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

Steve Trang: Everyone. Thank you for joining us for today's episode of Real Estate Disruptors. So we've got Rod Cleef. Am I saying that right? Cleef.

Rod Khleif: Yes, sir. Cleef. Yes, sir.

Steve: The king of multifamily and is here to share how they build lifetime cash flows through real estate investing.

Rod: I don't know about that whole king of multifamily business, but, But

Steve: you're doing pretty good from the research I I I did. So if this is your first time tuning in, I'm Steve Trang, broker owner of Stunning Homes Realty, founder of the OfferFast Homes app, the only app you need for wholesaling. And I'm on a mission to create a 100 millionaires. So please private message me if you ever need any help with any of your business. 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. I don't make any money doing this. So here's all I ask. This is all it cost for you to listen to this show.

If you get value out of this show, please tell a friend. Either share this episode right now, tag a friend below, or tell them your best takeaway 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. Rod would be happy to answer them for you.

Are you ready?

Rod: Are you ready? I'm ready.

Steve: You ready?

Rod: I'm ready.

Steve: Okay. So what got you into real estate?

Rod: Well, let me go back. I immigrated to this country when I was six years old. My brother, Albert, my mother's Vancha, and, we ended up in Denver, Colorado. Didn't have a lot of money. Mhmm.

In fact, for my first ten years here in The United States, I worked close from the Goodwill. My, 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 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 broker's license Oh. When I turned 18,

Steve: which

Rod: 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 gonna 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.

Didn't give me any business, of course,

Steve: but it

Rod: made my mom proud. But, and so I made about $10 my first year in real estate. Now my second year, I made maybe 12 to $15. But my third year, I made over $100, which back in 1981 was a decent chunk of change. So what happened between years two and year three?

And what happened was mindset. You know, I on my podcast, I talk about the psychology of success, how 80% of your success in anything is your psychology or your mindset. Only 10 to 20% 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 that started to teach me about mindset.

And, you know, so fast forward to today, I've owned over 2,000 houses that I've rented out long term multiple apartment complexes in three states. And, you know, I've had a lot of ups and downs. And

Steve: Oh, we're gonna talk about the ups and downs.

Rod: Oh, we are? You're gonna you we have to go there. Okay. Well, I've had a lot of ups and downs, and, I've learned from them. I call them seminars.

They're never failures. Excuse me. Only a failure if you don't learn anything, and you typically always learn something. So I've had plenty of seminars. Some have been bigger than others.

But, 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. Yeah. Because in 2006, my net worth went up $17,000,000 while I slept, a little more than my mom's $20.

In fact, if you wanna do the math on that, it's a little over 8,000 an hour, okay, for the whole year. And, you know, which is great. Feeling pretty good. And when they feel pretty good, good, you

Steve: get a big

Rod: head, you think

Steve: you can

Rod: conquer the world.

Steve: You know everything.

Rod: Yeah. You know everything. You're a real estate god. And, and then, you know, whenever you do that, life, the universe, God, whatever you believe in, will give you a smack down. Mhmm.

And that smack down for me was 2008. And I ended up losing that 17,000,000 and a whole lot more. I ended up losing $50,000,000 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 already back, and I'm back very you know, I came back very quickly, because they're 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, I'm a member of several masterminds.

I even put on my own mastermind now. But, in one of the masterminds I was in, I met Sarah Blakely, the billionaire owner of Spanx. She started with $5,000. Now she's a billionaire. She was 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. Mhmm. Isn't that an awesome question?

Steve: It

Rod: is. Yeah. Because because it's never a failure and you if you're afraid to try anything, you're never gonna get anywhere. People fail their way to success. Right.

And, so there you have my my big flaming seminar. That was the big one. I've had other ones, but that was

Steve: So I heard that you made 17 in one year. Mhmm. And I heard you lost 50. So I'm assuming that was all the equity, or was that including the

Rod: 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. Mhmm. My apartment complexes did just fine, and they would have survived if I hadn't cross collateralized them with the houses. So they would the whole thing imploded, but I would still have the the apartment complexes if they hadn't been cross collateralized.

So that's my message. And I I wrote a book, which I'm happy to share with your listeners that about 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 this morning. It's kinda funny. I was in front of a microphone all morning recording the first 100 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 $17,000,000. I wasn't paying attention to cash flow.

Steve: But you can't do anything with the equity anyway.

Rod: Well, you can't. But especially when the market, tightens up so you can't sell or refinance. Because, see, I was selling a house occasionally or refinancing a house occasionally just to offset that little bit of a negative that I had. Now you're wondering how with 800 houses was were those houses negative? The reason that they didn't cash flow was 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 I had a lot of, heavy duty insurance. I had wind insurance and flood insurance, which can be very expensive.

Steve: Mhmm.

Rod: So that impacted cash flow. But the third, probably the biggest reason, was I had houses two hours north and 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'd 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 Lowe's or a Home Depot, which could be half hour away.

Yeah. They'd buy the parts. They'd come back. They'd get into it. And then you know how these things go.

Then they'd figure out they need something else. And they would, you know, what would take thirty minutes in an apartment complex where you can stockpile parts Mhmm. Could take all day. And you multiply that times 800 and consistently, and it just it was it just didn't quite catch up.

Steve: Efficiency issues.

Rod: Yeah. Yeah.

Steve: Okay. So you lose $50,000,000, which for a lot of people is a lot of money.

Rod: For everybody,

Steve: it's a lot of money. Yeah.

Rod: So how

Steve: do you recover? What, like, what were the first things you did when that happened?

Rod: Well, I'm gonna probably tell you, I I I know where you're going, and and what you think I'm gonna say is probably not gonna be what I say. It really wasn't about my knowledge of real estate 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 what 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, to help with this process.

Steve: And do you

Rod: want me to get into that?

Steve: Oh, yes, please.

Rod: Okay. So, it 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. Pick it the time of the day that you're have a lot of energy and you're not gonna be interrupted, and sit down and write down everything you could ever possibly want in life.

Okay? I mean, of course, the stuff, the houses, the boats, the cars, the jet skis, the planes, all the 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 wanna go, who you you know, and all that. But beyond just the stuff and the money, write down what you wanna learn. Me, I wanna learn how to fly a helicopter, and I I got some drums. I'm gonna learn how to play the drums.

Write down who you wanna help. You know, I I've I've started a foundation. I can get into that later if you want.

Steve: But It's actually down there. I won't

Rod: request it later on. So so so figure out who you wanna help, you know, what you're gonna stand for. Write all that down. So it's not just the stuff. It's everything you wanna do, 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 till you can't think of another thing. The 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 gonna take. One, three, five, ten, twenty. 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, 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.

But then what you must do is you must write down a paragraph for each one of those goals why it's an absolute must because it's the why that's gonna 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. So write a paragraph for 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, 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 or, you know, thinking this is all fufu, I'm here to tell you it's not. This 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 and knowing what it is you want.

So then go out there and find pictures of of what it is you want. Find, you know, pictures that go on Google. Find pictures that resonate with you, associated with your goals. They don't have to be exact, but when you see them, they kinda stir you. Pull those out.

Go to Walgreens or CVS. Have them blown up, and put them where you're gonna 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, I 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?

Steve: Right. Right.

Rod: So, I worked with a guy that had a Corvette, and he let me drive it. And that was a key thing. It was experiential. So I got to drive that. I'm like, oh my god.

This is so cool. So this is way before the Internet. You couldn't even spell Internet back then. They had magazines. Okay?

So I 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 car examples because it missed my life. Now please know I'm not bragging because this stuff doesn't even interest me anymore. But this this will hopefully I can appreciate it.

I'm a car guy, so Okay. Alright. Alright. So this was back when Magnum PI was out. It was a TV show with Tom Selleck, and he drove this Ferrari three zero eight, gorgeous red Ferrari.

I got a picture of that actual Ferrari and put that on the visor of my Corvette. Within a couple years, I had a Maserati. It looked 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 what's astounding is he had a model of the exact color and style that I ended up getting, which I ultimately wrecked. But but, 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 thirty years, and but I knew I always wanted to live on the beach. I mean, I I would dream about palm trees, and we would travel occasionally to tropical places. I'm like, man, I've gotta 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 twenty years, but I built an incredible home on the beach. I mean, eight million dollar, 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.

Steve: Mhmm.

Rod: 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% of the time, but it always ends up in the right place. So they're always making course corrections.

Steve: Right. So if

Rod: you know what it is you want and why you want it, you may have to change your approach. And if that doesn't work, you change your approach again and rinse and repeat. Change and approach change your approach, and you'll ultimately get to where you wanna go as long as you keep that goal in your mind's eye.

Steve: So how long then when you you know, after the crash Mhmm. Did you feel sorry for yourself? How long did you feel much?

Rod: 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 are 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. And I had a story, you know, woe is me.

I lost $50,000,000. Woe is me. But I I ultimately picked myself up and remembered to focus on what I wanted. You know, I wish I'd have brought my planner. If I'd have thought that we were doing this visually, I would have brought my planner.

In the back of my planner are pictures that have been in there almost twenty years. This is a picture of the Lamborghini before I got it. Pictures of watches. I have a couple $100,000 worth of watches. The Rolls Royce, all the stuff that I got because I had pictures.

So those of you that are going, oh, this is foofy stuff, I'm here to tell you it's not. Okay? So you're making a mistake if you don't, you know, really visualize what it is you want. And, I recommend you do it with gratitude. And and I do a little morning ritual every morning where I sit and I, you know, I have my vision boards next to me, and I'll look at them.

And, and I'll visualize these things that I want as if I already have them with emotion, with gratitude. It's incredibly powerful.

Steve: Absolutely.

Rod: Yeah.

Steve: So then couple of months of misery.

Rod: Mhmm.

Steve: And then how long till you get back to

Rod: Well, what I did was I I made lemon lemonade out of lemons. So I was in foreclosure all over the place. So I found out that, you could actually you know, the banks created that crisis. I mean, don't don't if you could fog a mirror in o six, you could borrow money. And and so, you know, Wall Street and the banks created that mess that turned into a nightmare for everybody.

So I'd so I wanna pre frame 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. I created a litigation support company that I actually just sold last week. It was a $10,000,000 company, and and it wound down, and I sold it last week, but I helped probably several thousand families save their homes.

Oh. Yeah. So, 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, you know, it's kinda funny. I I now I I've got an amazing new wife.

I I I went through a divorce as part of all this as well, and my wife is is the 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. You know? And I have to look out my back door and see it, but, now life is good, my friend.

Steve: Okay. So then, so you did the fighting foreclosures thing, and then you bent back to buying acquiring properties again.

Rod: Mhmm.

Steve: And at some point along the way, you you you got the wisdom or the, the the hindsight that multifamily was much better return than single family.

Rod: So Well, I just based on my experience. I mean, my single families are what pulled me down. My multifamily would have been just fine. So, you know, 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. Mhmm. At least do that. Don't do houses.

If you're if you're buying for long term hold, that's this is this is my, opinion, but, you know, it's backed up by what I went through.

Steve: And so

Rod: so, and then if you can go larger, go larger. Now now we're in a really hot market right now, so it's it's hard to find deals. But but they're out there. I mean, we're we're working four deals right now, anywhere from 48 units to 540 units right now. But, you know, look, 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 to 41411, and we'll send you a copy for free. Happy to do that for your listeners.

But if, and but if you're thinking real estate, don't dabble. Mhmm. And I'm sure you talk about this on your show. Dabblers get crushed. You gotta study it.

So read my book, listen to your podcast, listen to my podcast called Lifetime Cash Flow. You know, we're, pushing four and a half million downloads, so people really enjoy it. And I in my show, I interview, like I say, people that just have a couple 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 that's 90% of it.

Steve: So then let's pretend I'm brand new,

Rod: and it's

Steve: like, hey, Rod, I wanna start investing in real estate.

Rod: Yep.

Steve: What advice do you give to that new person?

Rod: Person? Study. 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 I do three day live events. I've got one coming up in Atlanta right around the corner, November.

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. Come see me for three days. You'll leave knowing everything you need to know to buy an apartment literally in ninety days. In fact, that's the title of my of the of the event, how to buy an apartment building in ninety 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 big 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 gotta 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. So it's pretty objective. It's not that subjective, and the numbers are the numbers are the numbers. So, you know, the people that the people that fail

Steve: guidelines?

Rod: 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 gotta 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, it's like Domino's. They just they just fall after that. The first one takes the longest and it's the hardest, but, guidelines. Yeah.

There there are there are

Steve: several real quick. It was 41411?

Rod: Yeah. Just text the word rod to 41411, to get my free book. If you're interested in my boot camp, I'm gonna be in January I'm gonna be in Tampa in January, and like I said, I'm Atlanta November. Text multifamily to 41411, and we'll send you the information about the boot camp.

Steve: Okay.

Rod: But as far as some some basic financial, parameters for evaluating property, you know, without getting too technical, people look, investors, and that's the other thing about multifamily real estate, particularly if you go above four units. If your five units are higher, it's considered commercial multifamily. And what's great about that is the value is based on a multiple of the net operating income.

Steve: Mhmm.

Rod: In duplexes, triplexes, and fourplexes, the value is based on comparable properties. So what did other plexes sell for? But when you go five units or higher, the value is based on income, and that's something within your control. So if you can increase the net operating income by either raising the rents or decreasing the expenses, it's exponential as to the impact that it has on the value. So, you know, it's just a fantastic business.

The other piece about it that's fantastic is it's a team sport. So when you buy five units or more, the bank's 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 to show net worth. You can have another person that has money in the bank for the liquidity piece, and they're gonna 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, to to for the equity piece, which is the down payment and the and any, you know, operating funds and closing costs and and and renovation costs called capital expenditures or CapEx. They find investors to put up that money. They they coordinate the whole deal, and they end up with a nice piece of the deal. So there's a way to get in this business with little or no money, and that's not that's not, you know you know, a sales pitch.

It's it's reality, and a lot

Steve: of guys do it. Threshold is not as bad as or it's a lot looks a lot more intimidating than it really is.

Rod: So so it sounds like anything that you don't know, it's more intimidating. I mean, it 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 a 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, regs that they've come up with to to just buy a single family home, it's just become very cumbersome. It's probably easier to buy a 10 unit, seriously.

Yeah. 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, 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. Mhmm. And so you find somebody that, that, say, owns a 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 a 100 units, and we're interested in looking at yours. So you you hang your hat with them and use the we word, and it gives you instant credibility. That's how everybody does it in this business.

I'm probably getting a little too technical for you, but No.

Steve: That's exactly what we're looking for because, what we do a lot on this show is talking about about sourcing deals.

Rod: Mhmm.

Steve: And so that's the other part is everyone's talking about not everyone, but a lot of people are curious about apartments Mhmm. But they don't know where to get started.

Rod: So Well, they they there there's several ways to get started. Obviously, you've gotta educate yourself. You wanna grassroots it and bootstrap it, listen to podcasts, read books. Mine's free. It's a no brainer.

It's like a textbook. Start there, but then get out there and have brokers start sending you deals so you can evaluate deals. And and, you know, repetition is the mother of skill. I had Grant Cardone on my show, and he spent he's a big sales guy if you don't know who he is.

Steve: Oh, yeah. Everyone knows Grant's.

Rod: Okay. Well Yeah. 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, he he studied this business for four 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 study it a little bit. It's not hard, but but you but you gotta 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 you know, 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. Mhmm. So you just start putting all that together. And the more you focus on your competence, the more it's gonna build your confidence.

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 fifty fifty, and I bought a ton of property that way. And everybody was happy.

So, you know, that's that's not hard to do if you if you're out there finding deals.

Steve: So the harder part, is it finding sponsors or finding the the multifamily that

Rod: Finding sponsors is not hard. Okay. I mean, I've got in my coaching students, I've got coaching students, that there's probably almost 10 of them in there that can sponsor deals. We sponsor deals. I just raised 5,000,000 for a person's deal up in Ohio.

We raised the money too. There's like I said, there's a lot of money looking for deals. Mhmm. And so, you know, it's

Steve: So then finding the deals.

Rod: Finding the deals is the hard part right now.

Steve: Okay.

Rod: Yeah. It's and 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. Right.

Steve: And

Rod: you can spend a lot of time when 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 gonna 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 deal or two. They only have to do it for a deal or two. 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 you gotta satisfy three things. You gotta satisfy a bank. You gotta satisfy 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 gonna give them a piece of the deal.

So what if you only have 10%, 20%, 30%, 40% of the deal? That's how you get started. Yeah. So, you know, that's how everybody gets started. And I don't know about you, but I'll take 10% of something or 50% of something over a 100% of nothing.

Well, 10%

Steve: of a 100 doors. I'm that's all day.

Rod: That's not a chunk of chain that's not a small chunk of chains. That's right. But even if you start smaller, it doesn't matter.

Steve: Right. So as far as finding the deals then, I mean, are you are you cold calling? I mean, it sounds like you could

Rod: find a broker. Lots of strategies for finding deals. Number one, obviously, is broker relationships. If you can if you can, you know, 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 in 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, 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 normalized the expenses, and the cash on cash return that I came up with was x, and, I really need y. So I appreciate you sending it to me, but, you know, that one's not gonna work for me. Please keep me in mind for other ones. That's a lot better than not responding at all or just saying, 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. Mhmm. And so, excuse me, you're gonna 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. We do mailing campaigns.

Unlike most people that'll buy a list off a list, you know, list from a list broker, we actually go right into this assessor's office. We pull our lists. We do our searches. We pull lists of people. And what you'll find is that most of those properties 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.

Steve: But

Rod: under 50 units, we'll 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. Goes straight

Steve: in the trash.

Rod: Goes 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 mail them at their home addresses. Makes a huge difference. And then, you know, you hand address the envelopes, you type up the letters, you put the property address in the first sentence so that the owner sees that and they recognize their address.

And that's a strategy that works very, very well. And the key with mailing is you've got to be consistent. You can't do it once. So you need to do it 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 you have to be consistent.

So that's another way. Another way is to get lists of owners that are in eviction. You know, an owner when they're evicting clients is not a happy owner. Or get lists of people that have code violations, you know, on their properties and contact them.

Steve: We did that with a fiveplex the other day.

Rod: There you go.

Steve: Last month.

Rod: There you go.

Steve: Code violation.

Rod: There you go. I mean, if, you know, they're they're getting hassled by the city or the county, they're not happy. And Man. You're catching them at the right time. You gotta see, the key is motivation.

And and right now in this hot market, the best deals are 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 overpriced. Mhmm. 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. Because 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 gonna turn again. It it goes in cycles.

Cycles. I've been through I've been through several of them. Not as bad as o eight, but I've been through a couple other pretty bad ones. And and when the market turns, there's gonna 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 gonna kill it.

Steve: Yeah. No. That makes a lot of sense.

Rod: Yeah.

Steve: So what would you tell someone that's nervous, got a lot of fear, and how how do you get them over the hump and take massive action?

Rod: Goals. Gotta do the goals and the whys. You gotta have the you've gotta have the, the drive to do it. You gotta want it. Okay?

You've gotta 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. And the only thing that's gonna 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 you gotta get the driver first. Okay? Then you've gotta study this business. Don't dabble. Learn.

Listen. Read. Do what align yourself. Go to real estate investor club meetings. You know, listen to to your podcast, to my podcast.

I have incredible knowledge. I mean, I've I get I have a wall as big as a wall behind you covered with hundreds of thank you cards from people that have just listened to me and bought properties. Forget the coaching students that 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 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 3,000,000,000 in assets represented, in this group of of guys. And, And, you know, these guys, many of them have started with full time jobs. They now have 2,000 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

Steve: It's very interesting. Right? Because the idea is, from, you know, on the outside looking in, is you wanna start small. You wanna get some multifamily. Mhmm.

At some point, you cash that in. You get a down payment for a for an apartment complex.

Rod: Well, you you that's that's the common thought process, but you don't need the down payment.

Steve: Well, that's that's that's what's interesting.

Rod: You 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 I'm just there's so much money looking for deals right now. I I can tell you just in my coaching group, if you found a deal, you know, I think just in that group, you we could we could probably raise $10,000,000 in couple of days.

I mean, there's that much money looking for deals right now. And, you know, because they're getting 1% in the bank. And and who knows, you know, the the stock market is volatile, 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 feels like it is. It's frothing. I'm just telling you. I've been there. I see the signs.

I I ignored them last time, but I I recognized them this time. And, you know, and and it's coming.

Steve: So 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 on the sidelines?

Rod: 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, and you put a whole package together. And 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?

Steve: Mhmm.

Rod: That's it. It's that simple. And and and you start getting soft commitments for money. Yeah. If you find a deal like that, I'm in.

10% return, you bet I'm in. Okay? And then you're 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 shops, so you learn the nomenclature. 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 that you're new, and you 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.

You're 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 and, you know, you just gotta do it. That's the bottom line.

You're asking me the question, just do it. Like Nike says, just do it. Yeah. See, you know, you know what to do. Everybody that's listening knows what to do.

They just have to do what they know. Bottom line.

Steve: So you mentioned team. Right? Putting a team together. So what does a team look like?

Rod: Well, it's the people I've some of the people I've talked about. You need a broker. Mhmm. You need, you need, you need to align yourself with people with money. So, you you know, if they stand still long enough, they should know what it is you're doing.

Okay? You should be, you know, you should hit develop an elevator pitch that something along the lines like, 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% return, let me know. And start collecting names.

And then you put them in an Excel spreadsheet, or you go set up a CRM like zoho.com or Really Simple Systems. Those are free, and you start keeping track of these people. 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, you learn how to normalize expenses because a lot of the stuff you'll get is BS. So you gotta go through it and clean it up, and then and then, you know, see if it makes sense.

And Yeah. And you just mix it up. You go out there, you look at deals, you meet brokers, you and it just that's how you learn it. And and there's no shortcut, 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? Because life's too freaking short to not do what you love. Okay? So either either love it or learn to love it. And and, see, I I tell people equate it to hunting for treasure.

When you're out there looking for deals, just equate because that's really what it is.

Steve: Oh, yeah. Yeah. That makes sense. That's a great analogy.

Rod: 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, but love what it is you do. Life's too short, man.

Steve: That's that's great great advice. What about what would you do if the market dips? It sounds like you you feel like this is market for

Rod: dips, it's gonna dip. Trust me. It's coming. There's no question. And and and and it's not something to be afraid of.

Mhmm. Okay? With crisis comes opportunity. Now, see, I was under a rock hiding when it happened last time. If I'd had my my act together, I'd be on the back of my yacht right now because the opportunities were exponential.

Yeah. You know, I interview guys on my podcast that now have a 2,000, 4,000 units, and you can set your watch to this. Almost every one of them started in o 09/10, or eleven. 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 gonna happen. I lost my what was the question? No.

Steve: No. That was it. Okay.

Rod: That

Steve: was that was perfect. So, so in doing research about it, I saw that you're involved with the Tiny Hands Foundation. Can you talk about that?

Rod: So let me back up because because I can I I can really, I think, tell you how that came about? So I built this you know, I told you about this house that I wanted, and I built this giant 10,000 square foot, gulf to bay, beach on one side, my boat's on the backside, this giant home, magnificent. I mean, waterfall from the 2nd Floor into the pool, elevator, 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 butt together.

Just a magnificent, magnificent home. So I'm I'm floating in this pool that was in magazines. It's just an incredible pool with trees coming out over it. 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. Warm. 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 it.

My family's inside sleeping, and I got depressed. And I'm like, what is going on? I I mean, I did it. I built this incredible house. I'm you know, you know, for all practical purposes, I was a a huge success financially, but I was depressed.

And when I look back on there were two things going on, and that's and I'm really

Steve: glad to go

Rod: ask the question. This was, 2,000.

Steve: Okay.

Rod: 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. You need a vision for the future. You need a compelling vision.

And that was one of the things that was going on. I figured out that 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 names. But I got a Tony Robbins book, and I really enjoyed it.

I think it was Unleash the Power Within, I think was the book. But I think that was it. But anyway, I'm halfway through. I'm like, man, I like what this guy's saying. So I went and saw him live.

Found out that Tony feeds families for the holidays. Yep. 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. 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 I got that memo when I went and saw Tony, and I've now spent twenty 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 is earning, and you're always growing. Progress equals happiness. The goals like, I I built this $8,000,000 house, and then two months later, I wasn't happy anymore. It's not about the goals. Yeah.

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. So, you know, so I saw Tony fed family, so I decided to feed five families that year. Third third family changed my life. We went up to this this house, and it was one of these shotgun houses where, this old 100 year old property, you walk into the living room, you walk through the bedroom to get to the kitchen.

The kitchen had the bathroom off it. So like a one bedroom, but not even a very well laid out one bedroom. 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 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, a 100, then 200, then 400, then 800, then 1,600. I doubled it every year. 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 on the holidays. We've done probably pushing 20,000 backpacks filled with school supplies to this is in Sarasota and Bradenton, Florida where we've given, children who 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. Mhmm. And, it's been that's given me fulfillment. Yeah. 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. Yeah. And so, you know, that's given my life meaning. It was really kinda cool.

We, I was on watching the news about three months ago, and they found this little kid, this toddler, walking down this major street. Didn't know who its parents were. Now they 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.

Steve: That is awesome.

Rod: Yeah. So

Steve: so what is your biggest struggle right now?

Rod: I am you know, I've 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 you know, I just wanna help. Mhmm.

Well, now I'm a liar because I have, you know, I I have courses. I have online courses. I have coaching. I have live got now three sold out live events. We had 410 people in Chicago, and I'm going to Atlanta and then, 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. So that's one of my one of my challenges.

Another challenge is, you know, looking for, looking for the right people to continue to ramp my multifamily business and some other things that I'm interested in, but and and and getting a good team together, to, you know, to get back to the lifestyle, the time lifestyle that I used to have. I'm I'm working very, very hard right now, but I'm blessed. I've got an amazing wife, beautiful human being inside and out, and she's very supportive. But but I want more time with her. I want more time to travel and do those things.

And and that comes through systems. I mean, every business is nothing but people and systems.

Steve: Absolutely.

Rod: And 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.

Steve: Okay. And what is your superpower? Systems, for sure.

Rod: Systems. No question. I I I'm you know, I have very few, but that's one of them. Systems so I was able to buy 2,000 houses with very small staff. I mean, those were from individual owners, fixed up, renovated, and rented with very small teams.

It was all about systems.

Steve: Okay. And what book have you gifted more than any other?

Rod: Well, mine, actually. Actually. Probably twenty twenty thousand twenty thousand copies, you know, I've given away for free, and people are blown away when they see it's not a fluffy thing. Like, you know, a lot of these other guys, they'll write a bunch of fluff crap that doesn't add any value. It's 200 pages, like a textbook for multifamily investing.

It really is good. But as far as the books that I give my coaching students, I just, gave away Never Split the Difference, Chris Voss's book about negotiation. Yeah. He he he's been on my podcast. He's incredible.

Grant Cardone's 10 x book is awesome as well. Seller Be Sold is another one of Grant's books that's awesome. Giving 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.

Oh, yeah. That kind of validates, like, holy cow. That's what I've been doing my whole life when I watch that. What else? Great books.

Slight Edge. Yeah.

Steve: Okay. So if there was one note, one advice, one action that you would like to lead our listeners on, what would that be?

Rod: 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.

Steve: That's awesome. I think that's a great way to end it. And so, guys, again, if you guys like this show, please share this episode right now. Oh, is there a way if someone wanted to get a hold of

Rod: you, is there a best way to My website has got all kinds of incredible content. It's all free. It's rodkheif.com, rodkhleif.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 I think you'll 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. And, you'll you'll if you're interested in this business, it's an incredible resource.

Steve: Okay. And then, guys, don't forget, we do have a regularly scheduled time, 02:00 tomorrow, Josiah with Keely. They're gonna talk about how they're doing 70 properties every single month. Thank you guys for tuning in, and thank you. I appreciate this awesome.

My pleasure.

Rod: My pleasure, brother. Lot of fun. My pleasure. I enjoyed it. Thanks for having me.