Profit first lessons from a top real estate investor & educator Rod Khleif

Episode 144: Profit first lessons from a top real estate investor & educator Rod Khleif

The Profit First REI Podcast

January 5, 2023

David Richter 

Summary:

 

Joining us today is Rod Khleif. He is a successful entrepreneur, real estate investor, and business owner known for his expertise in the industry which he shares through his podcast, The Lifetime Cash Flow Through Real Estate Investing.

 

Rod is considered one of the top real estate trainers in the country, and I’m excited for you to hear the insight he has to give. But more than sharing his knowledge, Rod comes on the show to inspire us with his own story, his struggles—financial or otherwise—and how he recovered from them.  

 

Tune in as he talks about how he made his first $100,000 in real estate, how he recovered from losing a lot of money in 2008, and his amazing mindset on money.

 

Key Takeaways:
[00:45] Introducing Rod Khleif and His Background

[05:45] Limiting Beliefs That Might Have Contributed to Holding Him Back

[11:32] On How He Recovered After Losing $50 Million 

[18:39] How Rod Prepares for Downturns  

[22:50] Rod’s Denver Bootcamp

[26:15] Advice for Real Estate Investors: It Starts With Competence  

[28:30] Connect With Rod and Final Thoughts

[29:38] Closing

 

Quotes:

[12:57] “You’ve got to take that first step. Okay? And that first step can be the scariest step of your life. And it could be the most important step, especially for those [of who] you that are analytical. And you’ll sit there analysis paralysis stuff, and you can’t do that.”

[22:44] “So, how do you get ready [for downturns]? You keep your mindset right you focus on what you want, not what you don’t want, you get into cash, you build relationships.”

[26:26] “Competence equals confidence equals passion and success… It starts with competence”

 

Connect with Rod: 

 

Website: https://rodkhleif.com/
Podcast: The Lifetime Cash Flow Through Real Estate Investing

 

Text “Rod” to 72345 and remember the code “rodfriend” to get a lower price.

Tired of living deal to deal? 

If you are a real estate investor or business owner who is tired of living deal to deal, and want to double your profits, head over here to book your no-obligation discovery call with me. Either myself or someone from my team will hop on a short call with you to get clear on your business goals, remove any obstacles holding you back, and map out a game plan to help you finally start keeping more of the money you work so hard to make. – David 

 

Transcription:

 

Rod Khleif:

So how do you get ready? You keep your mindset right. You focus on what you want, not what you don’t want. You get into cash, you build relationships. Get your butt to my Denver bootcamp if you want. If you don’t know this business yet, because if you’re in the thick of it, it’s gonna be too late to learn it. You need to learn it right now. So I don’t care if you learn from me or not, but get up to speed right now.

Outro:

If you’re a real estate investor who’s sick and tired of living, deal to deal, then welcome home. Hear from everyday real estate investors just like you, and discover how they’ve completely transformed their business by taking a Profit First approach. This is the Profit First for REI podcast, where we believe revenue is vanity. Profit is sanity. It’s time to start making profit a habit in your business. So here’s your host, David Richter,

David Richter:

Rod Khleif that is our special guest today on the Prophet first r I podcast. If you don’t know him, he is a force of nature. I recorded these intros after because I like build the list of things and they’re like, oh my gosh, this one is incredible because he tells how he recovered from losing 50 million in 2008 and nine. But I think what’s gonna resonate with you even more is that he tells how he broke through his first a hundred thousand dollars in real estate because a lot of people struggle to get to that point. And then he’s got a lot of great mindsets of wherever you are, if you’re down in the dumps, or if you’re doing great, what you should be able to do to prepare for any downturns that come in your life personally or in the market. It was a great episode.

He tells his story, his background, and where he came from to where he is now. It is an absolutely incredible story. I know you’re gonna get a lot out of it. Thank you so much for listening. I hope you enjoy this episode. Hey everyone, we have the Rod Khleif here in the studio. We are recording now. And Rod is an amazing entrepreneur. He’s owned over 2000 properties. He’s done incredible things he’s doing. He just told me right before this call like some exorbitant number that he just got under contract as well too. And I don’t even know if we’re privy to that number, you know, on this podcast yet, but it is a huge amount. He’s also helping a lot of people in this space. I have a lot of good friends. So Rod, great to have you on the podcast today.

Rod Khleif:

Thanks for having me, David. This is gonna be a lot of fun and, and like I told you before we started recording, I absolutely believe in the whole Profit First mindset. Uh, and I told you, I’m sorry that I haven’t implemented it yet. I wish I had in, you know, I own a couple of different businesses, but, uh yeah, this will be fun.

David Richter:

Awesome. Well, let’s dive in then to your story, your background, where you come from, like let’s get into that cuz yes, I have read your bio, but I think it would be helpful for people then we can go down the, the road of the Sure. The money mindsets.

Rod Khleif:

Sure, sure, sure. Well, so, you know, I’m an immigrant. Uh, I was born in the Netherlands, you know, wooden shoes and windmills immigrated this country when I was six years old with my brother Albert, my mother’s mantra. Um, we ended up in Denver, Colorado. We didn’t have much, in fact, uh, you know, we ate expired food. We shopped at an expired food store, which was legal back then. We uh hmm. We, I had powdered milk with my cereal in the morning, uh, which sounds better than it is, trust me cuz it was cheaper than real milk. I wore, I wore clothes from the Good Wellness Salvation Army all the way through junior high school till I finally got disgusted and lied about my age of Burger King when I was 14 so I could flip burgers and buy my own clothes.

David Richter:

Hmm.

Rod Khleif:

And I’m sure you’ve got listeners that had it harder than I did growing up, or 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 with her babysitting money, she was an entrepreneur successfully actually. Uh, so she invested in the stock market and IPOs and with no formal education, but also in real estate. So her first real estate acquisition was the house directly across the street from us. Uh, she bought it when I was about 14 for about $30,000. Then when I was 17, she told me she’d made $20,000 in her sleep that had gone up in value that much. And I’m like, what, you made 20,000? You didn’t do anything. Screw college. I’m getting into real estate

David Richter:

<laugh>.

Rod Khleif:

And so I got my real estate broker’s license and I was gonna be rich selling real estate. Well, my first year in real estate, I made about $8,000 my second year, $10,000. I still lived at home, but my third year I made over a hundred thousand dollars, which back in 1980 was pretty decent change. And so what happened between your two and your three that caused me to 10 x my income. But what happened was, even though I was a broker, I, you could give, become a broker through education back then, now they got smart and you need some experience, uh, to be a broker and actually have your own real estate office. But yeah, I was a real estate broker, but I wouldn’t work for another broker because I was smart enough to know I couldn’t do it myself. And he taught me about the importance of mindset and psychology and how really 80 to 90% of your success in anything is just that your mindset and your psychology only 10 to 20%. The, you know, the mechanical stuff we talk about on our podcast, David, you know, it’s the, it’s the do and it’s the keep doing.

It’s the, you know, pushing through fear, you know, pushing through limiting beliefs we may have or getting uncomfortable. You know, a lot of people are in a comfort zone. A comfort zone’s a nice warm, soft place and nothing freaking grows there. Right?

David Richter:

Right.

Rod Khleif:

So, you know, you gotta be able to push through that. And fast forward today, I’ve owned a couple thousand houses that I’ve rented long term. I owned thousands of apartment units in 2006, my net worth went up 17 million while I slept. And you might say, wow. I said, wow. And, uh, I thought I was a freaking real estate. God, I thought my head got so big I could barely fit it through a door. And you know, when that happens, God of the universe or whatever you believe will give you nice little smack. Well, that was 2008. I lost everything. I lost 50 million conservatively in 2008. And so, like I say, what I’m known for is talking about the mindset and the psychology to have 50 million to lose in the first place. But maybe as importantly, maybe more importantly, is the mindset it took to recover from that to the success that I’m blessed to have today. So I’m happy to drill down on that in any way. You’ve

David Richter:

Seen Phil. Well, yeah. Well, let’s, let’s talk about from year two to year three. What were some of the limiting beliefs from growing up the way that you did? Or what that carried engine for, you know, to make that first hundred, you know, to break that first six figure mark?

Rod Khleif:

Really good question. In fact, the first time anyone has ever asked me that question, usually have to bring that information into the conversation myself. So when I was six years old, I immigrated this country and I didn’t speak English like I said, and I got thrown into school and I found out what bullies were for the first time.

David Richter:

Mm-hmm. <affirmative>.

Rod Khleif:

So I got my butt kicked on a fairly consistent basis, hadn’t learned how to fight back yet. 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 Octoberfest. So another butt kicking mm-hmm. <affirmative>. And then some of the bullies that lived on our block would chase me home from school. She’d chase ’em off for the fly swatter next day, another butt kicking. And I came up with this belief system that I wasn’t good enough.

Mm-hmm. <affirmative>, you know, that, that, you know, and I used to ask myself, how can I show them I’m good enough? Which of course, pre suppose that I wasn’t. And, and, um, and so, you know, and a lot of people have these limiting belief systems. You know, I’m not good enough. I’m not smart enough, I’m not analytical enough, I’m not strong enough, I’m not old enough, young enough. And there’s, listen, there’s a reason that the acronym for Belief Systems is BS because 99.9% of them are just that they’re bs. But, you know, we have some experiences happen to us in our childhood and we, our brain thinks they’re factual and they’re not. And so if you have one of these that you’re consciously aware of, sometimes you’re not even conscious of it. But if you have one when it pops up, bring it out into the daylight, look at it with your adult rational mind and you’ll burn it up.

I mean, you know, again, if I was, if someone rejects me, I came to the realization if someone rejects me, they just don’t know me. They don’t know that I’ve got a huge heart. If they, if they reject me, it’s their own bs. And I had to come to that realization. Um, and so again, if you have one of those, bring it out in the daylight. Here’s the operative word, they’ll consciously think about it. I mean, I used to be afraid that I’d get, you know, uh, selected in class to answer a question. And now I speak in front of thousands of people a year. Like I mentioned to you, I’ve got a bootcamp coming up the end of July in Denver, three days, and it’ll probably be probably 800 people there. So, you know, I’m not a <laugh> and I’ll be in flip flops. Okay. I don’t really care what people think anymore, but back then I did. And so, anyway, as it relates to limiting beliefs, so hope I answered your question.

David Richter:

So Yeah, I wanna dig in a little bit more there. So was it the limiting belief that you weren’t good enough and you finally got over that in year two to year three? And that’s where really dug

Rod Khleif:

In? Here’s, here’s, there’s several things. Okay. So, um, you know, and it’s hard for me to think back. This is, that’s 44 years ago. Okay. Yeah. It might be easier for me to answer that question as it related to losing the 50 million, cuz I remember what I did then. Sure. But let me try to remember what I did back, um, back in year two to three. Um, so first of all, I tell people you’ve gotta build your competence first. Okay? Okay. You, you can’t, you, you know, very few people are confident day one, but that confidence will then equate to confidence, which will then equate to your ability to influence. So I know that was a component. I became smarter and I understood, well, not really, not smarter, but more knowledgeable Okay. About the business so that I could take action. So that was a component.

Um, you know, I, I think, um I started utilizing goals. I remember back then I had this bone ugly Ford Granada four door car that I figured I had to have to show people houses. Right? Well, the guy I worked for, I dated his daughter and he had two cor vets and he let me take her out in one. And I’m like, oh my God, this is freaking amazing. So I got a picture of a Corvette out of a magazine, this is before you could spell internet. And I put that picture of that Corvette on the visor of that bon ugly granados. Every time I sat in, it was right in front of my face. Within a year or two, I had a beautiful Corvette. So I was starting to use visualization to get the goals that I wanted. And I give, uh, other examples.

You know, I’ve, I’ve visualize and gotten stuff that may not interest you if you’re listening, but, but let me just tell you what they are, just to replace them with what it does interest you. You know, back then the TV show Magnum Pi was out and the actor was Tom Sellek.

David Richter:

Mm-hmm. <affirmative>.

Rod Khleif:

And he drove this Ferrari 308. Now I thought that was, that was the first time I’d seen an exotic car. I thought that’s the coolest freaking thing I’ve ever seen. So I got a picture of that actual car put on the visor of that Corvette. Within a year or two, I had a Maserati looked just like it. Last example, car example, always wanted a Lamborghini. Okay. I thought they were just amazing. And what’s interesting is when my son was nine years old, he collected little models of cars and I’d buy ’em for ’em and stuff too. He had about 30, he had, you know, the Ferrari and the McLarens and the Porsches and stuff. But he had a model, the exact same color and style Lamborghini that I ended up getting, which I wrecked. But anyway, so, so the point is, you gotta know what it is you want and why you want it.

David Richter:

Yeah.

Rod Khleif:

If you, for example, if you come to my bootcamp, the first thing we do, the first hour and a half is goal setting on steroids. Cuz how do you get anything if you don’t know what it is and why you want it? You know, like Napoleon Hill says in his book thing can grow rich, you’ve gotta create a burning desire. That’s how you push through those fears and limiting beliefs. That’s how you get uncomfortable. You know, that’s how you push yourself to grind for a few years. Like most people won’t. So you live the rest of your life. Like most people can’t. You’ve gotta know what it is you want and you’ve gotta create that burning desire with it.

David Richter:

Sure. Now I love that. So then how did that translate when you, when you lost the 50 million? Like what was the thought process going through there and

Rod Khleif:

Rebuilding it? Yeah, yeah. So, so I’d already, you know, become really good at visualization and manifesting the things that I wanted in life. And I know I’m losing some of you analytical ones, but trust me guys, this stuff works okay. I’m just, trust me, this stuff works. This is how I had it to lose and how I got it back. And so one of the ways was I reassociate it with what I wanted and why I wanted it. Cuz you know, when you have something negative happen to you, and by the way, we are heading into a recession and I gotta tell you, you know, people like Robert Kiosaki, rich Dad, poor dad, Elon Musk, Warren Buffet, all say it’s gonna be bigger than people think. Okay? So, you know, don’t get scared, get freaking excited because with crisis comes the opportunity. But you know, back then when I lost it all, it would’ve been really easy to focus on the loss.

Okay? It’s human nature to focus on the negative. In fact, David, if you came up to me and said, rod, how you doing? And I said, oh my God, I am freaking fantastic. Life is amazing. You take a couple steps, you probably wouldn’t cuz you’re evolved. But most people take a couple steps back and say, okay, he’s off his freaking mix

David Richter:

<laugh>.

Rod Khleif:

But if you came up to me and said, rod, how you doing? I said, oh dude, my back is freaking killing me. I just lost 10 grand in the market, blah, blah, blah. You put your arm around me and say, I feel you brother, cuz we connect through pain and negativity. But anyway, back then I didn’t succumb to that. Sure I did for a while. I hit under a rock for a month or two. But, but, but then I resod with what I wanted and why I wanted it. So that was step one. Okay? I got, I got, I recreated the burning desire. Then the next thing is, uh, and this, and this will apply to you listening as well. You get that, then you’ve gotta make a decision. And the Latin root for the word decision means to cut off, you know to cut off. And I mean, if you’re gonna attack the island, uh, you know you’re gonna burn your ships cuz you’re taking their damn ships home. That’s a decision. It is freaking done. It’s not one foot in, one foot out, it is done. That’s a decision. So that’s step two. And I made a decision I wasn’t gonna wallow and, you know, make, let that loss be my story. You know, I use it to teach, but I don’t wallow there. You know, pain is gonna happen. Suffering is optional, right?

David Richter:

Yeah.

Rod Khleif:

And I wasn’t gonna suffer. So I made that decision. Then the next thing is you’ve got to take that first step, okay? And that first step can be the scariest step of your life. And it could be the most important step, especially for those of you that are analytical. And you’ll sit there and analysis paralysis stuff and you can’t do that. So when, if this is you listening, I want you to think about this. You can drive all the way across the United States at night, see your car headlights seeing 50 feet in front of you and you know, you can make it, you know, you might have obstacles, but you know, you can make it cuz other people have done it. It’s the same way with my multi-family business or any business. Um, but you’ve gotta take that first step. Like Dr. Martin Luther King said, you take that first step in faith, the next step will be revealed. Lasu said, a journey of a thousand miles begins with a single step. So you gotta take that first step. Then the next thing, I’ve got like two or three more. If you want me to keep going, I’ll,

David Richter:

Yeah, sure.

Rod Khleif:

Okay, alright. That’s a great stuff. The next thing is, is focus. Focus is so critical. Now, I know if you’re listening and watching David here, um, you are a leader. And right now, more than ever, the world needs leaders. I mean, don’t get me started on the political nonsense and the fake news and the crap that’s on the media. But, but you’ve, with that in mind, as a leader, you’ve gotta pay attention to what you’re focused on. So you’ve gotta weed out the negative stuff because there are people watching you and maybe it’s just a leader of your family. Okay? So you’ve gotta bring in the good stuff, you know? Um, on my podcast, I do a clip every week called Own Your Power. It’s five minutes, it’s motivational. Uh, I mean you gimme five minutes a week, I will juice you. My podcast is called Lifetime Cash Flow Through Real Estate Investing. And I’m super proud of those. There’s hundreds of them there. You gimme five weeks, uh, uh, five minutes a week, I’ll juice you. But regardless of whether you listen to me or not, you know, if it’s not me, go on YouTube, listen to motivational videos, bring in the read the good stuff, bring in the good stuff. Don’t, don’t get sucked into to the negative because whatever you focus on is gonna get larger, both positive or negative. Okay? So that’s super important, especially in what’s coming. Okay? Because pain is coming in, in our bus, in, in the multi-family real estate business. I don’t know if you talk, you’d probably talk about other asset classes, but I know pain is coming. I can talk about why if you like. But it’s, it’s, it’s upon us. I mean, I’ve only bought one large asset in the last year, uh, in San Antonio Scream and deal, you know, uh, economic, it could break even 59% occupied the day we bought it. And it’s even much better than that now. But in the last literally week, we have put two big deals under con, well, not too big one big one, one small deal under contract, a 30 million deal and a 7 million deal. And, and so they’re, the deals were already coming and these are screaming deals, um, great returns and everything else. So, and I’m super conservative. So I’m, uh, again, stuff, uh, excitement is coming. So we talked about focus. The next thing is, is um, is uh, peer group. You know, when I was losing everything in 2008 and nine, I was in Tony Robbins Platinum Partnership. Okay? Now Tony has this mastermind. Back then it was about 130 grand. I think it could be three times that now. But I was around people that were thriving through the crash.

David Richter:

Yeah.

Rod Khleif:

And they’re like telling me, okay, you puss, get up 50 million sh million. Go make things happen. Stop whining. That’s who you wanna be around right now, okay? People that aren’t afraid of success, people that aren’t going to be fearful of your success. You know what’s sad? Uh, David is so many people default to a peer group of people they went to school with or people they work with. And those people might have, might hold you back because of their fear,

David Richter:

Right?

Rod Khleif:

They might hold you back because they’re afraid of losing you. They might hold you back because they’re afraid you’re gonna make them look less than if you succeed. And sometimes it’s family. And I’m gonna tell you, love your family, but choose your peers proactively. You show me your two best friends. I’ll show you who you are every aspect of your life, okay? So be proactive with your peers. Um, and the last thing I’ll just, and then you can ask me questions. I’ve got more. But let me just say this last thing. As especially in multi-family, you gotta play to your strengths, okay? Um, you know, a lot of people tell you to build your weaknesses. No. You hire a line or partner for your weaknesses. And here’s why. And I’m just gonna equate this to multi-family cause that’s what I teach. And, and, and, and that’s what I love. But you know, in the multi-family business, there are lots of hats a person can wear. And it’s a team sport. It’s, you do not do large multi-family by yourself. It just doesn’t happen. So, you know, there’s the, there’s the outgoing personality like mine that goes out there and builds relationships with investors and brokers, things like that. So that’s one hat. Another hat is the underwriting. So an analytical person is needed to underwrite deals cuz you know, multi-family, real estate’s primarily empirical. It’s primarily numbers. You get that right and you ask the right question, it’s pretty hard to make a mistake. Uh, you know, there’s, there’s the process piece. You know, there’s asset management after the fact. So if you’ve got process, so there’s lots of hats you can wear. But if you’re, and if you’re playing to your strengths and you partner or higher align for your weaknesses, success is inevitable. And here’s why this is so important, because when you’re playing to your strengths, first of all, you’re not really working because you enjoying it. Your strengths are things you love and you don’t work another day in, in your life. I mean, hopefully you can tell I love what I do.

David Richter:

Yeah.

Rod Khleif:

Um, but you’ll also be passionate. Hopefully you can feel that as well. That, that I’m very passionate about this cuz I love what I’m doing. And when you have that passion, you have the ability to influence. And that’s why it’s so important for you to play to your strengths. Cuz in this business, we’re always influencing, you know and, you know, sales, whatever you wanna call it. But, um, but you have to be passionate. I mean, if you’re passionate, it’s so much easier. Pe people wanna be around people that you, they can tell love what it is they’re doing. So anyway, I’ll stop there.

David Richter:

No, no, that’s really good stuff. That was, thank you. I love how you came like from the making six figures than losing, you know, like eight figures and how you built back and like a lot of

Rod Khleif:

Those things. Well, I lost, I lost eight figures. Yeah. I lost eight figures. Okay. Right,

David Richter:

Exactly. So why losing eight figures and now you’re back on top, you know, coming all the way back. And those are a lot of those things that got there. You did mention something while you were going through there about, you know, like preparing for the downturn. Like what are you doing to prepare for the downturn, like in profit first you build reserves and we wanna make sure that they’re profitable and healthy. What are you That’s right. What are you doing?

Rod Khleif:

Well, I’m in a lot of cash myself. Okay. Okay. I’ve pulled a lot of cash. I hate it because it’s going down every freaking day with this, right. Don’t get me started on this administration and inflation and everything else. But anyway, we won’t go down that rabbit hole. But, um, but with an in a crisis, cash is king. And so, you know, you, you, you wanna, but here’s the thing. Multi-family real estate takes cash, but it doesn’t have to be your own cash. Mm-hmm. So, you know, at my bootcamp, I’m gonna tel I’m gonna teach people how to preframe their investors so they’re not fearful and how, and the strategies for doing that because you just, you just need access to money. You don’t not have to be your own money. And so, um, that’s super important. And so, you know, cash is really important. Getting lean and mean. Okay. If you’ve got a big infrastructure, you might have to cut, you know, cut, trim it. And, and right now, because you know, it’s, it’s gonna hit, uh, you know, the fed is, has said they’re gonna do five more rate increases. Rates have literally almost doubled in the last 60 to 90 days. So, I mean, and there’s gonna be a another rate increase each month for the next three months. They’re talking in, in, uh, what was it, uh, July, another 50 to 75 basis points. I mean a half a percent to three quarters of a percent interest, which is enormous. Okay?

David Richter:

Mm-hmm. <affirmative>.

Rod Khleif:

So, so, you know, but here’s the, here’s the sad thing. I don’t think that’s gonna fix it because it’s not about that. It’s really about there’s so much money out there right now, fake money that, that they’re, that they’ve printed. There’s trillions in, in, out there that they’ve printed. And so I don’t know that the interest rate bumps are gonna help. I think we’re gonna have stagflation, and this is really painful. I just read this today, uh, that, uh, an economist is projecting that they’re gonna have to print more money in September just to pay the debt on the 30 trillion that the United States owes. Hmm. So again, it’s like snowballing and it could be a lot worse than people think. So should you be afraid? No, don’t be afraid, get excited, get ready for it because it’s just afraid frame, you know, you just gotta frame it right in your mind. Um, you know, in the multi-family space, there’s a lot of, there was a lot of bridge debt these last few years and that is very scary debt. Okay? Yeah. Uh, short term, you know, it wasn’t there for what they used it for the last year, okay?

The last year people have used it to hike returns because you can get a higher loan to value, but it’s short term debt anywhere from 18 months to 36 months. Uh, the maximum is, is, uh, three years plus two one year extensions. But here’s the couple of big problems. They finally started insisting on cap, uh, interest rate caps just in the last short while they’ve insisted on interest rate caps. Like we were looking at 44 million asset here in Sarasota and they wanted a million dollars for a 2% rate cap. So the rate didn’t go up more than 2%. Well, a year ago they didn’t insist on those rate caps. Mm-hmm. And a lot of people got bridge debt without rate caps and they are in deep do-do right now. Okay? Yeah. The other piece is, you know, because this is short term debt, you gotta refinance or sell out of it.

And you know, if you’re trying to refinance and the rate has gone up and you didn’t calculate a high rate for your refinance, cuz again, rates have doubled, you’re not gonna get the debt service coverage ratio you need to be able to refinance. So if you don’t know what that means, uh, uh, let me give you a quick example. Let’s say, uh, this is, these are annual numbers. Let’s say that your mortgage payment for the year is a hundred thousand. Okay? Your debt on the, uh, for the property, I’m just gonna use round numbers. And let’s say that your net income, your net operating was 125,000. So a hundred thousand debt, 125,000 income, that’s a 1.25% debt service coverage ratio. And that’s typically the least that a conforming lender will consider. And so again, if the rates have gone up, you’re not gonna meet that debt service coverage ratio.

And so again, I see a lot of bridge debt going into receivership. I see a lot of people, a lot of pain coming just in that area alone. So again, so how do you get ready? You keep your mindset right? You focus on what you want, not what you don’t want. You get into cash, you build relationships. Get your butt to my Denver bootcamp if you want. If you don’t know this business yet, because if you’re in the thick of it, it’s gonna be too late to learn it. You need to learn it right now. So I don’t care if you learn from me or not, but get up to speed right now because it’s coming. And I mean, some economists are saying the biggest transfer of wealth in history is coming. Um, you know, even if it’s just a ver a percentage of that, there’s still gonna be exponential opportunity. You, I mean like in my podcast, I started to hear a pattern, you know, I interview a lot of people with five, six, 7,000 doors and I started to hear a pattern. Most of them started in 2009, 2010, 2011, 2012. That is what we call a clue. My friends, okay?

David Richter:

Mm-hmm. <affirmative>,

Rod Khleif:

Right? And so, you know, there will be exponential opportunity if you are ready to take advantage of it. So, uh, let, by the way, since I’m on it, let me just mention if you are interested in the bootcamp, text my name Rod to 72345 and use the code rod friend to get that 197 price. Uh, it’s double that now, but you just, you remember the code rod friend is one word. And if you, if you can also go to rodkhleif.com, that’s, uh, website. But you know, um, I don’t care if you learn from me or not, but get up to speed right now if you’re interested in capitalizing one, what’s coming? And if you’re not, you know, I hope you are because it’s awesome. They’re gonna be exponential opportunities.

David Richter:

So who would you want to go there? Like are these for new brand new people or

Rod Khleif:

Brand new brand? Yeah, brand new or even seasoned. I get a lot of people that have done single family maybe have a fourplex or a couple of plexes, you know, and the natural progression is to go from small to larger, you know? And you know, it’s funny, I typically ask the question on my podcast for this very reason. I ask the question, you know, of these people that have thousands and thousands of doors. If you could go back and tell your 18 year old self something, what might you do different? Cuz I know what the answer’s gonna be and I want the, I want my peeps to hear it so they don’t ha just hear it from me. And it’s always go bigger faster, you know? And so, um, and so, uh, you know, it, this, my bootcamp is for beginners and intermediary, intermediate and advanced. Um, and um, and it’s a, it’s a blast. I mean, I do a lot of mindset stuff. You will laugh, you will cry. I promise you it’s not, it’s not your typical real estate bootcamp. But there’s a reason that my students, at least the ones I know of, own over 70,000 units. I haven’t even been teaching five years yet. And I’m super proud of that. Um, because they take action with what they learn. And, uh, but anyway, and it’s not a sales pitch, it’s just a blast. We, we’ll have, in fact, if you come and you don’t love it, I’ll give you your money back after the three days. I don’t mean like it, I mean love it. Um, you know, it’s never happened, but that’s the first time for everything. Thousands of people have come. Awesome. But, uh, yeah, I appreciate you letting me plug it.

Um, it’s something I and I don’t make any money in the 1 97. Hell, that barely covers the cost. It’s it, you know, I do, I talk about my coaching for 30 minutes and you know, that’s it in three days. In fact, the second day is about 12 hours. Uh, cuz we go late, um, with, with um, panels at night. But, uh, so it’s, it’s not a sales pitch, it is full on. It is drinking through a fire hose though. So, you know, bring your a game because it, it is drinking through a fire hose. But again, you know, if you’re not interested then don’t come if you’re, but, and, and you don’t have to come if you can’t make it or whatever. But get, but get up to speed. I mean, go to your local meetup group, see if you can find a local trainer, whatever, mentor to get up to speed as fast as possible because again, opportunity’s coming.

David Richter:

So last question here. Advice on the, for real estate investors listening to this of all shapes, ages, sizes, like what would you tell them right now?

Rod Khleif:

Well, listen, if you, if if, uh, you know, I told you competence to equals confidence equals, you know, um, passion and success. And so, you know, it starts with competence. Don’t dabble. You know, dabblers get their butts kicked. Okay? And, and I see it, I see it in my business and I’ve seen some stupid crap these last few years. I’ve seen, you know, an operators, uh, offering memorandum where they’re claiming the rents are gonna double the first year. I’m like, yeah, really? And then I see them and there’s no operating reserves in case the soup hits the fan. And, you know, and, and, and they’re claiming that rent increases are going to be 10% for the next five years. Really? Yeah, I don’t think so. So I’ve seen tons of that stuff and there’s gonna be a lot of carnage and pain with these brand new operators that have never gone through a downturn and you know, most of them haven’t.

And so, you know, it’s all about, you know, uh, seasoned an e a seasoned operator that knows how to handle an asset through a downturn that’s gonna survive in what’s coming. And that’s for any business frankly. There’s gonna be a lot of business failures as well. Um, and you know, Elon Musk was quoted as saying that the economy needs it. A lot of these overvalued businesses, uh, you know, that haven’t made a lot of money are gonna fall away and, and the economy needs it. So, um, yeah, there you go. Get educated right now. That’s number one. Get

David Richter:

Educated. That’s good stuff. I mean, there’s a bunch

Rod Khleif:

Of one other thing, one other thing, I’m sorry David, I’m sorry I interrupted. I if you can’t make the bootcamp, I did my goal setting workshop on, on New Year’s Day this year. I do it every year at the first. If you go to rodslinks.com, take your spouse, do it with he or her, bring your kids if they’re over 10 years old and it’s, it’s with music, it’s professionally done. There’s a guide you can download. I’m not gonna try to sell you anything. Just do the goal setting. Here’s what’s sad, David. People spend more time, time planning a birthday party than they do designing their lives. Mm-hmm. <affirmative>, this is designing your life. So if you go to rodslinks.com, there’s a lot of free stuff there too. A lot of free books and articles and videos and stuff. It’s my link tree with all my social media, but it’s a lot of free resources there. Rodslinks.com and do the, do that goal setting. I promise you’ll be glad you did. Um, and um, you know, you’d be designing your life.

David Richter:

So there you go. There’s some good actionable stuff. I mean, you gave a lot of here about how you broke first through the first six figures, how you, you recovered from the 50 million. There was a gr a lot of great points there. And then make sure to give ’em that code again, like now that you provided

Rod Khleif:

Yeah. So for the bootcamp, yeah, for the bootcamp text my name Rod to 7 2 3 45 and remember the code rod friend. Now if you forget, just DM me that you saw you, you know, heard me or saw me on David’s show and I’ll get you that 197 price cuz it’s going to 700 here in a few days. So this, it may even be 700 when this airs. So if it is again, and you don’t remember the Rod friend just DM me and I’ll hook you up. But, and it comes with some awesome freaking bonuses too. I won’t, you know, make this a big sales pitch. But the point is, the bonuses are worth 10 times the 1 97. You’ll see when you see what they are. But regardless whether you learn from me or not, if you’re serious about this, don’t be in the same freaking place a year from now that you are right now, take freaking action, okay? And push yourself, you know, have five seconds of courage, go make it happen. I promise you’ll be glad you did. Just you, you know, then you grind for a few years. Like most people won’t. You live the rest of your life. Like most people can’t.

David Richter:

Yeah, no, that’s really good stuff. So thanks. Thank you so much Rod. This has been incredible. So if you’re listen right now as a real estate investor and you want that confidence and competence in your finances, head over to simplecfo.com. We can help you get that because a lot of people, that’s where they really struggle is just all the money mess in their mindset. Let us help you if we can, if we can. Well, you can at least schedule a call and we can point you in the right direction. So it’ll love to help you. But remember, make profit a habit in your business. And Rod, thank you so much for being on again today. Thanks

Rod Khleif:

For having me, brother. It’s been a lot of fun.

Outro:

This episode of The Prophet First for REI podcast is over, but there are plenty more where that came from. Are you ready to learn how David and his team can help implement the Profit First system in your business? Schedule a discovery call at simplecfo.com right now. We’ll see you next time on the Profit First for REI podcast with David Richter.

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