The $17M Lesson in Ego w/ Rod Khleif

251: In this episode, I talk with Rod Khleif, an immigrant-turned-multifamily mogul who built a $50M net worth, lost it all, and came back stronger. We dive into the mindset behind success, the pitfalls of fast growth, the current real estate market, senior housing, and much more.

(Show Notes: REtipster.com/251)

Rod’s story is filled with raw honesty, powerful life lessons, and specific advice on how to thrive in real estate (even if you’re starting from zero).

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Transcript

0:25

Hey, everybody. How's it going? Welcome back to the REtipster podcast. I'm Seth Williams. Today, I get to talk with Rod Khleif. So Rod has a fascinating story as someone who went from immigrant kid to multi-thousand unit multifamily owner, and then he crashed hard, and then he rebuilt big, not just with deals, but with mindset and mission. Rod has been in the trenches of real estate and entrepreneurship for 40 plus years. He's owned thousands of doors to learn the hard way what works and what doesn't. And now he teaches others how to do it smarter. Rod, how's it going? Thanks, Seth. Yeah, 47 years. It's crazy. I'm old as dirt. But it's funny. I'm getting into senior housing. And can I tell people, hey, 10,000 people a day are turning 65. And I'm one of them just turned 65 in January. It's like crazy how fast time flies, brother. With all the years you've been doing this, it sounds like you must have quite the story. Let's hear your story. How did you get into the real estate business? Let's talk about your early life as well? That's a great question, actually. I got in the real estate business because of my mother, but you just reminded me of a moment when you said that because I had a thousand people at a boot camp in Denver. I was teaching for three days and they brought my mom in from assisted living in her wheelchair. And I was behind the curtain crying because she's the reason I got into real estate. So yeah, I'm a Dutch immigrant. So I was born in the Netherlands, you know, think wooden shoes and windmills. Immigrated with her, my mother's Vansha, my brother Albert when I was six years old. And we didn't have much. We ended up in Denver, Colorado. I remember we shopped at an expired food store, believe it or not. True story. They had that back then. We drank powdered milk with our cereal in the morning because it was cheaper than real milk. And trust me, it sounds better than it is. And, you know, I wore clothes from the Goodwill and the Salvation Army, hand-me-down clothes all the way through junior high school till I lied about my age of Burger King when I was 14. You could work there if you were 15. I mean, I was tall and got a job flipping burgers, so they believed me, so I could buy my own clothes. And we struggled. I'm sure you've got listeners had it harder than we did and maybe even have it harder now. But I knew I wanted more. And luckily, my mom had an incredible work ethic. Like I said, she's the reason I got into real estate. So she babysat kids so we'd have enough money to eat. With her babysitting money, she invested in real estate. And her first real estate acquisition was a house right across the street from us. She bought when I was 14 for about 30 grand. I don't know, it was exactly 30 grand. And then when I was 17, she told me she'd made $20,000 in her sleep that had gone up in value 20 grand. Now, this is 1977 when 20 grand 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 out and got my real estate broker's license right when I turned 18, which you could do back then with education. I could have my own office. They got smart. Now you need some experience before you can have your own office. But I was smart enough to go work for another broker and I was still living at home. Well, my first year in real estate, I made about eight grand. My second year, 10 grand. But my third year, I made over $100,000, which back in 1980 was some pretty decent change. And so what happened between year two and year three that It caused me to 10x my income. Well, what happened was the broker I was working for actually taught me about the importance of mindset and psychology. His name was Gino and I was dating his daughter. And he told me how 80 to 90% of your success in anything is your mindset and psychology. Only 10 to 20% is the mechanical stuff we talk about on our podcast here, Seth. And, you know, fast forward to today, I've owned over 2000 houses that I've rented long term. I own thousands of apartment units now. In 2006, my net worth went up $17 million while I slept. And you might say, wow. And 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, when that happens, God of the universe will give you a nice little smackdown. Well, that was 2008 and 2009. I conservatively lost $50 million in 2008 and 2009. So what I'm known for talking about on my podcast, I'm blessed to host really the largest real estate podcast now in the commercial space by far. And the reason it's so large is I spend a lot of time talking on mindset and psychology. You know, the strategies that I used to have $50 million to lose in the first place, and then really maybe as importantly to recover from losing all that. I might be jumping ahead a little bit on this, but the whole mindset thing. So I hear about this a lot, limiting beliefs and how like you can do more than you really think you can and that kind of thing. Like you just got to change your mindset. Do you ever think people believe that their mindset is wrong instead of their business model? Like, could it be that like you actually are doing it wrong? Like you can have all the happy thoughts in the world, but like you got to fix a more tactical error that you're making. And how do you distinguish between the two? Because some people, I feel like they struggle and have a hard time and they think it's their mindset. But I know that you're actually doing something wrong. Well, they're two completely different things, Seth. The whole mindset and psychology thing is to get your ass up early in the morning, to stay up late, to do whatever you have to do, to grind for a few years like most people won't so you can live the rest of your life like most people can't. It starts with goal setting, for example. You come to one of my boot camps, the first thing we do is goal setting on steroids because how do you get anything if you don't know what it is? You know, again, that's mindset. You gotta create that hunger, that burning desire to push through those limiting beliefs, to push through the fear, to get uncomfortable. You know, the comfort zone is a nice, warm place, and we know nothing grows there, right? So it starts with the goals, but the tactical stuff. That's different. That's your ability to execute. That's your ability to build a company. That's your ability to build a culture. I call them seminars when they fail, but it's only a failure if you don't get up, you don't get the lesson. I've built 29 businesses so far in my career. I shocked when I counted and realized it was that many. Several worth tens of millions. I mean, I got two right now that are. However, most were spectacular flaming seminars. We fail our way to success. So don't fear failure, by the way, if you're listening. Fear regret. Fear being in the same place you are right now, a year or two, three years from now, unless you absolutely love where you are right now. Yeah. So I think those are two separate things, Seth. The mindset is what gets your butt up to go do it. The tactical is understanding business, learning business, getting around people that are doing it. You know, there's a reason my students are so successful. It's the peer group. They hold each other accountable. Rising tide lifts all ships. So if you're listening, you got to decide on your vehicle. You got to decide how you're going to take advantage of these incredible opportunities that are here. And they are here in my world in multifamily real estate and other asset classes, as well as buying businesses. I mean, there's 10,000 people a day turning 65. I'm getting into senior housing right now because it's a tidal wave. They call it the silver tsunami of seniors that are coming. And there's going to be a huge demand, a huge shortage of beds. Let me throw something else in here. So I listened to two podcasts, Joe Rogan and Tim Ferriss. I try to get both sides of the aisle. I'm definitely on one side. On the other side is Tim Ferriss. And listen, I love his podcast because he interviews the best of the best in the world. But on Joe Rogan's show, he had Elon Musk recently. I recommend everybody listen to that interview. It's exciting, but it's also very sobering. The most recent interview, he talks about AI, and he talks about how basically every job that's done in front of a computer. Is going to be gone within three years. I'm like, holy crap. Did he just say that? He's a pretty smart guy. Okay. Let's give him that $4 billion startups. So even if he's halfway right, it's sobering. Okay. And so, you know, if you've got one of those jobs, you better think about reinventing yourself. You better pick a vehicle and don't wait for the shoe to drop. Start learning something now. I'll tell you about my boot camps. I do every couple of months, if you're interested in real estate, but whatever it is, figure it out, you know, buying businesses, get around people that are doing it. And that'll help you with the tactical, like your question, Seth, that'll help you learn little nuances from people that are doing it. But you better think about that. If you're in a job in front of a desk doing computer work all day long, IT, for example, I mean, you saw Facebook just laid off tens of thousands of people not that long ago. They're ahead of the curve on this, but it's coming. And I'm not trying to scare you. You know, I've had to reinvent myself several times. I remember I was supposed to have 800 people at a bootcamp in Orlando right before COVID hit. I'm like, holy crap, what are we going to do? We had 400 tickets sold. I couldn't afford to get the money back. So I'm in my backyard, literally recording a video on my cell phone, telling people, hey, we're going to do it virtually. Yay. And we do it here in my compound. We built a studio here in one of my buildings. And now I pretty much do mostly virtual just because it's a great way to go. But anyway, I totally understand mindset and tactics are two totally separate things. I guess what we're getting that though, is if somebody's mindset is perfect. Like they're thinking exactly the way they should, but it's still not working out for them. What's wrong then? And how do you find out what's wrong? Because mindset, it's certainly a lot, but like, it's not everything, right? Here's a success formula. I learned this from Tony Robbins. He calls it the ultimate success formula. If you are going a certain direction with your business and you hit a wall. Focus on your outcome, your ultimate outcome, your goal, whatever it is, and you change your approach. That's it. And then if you hit another wall, you focus on your ultimate outcome and you change your approach. And that is the success formula. I had a business in 2010, Seth, that I built out of the ashes of my debacle. And it was a litigation support company that almost bankrupted the end of 2010. And then I evolved, I innovated, and it turned into a $10 million company with 60 employees that I sold a few years ago because I changed my approach. Just remember that success formula, guys. Don't think if you hit a wall that it's over. You just focus on what it is you want and get around people that are doing it. You want to be around people that think what you think is hard is easy, okay? And they can help you through things like that. Get a mentor, get a coach. When I was losing everything, I hired a coach that was $400 or $500 an hour. And he said we had to meet every week. And I was losing everything at that time. I was like, are you kidding me? but he just helped me change little nuances. That's all a coach does, help you work on the business instead of in the business. And there's lots of great business books out there. We implemented the EOS system from Gino Wickman's book, Traction, fantastic system to help you with your business and keep you on track. And there's a lot of good stuff out there, but you got to get back to basics. Right now, even my coaching business has slowed down quite a bit because the economy, people are scared. They don't want to invest. And so I'm reinventing myself. I built a studio at my Miami place in my dining room, and I'm going to do trainings every single Saturday just to reinvent myself a little bit. Back to basics. You got to do it. These 29 different businesses you've built. What are some of the big home runs, like the ones that went really well? And why do you think they went so well? My acquisition business right now is, my coaching business is fantastic. I can tell you, my student success, I think, eclipses everybody else combined, okay, my competitors. My real estate business up until the crash in 08 was very, very successful. I thought I was set for life. I I had 800 houses and multiple apartment complexes. I've had frozen yogurt shops, two frozen yogurt shops. I had a gold buying business. I've had a carpet cleaning business. I had vending carts, selling ice cream bars. I had a huge mortgage company with 80 loan officers. I've had a lot of different businesses, you know, shiny penny syndrome. Oh, that looks good. Were any of these things like big strikeouts? No, a lot of them were strikeouts. I mean, I call them seminars. I had a satellite business selling satellite dishes before direct TV came out, you know, big dishes in the backyard. That was about $100,000 seminar. You know, the gold buying business crashed and burned. That only cost us about 50 grand. But even my frozen yogurt shops, hell, I had employees taken out in handcuffs for stealing in cash and I lost a couple of hundred grand on that. But you know what? It's okay. Here's the thing to remember, guys. If you're going to start a business, do not let it be your identity. Okay. Very important. You know, that's your vehicle. And if you make it your identity, you're a failure. Don't let it be your identity. It's your vehicle. That way, if the vehicle fails, you're not a failure. Okay. And that's how I've been able to bounce back. Like, okay, screw it. Dust myself off. That sucked. But well, let's keep going. Let's do it again. That's the secret. What is the key to making sure it doesn't become your identity? Because especially in America, I feel like it's hard to get away from that. Like it is what you spend most of your waking time doing. How do you make sure it doesn't get in your psyche like that? Again, I spent 23 years with Tony Robbins. He's the best in the world at this kind of psychological self-reflection and self-actualization. So that was a big benefit to me. But yes, I don't know if there's a pat answer for that question, how you keep it from being your identity. Just consciously be aware of that. Consciously be aware that if it fails, you're not a failure. It just, that didn't work. Okay, boom, next. You just have to consciously think about it, I think, is the only answer I could give you. Yeah, it's going to suck, and you're going to lose some money, but you know what? It's okay. Again, I lost $50 million. I thought I was set for life. If you know anybody who lost more than that, please connect me with them so I can feel a little better about mine. But I've never met anybody. I know there's people out there that have. But when that happens, you reassociate with your goals. You take the first step towards your new endeavor. You get around people that are doing it. Your peer group is super important, which is why my coaching is so successful. It's more the people in the group than my help. You know, it's just everybody building on each other. And so get around people, go to meet up groups, meet people that are doing what you want to do, that think what you think is hard is easy. And that's a huge secret to success. They'll teach you little things that you'd have to learn through mistakes. I mean, with all this mindset stuff, thinking back to your history and your previous life, can you think of any specific beliefs you ever held that later you realized were holding you back? Like I used to think this, but now I changed it to this. So we'll talk about limiting beliefs for a minute, fear and limiting beliefs. So what is fear? F everything and run. That's what a lot of people do, right? You know, it's definitely false evidence appearing real because really we typically fear the emotion of fear rather than what is actually happening. I like to think it's face everything and rise because successful people have fear. You know, us achievers, we call it stress, but it's fear. Everybody has it. Successful people push through in spite of it. But let's talk about limiting beliefs. So when I immigrated to this country, I didn't speak English and I got thrown into school and I found out what bullies were for the first time. I hadn't learned how to fight back yet. And then my mom, proud Dutch woman that she is, I got them right here because it's funny, sent me to school in these wooden shoes. We found them when we put her in assisted living and these leather shorts the Germans wear for Oktoberfest. Okay. You actually wore that stuff? I got my ass kicked. Then my mom, the bullies would chase me home and she'd chase them off with a fly swatter. So the next day I got my ass beat. And then I had this thing happen on the playground where I got embarrassed because I had this crush on this girl and she embarrassed me in front of a bunch of kids. I came up with this belief system that I wasn't good enough. I used to ask myself, how can I show them I'm good enough? And I discovered that at a Tony Robbins event. I cried for a long time when I realized that honestly, it cost me my first family. It's the reason I was hugely successful, but it also cost me my family because I was so focused on success, to prove to the world I was good enough. And see, a lot of people have these limiting belief systems, Seth, you know, I'm not good enough. I'm not worthy of this. I'm not smart enough. I'm not courageous enough. I'm not old enough. I'm not young enough. And there is a reason the acronym for belief systems is BS, because 99% of them are BS. They have no basis in fact, but we believe they're real and they impact our entire lives. Sometimes you're not even aware of it, but if you're consciously aware of one of these limiting belief systems, Pull it out in the daylight. Look at it with your adult rational mind. Recognize that it has no basis in fact, and it will diminish and go away. But you got to consciously do it. Pull it out. Look at it. I mean, I used to be afraid to raise my hand in front of 10 kids in a classroom, Seth. And now I literally speak in front of thousands of people a year in flip flops. So you can push through these limiting beliefs, but you got to, again, pull them out in the daylight. You've experienced quite a few highs in your business life and career and all that. Was there ever a time when like your ego kind of got out of control and like no one what you know now, how could you keep it in control? I had a Lamborghini and a Rolls Royce and a Bentley and all the stuff I thought was important. That stuff doesn't motivate me anymore. My last remaining vanity is watches. I got a hell of a lot of watches, but yeah, I think so. Actually, just before the crash, I was single. I was living in Miami, and I had the Lambo, and I was like an escaped convict. I just ended a 12-year marriage, and I think ego got in the way there for sure. I didn't keep my eye on the ball. Now, in my defense, countries went bankrupt in 08, but yeah, maybe I would have caught it if I hadn't been playing around so much. I hide my ego pretty well. We all have an ego. I try to be as authentic as possible. I mean, you come to my boot camp within the first five minutes of the event, you'll hear really the most painful moment in my life. The word that's used to describe me most often because I air it all. I talk about all the problems and mistakes I've made. And the word is authentic. People resonate with that when you can just be authentic and real and transparent. And I believe that I am. So you have spent quite a bit of time in the real estate coaching and mentorship space. What do you think people often misunderstand about that world, if anything? Good question. I will tell you something. My most successful students, everybody has a story for why they should be where they are or why they're not where they are. And stories are like circuit breakers, OK, we use them to feel good when we don't move forward. The people that succeed are the ones that change their stories. And I've had very famous actors, NFL, NBA players, you know, wealthy people. I've had people that live in New York and people that live in a town of a thousand people. And the common denominator with my successful students is the ones that just change the story and then just take massive freaking action. That's the answer. You know, I think the fact that I spend a lot of time on mindset with my students, I help them create an identity statement. I help them with their goals and keep that momentum going. And then the group itself helps keep that momentum going because they're seeing closings almost every single day and everyone congratulating each other. A lot of problem is who you hang out with. You know, your peer group, you show me your three best friends. I'll show you who you are in every aspect of your life, your health, your happiness, your relationships, definitely your finances. And a. To people they went to school with or that they work with. And sometimes those people have their own limiting beliefs and fears. And out of fear of losing you, they'll hold you back. Out of fear of feeling less than if you succeed, they'll hold you back. And sometimes it's family. So I'm going to tell you, love your family, but proactively choose who you allow to influence you. Very important. So, you know, as I said, if you're facing the potential of losing your job or you know you need to do a side hustle and get your family the freedom you deserve, decide what the vehicle is get around people that are doing it. Go to meetup groups, get around people that are doing it. And that's a big boost in not giving up when you see that it's possible. You know, I just interviewed somebody on my podcast literally an hour ago, a Filipino woman that used to work at Panera Bread Company. She now has only 13 units, but she did it by herself. She's got the lowest amount of units of anybody I've ever interviewed. Sometimes people see I I have somebody on with 1,000, 2,000, 3,000, 4,000 units. They're like, they think it's impossible to do it. So I wanted to bring somebody on, you know, with a small number just to show that you just got to get started. And she just got started. And she's going to be a huge success. She's a hard worker, so. Even with your decades of experience, sometimes real estate can still throw us curveballs. Do you ever have deals today. That teach you something new? Like, oh, I've never seen that before. Oh, yeah. When I do my boot camps, I have typically five panels where I bring in my students and there's probably three, four billion dollars represented by my students in real estate. And one of the questions I ask almost every time is talk about a seminar. And they know what that means. A failure. Every day it happens, you know, and you're raising money and somebody backs out. The lender decides they don't want to do it anymore. Lenders are getting their butts handed to them right now because there's a lot of deals in trouble. We should talk about that. Incredible opportunities right now. So lenders are very skittish right now. They're like ostriches with their heads in the ground. Problems with lenders, with raising money, you know, in your due diligence, you might have something come up you weren't expecting. And a seller that's a lunatic you're dealing with. This happens all the time. Or an ex-partner. I've got a partner embezzled a bunch of money. He's probably going to go to jail. And I teach this stuff and I got bamboozled by this idiot. Yeah, things like that pop up all the time, Seth. And you dust yourself off. You try to come up with the best solution you can. There's always several options to pretty much anything that happens to you. So you just stop. You don't get excited. If you have anxiety, take saffron. That's been really helpful for me as a supplement, saffron, if I feel anxious about something. But you work through it. You don't knee jerk. You work through it. The beautiful thing about real estate is a check fixes pretty much anything. So I always remember that. Some businesses, you have business threatening things happen, but real estate is primarily empirical. It's primarily numbers. You get the numbers right. You ask the right questions, pretty hard to make a big mistake. But like anything, you got to learn it. And everybody starts, you know, with nothing and they get into it like any business, obviously. And what are you thinking about the current state of the real estate market? Like, do you think it's a good time, bad time, good opportunity? Glad you asked. There's a lot of deals in trouble right now. You know, this adjustable rate debt has hurt a lot of operators. Same with inflation has hurt a lot of operators. You know, payroll has gone through the roof. We used to pay maintenance supervisors, maybe 20 bucks an hour, 25 bucks an hour, paying 40 now. Okay. You know, which kills your expense ratios. And so, you know, taxes, insurance, all that's gone up. Cost of goods has gone up. I And of course, the interest rate. I mean, there's a lot of operators bought these properties at 3% interest. Now it's eight. It's debilitating. You can't make it happen. I remember I saw a guy, his reserve payment with his lender was 8,000 a month. It went to 80,000 a month. I mean, forget it. I mean, game over. There's a lot of assets being sold for the debt right now. And lenders are taking haircuts. I'll give you an example. I have a 200 unit complex in San Antonio on a lake, beautiful asset, mile away. I've got another 296 unit. But next to this 200 unit is a 300 plus unit, and we call them assets, apartment complex. It sold three years ago for 43 million. Okay. The lender now has it. It's down to 28. I'm not going to buy it unless it gets down to 24. And I think that's a real possibility. Okay. 43 to 24. Okay. That's what's out there right now. This incredible opportunity. I mean, if there's ever a time to get into this business, it's right now. And that's just multifamily. Senior housing, there's 10,000 people a day turning 65. There's a huge shortage of beds and they call it the silver tsunami. And it's an asset class that's going to have legs for a long time. So that's exciting. But even if it's not real estate, there's 10,000 people a day turning 65 that want to retire, that have businesses. Incredible opportunity to buy businesses. So, I mean, if there was two of me, one would be buying businesses for sure. Again, if you're listening, you got to decide what your vehicle is going to be. If it's real estate, I have a boot camp every couple of months. It's virtual. I don't sell anything there. It's 47 bucks. So there's no excuses. I mean, two days of training for 47 bucks with nothing being sold. So no excuses if you want to learn it, but decide, decide what it is you're going to do and don't wait because next year is going to be an incredible year to pick up deals, but you got to get up to speed as soon as possible. If you were to start over from nothing, zero in the bank, homeless, and then I gave you a million bucks to start over right now, where would you go first? You gave me a million bucks. Well, with a million bucks, I mean, you could buy five assets, 20% down and have enough cash flow to live comfortably, but maybe a hundred thousand bucks, make it harder. How about that? Let's do no money. I literally just did a Facebook live about this last night, how to get started in multifamily in the first 90 days. The first thing you got to do is educate. You know, if you can't afford it, $47 and go to YouTube university, learn what you can there. It starts with education. Then you got to get in an environment. Okay. My coaching program is extraordinary, but that costs money. So go to a meetup group. Those don't cost any money. Go there and get around people that are doing this. So education, then environment, and then it's execution, massive freaking action. Start analyzing deals, start reviewing deals, start looking and digging in. And the first deal is going to suck. It's going to take you all day to review. But every time you do another one, it gets better and better and better. Repetition is the mother of skill. You got to repeat it. That's a very high level. Start from scratch framework. Again, I just did a Facebook live on this last night, so it's fresh in my mind, but that's how I would do it. Now, knowing what I know, obviously that's an unfair advantage, but for someone that doesn't know, those would be the things, educate, environment, and then execute. And don't be scared, take action. Like I said, my most successful students, they don't know what they don't know. They just do it. And yeah, they're going to get their butts kicked occasionally, their nose bloodied and whatnot, but that's okay. I see it time and time again. It's really the ones that lose the story. They take action. They just go do it. Yeah, they make some mistakes, but they're the most successful ones I have. They have thousands and thousands of units. Their cash flow is extraordinary. They've retired from high-paying, consuming W-2 jobs with kids, with families, with church, with sports. They do it on the side. They still make it happen. So it's possible. This woman that I interviewed today with 13 units, she works two jobs. She was still able to buy 13 units and get this process started. There's no excuse. Has the market taught you any hard lessons recently? So not 2008, but recently? My ex-partner got me into some adjustable rate debt. Yeah, very painful. I mean, I'm dealing with the things I'm talking about. I mean, I will tell you, just about every operator I know has some struggles right now. The dangers of adjustable rate debt has taught me that. Really drilling down on asset management because rents are down, occupancy is down because this whole bunch of stuff got built these last three years. So there's an absorption issue. Now it will level out because nothing's being built right now. And we've become a renter nation. People have to have a place to live, but it'll take a year or two for it to level out. And then again, rents will start to skyrocket again. But asset managing better right now, paying attention to every detail. We have an asset in San Antonio that's got fantastic debt on it. It's like 3%. It's got eight years left on it. And I had to do a capital call. I'm doing a capital call on it right now, meaning I'm raising more money. And here's why. We asset manage this thing to the nth degree. We get a KPI report that ties into their software, accounting software, that we get every single day. We saw that the occupancy wasn't going up, but the management company told us it was because the economic conditions there. We saw people coming in and lots of people going out. So there's a lot of leasing, but we couldn't get the occupancy up. What we didn't realize is they weren't taking care of the tenants. And I had somebody go there three times a week. I have an analytical asset manager that was on every call for the last eight months. I was on every weekly call for the last eight months. And we didn't pick up on the fact that they were screwing around these tenants. We got rid of them, found out there was a quarter million dollars in bills they hadn't paid, found out there were rats in some of the units. And this is a beautiful asset. We missed that piece. And I teach this stuff and we missed it. And so, yeah, that was a real lesson. Painful. I mean, we've raised the money. It's not going to be a problem. That property is a freaking fantastic property. We've got a new management company and they were suing the old one. I'm literally signing the retainer agreement as soon as I'm done. I found an attorney that's willing to do it on a contingency because it's such gross negligence on their part on this management company. So I'm suing them because they cost us a lot of money. They lied. They flat ass lied to us. And so that was a lesson. And that's just business. It happens to people like me, like that partner I had, incredibly good talker. We bought 23 properties together and he's a nefarious narcissist. And he bamboozled a lot of people, raised $100 million or more, and got a lot of pain going on with this guy. And again, I teach this stuff. So no one's immune from it. But that shouldn't stop you, OK? Don't let that stop you. Because if you don't take action, especially if you're analytical and you're doing one of these IT jobs or in front of a computer, if that's you, you don't have to check off every box before you make a move. Don't do that, OK? Get started right away. Because I don't want you to get caught. Because it's coming. This AI thing, it's extraordinary, but it's also sobering. Speaking of lessons learned, can you think of anything that you used to believe was a strength that turned out to be a weakness? Yeah, I'll tell you one. I'm not the analytical person, okay? I'm the mouthpiece. In commercial real estate, there are lots of different hats you can wear. You can be the one that's outgoing, that builds relationships with brokers and sellers and investors. You could be the analytical one that does the analysis. Both are required. In fact, that's the best partnership I see in successful partnerships. It's an analytical person that's introverted with an outgoing person that's extroverted. That's a match made in heaven. And this ex-partner I'm talking about was a CPA. My partner now is very analytical. And so one of my biggest strengths is my ability to communicate. I've got a library downstairs, thousands of books, and I read a lot or did read a lot. But I've got a great vocabulary. That's a strength. I'm also very impatient. I move very quickly. And that's why I need a balance. I need somebody that's analytical to say, hey, stupid, we can't do that right now. I'm a fire-ready aim sort of guy. That strength has bit me a couple of times where I move too fast. And I didn't have somebody checking me and stopping me and so on and so forth. I'm kind of the opposite of that. But I'll tell you, like some of the best successes I've ever had is when I've been able to partner with those ready fire aim people and I can sort of like hold them back and they can kind of pull me forward. There you go. I'm in the other chair. It's the exact same thing. That's what I'm saying. And I need that because, you know, I got that shiny penny thing. I mean, 29 businesses. Hello. You know, oh, God, there's a shiny penny. Let's try that now. You know, I need that check and balance. And I've always had that. And the times I haven't is when I've had the answer to your question. there. Yeah. Can you think of anything that you see new investors focusing on that is actually a distraction from long-term success? Absolutely. If you're going to invest in anything, especially passively, like you're giving your money to someone else, for God's sakes, go learn it. Don't give your hard-earned money to someone like a stockbroker or an operator in real estate without having some basic understanding. Okay if you're going to invest in real estate passively and not buy the properties and all that stuff just being a limited partner don't get caught up with a beautiful website that got created on ai to make somebody look good and not do your homework because you know an operator can make a deal look good just by fudging a couple of numbers okay and unless you have a basic understanding of what you're looking at you could make some mistakes i will tell you there are hundreds of millions of dollars being lost right now people invested in these deals that are going south that are going to be an incredible opportunity. But, you know, they lost that money and it's very, very sad. I know you've got your own podcast. You come in a lot of podcasts like this. When you get interviewed like this or when you listen to other interviews and conversations about the real estate investing business, what's something you think people talk about too much? And what's one thing you think they don't talk about enough? Well, it depends on who you're talking to. If you talk to real estate brokers, everything's great. Oh, everything's great. Everybody has secondary gain. So you got to be careful that you're getting unbiased feedback, that you're getting unbiased information. That's a hard one right there. I know. And I thought COVID was going to create a crash. And I was convinced that was going to be a crash. And I did a YouTube video, the coming crash of whatever year that was. And I got so much hate because I was dead wrong. My kids love to tell me you're tired of being wrong. But I know a crash has been coming. We're in the midst of it right now, especially in my space. Now, not necessarily globally or anything. Did the Supreme Court rule on that tariff thing yet? Because I will tell you something. If they don't reverse that appellate decision and he does not have the tariff ability to bring countries to the table because they've been screwing us for years and to help eliminate our national debt with those tariffs, I think we're heading into some real pain in this country. I really believe that. I pray to God the Supreme Court gives him that tariff power back because, I mean, we're $36 trillion in debt. Interest on our debt is more than our military budget, to give you an idea. And I mean, you cannot keep printing money and expect the gravy train to last forever. I think those tariffs are the only way we're going to start nipping away at that national debt. And if they don't give that back to him, I mean, we'll recover, but it could be really ugly. I don't think they talk enough about... Well, I don't want to go political. You kind of already did with the tariff thing. Yeah, I kind of did. No, I'm a huge Trump supporter. I mean, sometimes I can't stand listening to him because of that ego, but no one else could take what he took without that ego, candidly. I thank God he got elected. But I don't think they talk enough about the good things that he's done. They've tried to destroy him ever since he's been in office. So I don't think people talk about all the amazing things he's done. Outside of that, I mean, in my business, you'll hear people that are trying to do deals, talk with rose-colored glasses and try to entice people. In my business, there's some very well-known competitors that I have that make it seem like it's just take a pill and you're going to be wealthy doing real estate. It's disappointing to hear that stuff because I get a lot of their students, actually. I end up getting a lot of their students, but they pay to learn from this person. I'm not going to give you names, but you'd know it. It's just unfortunate, candidly. You actually got to roll up your sleeves and go make something happen. Grind for a few years like most people won't. You live the rest of your life like most people can't, right? Well, you've had a chance to work with a lot of people. I know Tony Robbins, you mentioned, if you could work with any professional person you haven't already, who would it be and why? Oh God, I would have loved to work with people like Sam Zell. You know, what a brilliant real estate owner. My God, he is brilliant. What was it he did that you thought was so brilliant? He had no limitations. And no, we've all got these limits that we place on what we think we can do and what we can't do. And we're bound by those mental limits we place on ourselves. Or Elon. Love to spend time with Elon. My God, $4 billion startups. I mean, hello. Elon be my number one choice for sure. So tell me, what's something that you hear novice real estate investors or critics of real estate investing complain about that makes you roll your eyes? Oh, tenants and toilets. I'm not going to do real estate. You got to deal with tenants and toilets and two o'clock phone calls. No, I don't. You hire a management company for that. You don't deal with that. That's the one that cracks me up because I get love every single day. Let me start with that. I get love every single day. I get DMs. I get emails. I get gifts. I've got a wall in my office in one of the other buildings here in my compound covered with hundreds of thank you cards from students. It's my blessing. I have it right there where I sit by my desk so I can feel good and see that. But I also get hate every single day. OK, no one should have owned 800 houses. I get that naive, candidly stupidity from people that are going to just sit there and complain. You know, you got people that have a two thousand dollar phone that are able to drink seven dollar Starbucks and pretty much get a job if they want a job. You can get a job. Don't tell me you can't complaining about this economy. You know, and you look at Mondami just getting elected in New York. Socialism has failed everywhere they've tried it. So that'll be a real reckoning for a few people if he's able to do anything he promised. But there's some examples. Well, now that you've been in this business as long as you have, and you've been very successful and presumably made plenty of money, and you're in a place where a lot of people would dream of being... And now that you're on this side of the fence, what's something that really is everything you thought it would be about success, about having money? Like, man, that is every bit as awesome as I thought. Freedom, freedom. Everybody wants freedom. They want time freedom. They want money freedom. They want, you know, financial freedom. And, you know, they want the freedom to do whatever they want, whenever they want, go wherever they want, bring whoever they want. That's what everybody wants. And I have that freedom. I mean, I just booked a cruise yesterday. I love cruises because I don't have to think about anything. You know, I don't think about taxis and restaurants and hotels. So I get on the boat and I'm done. I just booked a virgin one. So we'll see how that is because I do that a lot. So it gives you that. What are some dreams you had early on that turned out to be false hopes or harsh realities of the business? So basically, it's either not real or it's not what I thought it would be. I've had so many. I wouldn't even know where to start, Seth. I mean, when you've had as many seminars as I've had, you know, so many things go wrong. Typically, the failure is in one of two things, systems and people. You get the systems right, you get the right people. Success is inevitable. I don't care what you do. But I've made so many hiring mistakes. I've hired and partnered with people. And I've had partnerships that failed because of communication and expectations that weren't defined early on. And if you don't do the systems right, you don't have the checklist. And it's about 2,000 houses. I had great systems. I had great checklists. And I did it with just a handful of people, employees. and my brother's on some of them. But I think probably the biggest... Of reckonings that I've had have been around employees and people I've partnered with that, you know, I made a mistake on. And I tell people, you know, it's interesting. Again, I teach this and I've got a list of questions you should ask before you get in a partnership. If you go to rodslinks.com, there's some free books there and they're great books. And one of the books, so rodspluralinkspearl.com, that's my link tree. It's got my bootcamp site on there. And if the price is more than 47 bucks, just say you heard me on Seth's podcast, I'll get you that price. Just DM me anywhere. Social media is there. But also at the bottom of is my goal-setting workshop. Even if you're not interested in real estate, here we are. It's near the first of the year, and it's time to do your freaking goals. People spend more time planning a Christmas party than they do designing their lives, Seth, and doing your goals is designing your life. So I'm not going to try to sell you anything. Do that workshop. Download the guide. Have your spouse do it. If your kid's over 10 years old, have them do it. I'll leave you so motivated. You'll be coming out of your skin. Design your life, okay? And it's something you should do two or three times a year. But there's some books there. And again, one of them is the questions you should ask before you get in a partnership. Thank you. And one of the pieces of that that I always tell, I don't even know if it's in the book, is to trust your freaking gut. Your brain is so powerful. It can pick up on micro nuances that you're not consciously aware of. A great example of this is Steven Pressman's book, Blink, how an art expert can look at a painting and they know it's a fake, but they don't know why they know it's a fake. And so it's the same thing with people. If something doesn't feel right, trust it. Trust me on this. Okay, women are better at this than men. It's intuition, but trust it. If your gut feels off, something's off. If you were starting out today, what's one piece of advice you wish someone had given you earlier on? You know, it's funny. I asked that question of my podcast guests because I know what the answer is going to be every single time. And it's the same answer for me. Go bigger, faster. I had to have 2000 freaking houses before I got the memo. I should have just done multifamily because when I lost everything, it was the houses that pulled me down. And my multifamily would have survived if I hadn't cross collateralized my packages of houses with multifamily assets. so I lost everything. My multifamily pulled back about 11%, but it would have survived the crash if I hadn't cross-collateralized. And that's why I started my podcast, to tell people, for God's sakes, if you're going to buy real estate, do multifamily, don't do single family. Ask me how I know, right? It's funny. I used to tell people on the podcast, I just want to give you that message. I don't want to sell anything to you. I'm not going to sell anything to you. Now I'm a liar. I sell everything, but I never planned to. You want to make God laugh, you tell him your plans. But when I hit a million down, I was like, hmm, maybe I should do something with this. There's a best-selling book in the Rod's Links as well, my best-seller. You can get the physical copy for like seven bucks. It cost me 30 to send it to you. Don't think I'm making money on it. I'm not. It's my lead magnet, you know, where you get the book and maybe you look into my coaching if you're interested. But I wrote that book and I've given away tens of thousands of copies of that book. But yeah, go bigger, faster for sure. Do you think that advice of go bigger, go faster, did that have anything to do with any of your businesses that failed? Yeah. Good question, Seth. That's a good one, buddy. You can get over your skis. You can grow too fast. And I've had some big businesses. I had a loan company. We were doing loans and I had 80 loan officers and we grew too fast and didn't make it. And I had that litigation support company that I sold a few years ago that actually we didn't grow too fast. That one was managed well. But yeah, any business, if you grow too fast, it's as bad as not having enough income because things implode. Does this mean you would like to change your answer then? about the best advice or we just stick with that? Go bigger, go faster. I'm talking about buying real estate when I give you that answer. But you said growing too fast is the reason it failed. So like, is it always good? Yeah. Well, I'll tell you something. That's actually what happened to my ex-partner. He kept buying real estate without dealing with the properties already had, which is why there was so much trouble and people lost money and he's in big trouble himself. So yeah, no, I think you can grow too fast. But in my case, no, I don't want to change my answer because I would have stuck with multifamily and stuck with the larger properties. So that's what I'm saying. Go bigger, with. The size of the assets, not necessarily go faster, but go bigger, faster instead of sticking with houses. So yeah, let me clarify that answer. You could go bigger slowly and that's okay. Yeah. I would go big with bigger properties, bigger properties, not necessarily buy faster, but do bigger properties, not do single family houses. So that's what I meant when I answered that question that way. Yeah. I totally get that. I mean, it makes sense to me. I could say the same thing to myself. I mean, even today I'm probably doing stuff that's too small. So it comes back to that limiting beliefs thing, probably. We all have it. It still pops its ugly head for me from time to time, too. You are a fairly public person. A lot of people know you, know your face, know your name. I'm curious, what's one thing about you that would surprise most people who know of your public persona? Is there anything about you that the average person just would never guess? Yeah, I'll sit and watch a Netflix video about soldiers coming home or somebody proposing to somebody else and I'll tear up and I'll cry like a little girl. So there you go. It's pathetic, but I'm in touch with my emotions. You spend 23 years with Tony Robbins, you get pretty in touch with your emotions and I don't care. I mean, I'm a very masculine guy and I can defend myself now. If I ran into those bullies from school, I wouldn't care, but I'm a big guy now, but I'm also in touch with my emotions. And so- You mentioned Tony Robbins. So what exactly did you do with him? Well, I was on his security detail for eight years, but I did his premier event, which is called Date with Destiny, which is coming up in December. And I promised one of my warriors I'd go to Vegas and do a meetup group for him so I can't go. And I could really use his juice right now. But I literally went to Date with Destiny every year for 11 years because every year I was working on something new. My relationships with my kids, my ex-wife, my finances, my health. And he helps with all of that. By the way, if you have a chance to see him, Just do it. Trust me. You'll thank me. But after 11 years, his head of security is like, dude, why don't you just join the team and you can just come? And so I did. I did it for eight years. And then I had a bad car accident. And in his security detail, you have to stand a lot. And I couldn't do it anymore. And so I had to step back. But he's probably my greatest mentor by far, for sure. One other question about mindset, because I know this is a big thing for you. If mindset is 80 to 90 percent, can you think of any specific moments when your mindset or your psychology mattered more than your numbers? No, not more than the numbers. No, the numbers are important. But the mindset is what gets your ass out of bed. It keeps you going when you get your nose bloodied. It's what pushes you through fear and limiting beliefs and gets you uncomfortable. You know, like I said, that comfort zone is a nice, warm place and nothing freaking grows there. Right. And so it's the mindset that gets you to actually take action. It's the mindset that gets you to get back up when you get your ass kicked like I did in 2008 and 2009. But the numbers are the numbers. Don't ignore the numbers. No. And sometimes I will tell you in an excitement, you will ignore the numbers. You know, I teach this. I say, you know, when you get a property under contract and you've looked at 300 properties to get that property and you're doing backflips the whole way home to your spouse, you need to stop right then, take a deep breath and take off the hat that says, why do I want to do this deal? Put on the hat that says, why do I not want to do this deal? because it's human nature to when we have a big decision to look for a reason to shore up that decision justify it you know validate it you can't do that because you'll overlook things and you don't want to overlook and so you know super important that you look under every rock so you don't make a mistake if the mindset doesn't necessarily matter more than your numbers then is mindset really 80 90 percent if it's not the most important thing Absolutely the most important thing. I see it with my students. There's a reason that there's not a lot of wealthy college professors out there. There's a reason there's not a lot of librarians that are wealthy. It's the do and it's the keep doing. I absolutely will stick with the fact that I believe it's 80 to 90% of your success. You've got to do the numbers. You don't ignore the numbers. You maybe don't believe that way because you've asked several questions around that particular topic. but I mean, don't get me wrong. I know it's absolutely important. I've got my own mindset problems for sure. But I also know that like, there are also things that are real limitations and can't be done. It's not just my opinion. It's a fact. It's an objective truth. And so what do you do with mindset then? Your life is what you focus on, Seth. And if you focus on what can't be done, then you're never going to get anything done. You can have some negative things happen to you. And I've seen it. I've seen it at Tony Robbins event. He brings somebody on that's a deaf mute that got kicked and beaten up, a POW who was in a POW camp for eight years, and they came out stronger, people with no arms and legs, and you see the joy on their face. You see that they place positive meanings on what happens to them. So that positive attitude, not focusing on what could go wrong, focus on what could go right, and that's how you succeed. That's how you push forward. Sure, things are going to go wrong, but if you focus on that, that's your world. Whatever you focus on is your world, both positive or negative. I get people will 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 is the question you want to ask. You know, they asked Mother Teresa if she was anti-war. She said, no, I'm pro-peace. I mean, you get the parallel there. What you focus on is your reality. Have you ever loaned money to anybody like as a hard money lender or anything like that? I've loaned money to people. Yes. I try not to do it anymore. Families sometimes will ask. I'm like, no, here's a gift. I don't want it to be a loan. The reason I haven't thought of that is because I used to work in the banking industry like 10 plus years ago and bankers, when they're underwriting deals, they're, All they do is focus on what could go wrong. Like that's like their whole job of how they don't lose money. That's how they make money is by focusing on the problems. So like there is a point at which it's appropriate to focus on what would go wrong. I just told you when you put your hat on after you get a property under contract, why do I not want to do this deal that causes you to focus on what could go wrong? No, absolutely. You've got to make these mindset shifts. I mean, you've got to make these shifts in how you look at opportunities, but that doesn't change your positive outlook and, you know, living from a place of gratitude and living from a place of positivity. And, you know, I'm going to tell you something. Gratitude, it's an important piece of this. It's the most powerful emotion we have available to us. It builds our, strengthens our immune system, you know, brings us closer to our spirituality, lowers our blood pressure. And it's how you manifest everything you want in life. You do it through gratitude. Yeah. And that's a mindset thing. When you say spirituality, how do you enrich your spirituality? Gratitude. You know, I thank God every day. I'm not super religious. In fact, I was on Ryan Panita's podcast. I don't know if you knew who that is. He does a lot of single family work. And we prayed on the show, which was kind of awkward for me, first time I've ever done that. And I told him I was exploring Christianity. He had me get this book called The Case for Christ, which is next to my bed. And I remember it's about this investigative reporter that didn't believe in God or Jesus and then started investigating and became very religious. Fascinating book. I didn't believe in God for a long time, but I do now. I go out in my cold plunge and I thank God while I'm sitting there looking at the birds and the boats and everything else because I'm right on the bay. So when you say gratitude, you mean gratitude to God? Just being grateful. Yeah, I say thank you, God. I use the word God, and I don't know what that means yet, but I don't believe this all came together by happenstance, all this amazing beauty and all this came together without help. But I just do gratitude. I'll sit in my recliner with my vision boards next to me, and I'll just be grateful for the people that I love. I'll be grateful for my students, my foundation. And then I'll do gratitude. For the things that I want as if I already have them. I've gotten emotional being grateful for things I don't even have yet. I know I lost some of you on that one, but this is how I had 50 million to lose and how I got it back. So you might want to ignore it at your peril because it works. It's manifestation. Now you could call it prayer if you like, but that's how you manifest what you want by deciding you already have it. And it's very effective. You can't be angry and grateful at the same time. You can't be fearful and grateful at the same time. You know, my live events, I do this thing that Tony taught me. It's called an emotional flood where you breathe into your heart, you close your eyes and just be grateful for things. And there's never a dry eye in the place. We have to turn the lights down. It's very powerful exercise. If you're listening and you just do that one thing and you incorporate gratitude every morning into your life and think about what you're grateful for, it's a completely different life. Yeah, that's awesome. I want to try that. I got to go to Tony Robbins. Thanks. It'll blow your mind. You know, people think it's this rah-rah thing. And yes, he does get you up and jumping because your physiology, when you're active physically, you retain more. And that's the purpose for it. That's this whole methodology. But the technology that he teaches is just spectacular. And I'm a pretty intelligent guy. So trust me on that. You'll thank me. Well, Rod, I want to thank you again for coming on. It's been awesome to talk to you. Some of these questions, by the way, were intended to be very thought-provoking and not easy to answer. So if it took you a minute to think about it, it's by design, nothing against you. They were really good, brother, I'll tell you. No, I was very impressed and I appreciate you having me on. And if you're listening, I hope maybe you'll check out my podcast. I'm very proud of it. It's at Rod's links, by the way. The link is there, all the different ways you can watch it. And yeah, it's been a lot of fun, Seth. That's been a very interesting interview. I'm going to have it transcribed and look at some of these questions again because they were really good and I may steal a couple of them. Well, I'm going to have links to all of Rod's stuff that he mentioned there in the show notes, retipster.com forward slash 251, rodslinks.com. You can always check that out. Rod, thanks again. It's great to talk to you, great to know you and hopefully we'll talk again soon. I hope so, Seth. It's been fun. Appreciate you, brother.