Why Multifamily Real Estate Beat Single Family | Rod Khleif’s Strategy

Michelle Kesil (01:31)
Hey everyone, welcome to the Investor Fuel podcast. I’m your host, Michelle Kesil. And today I’m joined by someone that I’m really looking forward to chatting with, Rod Khleif. I hope I pronounced your last name correctly. Awesome. Who’s been making serious moves in the real estate investing space. Rod, we are so glad to have you here today.

Rod Khleif (01:49)
You did perfectly.

Michelle Kesil (01:58)
I think our listeners are really going to take something away from how you’re approaching the real estate investing space specifically with your expertise on mindset and psychology and your school that you have. So let’s dive into all of that. First off, for people who may not be familiar with you and your world, just give us the short version. What is your main focus these days?

Rod Khleif (02:27)
So my main focus, I mean, I’m in acquisition mode, so I own multifamily properties and also senior housing. We’re actually just getting started in senior housing. have our first property under contract and ready to close. ⁓ But I’m also a coach and a mentor. So I host the largest real estate podcast in the world for commercial real estate.

I teach people how to buy apartment complexes. in fact, I just had a boot camp with hundreds of people, a virtual one, from this studio right here this last weekend. I’m still recovering a little bit because it’s me for 16 hours. yeah, so I do boot camps and I teach people how to buy apartment complexes. And I’ll brag for a moment. I’ve been doing it for a little over seven years. And my students own well over 260,000 units that we know of. In fact, it’s probably quite a bit more than that, but we just can’t even keep track anymore.

And it’s because of mindset and psychology. And if you allow me to tell my story, I’ll explain a little bit more into that. But 80 to 90 % of a person’s success in anything is their mindset and psychology. Only 10 to 20 % is the mechanical stuff we talk about on our podcast. It’s really the do and it’s the keep doing. It’s the pushing through fear. It’s the getting uncomfortable to make things happen. And that’s why my students are so successful. They actually do it.

Michelle Kesil (03:47)
⁓ Absolutely, I definitely agree with that. So let’s hear more of your story. I would love for the audience to get to know that.

Rod Khleif (03:52)
Alright.

Perfect. ⁓ For those of you that have heard it, I apologize. I’ll try to be brief. So I’m a Dutch immigrant. know, actually think wooden shoes and windmills. I actually have wooden shoes here. It’s kind of funny. It’s a story that I tell. But I immigrated to this country when I was six years old with my mother’s Vantje and my brother Albert. We ended up in Denver, Colorado. Really didn’t have much. In fact, ⁓ we shopped at an expired food store because it was cheaper than real ⁓ regular

regular store as true story they had him back then and drank powdered milk with our cereal in the morning because it was cheaper than real milk and I wore clothes from the Goodwill and Salvation Army all the way through junior high school till I lied about my age when I was 14 because I was tall and got a job at Burger King flipping burgers so I could buy my own clothes and you know and I’m sure you have listeners that had it harder than I did and maybe even have it harder now 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 she was a bit of an entrepreneur with her babysitting money so

She bought the house across the street from us when I was about 14 for about $30,000. 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, OK? And I was like, whoa, wait a minute. You made $20,000? You didn’t do anything? Screw college. I’m getting into real estate. So I went and got into real estate. But my first year in real estate, 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.

So what happened between year two and year three that caused me to 10X my income? Well, what happened was I met a guy that taught me about mindset and psychology and how that’s the biggest piece of the whole thing. You gotta push through fear. You gotta push through limiting beliefs to make things happen. And so fast forward to today, I’ve owned over 2,000 houses that I’ve rented long-term in three states. Excuse me. Yeah, 2,000 houses I’ve rented long-term in three states. I thousands of apartment units now. In 2006,

my net worth went up $17 million while I slept. And you might say, wow, I said, wow, and I got a head so big I could barely fit it through a door. I thought I was a real estate God. And you know that happens, God of the universe will give you a nice little smack down. Well, that was 2008. I lost $50 million in 2008 conservatively. And so what I’m known for talking about, you know, my podcast and my boot camps is really the mindset it took to have 50 million to lose in the first place. And

So what I’m known for talking about is the mindset it took to have 50 million to lose in first place, and probably more importantly, the mindset it took to recover from that back to the success that I’m blessed to have today, and happy to drill down on some of those pieces, because

The strategies that I utilized to recover from losing $50 million are the same strategies that anyone listening that hasn’t started yet, that knows they want more out of their life would use to get going. so happy to drill down on some of those pieces if you like.

Michelle Kesil (07:28)
Yeah, I would love to hear one of those strategies if you can give us a specific example.

Rod Khleif (07:31)
Okay.

Sure, well the first one is you got to know what you want. And so if you come to like this last boot camp I had this weekend, the first thing we did was goal setting on steroids because how do you get anything if you don’t know what it is? You’ve got to know what it is you want and why you want it because that’s how you push through fear. That’s how you create that burning desire or that hunger. that, you know, because fear stops most people. So it starts with, you know, figuring out what it is you want and then you’ve got to make a decision and move forward. ⁓

you know the Latin root for the word decision means to cut off. You know it’s not one foot in one foot out it’s not dipping a toe in the water it’s done. You know an example of a decision would be if you’re going to attack the island you burn your ships because you’re taking their ships home. You know that’s a decision. ⁓ And so it’s you know figuring out what you want making a decision and the next piece is taking that first step. you know and a lot of people you know are afraid to take that first step they get caught in analysis paralysis or they’re afraid of failure.

I’m going to tell you fear regret much more than failure. Okay. You know, there was a nurse in Australia, Michelle, that was a hospice nurse. Her name was Bronnie Ware. And so, and she, she had dealt with patients that were dying and she asked him a question. And the question was, do you have any regrets? And she wrote a book about it, something like the five regrets of dying. And you know what the number one regret was? It was a bestselling book. I, but the number one regrets 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. Don’t fear failure. I I lost $50 million and I came back. you know, there’s nothing you can’t pull back from. You’ve just got to, you know, I call them seminars. That was a big seminar. It was an expensive seminar, but it was a seminar. you know, if you get, it’s only a failure if you don’t get back up or you don’t get the lesson, but don’t fear that. We fail our way to success. Fear, regret.

Michelle Kesil (09:23)
Yeah, absolutely. It’s such an important mindset shift to have and I love that you can see the lesson in it. Can you share like what you feel that lesson was from that experience for you?

Rod Khleif (09:36)
Oh God, were lots of lessons. mean, from a technical standpoint, there were things that I did wrong from a technical standpoint. For example, you know, I had 800 houses when the market crashed, but they were scattered two hours north of me, two hours south of me, and everywhere in between along the Gulf Coast of Florida. And, you know, I’ll never own another house unless it’s a third, fourth, fifth house for me as an investment. I don’t believe in it. You know, I just do multifamily because

It was the houses that pulled me down. See, each house has its own taxes. It has its own insurance. And here in Florida, there’s no state income tax, so the property taxes are exponentially higher. And I had properties in wind and flood zones that had higher insurance, and all of this impacts cash flow. But what killed me was the maintenance. These properties were primarily C-class property. So there’s A, B, C, and D. A is brand new. D is the hood. Stay out of the hood. Ask me how I know. But C is older property.

tougher demographic, ⁓ know, they’re harder on the properties and there’s a lot more maintenance and you know if I sent a maintenance guy to and I had several apartment complexes back then as well and if I sent a guy to one of my apartment complexes to fix things we could stockpile parts so they’re you know stockpile appliance parts you know HVAC parts plumbing parts you name it locks door locks window locks whatever and they can be in and out in an hour well if I had to send them to a house that was an hour away they’d have to go in every house is different got to see what’s wrong then they got to

go to Home Depot or Lowe’s where we have an account, which is probably another hour round trip, and I don’t know about other guys that are listening, but when Rod tries to fix something, ends up going to Home Depot more than once. so what took an hour at one of my apartment complexes took all day at one of my 800 houses. So they never really fully cash flowed. And by the way, I get hate about this all the time. Yeah, you were probably over leveraged. I was at a 30 % loan to value, and I still crashed and burned. ⁓ Only owed 30 cents on the dollar. And ⁓ then the last piece from a

from a technical standpoint, again, not a mindset piece, but from a technical standpoint, I didn’t pay attention to tenant demographics back then. If they had good credit and they didn’t have, they had the deposit,

I let them rent. They had a source of income. Well, what I discovered after the fact was I had a lot of contractors, plumbers, electricians, dry welders, painters, roofers, and that work fell off a cliff in 2008 and nine. And so they didn’t have work. So it was like the perfect storm. And you want to hear something crazy.

By the end of 2009, I was trying to sell the whole portfolio. Just take it, just pay off the debt, and I couldn’t even sell the whole portfolio, and the value dropped below what I owed on it. So it dropped more than 70 % here in Florida. Florida, Arizona, California were the hardest hit back then. But anyway, from a technical standpoint, and this is why.

You know, started my podcast, I don’t know, nine or so years ago to tell people if you’re going to buy and hold real estate, for God’s sakes, do multifamily, don’t do single family. You know, ask me how I know. By the way, I give out t-shirts at my boot camp that say, hashtag ask me how I know. A student gave me one once. Because I’m like, don’t do that. Ask me how I know. And so anyway, I’ve said it twice now. That’s why.

Michelle Kesil (13:20)
That’s amazing. Yeah, that’s such a powerful experience that not many people. Yeah, painful.

Rod Khleif (13:26)
Painful painful might be a better better descriptor,

but you know, but you recover, you know, like I said, you know when it happened I reassociate with my goals. I made a freaking decision I took the first step to get back on track, you know and You know and I and I and I made sure that I was focusing on what I wanted not what I didn’t want It was it’d be very easy to focus, you know on what you don’t want focus is power and see what a lot of people don’t realize is what you focus on gets larger both positive or negative and so

you know i have people call me say how do i get out of student loan debt i’m like wrong question how do you make so much money that that’s irrelevant is the right question you know like they asked mother Teresa if she was anti-war she said no i’m pro-peace right it’s kind of the same thing but you get the message in that and you know and uh… it’s funny i i listen to two podcasts michelle uh… joe rogan and tim ferris to get both sides of the aisle i’m definitely on one side uh… but but you know on tim ferris’ show

I brag my podcast probably pushing 30 million downloads. Those guys get it a week on those shows. ⁓ on Tim Ferriss’ show, he interviews the best of the best in the world. The best athletes like Michael Phelps, the swimmer, NFL, NBA players, actors like Ed Norton, Hugh Jackman, Arnold, billionaires like Ray Dalio. CEO is the biggest companies in the world like Zuckerberg. And he deconstructs success. It’s fascinating conversation. But I started to hear a pattern, Michelle. They almost all meditate.

What does meditation enhance? Focus. Again, focus is power. So focus on what you want, not what you don’t want.

Michelle Kesil (15:00)
That’s such an important message. think that the audience is really going to get value from that. And let me ask you this. What are you most focused on solving or scaling next? Like what’s that next real big goal for you?

Rod Khleif (15:16)
Well,

Solving interesting interesting question, you know, I I went through all of the ⁓ Materialistic goals over my lifetime. I mean the watches I’ve got almost two million dollars of the watches the Lamborghini the Rolls Royce the Bentley all that stupid crap that I thought was important at one time

I will tell you, you know people’s goals shift as they get older. They experience some success and

My goal really now is, I’ve got a wall in my other, I’ve got six buildings here, I’ve got a compound on the water here in Sarasota, and in my other office, ⁓ I’ve got a wall covered with hundreds of thank you cards from my students. And this is gonna sound self-serving or maybe like hyperbole, but it’s not. I get incredible satisfaction from seeing my students’ success. I’m very, very proud of it. And…

So, you know, that’s a big area of focus for me. We’re continually improving our program. They’re called my warriors, my coaching students, and they’re called my warriors, and we’re continually improving it. It brings great joy to my life. I get love every single day. I mean, every day I get cards or gifts or DMs or emails ⁓ from students or people whose lives have been impacted by my work. And what’s really cool is I get recognized pretty much.

on a weekly basis anymore and that’s never gonna get old. mean that makes me feel so good when that happens. you know, again, my priorities have shifted ⁓ and ⁓ that gives, you know, that’s purpose. And I tell people, figure out what your purpose is in life. you know, and ideally it’s a way to make the world a better place. Ideally that’s incorporated in your purpose or your family better or your kids better or something. It’s outside of you.

You got to figure out what it is because when you’re operating in your purpose and your strength as well, I tell people play to your strengths. know, in the multifamily real estate business, there’s lots of different hats you can wear and it’s a team sport. And so, you you’re not going to do it all. You’re not going to take down a 100 unit apartment complex by yourself. You’re going to do it with other people, but you want to play to your strengths. Your strengths are your greatest assets. You know, when you’re playing to your strengths, you’re loving what you’re doing. And when you love what you do, work is play and you really don’t work another day in your life.

And when you love what you do, you’re passionate about it. And when you’re passionate about it, you have the ability to influence people. And influence is required to do any business. If you’re going to raise money for these deals you’re buying, or if you’re going to influence partners, potential investors, whatever, it requires passion. And that passion breeds innovation and breeds creativity. when you hit a speed bump, if you’re loving what you’re doing and you’re working in your purpose,

and what you’re strong at, you hit a speed bump, you push through it. You know, doesn’t completely derail you. Now, are you going to have setbacks? Are you going to get your nose bloodied? Are you going to get your butt kicked? Yes. But if you’re dealing in, if you’re working in your passion and you’re happy with what you do, you push through because you you’re loving what you’re doing and it’s a blip. So, yeah.

Michelle Kesil (19:02)
Yeah, that’s super valuable. And when you mention your students, can you expand more on what it is that you’re teaching your students or what your program entails?

Rod Khleif (19:14)
Uh-huh, sure. Sure,

sure. Well, first of all, it’s kind of gotten a life of its own. I have about 2,000 students around the country, and like I said, you know, they own, I mean, besides the, I don’t know, could be 280,000 units in multifamily, they own senior housing, student housing, hotels, mixed-use retail, industrial flex space, mobile home parks, I mean, you name it. Every asset class is being purchased by my students, and…

There’s a power of your peer group. Okay, and there’s that adage, a rising tide lifts all ships. Now, ⁓ you know, here’s the problem. A lot of people have ⁓ fear and limiting beliefs, but when they can see other people doing what it is they want to do, people that have nothing on them, it helps mitigate that fear. When they can bounce deals off each other.

You know, out of those units I was just talking about, whatever it is, 265 to 280,000 units that we know of, almost all of them are done between warriors because it’s a team sport. And so, you know, the power of your peer group is critical, you know. And, I mean, you show me, you’ve heard the adage, you are the people you hang out with. I mean, you show me your three best friends. I’ll show you who you are, your health, your happiness, definitely your finances, okay. And so, you know, and here’s the sad reality though, Michelle. Most people default to a peer group

that they went to school with or that they work with. And those people may have their own fear and limiting beliefs. ⁓ And, and, and maybe they’ll, they’re afraid of losing you or they’re fear, afraid of, ⁓ you know, feeling less than if you succeed. And sometimes it’s family. So I’m going to tell you proactively, you know, love your family, but proactively choose your peers. Okay. Be very careful who you allow to influence you. I remember when I was losing everything in 2008 and nine, I was in Tony Robbins platinum partnership.

and it was about a hundred grand back then all in and I was around people that were killing it. mean they were killing it in that crash. They knew it was coming. I didn’t. had rose colored glasses on or whatever but they knew it was, you know, so they were like just thriving and they’re like get up you puss, 50 million shmily and just go get up and make something happen. That’s who you want to be around, okay, is people that will push you and hold you to a higher standard. So I started a mastermind myself

At one time I think I had 40, 50 billion in assets represented by the members and it just became too much. It was like herding cats. But I started it because I wanted to be around people that thought what I thought was hard was easy. And so that’s what I want to tell you if you’re listening. Get around people that what you think is hard is easy. And that’s going to raise, that’s how you raise the bar. If you’re playing tennis, do you want to play somebody better than you or worse than you? Hello? You know the answer. So your pair group is critical. Yeah.

Michelle Kesil (22:05)
Yeah, absolutely. Relationships are everything in this space and your network really defines that.

Rod Khleif (22:12)
Yeah, that’s exactly right. So be careful who you choose. Be careful who you hang out with. ⁓ because, you know, same thing with kids. You want to see who your kids are hanging out with because who they hang out with is who they become. So it’s super critical. But, you know, I’ll share something else with you. And this might sound a little oofy-foofy to some of you, but this is how I had 50 million to lose and how I got it back. So you may want to ignore it at your peril.

So I want to talk about gratitude for a minute. Gratitude is the most important foundational emotion we have available to us. It strengthens our immune system, lowers our blood pressure, brings us closer to our spirituality, and it’s how we manifest anything we want in life. Most mornings, I will sit in my recliner in my other office, and I’ve got my vision boards there, and I will just do gratitude. I’ll be gratitude for the people I have in my life that I love, for my students, for my foundation.

then I’ll do gratitude for the things that I want as if I already have them. now you could call it prayer if you like, but I’ve gotten emotional being grateful for things I don’t even have yet. Now you might be laughing and be well this is how I had 50 million to lose and how I got it back. So you could ignore it if you want, but it freaking works, okay? And I’ll share one other thing with you that I like to share. So when I immigrated, we ended up in Denver, Colorado. But I knew I always wanted to live on the beach. There’s no beach in Denver.

And so, but I would visualize the palm trees and the surf and the sand. And for 20 years I would visualize that. 20 years later I built this incredible mansion on the beach. ⁓ I mean, just to describe it, I owned the beach on one side, had my boats on the back side. ⁓ It was 10,000 square feet. I had a waterfall from the second floor balcony into the pool. know, the pool was in magazines. A big spiral staircase up through the middle. ⁓

I’ll land the plane with it. elevator wine seller. On the second floor I had aquariums built around the staircase. Cost me almost $200,000. So this gives you an idea of the house. two months after I moved in, I worked for it for 20 years, right? Two months after I moved in, I’m floating up and I’m floating in the pool at night. I’m looking up at this testament to my ego. It was really to prove to the world I was good enough. That’s the truth of us. Because I had stuff happen to me when I immigrated. I got beat up in school and…

had some other stupid stuff that everybody’s had happen to them but you i used to ask myself how can i show them i’m good enough so that’s a limiting belief by the way you need to if you’re conscious if you’re consciously aware of those drag him out of the daylight because there’s a reason the acronym for belief systems is BS is because ninety nine percent of them are BS but we believe they’re real like my mom after i got you know i got thrown into school and didn’t speak english so i got found out what bullies were then she sent me to school in these wooden shoes okay can you imagine

I was crack cocaine for the freaking bullies, okay? And then, you know, the bullies would chase me home and she’d chase them off with a fly swatter. So the next day I got my ass kicked. And, you know, and again, that’s how I came up with this belief system. But a lot of people have them. And if you have them, I would just caution you. Pull them out into the daylight. Look at them with your adult rational mind. Recognize that they’re BS and they will go away. I used to be afraid to raise my hand in front of 10 kids in a classroom and I would speak in front of thousands of people a year, typically in flip flops, okay? You because I got past that.

But anyway, back to the story. so, you know, I had built this thing to prove to the world I was freaking good enough. If that didn’t do it, you know, what would? So I’m looking up at this thing and I got depressed, you know, and again, I mean, this place was magnificent. You know, I had the Maserati and the Mercedes and the boats and the jet skis and all the stuff. And I’m like, what the hell’s going on? How could I possibly be depressed right now? My beautiful family’s inside sleeping. And that this ties into the goal setting part of it. So.

You know, you should, so there were three things happening. Number one, you should never have a big goal that you achieve without having other goals lined up behind it. Because like the good book says, without a vision that people perish, you need a vision for your future. And I didn’t know what I was gonna do next. So that was number one. Number two is it’s never about the goals. You gotta have them to create that burning desire and that hunger, but happiness comes from progress and growth. You gotta be growing. And I didn’t know what I was gonna do next. So that was the second critical piece, you know, and.

You know, with the goal thing, you’ve heard the expression, the happiest days of a boat owner’s life, the day they buy the boat and the day they sell the boat. Again, you need the goals, because that’s what pulls you out of fear, pulls you to push through limiting beliefs. Or maybe you’re comfortable, right? Comfort zone’s a nice warm place, Michelle, and we know nothing freaking grows there, right? You’ve got to actually make something happen. So that was the second piece. But the third most important one was I’d been totally focused on me, because I had to prove to the world I was good enough. Rod, Rod, Rod. Show the world I matter. Blah, blah, blah.

That’s the year I went and saw Tony Robbins. This was 25 years ago. And I saw that he fed families for the holidays. 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 I called my brother in Denver. said, bro, let’s feed five families, because I was going to go visit him for Thanksgiving. So he called his church, found five families, really needed help.

and we had a lot of fun buying everything but the third family changed my life Michelle so we go up to this house and was a Hispanic woman with five kids and it wasn’t even a one bedroom it was a crappy place it wasn’t even a one bedroom and she came out and saw all the stuff on the porch and we had toys for the kids because we knew she had kids and she started crying and her kids came out two of the older ones started crying I started crying and I’m hooked now this is not me bragging if you’re listening okay there’s a really important message in this ⁓

relating to success okay so don’t like tune me out right now so ⁓ you know i’m blessed to say in the last twenty five years i’ve fed over a hundred and fifty thousand children here in my immediate area it’s probably more than that ⁓ and i’ve provided tens of thousands of backpacks filled with school supplies to local kids that at risk kids that don’t have basic supplies for school don’t get me started on that but i would just order two thousand for august i’ve done thousands and thousands of teddy bears to

local police departments for their officers to keep in their vehicles if they encounter a child that’s been in a traumatic situation. And again, I’m not bragging here. Tony Robbins calls it the science of achievement versus the art of fulfillment. Achievement’s a science. If you want to learn multifamily, get your butt to one of my boot camps, okay? I’ll give you code at the end of this. You can come for $47, spend two days with me, and I don’t even sell anything there. So it’s just two days of training for 47 bucks. So no excuses, okay? But that’s a science. I’ll give you the blueprint. You just got to go do it, okay?

But fulfillment is an art. I remember the science of achievements versus the art of fulfillment. Fulfillment’s an art. You got to figure out what juices you. For me, it’s kids. It’s also the elderly. ⁓ You know, maybe for you it’s animals. Maybe it’s the environment. But you’ve got to figure it out and you’ve got to give back right now. And you might be saying, well, you had money. That’s why you gave back. Well, that’s you want the money. Give back. That’s how you get it faster. That’s the way God works. That’s the way the world works. So, you know, anything you want, you give.

And so again, my message to you is no matter what, start giving back filling, figuring out what juices you and fulfills you. Because I will tell you, I’ve met super wealthy men that have sat in my couch right across here and they are not fulfilled because they’re still totally focused on themselves. So all right, I’ll get off my soapbox. But yeah.

Michelle Kesil (29:28)
Yeah, that

was such a powerful message. Thank you so much. I really appreciate your time, your story, your perspective. It’s really a unique way of sharing your light and your wisdom. So thank you.

Rod Khleif (29:37)
Thank you.

My pleasure. So if you are interested in my bootcamp, let me just throw that in there. And there’s tons of free resources here as well. Go to rodslinks.com. And what’s a code we could give them to get that price? Because it’ll be higher than that. Fuel, that’s right. So use the code FUEL to get that $47 price. Again, I don’t sell anything. You’ll leave knowing how to find deals, evaluate deals, finance them, raise all the money you need for them, syndicate, joint venture, property manager, you name it, all of it.

Michelle Kesil (29:58)
We said fuel, right?

Rod Khleif (30:13)
You’ll leave knowing how to do that for 47 freaking dollars and there’s about three thousand dollars in bonuses, too So there’s no excuses. Okay, and I don’t think I’ve ever had a complaint with thousands and thousands and thousands of people other than the breaks are too short because I’m trying to pack so much into the two days, but Anyway, again, if you have any interest in real estate get your butt to one of my boot camps rods links calm and Yeah, there you go

Michelle Kesil (30:39)
Amazing. Yes, hopefully people reach out to you and connect with you and get in that boot camp. So yeah, thank you so much again. And for those of you tuning in, if you got value from this, make sure you’re subscribed. We’ve got more conversations coming with operators just like Rod out here building real businesses and we’ll see you all on the next episode.