The Science of Flipping - The Next Big Real Estate Opportunity is Here—Are You Ready? | Rod Khleif

Episode Date: August 2, 2024

In this episode, I interview Rod Khleif, a renowned multifamily investor and host of a top-rated real estate podcast, who recounts his inspiring journey from his early days as a Dutch immigrant facing significant financial hardships to becoming a highly successful real estate mogul. Rod underscores the pivotal role that mindset and psychology play in overcoming obstacles and achieving success. He shares personal anecdotes, including the dramatic story of how he lost $50 million during the 2008 financial crisis and the mental fortitude required to rebuild his wealth. Throughout the conversation, Rod provides listeners with practical strategies for setting and achieving goals, making decisive actions, and harnessing their strengths. He also emphasizes the importance of gratitude and contributing to others' well-being as keys to lasting fulfillment. Rod concludes by urging listeners to prepare for upcoming opportunities in the real estate market, stressing the necessity of taking immediate action and committing to continuous learning and growth. --- Connect with Rod: Instagram - @rod_khleifFREE Resources - https://linktr.ee/rodkhleif LIVE VIRTUAL BOOTCAMP NOV 8-10 Use code 'JUSTIN' to secure your ticket for $197 Text "LINKS" to 72345 for more information  ---  BIG THANK YOU to 10x TV for sponsoring this week's episode. "Use TV Commercials to reach 10X More people, 10X Faster and 10X Easier, with 10X More Credibility."To learn more, go to https://10xtv.co --- The #1 training and coaching system to launch, grow, and scale your investing business! 𝐋𝐞𝐚𝐫𝐧𝐌𝐨𝐫𝐞: http://www.thescienceofflipping.com Turn cold real estate leads into engaged motivated sellers on auto-pilot using the power of A.I! 𝐋𝐞𝐚𝐫𝐧𝐌𝐨𝐫𝐞: https://www.rocketly.ai/ Have a question? Ask me anything at https://www.askjustin.ai/ 𝐀𝐛𝐨𝐮𝐭𝐉𝐮𝐬𝐭𝐢𝐧: After graduating from UCLA in 2003 with an English degree, Justin went directly into business for himself. He has never had a W-2 job. In 2005 he got into real estate by co-founding a brokerage in the Northern California area. Quickly he realized that being a realtor was not for him. In 2007 he got into real estate investing full time. 16 years later, Justin has flipped well over 2600 properties, accumulated millions in rental properties, and is an active investor to this day. His success in real estate led him to start The Science Of Flipping podcast and education company, where he has coached and mentored over one thousand aspiring and active investors.  He is a nationally recognized speaker and is on a mission to educate as many people as possible on becoming a successful dynamic real estate investor. 𝑾𝒉𝒂𝒕𝒕𝒉𝒆𝑷𝒓𝒐𝒔𝑯𝒂𝒗𝒆𝑻𝒐𝑺𝒂𝒚𝑨𝒃𝒐𝒖𝒕𝑱𝒖𝒔𝒕𝒊𝒏:  “Justin is one of the best trainers in this space. He really gives everything to his tribe.” – Brent Daniels (TTP)  “Justin’s ability to connect with people and help them understand what he is teaching, is unparallelled” – Kent Clothier (REWW)  “We have been in the trenches flipping homes in Phoenix for over a decade, he is one of the best to do it.” – Sean Terry (Flip2Freedom) Subscribe To Justin Colby: http://youtube.com/justincolbyView All My Videos: https://www.youtube.com/c/JustinColby

Right now, our debt is going up a trillion dollars every hundred days. Now, if you want to freak out, and by the way, I'm not trying to scare you here. I'm trying to get you excited because opportunity is freaking coming. And I'm going to tell you, you've got to pick your vehicle right now. If it's single family, if it's multifamily, if it's, it don't do all this. It's got to be real estate, period, end of story. I agree, or buying businesses. I wish there was another one of me to buy businesses because I think you could really kill it.

A lot of aging baby boomers. What is up, Science Flipping family? I have another incredible guest. Not only is he one of the best commercial multifamily investors in the nation, he has the top rated podcast for investing. We are going to be talking with Rod Khalif. What is up, brother? You, man. We're going to have some fun today, brother. Let's go get it. Pleasure to meet you. I'm really looking forward to this. Yeah, it's been a long time. I think we've circled each other long enough. We're both, I like to say the word old heads in the game. I've been around doing this 17 years. How long you been doing this game? I've got socks that have a dick. Yeah. So, but this is going to be good. So if you young cats, the people that are trying to break in, there's going to be a wealth of knowledge that's why you need to be watching this on youtube or listening to this on apple because between him and me we have seen i don't want to say everything

because i swear every day i wake up and there's something new but listen to this rewind this is going to be great he has made a lot of money he's also lost a lot of money and that's actually where i want this episode to start okay let's talk a little bit about your background. Yeah, sure. So I'm going to go way back because it'll lend some, uh, some framework to what we're going to talk about. So I'm a Dutch immigrant. I was born in the Netherlands, you know, wooden shoes, windmills, immigrated when I was six

years old with my brother, Albert, my mother's Vansha ended up in Denver, Colorado, and we really struggled initially. So I remember eating expired food. We shopped at an expired food store. True story. They had that. Drinking powdered milk with our cereal in the morning because it was cheaper than real milk. Trust me, it sounds better than it is. And wearing clothes from the Goodwill and the Salvation Army all the way through junior high school until I lied about my age when I was 14 at Burger King, got a job flipping burgers so I could buy my own clothes. And I'm sure you got listeners that had it harder than I did, but I knew I wanted more. And luckily,

my mom had an incredible work ethic. So she babysat kids so we'd have enough money to eat. And with her babysitting money, with no formal education, she was a bit of an entrepreneur. She invested in the stock market, but she also invested in real estate. And her first real estate acquisition was a house right across the street from me. She bought for about 30 grand when I was 14. And then when I was 17, she told me she'd made $20,000 in her sleep. And this is when 20,000 was a lot of money. And I'm like, what? You made 20 grand? You didn't do anything? Screw college. I'm getting into real estate. So I went and got my real estate broker's license right when I turned 18, which back then you could do with education. I was actually a broker. I could have my own office. They got smart. Now you need some experience to be a broker.

But I was still living at home. And my first year, I made about $8,000. My second year, maybe $10,000. But my third year, I made over $100,000, which back in 1980 was some pretty decent change. Listen, you made a lot of money. I still like $100,000. Back in 1980, that was a lot of money. So what happened between year two and year three

that caused me to 10x my income? Well, what happened was I met a guy. I was actually working for him. He was a broker. And he taught me about the importance of mindset and psychology. And how 80% to 90% of your success in anything is your mindset and psychology. Only 10% to 20% is the real estate stuff we talk about on our podcasts. And so fast forward to today, I've owned over 2,000 houses that I've rented long term in three states. In 2006, and now I own thousands of apartment units. I've pivoted. In 2006, my net worth went up $17 million while I slept.

That's nice. And I said, wow. And my head got so big, I could barely fit it through a door. And I thought I wow. And, you know, my head got so big I could barely fit it through a door. And I thought I was a real estate god. And you know when that happens, the god of the universe will give you a nice little smackdown. That's right. That was 2008. I lost $50 million conservatively in 2008 and 2009.

And so what I'm known for talking about on my show and at my boot camps and so on and so forth is the mindset it took to have $50 million to lose in the first place. But maybe even more important, the mindset it took to have 50 million to lose in the first place, but maybe even more important, the mindset it took to recover from losing it. And it's kind of the same sequence of steps. I'd love to drill down on that with you. I think your peeps would get a lot of value about it. You know, what I had to do to have it to lose in the first place, but, but, and, and it's the same thing. You know, if someone's listening, they haven't take action yet. You know, they maybe listened to your show and they, they know they need to do something with their lives they they're in a rut or a rat race or a w-2 they don't love um you may want to listen to this because i'll give you some strategies that i think will

really help you not the real estate strategies i'm talking about the things that you actually freaking take action yeah so happy to drill down no i think that's imperative i think there's too many people out there that are getting lost in the YouTube university. They're getting lost on podcasts and they don't do anything. They're like a professional student, if you will. Analysis paralysis. So please, if you have a system. Yeah, no, I do.

And I'll blow through it pretty quick. But these are really important strategies. So the first thing, like when I lost everything, the first thing I had to do was reassociate with what I wanted. It would have been real easy to focus on what I lost, okay? And it's the same thing when you're getting started. You've got to know what it is you want. If you come to one of my boot camps, the first thing we do is goal setting on steroids. Because how the hell do you get anything if you don't know what it is?

You've got to know what it is you want. And so, you know, it starts with goals. You've got to go do your goals. You've got to write them down. Don't throw them in your head. And if you're in your head, you're dead. You've got to write them down. And you've got to write down why they're imperative to achieve.

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I'm not going to try to sell you anything. Go do your goals because, you know, if you haven't done them recently, and have your spouse do them. If you've got kids that are over 10 years old, have them do it. Here's the sad thing, Justin. People spend more time planning a freaking birthday party than they do designing their lives. That's designing your freaking life. And the reason it's so important is because you've got to create what Napoleon Hill calls a burning desire. You got to want it. Hunger. You got to want it. That's how you push through that fear. That's how you push through

that analysis paralysis to go actually freaking take action and change your life and create, you know, the freedom you and your family deserve. So it starts with the goals. The second thing is you've got to make a decision. And I don't mean dip your freaking toe in the water. I don't mean one foot in, one foot out. I mean it's done. When you make that decision, it's freaking done. You know, the Latin root for the word decision means to cut off, meaning there's no escape.

You make that decision. And I mean, I got a great analogy for this would be if you're going to attack the island, you burn your ships because you're taking their damn ships. So it's done. Okay. So, and, and it could be the biggest decision of your life to maybe take action on your dreams. You know, I'd love to, at the end of this, to talk about what I think's coming. I think there's some proverbial, I think the proverbial shit's about to hit the fan in this country. And we'll talk about why I've got some incredible quotes from some very, very smart people and some statistics to share. But the point is, you got to make a decision to get started. You got to decide, okay, enough is enough. You know, if you don't want to be in the same place you are right now, two years from now, you know, unless you freaking love where you are right now, then you got to make a decision. All right. So the next thing is you got to take the first step. You know, I see with my students

all the time, I'll brag for a minute. My coaching students now own over 200,000 units that we know of. It's more than that because we can't even keep track anymore. And I've only been teaching a little over five years, super proud of that. But you see, I see it with them all the time. It's that law of the first deal. Okay. It's that, that the first one always takes the longest. It's the hardest. It's the scariest. And then they get one, you know, after six months, eight months, whatever. And then they have three.

I'm like, what the hell just happened? Yeah. You know, cause it's all between their head, but you got to take that first step. You got to, you got to actually do it. And you know, so many people, we, you talked about this. So many people get caught in analysis paralysis in my business. You know, I teach multifamily investing. I teach people how to buy apartment complexes. And we get a lot of analytical people. And if you're analytical, I love you. You know who you are and I love you

and you could be very successful in what I do. But you got to make a move, okay? Most analytical people, they got to check off every single freaking box before they... And you know who you are. And again, I love you and you're very successful in my business but let me give you an analogy if this is you you know you can drive all the way across the united states at night headlight only seeing 50 60 feet in front of you and you know you can make it you know other people have made it before you now you may have some obstacles it's the same way with any goal that you go after but you got to take that first step okay and the next thing and here's the thing, you know, so many people, especially analytical fear failure, and we'll talk about failure in a

minute, but I'm going to tell you fear regret much more. You know, there was this nurse in Australia named Bronnie Ware, and she was a hospice nurse. So she took care of people right before they were about to die. And she asked him a question, Justin. And the question was, do you have any regrets? And she wrote a book about it, something like the five regrets of dying. But you know what the number one regret was? Not living the life I could have lived, living someone else's life, not doing what I know I'm capable of. I can't think of anything worse than that. Right? So no regrets, guys. Take action. Take that first step and change the trajectory of your life. And so let's talk about fear and limiting beliefs for a minute because we all have fear.

You have fear. I have fear. Most successful people on the planet have fear, but they move through in spite of it. That's okay. Limiting beliefs. I'll give you a great example of limiting belief. When I immigrated this country, I didn't speak English and got thrown into school and I found out what bullies were for the first time. So I got my ass kicked occasionally. And then my mom, proud Dutch woman that she is, thought it'd be a great idea to send me to school in wooden shoes and those leather shorts the Germans wear for Oktoberfest. So another ass kicking, you know. And, you know, that coupled with some other things caused me to believe I wasn't good enough. You know, I used to ask myself, how can I show them I'm good enough? Which, of course, presupposed that I wasn't. And a lot of people have these limiting beliefs.

I'm not good enough. I'm not smart enough. I'm not analytical enough. That's another one of mine. I'm not old enough. I'm not young enough. Whatever. See, the thing to remember, if you're consciously aware of one, if you're listening, is there's a reason the acronym for belief systems is BS.

Because 99% of them are BS. But see, we believe they're real. And so if you have one of these that you're consciously aware of, sometimes you're not aware of it, but if you're consciously aware of it, drag it out into the daylight, look at it with your adult rational mind and you'll burn it up. I mean, I used to be afraid to raise my hand in front of 15 kids in class and I speak in front of thousands of people a year now. And so, you know, you can eliminate a limiting belief, but you got to focus on it consciously and that's how you get rid of it.

The next thing I'll talk about, this is a few more. The next thing is focus. The most successful people on the planet have the highest degree of focus. And, you know, focus is clarity. Focus is power. You know, I listen to two podcasts, okay? I listen to Joe Rogan and I listen to Tim Ferriss. I try to get both sides of the aisle.

I'm definitely on the red side of that aisle, but we won't go down that rabbit hole. But on Tim Ferriss's show, he interviews the best of the best in the world. Okay. Like the best athletes, Michael Phelps, NFL, NBA players, actors like Ed Norton, Hugh Jackman, Arnold, Jamie Foxx, billionaires like Ray Dalio, heads of the biggest companies in the world like Zuckerberg and Facebook. And he deconstructs their success. Very intelligent conversation and some really cool conversations. And I started to hear a pattern, Justin. They almost all meditate.

What does meditation enhance? Focus, right? Focus is critical. And so it's very, very, and here's the other thing. Whatever you focus on gets larger, both positive or negative. You know, like I'll get people call me and say, how do I get out of student loan debt? I'm like, wrong freaking question. How do you make so much money that debt's irrelevant? That's the question you need to ask. And, you know, it's so easy to focus on the negative. We connect through the negative, you know.

And, you know, it would have been easy for me to make my identity around losing the $50 million. I use it to teach, but it's not my identity. And, you know, because, again been easy for me to make my identity around losing the 50 million. I use it to teach, but it's not my identity. And, you know, because, again, where focus goes, energy flows. It's got to be positive. You know, for example, they asked Mother Teresa if she was anti-war. She said, no, I'm pro-peace. That's right. See the difference?

And so the next piece is playing to your strengths. Now, in my space, the multifamily space, it's a team sport. It's not like flipping, you know, as you know, or wholesaling. You can do that yourself. I mean, I bought 2,000 houses basically by myself, one at a time. I had a small team, and my brother helped a little bit. But multifamily is a team sport. You know, they're different, and you're not going to do it alone.

You're not going to buy 10, 20, 30, $40 million properties by yourself. It's just not going to happen. Nobody does. And so, you know, there are different hats you can wear. Like one is you could be the person that finds the deals. You could be the analytical person that underwrites the deals. You could be the investor relations person like you and I on our platforms. We're able to bring money in because of our platforms.

You could be the, you know, the asset manager. Maybe you've got construction experience, project manager experience, whatever, and do asset management. So lots of different hats you can wear. But here's the thing. You want to play to your freaking strengths. Why? Because when you're playing to your strengths, you're loving what you're doing. And when you love what you do, work is play.

You never work another day in your life, right? And so you're in the zone or the Kwan like in Jerry Maguire. You're freaking humming on all cylinders. And when you play to your strengths and you love what you do, you're passionate about it. Iuire, you're freaking humming on all cylinders. And, and when you play to your strengths and you love what you do, you're passionate about it. I mean, you can feel my passion. I freaking love talking about this shit, you know, and, and, and when you're passionate, passion is required to influence people. And in any business, you're going to need to influence people, investors, sales, whatever. And, and so when you're playing to your strengths, you're in

your passion and, um, and you're able to do that. So playing to your strengths, you're in your passion and, um, and you're able to do that. So play to your strengths, hire a line or partner for your weaknesses. Don't try to build your weaknesses. And when you get two people that are each playing to their strengths, yin and yang man, success is inevitable. And I see it on my podcast all the time. I see these guys, there's an analytical person with an outgoing person. And, uh, and I mean, those, those connections always are successful because you need both. You need both in this business. The next piece is peer group. You know, you've heard the expression, who you hang out with us, who you become, you're the

sum total of the three or four people you hang out with. Well, I'm telling you, it's absolutely the truth. And I'll give you a great example story of this. You know, when I was losing everything in 2008 and nine, I was in Tony Robbins' Platinum Partnership. Okay, it's a mastermind. And back then there were only about 60, 70 people in it. There's like a few hundred in there now. But I was around people that were killing it in the crash. They had prepared for it.

They knew it was coming. And I'm going to give you information today to tell you I believe it's coming to definitely in my space, in the apartment space. Maybe not in the houses because there's a huge shortage of houses, but definitely in my space. And so these people were killing it. And they're like, get up, you puss, 50 million, shmillion. I mean, you know, who do you want to be around when that stuff's hit? That's right. When the shit's hit the fan, you want to be around people that hold you up and prop you up and validate you.

You know, like in my coaching program, you know, you want to be around people. And that's like I talked about those 200,000 units. Those are all done between my warriors, my coaching students. And, and so, you know, you want to be around people like that, people that aren't going to hold you back, you know, because feeling less than if you succeed or they've got their own fears and sometimes it's family yeah you know so many people will default to like peers that they went to school with or peers that they work with and again those people may not have your best interest at heart so and if it's family love your family but choose your freaking peers proactively right super important um so because they will absolutely trajectory your life up or down depending on, you know, and what their what their feelings are, motivations are and fears are. The last really big piece is failure. And and and I will tell you, you know, I call them seminars. OK, that was a 50 million dollar seminar, expensive freaking seminar. But it was a seminar because it's only a failure.

If you don't get up, you don't get the lessons. You know, I believe we fail our way to success. And, you know, I've built, I was staggered when I counted this a couple of years ago. I've built 28 businesses now, several were tens of millions of dollars. I got three right now that are. Most, however, were spectacular flaming seminars. You know, I got to meet the billionaire owner of Spanx, Sarah Blakely. You know, guys, that's the stuff that holds stuff together for the women under the clothes. And beautiful human being, started with $5,000, and now she's a billionaire. And I met her at her mastermind, and she told me that her dad used to ask her and her brother almost on a weekly basis,

what have you failed at this week? And I thought, what an awesome freaking question to ask your kids so they don't fear failure you know uh because there really is no failure i mean you know we just you get your butt back up and you start all over again that's how it works yeah so the only thing i would tell you i have five laws of of success that you really kind of encompassed and in what you'd maybe call yours. These are all emulated from other things. I think the only thing I would add to it, if I had to add anything, is the expectation of timing on the result you're trying to achieve. It's measuring the goal.

People want it now. And then they come to your program, my program, anyone, right? And they say, oh, I'm coaching with Rod. I'm coaching with Justin. I'm coaching with Justin. I'm going to go buy my first multi. I'm going to go get my first deal in 30 days. Oh, yeah. OK, I see what you're saying. And then they don't. And what happens mindset wise? Yeah, yeah, yeah. They quit. They check. Oh, Rod, this doesn't work. Justin, this doesn't work. Oh, the market.

And then the excuses. But if you don't ever put an expectation on the timing of your result, you just say, I'm going to go by 100 doors. A full stop, meaning as fast as I can, then you'll never give up because you didn't say within 60 days or 90 days of working with Rod. Well, I will tell you, I agree with what you just said.

And if you've got clear enough drive from your goals, from your whys, and you associate with those daily and you live in those and you trigger what's called your reticular activating system. I'm sure you know what that is. It's that filter that points you in the direction that your brain thinks you're interested in. Greatest example is when you first buy a car. You never really notice them. You buy the car and they were everywhere. They were there before.

It's the same thing with your goals but when you've got a strong enough why and and you create that burning desire you know that the timing is isn't gonna isn't gonna stop you it's it's it's it's the ultimate goal that you're after because it's authentic right so back to your decide what you want because i say the same thing yeah my number one rule and I don't know if there was any like format in yours is decide what you want it's the number one rule but it has to be authentic is what you're talking about it has to be believable in your own brain too I'm going to be a billionaire yeah okay all right fine okay but it's got it you've got to believe it you've got it so that's another piece of this for sure right I mean you can't have unrealistic timelines I'm going to be a billionaire in two years no the timeline right's the timeline. Right. So that's the timeline piece. And the goals

have to, you have to believe they're attainable. That's right. Okay. And so that's a critical piece as well. And I'll add one other thing. You've got to incorporate gratitude. And I know this is going to sound foofy, but stay with me here, guys. Okay. Gratitude is the most powerful emotion we have available to us. It strengthens our immune system. It lowers our blood pressure, brings us closer to our spirituality, and it's how you manifest everything freaking thing you want in your life. I will tell you, most mornings I will sit in my recliner, and I've got my vision boards next to me,

and I'll just do gratitude for the people that I love in my life, my students, my foundation, and then I'll do gratitude for the things that I want as if I already have them okay and sometimes I'll get emotional being grateful for things I don't even have yet and I know I lost some of your analytical ones on that one this is how I had 50 million to lose and how I got it back so ignore it at your peril is all I would tell you because it freaking works yeah so but um let's talk let's talk about that I think you brought it up now and I don't know if you were ready to talk about it let's talk about how do you make it?

How do you lose it? How do you get it back? I think that's what everyone wants to know. It's the same sequence that I just gave. I had to reassociate with my goals. I had to make a decision to pick myself up, crawl underneath from the rock I was hiding under, and go after it again. Yeah, because you felt beaten down. Yeah, then I had to take that first step towards commercial.

Because when I lost everything, I was renting. can you cut this out yeah i just said cut this out because i don't want to slam single family because i was going to slam single family and i'll let your wheelhouse so i'm gonna leave it alone no by the way you can't i'm not going to be combative that's all well i don't want this i just don't want we can cut it out no matter what okay well i'll say it and you can decide if you want to leave it in yeah fair enough so when i was losing everything it was my houses that pulled me down i had 800 houses and you know houses don't cash flow as well as multifamily they just don't you have a house that's empty you're 100 vacant and if you gotta if you've got a renovated three five thousand dollars

typically minimum to turn it around you're gonna lose a couple months right you could lose the cash flow for 18 months yeah yeah and so economies of. That's it. And so my multifamily pulled back about 11%, but it would have survived if I hadn't cross-collateralized my apartment. I had several apartment complexes that I cross-collateralized with packages of houses. The houses are what pulled me down. And so I'll give you, people always ask, well, you were over leveraged. I was at a 30% loan to value when I lost everything and I still crashed and burned. So let me tell you what happened. I had houses two hours north of me, two hours south of me and everywhere in between along the Gulf coast of Florida. Okay. From like Spring Hill down to Bonita Springs with Tampa, Sarasota, Fort Myers, all that in between.

And if I had maintenance issue, well, first of all, the taxes here, property taxes here in Florida are higher because there's no state income tax. That's right. So they have to make up more tax. I had properties in wind and flood zones, higher insurance. Both those things impact cash flow. Of course. But what killed me was the maintenance. I had mostly C-class houses, older properties, tougher demographic, tougher tenant demographic. They're harder on the properties. Tons of maintenance. If I send a maintenance guy to one of my apartment complexes, everything's the same. So we can stockpile parts, plumbing parts, appliance parts, window locks, door locks, electrical, anything that's, you know, you can

stockpile those parts. They're in and out in an hour, maintenance guy. If I had to send a maintenance guy to one of my houses that's an hour, hour and a half one way, they got to go see what's wrong. They got to, you know, every house is different. Then they got to go to a Home Depot or a lowe's where we have an account and i don't know if you've if this is the case with you but when rod's happy ass tries to fix something he goes to home depot more than once and so you know and so these maintenance guys are there all day on one house and that's what killed me so i never really cash flowed well at all even at 30 loan to value now you want to hear something crazy by the end of 2009 my portfolio was upside down it had dropped more than 70 in 2000 yeah florida got hit that bad because i know i was in

phoenix florida vegas phoenix california got crushed that's 70 more than 70 drop in value i didn't know that about florida i know i don't mean phoenix vegas i knew those two it died hard but so let me ask you another question just regarding that did you ever go into um section 8 meaning I had a bunch of section 8 tenants I had a bunch of section 8 did they did they last longer because it was government subsidized yeah actually I forgot to tell you what the coup de grace was for me so I you know if somebody had good credit and they paid a deposit I let them rent and I didn't pay that much attention to where they worked or tenant demographic after it all crashed I discovered that most of them were contractors plumbers electricians drywallers painters roofers which fell off a freaking cliff in 2008 didn't have any work so as it relates to section 8 you know

when it hit I didn't have any section 8 I had done that in Denver I had 500 houses in Denver and had section 8 there some really tough d-class properties. People killed, cracked, you name it. But yeah, Section 8 back then was a lot different. They could screw you it, but I'm getting involved to help these people out. And we're bringing in Section 8. We're bringing in housing because I believe in it. And I ask that specifically because I'm going through not the same thing at all, but I'm actually deciding to go heavier on the Section 8 with any of, whether a single family and or like I bought four apartments this year, smaller apartments.

But I'm choosing to go Section 8 because they are C-class neighborhoods not bad not cracking death whatever but part of that is not just the increased rents but what you went through i'm safety safety brother yeah because it's the fan and i know we're going to talk about that don't you think the section oh sure oh we're going to be a lot more unless the government goes, which we can talk about in a minute. We're going to be at par, by the way. But, yeah, no, we're already broke, way broke. But wait until you hear how broke. But, no, that's really smart, man. Okay.

And, you know, that might – and I will tell you, I don't buy C-class assets now for that reason. Right. Okay? Because, you know, I'm recently single, and I didn't have to buy groceries. And I went to the freaking grocery store, and I'm looking at the clerk. I'm like, $150 for that? Are you freaking kidding me? I'm like, how do people afford this?

She just shook her head. And then, you know, $150 to fill up my truck? I mean, there are people who live paycheck to paycheck, and then that C and D class asset base, man, it's scary. So I try to stick. I'll buy a C asset in a B area that I can build up or a B asset in an A area that I can build up. Don't buy D. Ask me how I know.

That's right. I had properties in Denver where they cut holes in the door to pass the crack through, where they put concrete pilings at the end of the street to slow down. Is there a F or an E of that? No, there's D minus, I suppose. I have people killed in them, behind them, around them. You don't need that brain damage. I don't want all that.

You'll see the higher cash flow, but the only people that will buy is bottom feeders and it's not worth it. It'll, it'll slow down your acquisition from ID assets. And you know, I'll get people that do it anyway and you'll regret it. I promise you. But, but let's talk about, if you're ready, talk about what I think is coming. Let's do it. All right. So I'm going to give you some headlines. I got my sheet here so I don't misquote. So the head of Chase, JPMorgan Chase, Jamie Dimon. JPMorgan Chase, largest bank in the world with the exception of state-owned Chinese banks. So really probably the largest bank in the world. Okay. Here's his headline. The U.S. is driving towards a cliff as debt snowballs. He said, brace yourself for an economic hurricane. Direct quote from him, okay?

Guy named Rubini, who was Clinton's senior economist, who predicted 2008-9 crash, warns of a coming greater depression. This is in Fortune magazine. The head of Citibank, his economist named Hollenhorst told Bloomberg, the U.S. economy is headed for a hard landing. Donald Trump says, the U.S. economy could reach levels of the Great Depression. This is a news week. Here's the thing. Here's what's crazy. In the last four years in this country, we've created 80% of the currency in existence. Yeah.

Up to 2020 was 20% of the currency. Literally made the currency. We made basically. We printed 80% of the money in the last four years. I mean, hello. Why is four years. I mean, hello. Why is there inflation? I mean, hello. Right.

And how do they fix it? I don't think interest rates are going to fix it. Right now, our debt is going up a trillion dollars every hundred days. Now, if you want to freak out, and by the way, I'm not trying to scare you here. I'm trying to get you excited because opportunity is freaking coming. And I'm going to tell you, you've got to pick your vehicle right now. If it's single family, if it's multifamily, if it's, it don't do all. It's got to be real estate, period, end of story. I agree. Or buying businesses. I wish there was another one of me to buy businesses because I

think you could really kill a lot of aging baby boomers. But certainly retail, industrial, self-storage, any of those asset classes are great. Don't do office. Good God, office is getting killed. But if you really want to be blown away, go on Google and look at an image of a billion dollars, a million dollars, a billion dollars versus a trillion dollars. It'll blow your mind. A trillion dollars is such a staggering amount of money. It'll blow your mind. And right now we're paying a trillion a year in interest on the debt. Okay. That's more than Medicare for the United States. I mean, do you see a problem? Do you see a problem here? I don't think there is. And so that Piper has got to get paid at some point, you know, and I will tell you, even if it's, if, and if it doesn't hit hard, like in the next 12 months, we're still going to see a big crash

in my space, which is commercial real estate. Office is like 65% occupied. These assets don't break even unless they're 85% occupied. Multifamily, there's a lot of operators that got adjustable rate debt called bridge debt. It's short term. It's very onerous debt. And they're in deep shit. I'm telling you, there's a ton of them. I just closed on a 200 unit asset in San Antonio, a mile away from a 296 unit that I own, and I got it at a 40% discount. I just closed on it 30 days ago, and 40% discount compared to the one that sold next door. And so it's coming. It's already starting to happen.

There are deals coming, and I think we're going to see a ton of them in my space. So, again, don't get – let me give you a couple other headlines here, actually. This was actually about eight months ago. 20 million households are behind on their utility bills. This is in CNN, okay? Elon Musk, pretty smart guy, yes? Sort of. Said they're lying to you.

The crash will be much bigger than they say. There's a direct quote. Again, should you be worried? No. Get excited. Pick your freaking vehicle. Right. You know, whatever it is, learn it as quick as you can.

Do you mind if I mention my virtual boot camp coming up? Do it. Pick your freaking vehicle. Whatever it is, learn it as quick as you can. Do you mind if I mention my virtual bootcamp coming up? Do it. All right. So I've got a live bootcamp in Orlando, Florida coming up November 8th, 9th, and 10th. And if you use the code Justin, you can come for $197. It's three days of training and networking for $197. Tell me your excuse. I don't care if you learn from me, but now is the time. And by the way, to do that, you go to rodslinks.com or text the word links to 72345. That's my link tree. There's a ton of free resources there, free books, best in class books that are free about

different aspects of multifamily. My bootcamp site is there. My podcast is there. Use the code Justin when you check out to get that $97 price. It's about three times that now. But again, I don't care if you learn from me but get up to speed right for what i said is yet now we're not all rod cleef right so for example i'm i do own a rather large 584 door nice property in houston this is syndication right so i'm not by any means only right um but the other four apartments are all smaller um 30

door stuff like that good for you man but for the other individuals who might not even have my level of experience where do they go what come come come learn i mean even if you're going to invest passively for god's sakes don't give your hard-earned money to someone unless you understand the business and 16 hours with me you'll have a pretty freaking good understanding it's drinking through a fire hose i'm going to tell you i mean mean, it's, and I don't sell anything. It's not a big sale. It's not a sales pitch at all. I won't, I won't even take your credit card. So, so, and for $97, I mean, hello, tell me your excuse, but I'll teach you, you know, how to, how to pick a market, how to evaluate a market, how to find deals, how to evaluate those deals,

how to raise all the money you need for your deals, how to syndicate, how to joint venture, how to finance, how to manage your properties. You know, when I spend time on mindset, there's a reason my students are so freaking successful because they actually take action with what they learn. Okay. So, I mean, I will tell you, if you come to my event, it's a Saturday and Sunday and you can pay a couple extra bucks and get the recordings. But if you come on Monday, if you didn't love it, I'll give you your 97 freaking dollars back. So it never happened. This is the first time for everything. But, you know, I don't mean like it.

I mean love it. I'll give you the money back. Let's talk about choosing markets. A quick question I get all the time. Just do it. Let me tell you what you do. You use three, four websites. Write these down.

City-data.com is one. Bestplaces.net is another one. DataUSA.io is another one. And census dot gov and you play in there you look at the demographics but you want to see three things growing population income and jobs what's the most important jobs okay and so that's how you pick a market and and if you live in california well first of all don't invest in a blue state it's not a political thing life's too freaking short okay for those regs and they're overtaxed and don't get me started. But if you live in California, don't invest in Boston or vice versa. There's enough low-hanging fruit near you so you don't have to, you know, don't go across the country. That's ridiculous,

okay? I would tell you the four markets to consider first. The first is your backyard. For me, that's a two-hour drive in any direction because you can do it with day travel, okay? So that's option number one of the four. Second option would be somewhere you've lived or spent some time, went to school, whatever. For me, it'd be Denver. I guess don't name every street across the whole city because I used to knock on doors of people who are in foreclosure. That's how about 500 houses there. So that for me is Denver, whatever it is for you. That's option two. You know that town. Option three would be a place you have boots on the ground, friends or family, people that can tell you what's going on. They've got the air to the ground. They can help you if you need something. That's option three. Option four would be a place you like visiting and might

even want to retire. Okay. So those are the four options I would consider first, but don't fly all the way across the country. That's silly. Especially in the asset class that has a price point, right? So if you bought a little. Sorry to interrupt. Forgive me. Remember this. In my space, you can buy anywhere. I've got assets in seven states because you can hire great management companies.

You buy small stuff, you can't find the good management companies, okay? You'll get a broker that does it on the side or something. And I've had lots of problems with that, but you buy a large asset. I mean, they have sophisticated operators that manage these things. Third-party property management companies. Back to economies of scale. That's why you're able to go do it. What states do you buy in? I'm in, I'm in, I heard Venus and I'm in, I'm in the same ones and a couple of others. I'm in Florida, of course, love fucking Florida, uh, where we're doing this right now. Um, I'm in Georgia. Yeah. Um, parts of Georgia Parts of Atlanta are tough.

I've got a really nice asset there, North Carolina, South Carolina. I've got assets in Ohio, but my biggest market is Texas by far. I've got assets in Dallas, San Antonio, Houston. And I've had assets in Louisiana. We'll do that again. I've had assets in, oh, I have one in Nashville. I like Nashville. I don't like the other side of the state.

I had bad experience in Memphis uh yeah those are the main ones yeah yeah it's it's interesting that there's a lot of again this is kind of what uh you're saying it's all about economy of scale yeah if you buy one single family home in anywhere wherever you can't get good contractors you have have one home. What's the point? What do they call that? Oh, God, where it's all done for you. Turnkey. Turnkey. The only person that benefits on a turnkey is the one selling you the property. That's right.

And you've got no leverage. I can't tell you how many people I've had complain about turnkey because you've got no leverage. You've got one house. Who cares if they do a shitty job managing it? You have no leverage at all. You've got a 200-unit apartment complex. You've got some freaking leverage. Absolutely.

Yeah. A hundred percent. So if you're a newbie, if someone's listening to brand new, do you say go apartment just straight out of the gate? Very few people do. I mean, I've had people on my, again, I've, I've got people that on my couch in my studio that own 20,000 units, 10,000 units, 5,000, 3,000, 2,000, almost all start with a house or a duplex. Do you suggest that just to kind of get their wheels turning or do you say,

I just say, get started. Okay. Period. Whatever you got, you know, you got a courage muscle, right? And whatever you've got the courage to start with, just start. Okay. And, and, uh, because that'll start to get you over the hump. It's like that law of the first deal. Cause it's the, the, the, thegap is on your brain. Okay, you just got to do it. And when you realize it's not as hard as you think, it's not as intimidating as you think. You know, you hear syndication, you hear $10 million property, you're like, holy shit. Well, believe it or not, it's probably easier than buying a house.

But you've got to know what to do. Come to my freaking boot camp. Okay, and you'll have a great understanding what to do and or learn somewhere else whatever but once you know it and you educate yourself um then then it's not as intimidating and but but again i think the shit's about to hit the fan but you got to get up to speed right now because if you're trying to learn it in the thick of it you got to have the relationships built up you've got to you know understand how to underwrite deals and have looked at a bunch of deals. I'll get people say, should I wait? I'm going to say, no, I believe you heard about the deal. I just closed on you.

You know, you've got to get to a point where you can sniff if a deal is a good deal, but that takes time. That's why you got to start now. So the age old mom was the best time to plant a tree 50 years ago. When the next time is today, it's the same thing. And I'm with you. I am agreeing on everything. Thank you. And I, and I'll tell you the thing that i made a mistake in my own career is i didn't take what your advice that you're giving to everyone here listening to this on apple and watching it on youtube is you need to be getting into this asset class faster and or at least buying assets to keep for yourself because you've done a lot of single family yourself so i know you're not totally against single family no i'm not listen if they're all in the same general like close area

it's okay sure i would not spread out like my dumb ass kid where two hours in each direction yeah no so the point though is start that process today to to your point rod is get started today that is the best strategy right so if it's one single family, if it's a fourplex, if it's a 10-door apartment, just get started. That's right. Right? And start studying it. You may have to kiss 100 frogs, 200 frogs, 300 frogs to find one. But start looking right now.

Start, you know, immerse yourself in it. Wallow in it, for lack of a better word. Use those websites I sent you to study your markets. Get your butt to my boot camp. There's no excuses for $97. Or just learn on YouTube University, whatever, but get started. And so-

What do you think about interest rates and how that's impacting your current business? And then how do you think it's going to be impacting the next 18 months? That's why we're paying a trillion a year in interest right now on the national debt. It's killing the country. It's killing it.

And so, but the problem is with inflation, you just heard, we've created 80% of the money in the last four years. I don't know how they're going to slow inflation down. And their only mechanisms are quantitative tightening, which is kind of happening a little bit right now because it's harder to get money. But, and the other one is interest rates. But if, you know, I don't know, people say the interest rate's going to drop. I hope they do because otherwise it's, I think it's really going to be ugly. Really hurt. Yeah. No, i tend to agree yeah and by the way drop to me is you know fives and sixes yeah because what i think covid did terrible for people

is it indoctrinated them to reality of a 2.8 percent loan which has never been seen before and in my opinion will never be seen again. I agree. But now it gives them this expectation that is so improper about what loans look like. What interest rates look like. You know, I'll tell you something funny. In 1978, when I started in real estate, I was 18, 1978,

interest rates were 18%. That has to give you some freaking perspective. I mean, I remember doing backflips when they hit 7%. I'm like, holy shit, it's 7%. But I was buying properties at 18%. Yeah. That's to give you some freaking perspective. I mean, I remember doing backflips when they hit 7%. I'm like, holy shit, it's 7%. Right. But I was buying properties

at 18%. Right. Because it's all numbers. Our business is empirical. It's numbers. I get, and listen, I don't mean this disrespectfully.

My grandfather says the same thing. He's like, tell all your students to shut the fuck up. Because he was developing. He was developing. I just flipped him off, by the way,

for that 7th grade grandfather. That's developing. I just flipped him off, by the way, for that grandfather. That's funny. But he's like, people don't get it. They genuinely don't. No, they don't. And the sad reality is even if they do, they forget. I mean, don't get me started on what's happening. Rod is direct.

You guys understand one thing. You need to take the action now. This is the only vehicle that Rod or myself are aware of that can create a tremendous amount of income and build a tremendous amount of net worth and have a life that millions can live. Here's the thing. Inflation is going to raise everything, including rents. You buy a place now, even if it's just an okay deal, inflation is going to drive rents up, and income is what drives the value of commercial real estate.

And so any increase to the net income is an exponential increase to the value. That's it. And so everyone needs to please live. They forget that. Thank you. And there's a huge shortage. A huge. And a huge disparity between a mortgage payment on a house and what you can rent for.

And people can't afford to buy. We've become a renter nation. I mean, think about all the babies that were born during COVID covid think about the 17 million people they let across the southern border people need a place to live that's it you know and so it's it's not getting better it's getting worse so you know our business you know renting real estate is going to go nowhere but i was saying you know residential real estate is going to go nowhere up i'll tell you guys one thing about rod he's been there and he's done. If there's someone that you can trust is someone who's been through the war, survived the war, has the scars to prove it and be able to keep going. I appreciate that. I'd like to share

one quick last story because it ties into goals. So when I lived in Denver, I'd always knew I wanted to live on the beach. There's no beach in Denver. So I would visualize the palm trees and the surf and the sand of the beach. And 20 years later, I built this, what's now a $25, $30 million mansion on the beach. I owned the beach on one side. I had boats on the backside. It's called a Gulf to Bay. It was like a slice through an island, which was unthinkable when I was 18, but I made it happen. And you can make it happen too. You know, do these goals and don't limit yourself. Again, go to Rod's links and do my goal settingsetting workshop. RodsLinks.com. It's at the bottom.

There's a guide you can download. And again, I'm not going to try to sell you anything. I don't even think I asked for email addresses. Just go in there and do it. But so 20 years later, I built that house. And two months after I moved in, I'm floating in the pool at night. Just let me describe it, okay? There's a giant waterfall from the second floor balcony into the pool.

You had to walk through the waterfall to get to the pool as a magazine the pool was you know big spiral staircase up through the middle of the house wine cellar elevator on the set i'll land the plane with this on the second floor i had aquariums built around the staircase that cost me almost 200 grand so this gives you an idea of the house yeah so two months after i moved in i'm floating in the pool at night i'm looking up at this testament to my ego which is really what it was prove the freaking the freaking world I was good enough. Okay. That didn't do it. You know, I don't know what would. And, and I got depressed and I don't mean a little depressed. I mean, I got really depressed. I'm like, what the hell? My family, beautiful families inside sleeping. I had all the cars, the Maserati and the stupid shit, boats, jet skis. And, and I'm like,

how could I be depressed? And when I look back on it, there were several things happening. And that's what I want to share with your audience real quick. So number one is it's never about the goals and you need, but you need them. Happiness comes from progress and growth. You got to be progressing and growing. Okay. So that's number one. Number two is you should never achieve a big goal without having other goals lined up behind

it. Like the good book says, without a vision, the people perish. You got to have a vision for the future. So that's another one. But the, but the, the big one for me was I'd been totally focused on me, Rod, Rod, Rod, show the world I'm good enough, show the world I matter. That's the year I went and saw Tony Robbins and found out he fed families for the holidays. I spent 20 years with him after that and just following him around the world. But I'm like, what a concept. Do something for someone else. I'm embarrassed to say I had to be 40 to get that memo.

And so I called my brother when I got home. I said, hey, let's feed five families because I was going to see him in Denver for Thanksgiving. So he called his church, found five families that really needed help. And we bought toys for the kids and frozen turkeys. And we just had a lot of fun buying this stuff. The third family changed my life, Justin.

So we go up to this house and there's this woman in there with five kids in a one bedroom uh hispanic woman and she comes out she sees all the stuff on the porch she starts crying her kids come out to the older ones start crying i start crying and i'm hooked in the last and this is not ego there's a message in this in the last 24 years i've fed over 150 000 children in my area in Sarasota for the holidays. I've done tens of thousands of backpacks filled with school supplies. I'm doing 2,000 here in two months in August. I've done thousands and thousands of teddy bears to give local police departments for officers to keep in their vehicles and they encounter a child that's been in a traumatic situation to comfort that child and bridge the gap with the police.

And the reason I bring this up is Tony Robbins calls it the science of achievement versus the art of fulfillment. Achievement's a science. If you want to learn from Justin and I, we'll give you the blueprint. You just got to go do it, right? That's it. We'll give you the map. You just got to go do it. That's a science.

But fulfillment's an art. You got to figure out what juices you. For me, it's kids. Maybe for you, it's the environment or the elderly or animals or whatever it is. Give right now. See, we've been taught in this country to achieve, to be happy. But if we're giving back, and it's a play on words, but it's important. If we're giving back, we're happily achieving. Okay. And so give back right now and don't say, ah, you had money. That's why you did it. You want the money? Give back right now. You'll get the money. Okay. That's the way God works. So, you know, anyway, I just

wanted to leave with that. That was a great exit of a podcast episode, my friend. Thank you. Guys, it's been an honor for me. Thank you very much coming in here and giving your wisdom, all the real estate stuff and goals and mindset. Guys, this has been an incredible episode. Make sure you share this with at least two of your friends. if you got something from our guy here, Rod. Thanks. And get your butt to my link tree and come to my freaking boot camp for $97. Or at the very least, start listening to my podcast. It's free.

There's a bunch of free stuff there. RodsLinks.com or text the word LINKS to 72345. And feel free to ask me any questions there. I answer every single question. Love it. Thank you very much my friend good to see you all right guys that is the end of this episode stay tuned for the next episode where we're gonna have another incredible guest again if you got something great from this share it with at least two friends peace you