionaire. She’s on Forbes just a couple months ago and she told me that her father every night at the dinner table, or at least once a week would ask her and her brother what they failed at that day. Not An awesome question. It is, yeah, because, because it’s never a failure if you’re afraid to try anything. You never gonna get anywhere. People fail their way to success. And so there you have my big flaming seminar. That was the big one. I’ve had other ones, but I heard that you made 17 in one year and I heard you lost 50. So I’m assuming that was all the equity or is that including the. No, what happened was, what was interesting and the reason I started my podcast was what was interesting is when I was crashing and burning, it was my single family houses, uh, my apartment complex has to just fine and they would have survived if I hadn’t cross collateralized them with the houses.

05:49 So they wrote the whole thing imploded, but I would still have the apartment complex is if they hadn’t been cross-collateralized. So that’s my message and I wrote a book which I’m happy to share with your listeners that, uh, about a multifamily real estate investing, but the subtitle of the book. In fact, that’s one of the things I was recording the audio version of that book this morning. It’s kind of funny. I was in front of a microphone all morning recording the first hundred pages, but, but the subtitle of that book is the new rules of real estate investing. I e the new rules being focused on cash flow instead of value. I was focused on the value that $17, million dollars. I wasn’t paying attention to the cashflow. We can’t do anything with equity anyway. Well, you can’t, especially when the market tightens up so you can’t sell or refinance because he was selling a house occasionally or refinancing a house occasionally just to offset that little bit of a negative that I had.

06:40 Now you’re wondering how with 800 houses was where those houses negative. The reason that they didn’t cash flow were several. One was taxes in Florida, very high. There’s no state income tax. That’s number one. Number two, I was along the coast, so I had a lot of a heavy duty insurance and wind insurance and flood insurance, which can be very expensive, so that impacted cashflow, but the third probably the biggest reason was I had houses two hours north in two hours south and everywhere in between. So you know, if I had a maintenance call on one of my houses, I’d send a maintenance man. They might drive an hour to get there. Okay. I had my own, my own staff, so I send a maintenance guy. They’d take an hour to get there. They’d see what was wrong. Then they’d have to find a lowe’s or a home depot, which could be half hour away.

07:23 They buy the parts, they’d come back, they’d get into it, and then you know how these things go. Then they figure out they need something else and they would, um, uh, you know, what would take 30 minutes in an apartment complex where you can stockpile parts, could take all day and you multiply that times 800 and consistently and it just, it was, it just didn’t quite the issues. Yeah. Yeah. Okay. So you lose $50, million dollars, which for a lot of people is a lot of money for everybody, a lot of money. So how do you recover what, like what were the first things you did when that happened? Well, I’m going to probably tell you, I know where you’re going and what you think I’m going to say is probably not going to be what I said. It really wasn’t about my knowledge of real estate.

08:06 That got me back. It was mindset again. Yeah. Okay. It was all psychology. Okay. It was remembering to focus on what I wanted instead of wet. I don’t want, in fact, if you’ll humor me, I’ll, I’ll share this with you and your listeners. A process I take my coaching students through and I do this in my live events as well, um, to help with this process. Do you want me to get into that? Yes, please. Okay. So, um, it really revolves around knowing what it is you want and why you want it. And so the process I take my coaching students through is, it’s a goal setting exercise, but it’s a little, it’s quite a bit more than that. So if you’re listening, pick an hour when you have a lot of energy and don’t do it right after a meal or when you’re tired all the time of the day that you’re have a lot of energy and you’re not going to be interrupted and sit down and write down everything you could ever possibly want in life.

08:55 Now I’m of course the stuff, the houses, the boats, the cars, the jet skis, the planes, all this stuff. Write that stuff down. How much money you want in the bank, what net cash flow you want from your real estate? All of that stuff, but, but, and where you want to go, who you know and all that, but beyond just the stuff in the money, write down what you want to learn. Me. I want to learn how to fly a helicopter and I got some drums. I’m gonna. Learn how to play the drums live. Write down who you want to help. You know, I, I’ve, I’ve started a foundation. I can get into that later if you want, but you know, so, so, so figure out who you want to help you know what you’re going to stand for. Write all that down. So it’s not just the stuff, it’s everything you want to do.

09:36 Be or have. And don’t you know, if you’re analytical, don’t stop and analyze it. Just keep writing. You can scratch it out later, but literally don’t stop writing to. You can’t think of another thing. That big things, the little things, everything. Then once you’ve done that, then it’s not real until it’s measurable. So write down how long it’s gonna. Take you to achieve each one of those goals. Just put a number by how many years it’s going to take, one, three, five, 10, 20, remembering that as human beings, we will overestimate what we can accomplish in a year and massively underestimate what we can do in a decade. So keep that in mind, but write down, put a number by each goal, and then once you’re done with that, pick, pull out four of those goals. Pick out three of your top, one year goals, and then pull out the number one goal.

10:22 Um, uh, the juiciest one, the one that really lights your fire. And there may be several. Just pick one, it won’t matter, but pick, pick one of your top top goals. So you’ve got four goals. Write those on a separate sheet of paper. Now, this is where most people stop, okay? In fact, most people only go this far, um, but then what you must do is you must write down a paragraph for each one of those goals, whites and absolute must, because it’s the why that’s going to drive you. So, you know, so I can show my wife what success looks like or my husband. So I can, you know, we can do whatever we want, whenever we want, wherever we want, with whoever we want, you know, whatever it is for you, write it down, use powerful emotionally charged words, very, very important. Words are very, very powerful.

11:04 So write a paragraph, each one, why it’s a must, but take it one little step further. Put some pain in there if you don’t achieve it. So, you know, so I don’t feel like a failure, so I don’t live a life of regret. So I don’t fail my family. Whatever it is, make it painful because again, that pain will drive you that, that, that, uh, a possibility of pain will drive you. So put that in there too. And then once you’re done with that, there’s one more step. And those of you that are analytical or listening to this thinking, this is all food, food. I’m here to tell you it’s not the stuff works. This is why I made. I was able to lose $50,000,000 and come back from it and live the life that I have right now because of mindset and, and knowing what it is you want.

11:45 So then go out there and find pictures of what it is you want. Find pictures that go on Google, find that resonate with you, associated with your goals. They don’t have to be exact, but when you see them, they kind of store you, pull those out, go to walgreens or CVS, have them blown up and put them where you’re going to see them. And I’ll give you some examples of this. And I even know I was doing this. This is really manifesting what you want in life, but when I was 18, when I got my broker’s license and went out and got a four door Ford Granada, okay, great color of your, of your laptop, ugliest car you’ve ever seen in your life. But I thought you had to have a four door so you could show houses, you know? Right. So, um, I worked with a guy that had a corvette and he let me drive it.

12:27 And that was a key thing. It was experiential. So I got to drive that Michael. Oh my God, this is so cool. So this is way before the Internet. Couldn’t even spell Internet back then they had magazines. Okay. So I’ve got a picture of a corvette and I put it on the visor of my four door Granada. Within a year or two I had a beautiful red corvette, Burgundy. Then I’m gonna. Give you some examples because it’s my life now. Please know I’m not bragging because this stuff doesn’t even interest me anymore. But there’s this. This’ll hopefully shit. I’m a car guy so. Okay. Right. Alright. So this was back when magnum Pi was out. It was a TV show with Tom Selleck and he drove this Ferrari three. Oh, eight gorgeous Red Ferrari. I got a picture of that actual Ferrari and put that on the visor of my corvette.

13:06 Within a couple of years I had a Maserati look almost identical to that Ferrari. Last example, I’m the guy that always wanted a Lamborghini. Okay. I had the posters in my bedroom with the bikini girls and yeah, that was me. Okay. And, and my, my son was nine years old and I made the mistake of telling him I wanted a Lamborghini. And so he got, he was collecting models of exotic cars and he had the posters and the pictures too. And he is, what’s astounding is he had a model of the exact color and style that I ended up getting, which ultimately wrecked. But, but, uh, but anyway, so, so this stuff works. I’ll give you one last example. I lived in Denver, that’s where, where we ended up. I lived there for 30 years and, but I knew I always wanted to live on the beach.

13:51 I mean I, I would dream about palm trees and we do a travel occasionally to tropical place. I’m like, man, I’ve got to live like this. I love this. I don’t like snow. And so I always dreamed about having a place on the beach and it took me 20 years, but I built an incredible home on the beach. I, I mean $8,000,000, 10,000 square foot, incredible home beach on one side, bay on the backside. And, and so it doesn’t matter how big the goal is, you just have to believe in yourself and you have to take action and you have to stay focused on it, you know, like an airplane or a boat is off track probably 90 percent of the time, but it always ends up in the right place. So they’re always making course corrections. So if you know what it is you want and why you want it, you may have to change your approach.

14:40 And if that doesn’t work, you change your approach again and rinse and repeat, change in approach, change your approach, and you’ll ultimately get to where you want to go. As long as you keep that goal in your mind’s eye. So how long then, when you know, after the crash did you feel sorry for yourself? How long have you been for? A few months. Few months. Oh yeah, yeah. I was under a rock and feeling sorry for myself. And I created a story. Stories are stories or circuit breakers, so you don’t feel disgusted with yourself. You’ll tell a story. Okay? And, and people use stories to, to justify a mediocre existence. I had a story, you know, woe is me. I lost 50 million bucks, what was me. But I ultimately picked myself up and remember to focus on what I wanted, you know, um, I wish I’d have brought my planner if I’d have thought that we were doing this visually.

15:26 I, what about my planner in the back of my planner are pictures that have been in there almost 20 years. There’s a picture of the Lamborghini for I got pictures of watches. I have a couple hundred thousand dollars with a watch is the Rolls Royce. All the stuff that I got because I had pictures. So those either going, oh, this is foofy stuff. I’m here to tell you it’s not okay, so you make a mistake. If you don’t, you know, really visualize what it is you want. And, uh, I recommend you do it with gratitude. And, and I do a little morning ritual every morning where I sit and I have my vision boards next to me and I’ll look at them and I’m, and I’ll visualize these things that I want as if already have them with emotion, with gratitude. It’s incredibly powerful. Absolutely. Yeah. So then a couple of months of misery.

16:08 And then how long do you get back to? Well, what I did was I made lemon lemonade out of lemons, so I was in foreclosure all over the place. So I found out that, um, you could actually, you know, the banks created that crisis. I mean, don’t do that. If you could fog a mirror and oh, six, you could borrow money. And so, you know, Wall Street in the banks created that mess that turned into a nightmare for everybody. So I, so I want to preframe what I’m about to tell you by saying that. So I found out you could fight foreclosures. And so I, I helped families fight foreclosures, created the litigation support company that actually just sold last week. It was a $10,000,000 company. Uh, and, and, uh, it wound down and I sold it last week, but I helped probably several thousand families save their homes.

16:51 Um, yeah. So, uh, that’s, that’s what I did. And then I was building up to, to buy real estate again and I’m back buying real estate and uh, you know, it’s Kinda funny. I, I, now I, I’ve got an amazing new wife. I, I went through a divorce as part of all this as well and I, my wife is his most beautiful human being on the planet and I live in a compound now that’s six buildings. I mean, it’s incredible. It’s on the bay. It’s two acres on, on the, on the bay and because God’s got a sense of humor, I can see my old house across the bay that I lost. I have to look out my back door and see it. But, uh, now life is good, my friend. Okay. So then, uh, so you did the fighting for closures thing and then you’ve been back to buying, acquiring properties again.

17:33 And at some point along the way, you, you got the wisdom or the, uh, the, the hindsight that multifamily was much better return. Well, it’s single family so. Well, just based on my experience, I mean my single families or what pulled me down, my multifamily would’ve been just fine. So if you’re thinking about getting into real estate, if you’re listening to this, you’re thinking about getting into real estate. Don’t do houses, at least do a plex. You know, I’ve interviewed people on my show that made you know, tens of millions of dollars just doing one duplex at a time, triplex, fourplex. You can do plexes, at least do that. Don’t do houses if you’re, if you’re buying for longterm hold, that’s, this is, this is my opinion. But, uh, you know, it’s backed up by what I went through. And so, uh, and if you can go larger, larger now, now we’re in a really hot market right now.

18:19 So it’s, it’s hard to find deals. But, but they’re out there. I mean, we’re, we’re working for deals right now, um, anywhere from 48 units to 540 units right now. But there is a correction coming, and by the way, if you’re, if you guys are interested in this business, I’ve got a 200 page book, that’s the one I’m reading. You can get it for free, just text the word Rod, two four, one four, one one, and we’ll send you a copy for free. Happy to do that for your listeners. But if I’m in, but if you’re thinking real estate, don’t dabble and I’m sure you talk about this on your show, dabblers get crushed. You got to study it. So read my book, listen to your podcasts, listen to my podcast called lifetime cash flow. You know, we’re pushing four and a half million downloads so people really enjoy it.

19:06 And I, and my show I interview and like I say, people that just have a couple of duplexes to people that have 17,000 units and everywhere in between. So I do that. And then I also incorporate little clips about the psychology of success. Sure. Because that’s 90 percent of it. So then let’s pretend I’m brand new and I was like, Hey Ryan, I want to start investing in real estate. Yep. What advice do you give to that new person? Um, study. Uh, don’t, you know, get out there and mix it up. Go look at properties, go meet people, read my book, read other books, listen to podcasts if you want. I do three day live events. I’ve got one coming up in Atlanta right around the corner on November, second, third, and fourth tickets are. I mean, you can fly to Atlanta cheap from anywhere in the country and tickets are very reasonable and there’s still some left.

19:51 Come see me for three days. You’ll leave knowing everything you need to know to buy an apartment, literally in 90 days. In fact, that’s the title of my, of the, of the event, uh, how to buy an apartment building in 90 days. But you know, whether you do it with me, it doesn’t matter, but, but get it, get the education. Okay? Because when you’re buying apartments, a mistake can be a bit. If you make a mistake on your first deal, there may not be a second deal. So, but, but there’s no reason to make a mistake because it’s really empirical. It’s numbers, as long as you understand how to evaluate a deal, it’s really, there’s very little subjectivity to assure the area. You’ve got to check the comparable properties, make sure that what you’re buying, you can create it to be better than what’s around you, or at least be competitive with what’s around you.

20:35 So it’s pretty objective. It’s not subjective and the numbers are, the numbers are the numbers. So you know, the people that, the people that fail guidelines, the people that fail are the ones that don’t take the time to learn. That’s it. And it. And it’s like anything else. Yeah, you’ve got to study it a little bit, but don’t be intimidated by it. The first one’s the hard one. Once you buy that first property is like dominoes. They just, they just fall after that. The first one takes the longest and it’s the hardest. But, um, guidelines. Yeah, there are, there are, there are several quick. It was rod four, one slash four slash 11. Yeah. Just text the word rod to four, one slash four slash 11. Uh, to get my free book. If you are interested in my bootcamp, I’m going to be in January, I’m going to be in Tampa in January, and like I said, I’m Atlanta, November a text, multifamily, two, four, one, four, one, one.

21:23 And we’ll send you the information about the bootcamp. Okay. Um, but as far as some, some basic financial parameters for evaluating property, um, you know, without getting too technical, people look, I’m investors. Uh, and that’s the other thing about multifamily real estate, particularly if you go above four units, if you’re five units or higher is considered commercial multifamily. And what’s great about that is the value is based on a multiple of the net operating income in duplexes, triplexes and fourplexes. The value is based on comparable properties. So what did other plex is sell for, but when you go five units or higher, the values based on income and that’s something within your control. So if you can increase the net operating income by either raising the rents are decreasing the expenses, it’s exponential as to the impact that it has on the value. So, um, you know, it’s just a fantastic business.

22:22 The other piece about it that’s fantastic is this a team sport, so when you buy five units or more, the banks not looking at you individually so hard. If you put two or three people together, you can have one person that brings their balance sheet to the table to show net worth. You can have another person that has money in the bank for the liquidity piece and they’re going to look at the property’s ability to carry the debt versus your personal ability to carry the debt. So, you know, there are lots of guys out there that are buying large multifamily properties with none of their own money. They’re, they’re finding the deals they’re bringing in investors, uh, to, to for the equity piece, which is the down payment and the, in any, you know, operating funds and closing costs and, and, and renovation costs called capital expenditures or Capex.

23:08 They find investors to put up that money. They, they coordinate. The whole deal may end up with a nice piece of the deal. So there’s a way to get into this business with little or no money. And that’s not, that’s not, you know, you know, a sales pitch, it’s reality and the threshold is not as bad as, or it looks a lot more intimidating to really is. So it’s like anything that you don’t know, it’s more intimidating. I mean, it, it, it’s just, it’s just, it’s a learning curve. And, and that’s why the first one’s the hardest. And when you realize after that first one, how easy it really was. And, and, and I’ll tell you, a lot of people don’t realize that it’s as much work to, I mean it’s very close. You buy 10 unit apartment building, you buy a single family house, it’s probably actually easier to buy the 10 unit because the, the, the dodd frank stuff that you’re dealing with, the lending and all the, you know, the, the, um, regs that they’ve come up with to, to just buy a single family home.

24:01 It’s just become very cumbersome. It’s probably easier to buy a 10 unit. Seriously. So, and, and, and again, what’s great about it is it’s a team sport, so you can put, you can put the team together. Um, you know how everyone starts in this business, in the multifamily business is they align themselves with someone called a sponsor, somebody that’s done it before, and so you find somebody that say owns 100 units and you go and you, you befriend them and you and you and you learn the business, you study it and then you ask them, hey, if I find a deal, are you interested in getting involved? And if they are, then when you go approach people like sellers and brokers, you can say, yeah, we have 100 units and we’re interested in looking at yours. So you, you hang your hat with them and use the keyword and it gives you instant credibility.

24:46 That’s how everybody does it in this business. And I’m probably getting a little too technical for you, but no, that’s exactly what we’re looking for because we do a lot on this show is talking about sourcing deals. And so that’s the other part is everyone’s talking about not everyone, but a lot of people are curious about apartments, but they don’t know where to get started. So there, there are several ways to get started. Obviously you’ve got to educate yourself. You want to grassroots at a bootstrap it, listen to podcasts, read books, minds free, it’s a no brainer, it’s like a textbook, um, start there, but then get out there and have brokers start sending you deals so you can evaluate deals. And, you know, repetition is the mother of skill. I had grant cardone on my show and he spent that. He’s a big sales guy if you don’t know who he is and everyone else grants.

25:30 Okay, well he’s got his own jet. He’s got, I don’t know, probably five or 6,000 units now. He’s a riot. But, but he, um, he, he studied this business for years before he ever bought his first apartment building. And, and I’m not saying it has to take that long, but again, don’t dabble. Don’t think you can go in half cocked and not, not studied it a little bit. It’s not hard but, but you. But you got to apply yourself like anything else. And evaluate deals. Start making relationships with brokers, you know, start talking to people about the fact that, hey, you’re into multifamily real estate, looking, trying to find deals at cash flow and if you find a deal, are you interested in participating and you’ll find there’s a ton of money on the sidelines looking for deals. She just started putting all that together and the more you focus on your competence, the more it’s going to build your confidence.

26:19 And by virtue of having the confidence, you’ll have the ability to influence people to invest with you. I mean, when I was in my twenties, I bought tens of millions of dollars worth of real estate, none of my own money. I said, hey, if I find a deal, you and you put up the money, we’ll split it 50 slash 50. And I bought a ton of property that way. Everybody was happy. Um, so, you know, that’s, uh, that’s not hard to do if you, if you’re out there finding deals. So the harder part is finding sponsors or finding the, the multifamily that finding sponsors is not hard. Okay? I mean, I’ve got in my coaching students, uh, I’ve got coaching students that there’s probably almost 10 of them in there that can sponsor deals. We sponsored deals. I just raised a 5 million for a s, s a person’s deal up in Ohio.

27:01 We raised the money to just, like I said, it’s a lot of money looking for deals. And so finding the deal, signing the deals is the hard part right now. And there are lots of strategies for that, but it’s, it’s, you know, it’s hard work, especially if you’re brand new because brokers won’t take you seriously. You know, broker doesn’t get paid as you know, unless, unless the property sells and you can spend a lot of time with somebody doesn’t know what the heck they’re doing and waste that time. So you know, if a broker is sharp, they’re not gonna, you know, they’re not going to give you the time of day until they know you can close. Which is why it’s so important to align yourself with someone that has to align on their first dealer to. They only have to do it for a dealer to.

27:38 And then once you’ve got those on your resume, then you can be the sponsor. You don’t need that person to help you. But you know what’s great about commercial real estate is you’ve got to satisfy three things. You got to satisfy the bank, got us fast, satisfying experience. You have to have net worth and you have to have liquidity. But what’s great is you can find all three of those things in one sponsor and yeah, you’re going to give him a piece of the deal. So what if you only have 10 percent, 20 percent, 30 percent, 40 percent of the deal. That’s how you get started. So, you know, I, you know, that’s how everybody gets started and I don’t know about you, but I’ll take 10 percent of something or 50 percent of something over 100 percent of nothing. 100 doors. I’m is not a chunk of change.

28:18 That’s not a small chunk of change. That’s right. But even if you start smaller, it doesn’t matter. So as far as finding the deals then, I mean, are you, are you cold calling? I mean, it sounds like if I can give you lots of strategies for finding deals, number one obviously is broker relationships. If you can, if you can, again, align yourself with somebody that’s done it and go out and break bread with brokers in your target market. Go on loopnet.com. That’s the largest multifamily, really commercial website and the planet. Go there. Find the brokers that are selling the type and size property that you’re interested in. Reach out to them, have them send you a deal, you know, uh, become competent enough to thoroughly analyze that deal. So when you respond, you can say, yeah, you know, I did the numbers on that. I normalize the expenses and the cash on cash return that I came up with those acts and, uh, I really need why?

29:05 So I appreciate you sending it to me, but you know, that one’s not going to work for me. Please keep me in mind for other ones. That’s a lot better than not responding at all. Or just say, no, I’m not interested. And they, they take you seriously. And this is all about credibility when you’re just getting started. So brokers are great, residential brokers are great, like yourself, you know, residential brokers will come across a multifamily property and they’re really not geared to handle it, you know, they, they’re, they’re used to putting properties in the mls. And so, excuse me, you’re going to want to align yourself with a residential broker because they’ll stumble across multifamily deals from time to time. And if you’ve got a relationship, they can send it to you. Um, we do mailing campaigns, uh, unlike most people that’ll buy a list off a list from a list broker, we actually go right into the assessor’s office.

29:54 We pull our lists, we do our searches, we pull lists of people. And in what you’ll find is that most of those properties that now, when I say this on the, on the mailings, we typically go from like five to 50 units. We don’t go above 50 units. This doesn’t work for the larger properties. But under 50 units will pull a list. And what you’ll find is most of those properties are owned in entities, llcs, or corporations. And if you mail to the registered agent of that entity, well you can imagine what happens to that mail, go straight in the trash. So what we do is we go to the secretary of State’s office and we break down those entities and we find out who the principals are, the owners we mailed them at their home addresses. It makes a huge difference. Um, and then you know, you, you hand address the envelopes, you type up the letters, you put the property address in the first sentence so that the, the owner sees that and they recognize their address and you know, and, and that’s, that’s a strategy that works very, very well.

30:46 And the key with mailing is you’ve got to be consistent. You can’t do it once, so you need to do a two or three times a year and keep doing it. And you have to hit the seller when they’re motivated. I mean you have to hit them when they have a life event. So maybe they get sick, maybe they decide to retire, maybe there’s a divorce or whatever. I mean you have to be consistent. So that’s another way. Another way is to get lists of owners that are in eviction a, you know, an owner when they’re evicting clients is not a happy owner or get lists of people that have code violations on their properties and contact them. Um, we did that with a fiveplex the day. There you go. There you go. There you go. I mean, you know, they’re, they’re getting hassled by the city or the county.

31:26 They’re not happy and then you’re catching them at the right time. You got to see the key is motivation. And, and right now in this hot market, the best deals of the off market deals, if they’re on the market, they’ve been looked over, they’ve been picked over and they’re probably way over priced. Um, so, you know, the key is to try to go direct to seller if you can, but, but the other key is not to get frustrated, okay, this is a hot market. So use this time. This is the great time for you to learn the business, to build the relationships with. I’m here to tell you, you learn the business, you build the broker relationships, you build banking relationships, you build relationships with investors. When this market turns, it’s going to turn again. It, it goes in cycles. I’ve been telling, I’ve been through several of them.

32:04 Not as bad as the weight, but I’ve been through a couple of other pretty bad ones. And, and when the market turns, there’s going to be exponential opportunities. If you’ve got, you know, your powder dry and you’ve learned the business, you’ve got the confidence so you know what you’re doing, watch out, you’re going to kill it. Yeah, no, that makes total sense. Yeah. So what would you tell someone that’s nervous? Got a lot of fear and uh, how, how do you get them over the Hump and take massive action? Goals? Got To do the goals and the wise you’ve got to have, you’ve got to have the, have the drive to do it. You gotTa want it? Okay. You’ve got to get uncomfortable. The life you want is on the other side of comfort. You have to get uncomfortable. You have to push through the fear.

32:44 And the only thing that’s going to cause you to do that is to have leverage on yourself via pain, the potential for pain or the allure of, of the, the things that you want. So you got to get the driver first. Okay? Then you’ve got to study this business. Don’t dabble, learn, listen, read, do what have you. Align yourself. Go to real estate investor club meetings. Um, you know, listen to your podcast, to my podcast. I incredible knowledge. I mean I’ve, I get, I have a wall is big as the wall behind you. Covered with hundreds of thank you cards from people that have just listened to me and bought properties for get the coaching students that are bought big deals from me, but just from listening. So, but, but again, you’ve got to apply yourself. You’ve got to carve out some time every week to apply to this business. Even if you’ve got a full time job, even if you’ve got kids. I mean, I’ve got, I’ve got a mastermind where I’ve got about 3 billion in assets represented in this group of, of guys. And you know, these guys, many of them have started with full time jobs. They now have 2000 units. They did it on the side with a family with a full time job and, and you know, they’re set for life. So

33:57 it’s very interesting, right? Because the idea is I’m from the outside looking in is you want to start small, you won’t get some multifamily at some point you cash it in and you get a down payment for an apartment complex.

34:10 Well that’s, that’s the common thought process. But you don’t need the down payment. Well that’s interesting. You don’t need the money, you just need to find the deals and you need to. And you need to build a team and you know, go talk. I’m just, there’s so much money looking for deals right now. I can tell you just in my coaching group, if you found a deal, you know, I think just in that group you could, we could probably raise $10,000,000 in a couple of days. I mean, there’s that much money looking for deals right now and you know, because they’re getting one percent in the bank and, and who knows, you know, the stock market is volatile. Um, and what goes up comes down and I’m telling you, it’s very near the top right now, if it’s not, if it’s not already cresting, it’s frothing. I’m just telling you, I’ve been there, I see the signs, I ignored them last time, but I recognize them this time and you know, and, and it’s coming. So,

35:02 so you mentioned that there’s a lot of money on the sidelines. So how would someone getting into this go about finding the money? Yes.

35:08 You know, what you do is you put together what’s called a sample deal package. We went, just went through this with my coaching students. You, you put a package together of a deal of a deal that looks decent with a decent cash on cash return for the money, decent returns, um, and you put a whole package together and we did a sample package and we did a template for everybody so they could do it. But, but you put that something like that together and you say, Hey, if I find a deal that looks like this, are you interested? That’s it. Is that simple? And, and, and you start getting soft commitments for money. Yeah. If you find a deal like that, I’m in 10 percent return. You Bet I’m in. Okay? And then you were out there looking for deals. You’re out there evaluating deals, you’re out there mixing it up, you’re meeting people in the business, you’re around people that are talking shop.

35:54 So you learn the Norman Clutcher, you’re, you know, you just immerse yourself in it. You don’t dabble. You immerse yourself in it and you know, and you tell people, you know that you’re new and you go have lunch with them. You go buy them lunch. You add value to the people that have done it already. You figure out how you can help them so that you don’t. You know, you’re not just a taker. You’re giving and taking your, you’re, you’re making relationships, you’re trying to add value to people, but you’re also learning from people that have done it already. You find mentors and that’s how you do it and you know, you just got to do it. That’s the bottom line. You’re asking me the question, just do it. Like Nike says, just do it. You know, you know what to do. Everybody that’s listening knows what to do.

36:33 They just have to do what they know. Bottom line. So you mentioned team, right? Putting a team together. So what does a team look like? Well, it’s the people. I have some of the people I’ve talked about. You need a broker, you need a, you need a, you need to align yourself with people with money. So you know, if they stand still long enough they should know what it is you’re doing. Okay. You should be, you should develop an elevator pitch that something along the lines like, you know, I’m, I’m sourcing multifamily properties for cash flow and I’m always looking for partners and investors. So if you know anybody, let me know. If you know anybody that wants more than a 10 percent return, let me know and start collecting names and then you know, you put them in an excel spreadsheet or you go set up a crm like Zoho.com are really simple systems.

37:15 Those are free and you start keeping track of these people and you and you send them an email. Every so often you send them an article about the target market that you’re interested in. You’re building that buyer list. Then you’re out there getting packages from brokers to look at deals, you’re evaluating them, you’re running them through their paces. You’re, you know, um, you learn how to normalize expenses because a lot of the stuff you’ll get as bs. So you got to go through it and clean it up and then, and then, you know, see if it makes sense and, and use mix it up. You go out there, you look at deals, you meet brokers, you, um, and it just, that’s how you learn it. And there’s no shortcut. Um, but, but the key here is, and this is really important, so listen to this, if you don’t love it, if you don’t love real estate, then you learn to love it, okay?

38:00 Because life’s too short to not do what you love. Okay? So either either love it or learned to love it and see, I tell people, equate it to a hunting for treasure when you’re out there looking for deals just to quit because that’s really what it is. That makes sense. So, so, so, so you need to associate pleasure with it because you know, life’s too short not to do what you love. So if you can’t learn to love it, then for God’s sakes, don’t do it. Go Do, go start a business, buy a franchise, do an Mlm, do something else. But, but, um, but love what it is you do. Life’s too short. That’s great. Great Advice. What about, what would you do if the market dips? It sounds like you feel like this is my favorite, it’s Gunna did trust me. It’s coming. There’s no question.

38:40 And, and, and, and it’s not something to be afraid of. Okay. With crisis comes opportunity now. See I was under a rock hiding when it happened last time. If I had my, my act together, I, I’d be on the back of my yacht right now because the opportunities were exponential. You know, I interview guys on my podcast and now have a thousand, 2000, 4,000 units and you can set your watch to this. Almost every one of them started in [inaudible] nine, 10 or 11. Every one of them. I mean, that’s when the real opportunity is there after the crash. Okay. So that’s coming again. It’s going to happen. Um, I lost my. What was the question? No, no, that was it. Okay. That was, that was perfect. So, uh, so in doing the research about you, I saw that you’re involved with the tiny house hands foundation.

39:23 Can you talk about that? So let me back up because. Because I can, I can really, I think tell you how that came about. So I built this, you know, that I told you about this house that I wanted and I built this giant 10,000 square foot golf Tobay beach on one side. My boat’s on the backside, this giant home, magnificent. I mean waterfall from the second floor into the pool elevator. I’m a wine cellar. I mean I could push a button and all the hurricane shutters came down whole house, 80 feet of glass, 10 feet high all but together I’m just a magnificent, magnificent home. So I’m floating in this pool that was in magazines. Just incredible pool with trees coming out over. It’s changing colors at night. About two months after I bought the house, so I’m floating in my pool by myself. It’s at night, water’s warm.

40:13 It’s gorgeous. I’m looking up at this giant. I call it testament to my ego because that’s really what it was. I built it just to prove to the world I was good enough, you know, and that, that drove me for a long time, but I’m looking up at this thing and it was two months after I built up my family’s inside sleeping and I got depressed and I’m like, what is going on? I mean, I did it. I built this incredible house I’m on, you know, for all practical purposes, that was a huge success financially, but I was depressed and when I look back on, there were two things going on and that’s an, I’m really logistically was a 2000. Okay. So there were two things going on. One was you shouldn’t. And this ties into the goal setting we were just talking about you should never achieve a big goal without having other goals lined up because like the good book says, without a vision, the people perish.

41:01 You need a vision for the future, you need a compelling vision. And that’s, that was one of the things that was going on. I figured out later, but I didn’t know why I was depressed, but then I started reading books to get motivated again. So I got Dale Carnegie, Zig Ziglar, you know, all the big name then. But I got a Tony Robbins book and I really enjoyed it. I think it was unleashed the power within. I think it was the book. But um, I think that was it. But anyway, I’m, I’m halfway through. I’m like, man, I like what this guy saying. So I went and saw him live, found out that Tony feeds families for the holidays and I was blown away by that. And so what was happening was I was focused on Rod, Rod, Rod, Rod, Rod, Rod, you know, show the world you’re good enough and you know, it was all about me.

41:47 And whenever that happens, whenever someone is depressed, they’re focused inwardly, they’re focused on their own problems. When you focused outwardly, it’s impossible to be depressed. And so I was successful but I was unfulfilled and there’s a big difference between achievement and fulfillment. I had achieved, but I was unfulfilled. I was not happy. So I got that memo when I went and saw Tony and I’ve now spent 20 years following him around the planet. In fact, I’m going to another event in December that I’ve probably been to 30 times, but really, you know, yeah, but, but I’m learning as earning and you’re always growing. Progress equals happiness. The goals that I’ve built this $8,000,000 house and at two months later I wasn’t happy anymore. It’s not about the goals, it’s about who you become and how you grow and how you progress. That’s how you’re, that’s, that’s what equates to happiness.

42:37 So you know, so I saw Tony Fed family, so I decided to feed five families that year for third family, changed my life. We went up to this house and it was one of these shotgun houses were these old hundred year old property. You walk into the living room, you walk through the bedroom to get to the kitchen. The kitchen had the bathroom often, so like a one bedroom, but not even a very well laid out. One bedroom, um, lady had five kids. It was a lady with five kids in this one bedroom shack. I, we, we got these big boxes of food. We got Turkeys, we’ve got a roasting pan. And I go to the door. She comes out, she sees the food, she starts crying, her kids come out, they start crying, I start crying and I’m hooked. The next year I fed 50 families. Next year after that, 100 than 200 and 400,000, 800 and 1600, I doubled it every year.

43:28 And I’m blessed to say that since then I’ve now fed 60,000 my foundation. I shouldn’t say I, we have fed 60,000 children’s for the holidays. We’ve done probably pushing 20,000 backpacks filled with school supplies to this isn’t Sarasota and Bradenton, Florida, where we’ve given our children don’t have the basic school supplies, school supplies. I’ve done probably 10,000 teddy bears to the local police departments for their officers to keep in cars when they encounter a child that’s been traumatized. And um, it’s been, that’s given me fulfillment. Life’s about giving back my friend. It’s not about success without fulfillment is not success. If you are totally focused on yourself and you’re not giving back in some fashion, you’re not successful. And so, you know, that’s given my life, meaning it was really kinda cool. We, um, I was watching the news about three months ago and they found this little kid, this toddler walking down this major street, didn’t know who his parents were not. I found the parents about three hours later, but they got a picture and it had, he had one of our bears in his hand, which was really cool. That is awesome. So, uh, so what is your biggest struggle right now?

44:41 I am, you know, I, I, I started my podcast with the idea to help people. So they didn’t make the same mistakes. I did never intended to do what I’m doing now. In fact, I used to say on my early episodes, I’ll never sell you anything. I’m just, yeah, I just want to help. Well now I’m a liar because I have, I have courses, I have online courses, I have coaching, I have live guide now. Three sold out live events. We had 410 people in Chicago and I’m going to Atlanta and then Jay, you know, Tampa in January. But my biggest struggle now, which I know what it is, is that I’ve been focused working in the business. I need to work on that business doing very well. We’re helping a lot of people and I just need to get all those ducks in a row.

45:18 So that’s one of my, one of my challenges, another challenge is, um, you know, looking for a, I’m looking for the right people to continue to ramp my multifamily business and some other things that I’m interested in, um, but, and, and, and getting a good team together, uh, to know, to get back to the lifestyle, the time lifestyle that I used to have. I’m working very, very hard right now, but I’m blessed. I’ve got an amazing wife, a beautiful human being inside and out and she very supportive. Uh, but, but I want more time with her. I want more time to travel and do those things. And that comes through systems. I mean every business is nothing but people in systems and I’m good at setting up the systems and I just have to find the time to really focus on that. That’s my biggest challenge.

46:09 Okay. And what is your super power systems for sure systems? No question. I, I’m, you know, I had very few, but that’s one of them systems. So I was able to buy 2000 houses were very small staff. I mean, those were from individual owners, fixed up, renovated and rented with very small teams. Uh, it was all about systems. And what book have you gifted more than any other? Well, mine actually 20,000, 20,000 copies, you know, I’ve given away for free and people are blown away when they see it’s not a fluffy thing. And like, you know, a lot of these other guys, they’ll write a bunch of fluff crap that doesn’t add any value is 200 pages, like a textbook for multifamily investing. It really is good. Um, but as far as the books that I get my coaching students, uh, I just gave away never split the difference.

46:54 Chris Voss, his book about his associates, he, he’s been on my podcast, he’s uncredible grant cardone’s 10 x book is awesome as well. A seller be sold as another one that grant’s books. That’s awesome. Given away the slight edge. Hundreds of copies of that. Of course the movie the secret, you know, I never knew that, that, you know, with the pictures and everything that I was really incorporating the law of attraction. But that kind of validates like, holy cow, that’s what I’ve been doing my whole life when I watched that. What else? A great books. Um, slight edge.

47:27 Yeah.

47:28 Okay. All right. If there was one note, one advice, one action that you will like to leave listeners on, what would that be? That you can do it, that, that don’t underestimate what you’re capable of. I can tell you, I’ve interviewed people on my show that haven’t got anything on anybody, that they’ve just gone out and done it through sheer perseverance. They’re not smarter. They’re not better looking. They’re not anything other than they just took action to do it. They just pushed through their fear. They got uncomfortable. The life you want, that magnificent life you want and deserve is on the other side of comfort. That’s awesome. I think that’s a great way to end it. And so guys, again, if you guys liked this show, please share this episode right now. Oh, is there a way if someone wanted to get ahold of user, but my website has got all kinds of incredible content.

48:16 It’s all free. It’s Rod Khleif.com. Rod K, h l e I f Dot Com. Come listen to my podcast. I, I mean I must be doing something right because I’m down about 20,000 downloads a day, so check it out and uh, I think you get a ton of value. Be Glad you did, but my website has got videos. It’s got the podcast, it’s got a lot of blog articles. I curate content or I write content, just a ton of value there. Uh, and uh, you’ll know if you’re interested in this business, it’s an incredible resource. And then a guys don’t forget, we do have a regular scheduled time, 2:00 tomorrow. Josiah with Kigali. I can talk about how they’re doing 70 properties every single month that you guys for tuning in. And thank you. I appreciate this. My pleasure, Bro. A lot of pleasure. I enjoyed it. Thanks for having me.

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