One of the most critical things that separate successful people from those who are not is the mindset. No matter what vehicle, be it note buying, real estate, and entrepreneurship, all of it comes down to how you think and manage your focus. In this episode, Jamie Bateman has the perfect guest who can help us get our mindsets in the right direction. He sits down with seasoned and passionate real estate investor and the Director of The Lifetime CashFlow Academy, Rod Khleif. Rod teaches some great habits, strategies, and tips when it comes to goal-setting and visualization while breaking down the steps and misconceptions about achieving them. He then shares a couple of great resources that we can use to help with our mindset, showing just how much we’ve yet to tap within ourselves to succeed beyond what we think how.
Listen to the podcast here:
The Success Mindset: Manage Your Focus With Rod Khleif
I’m joined by Rod Khleif. How are you?
I’m good. I appreciate you having me on.
No problem. Let’s get into your backstory if you don’t mind.
If I go back a little bit and talk about what happened to me, it will add value and lend a framework. I immigrated to this country when I was six years old with my mother and my brother, Albert. We ended up in Denver, Colorado where I lived for more than 30 years. When we got here, we struggled. I wore clothes from the Goodwill and the Salvation Army all the way through junior high school till I lied about my age. When I was fourteen, I got a job at Burger King and bought my own clothes, and I bought a car when I was fifteen. I wasn’t even old enough to drive it. We ate expired food. We drank powdered milk because it was cheaper than milk and she thought milk was healthy and on and on.
I’m sure there are people reading that may have had it harder than we did or maybe have it harder than we did now with COVID and everything that’s going on. Back then, I knew I wanted more, and luckily, my mom had an incredible work ethic. She babysat kids, so we’d have enough money to eat. With her babysitting money, she was a bit of an entrepreneur. She invested in the stock market, but she also started buying real estate. She bought the house across the street from us when I was fourteen for about $30,000. When I was seventeen, she told me she made $20,000 in her sleep that had gone up in value. I’m like, “Screw college. I’m getting into real estate.”
Screw Burger King.
I was eighteen at that point. Burger King was long gone. The point is I was going to be rich in real estate. At least I thought. I got my real estate broker’s license when I turned eighteen. Back then, you could do it with education. Now you need some experience. They got smart. You have to have some experience before you can be a broker. When I turned eighteen, I could own my own office and everything. In my first year in real estate, I made about $8,000, and in my second year, maybe $10,000, but in my third year, I made over $100,000, which back in 1981 was good money. One of the things I enjoy talking about is the mindset it took because that’s what the difference was between year 2 and year 3.
I met somebody that taught me about mindset and psychology, how 80% to 90% of your success in anything is your mindset, the vehicle. Be it note buying, real estate, entrepreneurship, or whatever it is. It’s the smallest piece of it. If it were knowledge, there’d be a bunch of wealthy librarians and college professors out there. It’s the do and it’s the keep doing. I met a guy that taught me about that back then. Fast forward to now, I’ve owned a couple of thousand houses that I rented long-term, multiple apartment complexes. In 2006, my net worth went up to $17 million while I slept. If you want to do the math on that, it’s $8,374 an hour in the course I did.80% to 90% of your success in anything is your mindset. Click To Tweet
I got a head so big that I could barely fit it through a door. I thought I was a real estate God. When that happens, God of the universe will give you a good little smackdown. That was a wake for me. I lost that $17 million a lot more. I lost $50 million in 2008. One of the things I enjoy talking about is the mindset it took to have $50 million to lose in the first place, and then the mindset it took to get back to the success that I enjoy today. I’d love to drill down on that with you. Let me say one thing as it relates to where we are with this COVID nonsense. If you’re reading this, you’re a leader, frankly. You’re not a follower and the world needs leaders. As a leader, it’s critical that you manage your focus. It’s easy to get sucked into the fake news and all the crap that’s out there and get buried in it.
I would tell you to stand guard with your mind and only bring in the good stuff, motivational stuff, things that you’re interested in, and things around your goals because whatever you focus on is going to get larger. Be it positive or negative. The world needs leaders and maybe you’re just the leader of your family but people are watching you. It’s critical that you manage your focus so that you’re focused on the things that you want and not what you don’t want because what you focus on gets larger. I love the example of Mother Teresa. They asked her if she wanted to go to an anti-war rally and she said, “No. If you have a pro-peace rally, I’ll go.” It’s just a play on words, but the bottom line is that that’s the perspective of focus.
Our show is primarily about typically, the first position mortgage notes, but as both of us grow our portfolios, and Chris’ is frankly larger than mine, but you move in more toward mindset stuff. How do I grow this? Not how do I make money on a particular deal? It’s more about leadership and mindset. I find myself as an example. BiggerPockets has a bunch of podcasts. I find myself not listening to the real estate podcast. They have one on Sundays that’s more about mindset, business, and leadership. That’s interesting you bring all that up because that’s where my headspace is. I’m reading some books on that topic, so that’s critical.
Let’s talk about it. Let’s drill down if you don’t mind. What it’s all about is focus. Let me share a process that I take people through at my live events. I was supposed to have 800 people in Orlando in May of 2020, and we all know what happened with that, so I pivoted. This another thing I want to talk about is as a leader, sometimes you have to innovate or pivot. If you go to MultifamilyVirtualBootcamp.com, you’ll see me in my backyard with my phone recording the video. We put a website up in two days because we were freaking out. What are we going to do?
Our business is around training and we had people that had paid for the event and everything else. We pivoted to online and we had 900 people at the online events. It’s the largest grossing event we’ve ever had. We’ve done 2 or 3. I’m building a video studio here and one of the other buildings in my compound. I had to innovate or pivot. Let me say this to you that are reading. Maybe you need to innovate or pivot. Maybe you need to shift gears and reevaluate what it is you’re doing. I’m going to tell you that some of the biggest companies in history were built in times like this.
If you wanted to chat about my view on economic conditions, we’re headed for some serious pain. I did a YouTube video on the Coming Real Estate Crash of 2021. I’m sure it will be 2022 or ‘23. It was the highest watched YouTube video I’ve ever done because it was negative, of course. We’re up to 70,000 to 80,000 views. People love negative news which is why the news does well. The point is I don’t think you can have the unemployment that we’ve had and not have some fallout. In fact, one of my favorite things to do with my wife is to go to this place called CinéBistro, where you go and watch movies and they feed you. It’s a high-class movie theater.
I was going to take her, but I discovered they filed bankruptcy and now it’s a new company. We’ve gone to these places that had lots of retail like South Beach Florida and 1/3 of the retail is forever gone. Iconic restaurant’s gone. I went to Vegas and there’s so much pain there with the casinos. We’re headed for some pain. We’re going to have a correction and it could be significant. I’ve had some prominent economic people on my podcast. For those of you who don’t know, I’ve got a podcast that teaches multifamily real estate investing called Lifetime CashFlow. I’m blessed to say it’s the largest commercial real estate podcast in the world. We have over 10 million downloads.
I can say that I’ve listened to many episodes of it and it’s well worth the listen.
Thank you for that. We’re headed for some pain, but back to mindset, even I went negative there. At my live events, I do this process and it takes about 1.5 hours. I call it Goal Setting on Steroids. Let me describe it to you. If you have the ability to take some notes, you’ll get value from this if you do. How the heck are you going to get anything if you don’t know what it is? You’ve got to know what it is with clarity and that’s critical. This is how I had $50 million to lose. Some people never recover from that. People jumped out of buildings for that amount of money, date proportion in the ‘20s.
It’s a lot of money.
I’m back. How did I get back? This is how. What I want you to do is pick an hour when you have a lot of energy. Don’t do it after a big meal. Make sure you’re well hydrated. Sit and write down everything you could ever possibly want in life. I’m not talking about New Year’s resolutions. I’m talking about everything like houses, cars, boats, jet skis, and planes. I was looking at the Robb Report magazine and private islands have taken off. People want their own. Here’s the thing that I want to tell you. Take the lid off your brain. If you can imagine it, you can have it, but you’ve got to believe you can have it.
If you want a private island, a yacht, a jet or whatever it is, write it down because there’s truly nothing you can’t do, be or have. Write down everything. Write down how much money you want in the bank, say in 3 years and in 10 years, and how much cashflow you want from your investments. If it’s known investments, how much passive cashflow do you want from those investments, say in 3 years, and then again in 10 years. Write down all the things that you want to do in this lifetime. I’m talking about your whole life. Maybe you want to write down the places you want to travel to. Maybe you want to climb all the mountains over 14,000 feet. Write down all the things you want to do.
Maybe you want to skydive or jump out of a perfectly good airplane. I did that and I’ll never freaking do it again. It’s off the list. What is it that you want to do? Write it down. Also, write down everything you want to learn. Maybe you want to write a book, too. I always mention that. The things that you want to do to build yourself up, but also write down what you want to learn like a skillset. You’re reading this podcast to learn about note investing. If you want to learn multifamily, come listen to mine. I’m doing a bootcamp in February 2021. I’ll give you a code. You can come for $97. I don’t sell anything there. It’s two full days of training. It’s 16 to 18 hours of training and nothing is being sold.
I can get you in there for $97 if you’re interested in real estate. If not, then no. I know your audience is mostly note buyers, but if you’re interested in multifamily real estate, I promise you you’ll be glad you spent a couple of days with me. It’s a no brainer. I’ve never gotten any complaints except that the breaks are too short. That’s the only complaint I’ve ever gotten because I try to pack so much in. Anyway, write down what you want to learn, a skillset you want to learn, a foreign language, or whatever it is. Lastly and probably most importantly, write down who you want to help because we’ll do more for others than we’ll ever do for ourselves. You want to write that down.
I bought my parents a house here in Florida on a canal. I bought them a car and took them on cruises. Who do you want to do something for? Your children, extended family, or whoever it is, write it down. If you’re analytical, which I’m sure a lot of you reading are, don’t stop and analyze it. Keep going. Don’t let the pen leave the freaking paper. You can always go back and scratch it out later. Don’t stop and keep writing. Once you can’t think of another thing, the next step is to write a number for each goal. How long do you think it’s going to take you to achieve it in years? You’re going to put a 1, 3, 5, even a 10 or a 20 next to each goal. Don’t overthink this either. Those of you analytical ones, don’t stop and take forever to try to figure out if it’s going to be 2.5 years or 3. Just put 1, 3, 5, 10 and 20.
Recognize that as human beings, we will overestimate what we can do in a year and massively underestimate what we can do in 5, 10, 20 years. I’ll give you an example of this. When I was eighteen, I lived in Denver but I knew I wanted to live on the beach and there’s no beach in Denver. I would visualize the palm trees, the surf and the beach. I would visualize living on the beach and twenty years later, I built this incredible mansion on the beach. A 10,000 square foot, $8 million house at the beach on one side and boathouses on the backside. This house was spectacular, but it was unthinkable when I was eighteen.If you can imagine it, you can have it, but you've got to believe you can have it. Click To Tweet
I’m not trying to brag about this. I want to inspire you to not limit yourself because by just simply writing down your goals, it triggers something in your brain called the reticular activating system. It’s subconscious. You’re not even aware of it. Subconsciously, it points you in the direction of what it thinks you’re interested in. The greatest example of that is when you buy a car. You never notice them, and then they’re everywhere. They were here before. You just weren’t paying attention to them. That’s your reticular activating system. The same thing goes for your goals. Once you’ve got these time limits on all the goals, a couple more quick steps, you need to pick your number one goal.
When you’re getting that goal, you’re like, “This is incredible.” You know you have arrived when you get that goal. Put that on a separate sheet of paper, then I want you to pick your top three one-year goals. Put those on a separate sheet of paper and leave some room in between them. You are now ahead of 99.9% of the people on the planet that do a New Year’s resolution that’s forgotten by February. There are a couple more quick steps. The goals are important. The goals will drive you. They’ll push you and they’ll pull you. I’ve always got goals, but the real fuel is the why. Why do those goals have to happen? I want you to write a paragraph about why each one of those goals has to happen and you want to use emotionally-charged words. Words are incredibly powerful like amazing, incredible and beautiful. Use words that will juice you.
You might say, “So I can show my wife what success looks like or I can show my husband what it means to be incredibly successful. I can show my kids how to build an amazing, successful life of their own, so we can have the freedom to do whatever we want, whenever we want, wherever we want, and bring whoever we want.” Whatever is going to juice you, write it down. Take the time to write down the why. It’s critical. Those of you analytical ones, you’re not doing this in your head. You must do this on paper. If you’re in your head, you’re dead. I’m sure you’ve heard that before and it’s true. You’ve got to write it down, so you can look at it and have it around you.
You’ve written down why it has to happen, but you’re going to take it one step further. You want to put a paragraph under each one of these goals. There’ll be some similarities maybe, but it doesn’t matter. You also want to put some pain in there if you don’t achieve the goal and make it freaking painful. People will do more to avoid pain and gain pleasure and you want to use this. This is the fuel guy. This is the fuel to get you to take freaking action to build that life of your dreams.
This is the fuel to get you to push through any limiting beliefs and fear you may have. Maybe you’re comfortable. I’m going to tell you that the magnificent life of your dreams is right on the other side of comfort. This is to push you through that comfort, so put some pain in there. You might say, “I don’t feel like a failure. I don’t live a life of regret. I don’t fail my children. I don’t fail my spouse.” Whatever it is, make it freaking hurt if you don’t achieve the goals.
I hadn’t heard that before as far as the pain part.
People who avoid pain, you want to use this. Let me share this with you. There was this nurse in Australia. Her name was Bronnie Ware. She was a hospice nurse, so she helped people at the end of their lives. She asked them a question, and the question Jamie was, “Do you have any regrets?” She wrote a book about it called The Top Five Regrets of the Dying. Do you want to know what the number one regret was? Not living the life I could have lived, living someone else’s life, and not doing what I know I was capable of. Screw that. This is the fuel that prevents that from happening. You’ve got your whys down.
The last thing is you need to get pictures around you of your goals. You need to manifest them and that’s how you manifest them. I’ll give you a couple of public examples. Jim Carrey was the actor in The Mask and a bunch of movies. When he was flat broke, he wrote himself a check out of his own check-in account for $10 million and he put on it for services rendered. For those of you who are Millennials, a check is something we used to pay for things. He used to go up by the Hollywood sign. He pulled it out of his wallet and he’d look at it and he visualized cashing it. That’s how much money he made for Dumb and Dumber. Google it, it’s right there.
He was in In Living Color and he was a stand-up comedian. He was struggling. You’re absolutely right. He made $9 million or $10 million in Dumb and Dumber.
He buried that check with his dad when he died because his dad was a big supporter. I’ll give you one more example. Demi Lovato, years ago, when she was unknown, posted on social media, “I’m going to sing in the Super Bowl.” Go watch the Super Bowl. I’ll give you my own personal examples but let me pre-frame this and let you know this is not me bragging. I want to hopefully inspire you. Back when I was eighteen, I was going to get rich selling other people’s houses. I got this four-door car because I figured I had to have it to show people houses. I got this bone ugly Ford Granada, bench seat in the front, a real piece of who knows what.
I worked with a guy that had Corvettes and he let me drive one. That’s a critical piece here. If there’s something that you want, go experience it. Go test drive the car. Go to the open house of the house. Get pictures of the vacation or watch videos. Try to be as experiential as you can. It’s because it works. I’ll give you an example. On Valentine’s Day of 2020, I brought my wife to Miami. We stayed in a nice hotel and we went to the Miami Yacht Show. I talk my way onto these $10 million to $12 million yachts and I walked around like I own the place. I sat in the captain’s chair and I got associated with owning a yacht because that’s something I want to do.
I took my wife to the Amalfi Coast and they have all these yachts there in Italy. It’s spectacular. I told her, “We’re going to rent a yacht or buy one and go around the Horn of Italy and go to Greece, Croatia, Spain, and all that.” I did that because it works. Anyway, I drove this Corvette. This guy let me drive it. I’m like, “This is amazing.” Before you could spell internet, nobody knew about the internet yet. I got a picture out of a magazine and I put it on the visor of my bone ugly Grenada. Every time I sat in the car, it was right there in front of me. Within a year or two, I had a beautiful Corvette.
I’ll give you a couple more examples. I’m not bragging. I just want to inspire you. This is back when the TV show Magnum P.I. was out. It was a detective story. The actor’s name was Tom Selleck. He drove this Ferrari three away and it’s the first time I’ve seen an exotic car. I got a picture of that actual car and I put it on the visor of my Corvette. Within a year or two, I had a Maserati that looked like it. The last example, I’m the guy that always wanted a Lamborghini. I had Lamborghini pictures in my bedroom growing up with the bikinis, the soap, and all that crap. I visualized having a Lamborghini and what’s crazy is my son was into exotic cars, too. He collected models of them.
I’ve got this model in the other building in my compound here of the exact same color and style I ended up getting which he had, which was crazy. I have a planner and in the back of it, I’ve got pictures that have been in here for more than twenty years. The first pictures of my gratitude pictures they were pictures of my kids when they were young because everything starts from a place of gratitude. If you want to bring anything into your life, you have to use gratitude to get it. I’ve got pictures of the houses. The top picture looks like that house on the beach. I had a 10-foot-high glass and travertine floors like that.
I lost that house in all the craziness, but what’s crazy is I live in a compound. I’ve got five buildings here. I’ve got a giant main house and a beautiful two-bedroom guesthouse on the water. I’ve got a media building. I’m building a video studio on the top floor. God’s got a sense of humor, the old house that I built on the beach is right across the bay. I can see it right out of my backyard. It’s hilarious. Pictures work. I’ve got a few $100,000 with the watches, the Lamborghini before I ever got it, Rolls-Royce, Bentley, and all this crap that I got because I had pictures. Get them around you, put them on your screensaver, put them in your planner, and put them on the wall. Around me are pictures of yachts and the other things that are important to me because they work.
In any success that I’ve had, I’ve found that goal setting and visualization are critical. Let me ask you this because I personally struggle with this and I’m sure other people do, too. I’ve mentioned it in previous episodes. I like to do what I say I’m going to do. My word is important to me and I’m sure it is to you as well. How do you reconcile what you’re talking about with saying you’re going to do something and then you don’t do it?Pain is the fuel to get you to take freaking action to build that life of your dreams. Click To Tweet
You’re talking about goals specifically?
You always need to have a target to shoot for. I’ve heard the analogy, “Shoot for the stars. If you only hit the moon, you’re still doing okay.” You can’t beat yourself up about this stuff, but you’ve got to have a target. How the hell are you going to get anything if you don’t know what it is with clarity? You’ve got to have clarity as well. The clearer you are around what it is you want, the faster you’re going to get it, which is why I recommend pictures. I’m a visual guy. I’ve got vision boards. It’s funny when I go to my live events or when I am having them, my son and my daughter help me. People come up to them and say, “Does he do this crap?” They’re like, “Yeah, he does the affirmations, incantations, vision boards and all that stuff.” What I’ll do is I’ll sit in my chair and I’ll do gratitude. I’ll be grateful for my amazing, beautiful wife, my kids, my foundation, and my coaching students. I’ll do gratitude for a couple of minutes, but then, I’ll do gratitude for the things that I want in my life, the goals as if I already have them. I know I’m losing some of you analytical ones, but a big mistake is all I can tell you. This is how I had $50 million to lose and I’m back. I bought 2,200 doors with students. It works. You can poo-poo it, but I’m telling you it works if you want it. I do that. I’ve got pictures on my vision boards of the things that I want. Some are charitable some are material.
Let’s talk about that. What would you say has changed as far as what’s important to you over the years?
Let me pre-frame it because this will help. Let me go back. I built that house on the beach and this house was freaking magnificent. It has a giant spiral staircase up through the middle of the house, a giant waterfall on the second floor, and a balcony into the pool. The pool is in magazines. I had tens of thousands worth of palm trees that I bought that were bent that didn’t bend out above the pool. I want the beach on one side. I had boathouses on the backside called a Gulf to Bay, a slice through an island. I’ll land the plane with this. On the second floor, I had an aquarium that went around the spiral staircase. It was curved and it was custom-made. It cost me almost $200,000. It gives you an idea of the house.
I worked for this freaking thing for twenty years. I didn’t need to work that long, but that’s how long it took. Two months after I moved in, I’m out in the pool at night looking up at this testament to my ego because that’s what it was. It was to prove to the world that was good enough. It’s embarrassing to admit, but I built that house to prove to the world I mattered. I’m looking up at this thing and the pool is changing colors. It’s got fiber optic lighting. It’s magnificent. I got depressed. I don’t mean just a little bummed, Jamie. I was really bummed and I’m like, “What the hell? I’ve just achieved success times 1000. How can I possibly be depressed?”
There were some things going on and let me share them with you because they’re important. The first thing is you should never achieve a big goal without having other goals lined up behind it because like the good book says, “Without a vision, the people perish.” You need a vision for the future and I didn’t know what I was going to do next. That was number one. Number two was people think that when they achieve the goal, they’ll be happy. “We’re going to achieve to be happy,” but it’s much better to happily achieve. Let me tell you how you do that. It’s never about the goal. It’s about who you become on your path to the goal. Happiness comes from growth and progress. It does not come from the outcome.
You need to continually be growing and progressing. I don’t know how I was going to do that. Here’s the biggest thing that was going on. I had been totally focused on Rod to prove to the world I’m good enough and I matter. I went out and bought some books. I bought Dale Carnegie’s and Zig Ziglar’s and I’m like, “I’m going to take action. I’m going to get back and I’m going to get back to a good frame of mind.” One of the books was Tony Robbins’ book, Unleash the Power Within. I’m like, “I like this. It’s interesting what he’s written here.” I went and saw him live. When I went, I discovered that he feeds families for the holidays. I’ve spent many years following him around the planet. It slowed down a little bit in 2019, but I’ll probably go to another event.
If you can see him, just see him while he’s speaking live. He’s doing a live stream. I hope he does it live again because it’s exciting to go to one of his events. I found that he fed families for the holidays and I’m like, “What a concept does something for someone else, I’ve been totally focused on Rod.” I went back and fed five families and it was life-changing. I’m blessed to say we fed 1,000 families for Christmas. Over the last 20 years or so, I fed 95,000 children for the holidays and I’ve done tens of thousands of backpacks filled with school supplies for the holidays.
I’ve sent tens of thousands of teddy bears to local police departments for the officers to keep in their vehicles when they encounter a child who has been traumatized. I paid for it all myself up until 2008, then I formed a foundation called the Tiny Hands Foundation and I cover all the operating expenses. If you are inclined to do something, I love to have you throw something at it. It’s TinyHandsFoundation.org. Every dime goes to the food and the materials for the kids. That has given my life meaning and that coupled with the podcast.
We hit 10 million downloads and I’ve got hundreds of students around the country. I’ve got a whole wall of thank you cards from students whose lives have been impacted by my work. That’s my greatest gift in life. This is not me bragging. Please understand that. I get love every single day. I get a DM or more. I get emails, gifts, cards, and all these things. Every day, I get something. How can you not love that? That coupled with the foundation and being focused on, gratitude has made such a huge difference.
It’s not that you have a negative view of materialistic things or earthly possessions, but you’ve added to that. You’re all about adding value to others.
Contribution is a basic human need. It’s not a desire. We need to contribute. If you’re in a relationship, not only do you need to contribute to them, but you need to allow them to contribute to you. It’s important. I will tell you anything in this universe, frankly, that doesn’t contribute, gets eliminated. Human beings need to contribute. If you’re reading this and you’re young or even if you’re not young, but you know you want this. If you got blood dripping from your teeth and you’re going to make this freaking no business happen or something happens, or a side hustle happens, incorporate giving back now. Do not wait because you will get it faster, but more importantly, you’ll be happily achieving instead of achieving to be happy.
Your why will be that much more important. I know we haven’t gone too specific as far as your story and your ups and downs, but I’ve listened to a bunch of podcasts of yours and it’s a roller coaster.
I’ve had lots of ups and downs. I call them seminars. I’ve built 24 businesses. Several have been worth tens of millions of dollars and most have been spectacular flaming seminars. You grow, learn, and become more. Don’t fear failure. I met the billionaire owner of SPANX, the woman’s undergarment company. She started at $5,000 and she’s a billionaire now. She’s a beautiful human being. Her name is Sara Blakely. I met her at a mastermind that I belong to and she told me that her dad used to ask her, “What have you failed at today?” Isn’t that an awesome question to ask your kids to not fear failure?
Let me tell you something. You get a lot of analytical people. Not only are you a perfectionist, but you get caught in analysis paralysis and you fear failure. I’m going to tell you to fear to regret a whole lot more than you fear failure. We fail our way to success. You’ve got to take action and don’t get caught in analysis paralysis. Don’t be in the same place a year from now that you are right now because you didn’t take action.Contribution is a basic human need. It's not a desire. Click To Tweet
I had a roommate back in college and he was a national level powerlifter. He’s a strong guy and successful in his field. One of the quotes he told me is people say, “That’s got to be dangerous,” or, “That’s bad for your joints to squat 1,000 pounds,” or whatever. He always said, “Would you rather rust out or wear out?” It stuck to me.
Do you want to get to the end of your life and have regrets? To me, that’s the worst thing in the world. I’m not going to say I’m the greatest at all of this. I suffer from the same setbacks that everyone else does. I circled back faster maybe now because I’ve done it successfully. I stay focused on what I want, not what I don’t want. It’s easy with all the crap that’s going on. Don’t get me started on the politics, but the COVID and everything else. I’ve even found myself getting sucked in a little bit and my wife is like, “You eat your own cooking.”
It all relates to mindset. Besides economic conditions and other reasons, from 2008 to 2010 or that time period, what would you say was your biggest mistake?
Let’s get into the mechanics of it. Why did I fail? Let me tell you something. I was at a 30% loan-to-value when I was seven. I only owe $0.30 on the dollar and I still crashed and burned. Here’s why. First of all, Florida has no state income tax, so property taxes are higher which impacts cashflow. All my properties were along the Gulf Coast. Two hours North of me and two hours South of me and everywhere in between along the Gulf Coast. A lot of them in wind and flood zones, which impacts wind and flood insurance. What killed me was if I had to send a maintenance guy to one of my apartment complexes, everything is the same. The plumbing, appliances, door locks, windows, and everything are the same.
We could stockpile parts and they can go in and be in and out in an hour. If I descend to a house and it’s 1.5 hours away one-way and they get there. Every house is different and they got to see what’s missing and what’s wrong, then they’ve got to go find a Home Depot or Lowe’s where that could be 30 minutes away. I don’t know if you’ve ever fixed anything, but invariably, when I try, I end up going to Home Depot more than once and it’s no different. What took an hour at one of my apartment complexes took all day at 1 of my 800 houses. I had 800 houses I was renting long-term and I had several apartment complexes.
It didn’t cashflow, but I thought it was golden because I thought 80 million Baby Boomers were getting old and getting cold. Florida was recession-proof. The coup de grâce for me was a lot of my properties were C-class small houses and a lot of my residents were contractors, plumbers, electricians, drywallers, painters, and roofers. That fell off a freaking cliff in a way. They couldn’t pay their rent either, so it was the perfect storm. Here’s something crazy. My portfolio went upside down and it dropped more than 70% of the values. I’m like, “Screw it. I’m out.” It sucked, but I’m back. Once we close on what we have under contract, we have done 2,200 to 2,300 doors in Alaska.
What I learned in all of that was my multifamily did just fine. It was the houses that pulled me down, which is why I started my podcast. Flipping and wholesaling is cool, but if you’re going to buy and hold, do multi. Don’t do a single. Ask me how I know. I’ve got t-shirts that say, “Ask me how I know,” because I made every freaking mistake known to man. I hate asking for money and I thought, “Let me start a podcast.” If you read the first episodes, I’m like, “I’ll never sell you anything. I just want to add value.” I’m a liar because I want to hit 1 million downloads. I’m like, “I better do something with this.” I did courses, and then I’ve had sold-out live events for the last couple of years and I freaking love it. That’s the thing. I wanted to give people that message, and then I realized I was going to get back into the real estate game and I’ve had a lot of fun with it. I never thought I’d enjoy podcasting but I love it and the feedback but I’m sure you do as well. You get a lot of great feedback as well from people.
You talk about how you pivoted as far as your training.
I had to go from live to a livestream and I hope it doesn’t remain that way. I’ve got a lot of people saying, “We miss your live events. They were awesome.”
I’m curious how you’ve pivoted on the actual investment side or through your students, or how that works.
We haven’t pivoted there at all but we are actively buying. In fact, we’re about to hire someone else for the team. We’ve taken some of our management in-house and we’re going to probably take it all in-house at some point.
You see the multifamily space going strong for the foreseeable future?
People need a place to live in. They didn’t give stock market moratoriums on rent. They gave renters moratoriums on rent. Do I still think there’s going to be pain? Yes. Do I think there’s going to be distressed assets coming? Yes, I absolutely do. Is that something to fear? No. It’s something to get ready for in cash. You are perfectly positioned to capitalize on distressed notes. I know a guy that’s a billionaire that did it with distress notes.
We had Dave Van Horn. He’s a big name in the note space. One of the things he talked about was he’s like, “Tell me what the rules are and I’ll figure out a way to win.” I’m hearing a lot of the same things from you. He is able to pivot. You’re not going to know exactly what the economic conditions were, even the legislation is going to look like. You can guess but no one knows exactly what’s coming. If you have your mindset and your principles in place, then you’re ready to pivot and there’s always opportunity behind.
With crisis comes opportunity. Unfortunately, I was hiding under a rock for a few months in ‘09 and ‘10. I was a little soured on real estate for a while, so I started at a different company. I started a litigation support company back then, which I sold. Had I not done that and took advantage of it, I’d be on the back of my yacht right now. There’s no question because there were incredible opportunities. In fact, if you listen to early episodes of my podcast, you’ll hear some of these guys with thousands of doors that started in ‘09, ‘10, and ‘11. That’s what we call a clue.
Real estate is a little easier than the stock market.With crisis comes opportunity. Click To Tweet
I call that gambling unless you’re going to study it, study the graphs, and play it full-time. You’re throwing your money away. By the way, if you’re reading this and you’re thinking of investing passively possibly in some multifamily syndications, come to my bootcamp because why would you invest in something that you have no knowledge of? Come spend a couple of days with me. You will have an incredible understanding of the business and you’ll meet a lot of operators that you can invest with as well. Even if you’re thinking about investing passively in some deals, we’ve got phenomenal deals.
A lot of the operators that are students of mine have got phenomenal deals. You need to educate yourself. If you’re going to invest in the stock market, educate yourself there as well. If you’re reading this podcast, educate yourself about note buying. The same thing applies in any vertical that you’re going to get into. Educate yourself. If you’re interested in my bootcamp, text the word, MULTIFAMILY, to 41411, and then use the code, RODFRIEND, and you can come for $97 for 16 to 18 hours of training. I don’t sell anything. It’s a duh. I promise you, you’ll be glad you did. You’ll have a blast. We’ll have a good time and you’ll learn a lot. It is drinking through a firehose though.
I’m sure there’s a lot of information. That’s less than I’ve spent on some virtual seminars that I’ve hardly even participated in.
In the last one, we had 700 people for the entire eighteen hours, which is unusual. People drop off. I bring my mindset into it. I bring a lot of energy to it and I keep people engaged because some of the material is dry. It’s like doing future cost of money on your notes unless you’re a spreadsheet lover, which most of you probably are. You may love all that dry stuff that makes my eyes cross.
Those that are successful in the note space specifically are the people who can get out of that analysis paralysis. We do have a lot of the analytical types and that’s good. You don’t want to make too many mistakes. You want to know what you’re investing in and you want to give a crap, but you’ve got to take action, too.
Some of the best partnerships I’ve seen common in multifamily is an outgoing person because multifamily is a team sport. You don’t get any scale on your own. It is an outgoing person with an analytical person. My partner is a CPA. He’s done $1.5 billion with a commercial real estate, Robert, and I’m the mouthpiece as it were and I can read a spreadsheet. I just don’t love it. You can throw him in a locked room with a spreadsheet and throw raw meat in once in a while. He’s thrilled. I do spend a lot of time on mindset and about everything that I do so that you don’t get caught in analysis paralysis because there’s nothing worse than having regret.
I like what you’re saying about teamwork as well. I’m reading a book by Dan Sullivan. He’s a business coach. The book is a Who Not How. It’s all about teamwork and adding value.
Every business is nothing but people and systems. If you get those two things right, your success is inevitable. I interviewed a guy that wrote a book about introverts and it’s fascinating. If you’re analytical and you’re introverted and you want to maybe come out of that show a little bit, not be as uncomfortable with being introverted, it’s a superpower, frankly. Being an introvert is a superpower because you build deeper connections. Listen to that episode. It’s a good interview. He wrote a book that I would recommend as well, The Introvert’s Edge.Every business is nothing but people and systems. If you get those two things right, your success is inevitable. Click To Tweet
Rod, this has been good. You’ve had a lot of value and energy for sure. It made my job easy.
Thank you, Jamie. I appreciate you having me on. Say hi to your cohort with me.
Is there anything else you want to let the readers know?
If you’re interested in this business at all, come spend a couple of days with me. It’s $97 and I don’t sell anything. It’s a duh. If you want to learn about this business more, my website has tons of free material. Go to RealEstateWithRod.com and it’s a link to RodKhleif.com. There are articles, books and videos. It will take you a year to go through it all but there are tons of free stuff there.
What’s the name of your podcast?
Lifetime CashFlow Through Real Estate. If you search real estate on your iPhone in the podcast app, I usually come up number one, me and BiggerPockets.
I know it’s a popular one. I’ve listened to a lot of episodes and I got a lot of value through that. I want to thank you for joining us. To all the readers, don’t forget to give us ratings and reviews on all the sites. Rob, you could probably name them better than I can.
Also iHeartRadio Go out and do some good deeds. Thanks, everyone.
- Rod Khleif
- Coming Real Estate Crash of 2021 – YouTube video
- Lifetime CashFlow Podcast
- The Top Five Regrets of the Dying
- Unleash the Power Within
- Dave Van Horn – Previous episode on iTunes
- Who Not How
- The Introvert’s Edge
- Stitcher – Good Deeds Note Investing Podcast
- iTunes – Good Deeds Note Investing Podcast
- iHeartRadio – Good Deeds Note Investing Podcast
About Rod Khleif
Rod Khleif is an entrepreneur, real estate investor, multiple business owner, author, mentor, and community philanthropist who is passionate about business, life, success, and giving back. As one of the country’s top real estate trainers, Rod has personally owned and managed over 2,000 properties.
Rod is Host of the Top-Ranked iTunes Real Estate Podcast which has been downloaded more than 8,000,000 times – “The Lifetime Cash Flow Through Real Estate Investing Podcast.” Rod is the author of “How to Create Lifetime Cash Flow Through Multifamily Properties” considered to be an essential “textbook” for aspiring multifamily investors.
As an accomplished entrepreneur, Rod has built several successful multi-million dollar businesses. As a community philanthropist, Rod founded and directs The Tiny Hands Foundation, which has benefited more than 75,000 community children and families in need. Rod has combined his passion for real estate investing and business development coaching with his personal philosophy of goal setting, envisioning, and manifesting success to become one of America’s top real estate investment and business development trainers.
Love the show? Subscribe, rate, review, and share!
Join the Good Deeds Note Investing movement today: