As a result of the financial crisis in 2008, Rod Khleif lost $50 million — but he refused to let his story end there. It takes drive to recover from a loss so large, but Khleif did it, and he’s here to share how. In this episode of The Agent of Wealth Podcast, host Marc Bautis is joined by Rod Khleif, one of the country’s top business real estate and peak performance luminaries. Khleif is the host of Lifetime Cash Flow Through Real Estate Investing Podcast and author of How To Create Lifetime Cash Flow Through Multifamily Properties: The New Rules of Real Estate Investing.
In this episode, you will learn:
- Rod Khleif’s personal and professional background, including how he and his business were affected by the financial crisis of 2008.
- The key elements of creating a positive mindset.
- How to use “I am” statements to define identity and propel success.
- How to use visualization to achieve your purpose in life.
- And more!
Resources:
Rodkhleif.com | Multifamily Bootcamp (Live in Orlando) | Lifetime Cash Flow Through Real Estate Investing Podcast | How To Create Lifetime Cash Flow Through Multifamily Properties: The New Rules of Real Estate Investing | The Five Regrets of Dying | Bautis Financial: 7 N Mountain Ave Montclair, New Jersey 07042 (862) 205-5000
Disclosure: The transcript below has been lightly edited for clarity and content. It is not a direct transcription of the full conversation, which can be listened to above.
Welcome back to the Agent of Wealth Podcast, this is your host Marc Bautis. On today’s show I brought on a special guest, Rod Khleif. Rod’s a multiple business owner and philanthropist who is passionate about real estate business and giving back. As one of the country’s top business real estate and peak performance luminaries, Rod has owned over 2000 homes and apartment buildings and has built over 24 businesses in his 40 year career, several of which have been worth tens of millions of dollars. Rod’s also the host of the number one real estate podcast, Lifetime Cash Flow Through Real Estate Investing and the author of the number one best seller, How To Create Lifetime Cash Flow Through Multifamily Properties: The New Rules of Real Estate Investing. Rod, welcome to the show.
Hey Marc, it’s great to see you, let’s have some fun today.
So, I’m excited to talk not just about real estate investing, but mindset. A lot of people think that you need to have a ton of capital saved to get started. Or, you have to have wealthy friends and family. I don’t think your beginnings we’re like that. How’d you get started in real estate?
Rod Khleif’s Upbringing
Well, I’m going to take you back to give you some framework and foundation to the conversation. I immigrated to this country when I was six years old with my brother Albert and my mother Svantia. I was born in the Netherlands, in Holland, and we ended up in Denver, Colorado. We struggled. I remember eating expired food, because that’s all my mother could afford. I wore clothes from the Goodwill and Salvation Army all the way through junior high school, until I was old enough to get a job. I actually lied about my age to get a job at Burger King when I was 14, which is when I was able to buy my own clothes. I’m sure other people listening may have had it harder than we did, but I knew I wanted more.
Luckily, my mom had an incredible work ethic. She babysat kids, so we always had a house full of them. She was a bit of an entrepreneur. With her babysitting money, she invested in the stock market and did quite well.
She also purchased real estate, the first house she bought was right across the street from us. She told me that when she bought it, she paid $30,000. This was when I was about 14 years old. By the time I was 17, she told me she’d made $20,000 practically in her sleep. I said, “What? Screw college I’m going to do real estate.”
So, I got my real estate broker’s license right when I turned 18.
My first year in real estate, I made somewhere between $8,000-10,000. This was 42 years ago. My second year, I made somewhere between $10,000-12,000. By my third year working, I made over $100,000. Back in 1981, that was really good money. So, what happened between year two and three?
That’s what you were just starting to speak to: Mindset. I met somebody that taught me about the importance of psychology and how 80-90% of your success in anything is your mindset. And if it was just knowledge, there’d be a bunch of wealthy librarians and college professors. You actually have to take action — it’s pushing through fears and limiting beliefs.
Right.
The Stock Market Crash of 2008
So, fast forward. I’ve owned a couple thousand houses that I’ve rented long-term, and thousands of apartment units. In 2006, my net worth was $17 million. If you do the math on that, it’s about $8,340 an hour over the course of a 40 hour work week. I thought I was a real estate God. My head got so big that I could barely fit it through a door.
When that happens, God, the universe or whatever you believe will give you a smack down. Well, for me, that was 2008. I lost $50 million, conservatively.
I’m back from that, but it took a lot of changes to my mindset. I’m happy to drill it down for you, if you like.
Yeah, let’s start from that point in 2008.
Sure. I really thought I was set for life prior to ‘08. All my property was in Florida, and I thought 80 million Baby Boomers getting old and getting cold was recession-proof. As it turns out, Florida was ground zero for what happened.
The Importance of Your Peers
So, how did I bounce back? Well, luckily I’ve been in the self-actualization, self-improvement space for a long time. I followed Tony Robbins around the planet for 20 years, and I joined what he calls his “Platinum Membership.” It’s a high-level peer group, the kind of people who survived and thrived during the crash.
You want to be around people that aren’t threatened by your dreams and your goals, and that aren’t going to hold you back because of their fear, jealousy, or perceived inadequacies. So these people encouraged me by saying, in essence, “Stop whining. Pick your little butt up and go make stuff happen again.” That was important.
How Focus Plays Into Mindset
But the big thing for me was re-associating with what I wanted and why I wanted it. It’s so easy when you’re having challenges, to focus only on the challenges. Focus is such a critical piece of mindset, because whatever you focus on is going to grow larger, both positive or negative.
I could have let the $50 million loss in 2008 be my story, my identity. You have to be very careful no to do that. You see, as human beings, we’re connected through pain. Marc, if you came up to me and said, “How are you doing?” And I said, “I’m fantastic.” You’d step back and say, “Rod’s off his meds.” Maybe not you, because you’re evolved, but most people would. But, if you came up to me and said, “How are you doing?” And I said, “Oh God, dude, my back is freaking killing me. I haven’t been able to sleep.” You’d put your arm around me and say, “I feel your brother.”
Using Visualization to Achieve Your Life’s Purpose
Because we connect that way, it’s so important to manage your focus. So, I reassociated with what I wanted and redid my goals. In doing so, I created a vision board.
I take this stuff very seriously. Some super analytical people think it’s a woo-woo. Well, I’m here to tell you: That’s how I had $50 million to lose, and that’s how I got it back. Visualization does work, whether you believe it or not.
I instruct people through this process at my events. And what’s great is I’m actually doing my first live event since the COVID-19 pandemic in Orlando, December 3-5, 2021. But, the reason I bring that up is because the first thing we do is goal setting. Again, people say, “Let’s get on with the real estate stuff.” What they don’t realize is that mindset is truly 90% of my real estate success. You have to know exactly what you want. And, more importantly, why you want it.
Quick plug in: If you are interested in the event, text, “Rod In Orlando” to 72-345 or go to rodinorlando.com.
What’s an example of a goal? Is it, “I want to own a thousand units”?
It could be that. It needs to be specific. But, the critical piece is you have to believe you can do it. Goals can be anything, they can be financial — your intended net worth, how much cash flow you want from an investment, etc. It can also be the “stuff” — a house, a car, a boat, a jet ski, etc.
But when you’re creating your goals, include everything you could ever possibly want in life. For example, I have a friend that’s climbing every mountain over 14,000 feet in the world. It could be writing a book, traveling, and so on.
I also instruct people to write down everything they want to learn in this lifetime and who they want to help.
Happiness comes from progress and growth. I talk about that extensively in my trainings, because you’ve got to acknowledge that growth. Are you going to have delays? You bet. Are you going to have setbacks? You bet. In fact, I met the billionaire owner of Spanx, Sarah Blakely. She told me that her dad used to ask her and her brother, “What have you failed at this week?” on a weekly basis. Isn’t that an awesome question to ask your kids?
Don’t fear failure. Fear and regret are a lot worse than failure. The only thing you should fear is being in the same place a year from now, unless you absolutely love where you are right now.
I’ll give you a profound example. There was this nurse in Australia named Bronnie Ware, and she was a hospice nurse. So, she took care of patients when they were about to die. She asked a lot of them the same question: “Do you have any regrets?” She wrote a book about what she found, called The Five Regrets of Dying. You know what the number one regret was? Not living the life they could have/not doing what they knew they were capable of.
I can’t think of anything worse than that. Doing these goals, getting aligned on what you want and visualizing will prevent you from having that feeling.
There’s a reason Olympic athletes are now trained to visualize a race before they do it — it’s been proven to enhance performance. Goals trigger something in your brain called your reticular activating system, which is a subconscious filter. You’re not aware of it, it’s subconscious. Your brain points you in the direction it thinks you’re interested in.
An example of it is when you first buy a car, you see that make and model everywhere, right? And it wasn’t like that before. Well of course, people were driving that car… but now, you’re noticing them.
It works the same with goals. If you write your goals down and you associate with them regularly, your brain’s going to turn you in the direction of things you need to do and participate in to accomplish them.
How to Use “I Am” Statements to Define Identity and Propel Success
I’m also really big on being clear about your identity. Anything you put the words, “I am” in front of is an identity statement. On my wall I have signs that say:
- I am successful.
- I am the best in the world at what I do.
- I’m a business genius.
This is not my ego — this is what I’m aspiring to be.
People will die over their identity, so use that force to create what it is that you want in life. And again, visualization is huge.
I’m a proponent of visualization, as well. Something we do with clients is work on a framework we call the Advice Value Stack. We start at the bottom, where there’s managing money and saving for retirement. But up the stack, there’s components like peace of mind and happiness. Then, at the very top, there’s fulfillment. Which is like you mentioned, your ‘why.’
Hopefully people are also considering contribution. Let me share a story with you. When I was 18 and living in Denver, I had a goal to live on the beach. I would visualize palm trees, surf, sand… all of that — for 20 years. 20 years later, I built this $8 million, 10,000 square foot mansion on the beach. I had the beach on one side, and the bay on the other. It’s called the Gulf de Bay. All of it was unthinkable when I was 18. But that’s the power of visualization. I visualized it and I made it happen.
Three months after I moved in, I’m floating in the pool and looking up at this 10,000 square foot testament to my ego. Really, that’s what it was when I dissected it later on — that’s the truth. So I looked up at the home, and I got depressed. I don’t mean just a little bummed. I mean depressed. I had, by societal standards, achieved incredible success. But I was really bummed.
So, I went out and bought books, searching for answers. Back then, I didn’t believe in therapy. I picked up books by Napoleon Hill, Zig Ziegler and Tony Robbins. I only got halfway through the Tony Robbins book when I decided I wanted to go see him speak. This was 20+ years ago.
Robbins spoke about how he fed families for the holidays. I thought, ‘What a concept, doing something for someone else.’ I’d been totally focused on me and only me.
There were several things going on back then that contributed to the depression. Let me talk about those real quick.
One of them was that I had achieved a big goal, but didn’t have any other goals lined up behind it. Like the Good Book says, “Without a vision, the people perish.” You need a vision for the future, and I didn’t know what I was going to do next.
The second thing we talked about earlier. Happiness comes from progress and growth, not the goals themselves. You have to acknowledge all progress, even if it’s only a little bit every week.
The final thing was that I was totally focused on myself. I wanted to prove to the world I mattered and that I’m good enough. I was focused on Rod, Rod, Rod.
Like I mentioned, I heard that Tony Robbins fed families for the holidays. He’s fed millions. I liked that, and I was inspired by that. So I flew to Denver for Thanksgiving with my brother. Our goal was to feed five families.
So we went to his church and found five families that really needed help. The third one changed my life.
We walked up to this house. It was not even a one bedroom, because you had to walk through the bedroom to get to the kitchen. There, we met a Latin woman with five kids. We had big boxes of food, toys for the kids and of course a frozen turkey for Thanksgiving. We even brought a roasting pan, assuming she didn’t have one. She started crying. Then her kids came out and the older one started crying as well. Next, I was crying.
I was instantly hooked. I’m blessed to say that we have now fed well over 100,000 kids in the last 21 years, everywhere from Sarasota and Manatee County to Hillsborough County. For those of you listening, I’m not saying this to brag. But I’m highlighting the hierarchy that Marc shows his clients. Tony Robbins calls it The Science of Achievement versus the Art of Fulfillment.
As human beings, in this society, we’ve been taught to achieve to be happy. When you’re giving back, even in a little way, you’re happily achieving. There’s a big difference. Plus, whatever you give, you get back tenfold, a hundred fold. So I’m going to encourage those of you listening to begin giving back now. Pick a cause: Kids, the elderly, the environment, animals, whatever it is that juices you and do something. Regardless of how small, it can just be your time, because then you’ll be happily achieving.
Yeah, I think it’s important. I also think the “I am” statement exercise that you mentioned is important as well. Goal setting is obviously important too. How do you then translate goals into action?
How to Translate Goals Into Action
Once you’ve got your goals, then you really need to look at what you need to do every month, week and day to achieve them. Then create timelines. Don’t say, “I’m going to lose some weight.” Say, “I’m going to lose 10 pounds by January 1st.” That’s a goal that’s specific and measurable. You’ve got to do that with your financial goals too.
And for those of you that are analytical, you can take that approach. But the key is planning. If you fail to plan, you plan to fail. You’ve got to determine how you’re going to do it by picking your vehicle(s). I would encourage you to pick a vehicle you enjoy.
I firmly believe that you can learn to love anything if you associate pleasure with it, including working out. The point is, if you can’t learn to love it, then for God’s sake, go do something else.
“You can learn to love anything if you associate pleasure with it.”
—Rod Khleif
And then there’s the mindset part. Figure out:
- What do you want?
- Why do you want it?
Be clear. Be precise. Get pictures of it. Associate with it. Write those goals down regularly, so it continues to trigger a reticular activating system. Then, once you find a vehicle that you enjoy, or can learn to enjoy, success is inevitable. Period.
You build your competence first, that builds your confidence, and then you have the ability to influence. But, it’s got to go through that trajectory.
Very often, it’s necessary to raise money, influence people or build a team before you reach success. Everything involves influence. And if you love what you’re doing, you have passion and passion influences. Many people want to be around others that are passionate about what they do.
I know you talk a lot about multifamily investing in your books, podcast and bootcamp. Why multifamily?
Multifamily real estate investing allows for more scale. It’s much easier to raise money for a commercial multi-family property.
Makes sense. I’m a big proponent of cash flow, because in real estate transactions it’s the one thing you can control — you can project it, you can map it out. But, what I’ve seen over the past five years is that it’s harder to find real estate that looks like it works cash flow-wise. The asset values have just been fleeting to the point where-
Well, let me tell you something: Rents are going up too, buddy.
I will say that there’s some illogical things happening in the real estate market right now. A lot of sellers are encouraging best and final, which is basically an auction process where the highest offers from a prospective buyer is the one that’s accepted. When we see what some of these properties are selling for, we’re left scratching our heads. So I think there could be some reckoning happening. This feels a little bit like 2006 to me, but the current situation is much different.
The good thing about what it is that I do is that inflation helps us. Rents go up too. And in fact, in a recent San Antonio deal, rents went up 18% in the last 12 months. Typically we see 2-3% rent bumps. It’s just incredible.
With this administration throwing trillions more dollars at this economy — which I think is freaking nuts — inflation is just going to get worse. That negatively impacts just about everything except cash-flowing real estate.
How to Get Started in Multifamily Real Estate Investing
What’s the natural progression, if someone wants to get involved in multifamily real estate investing?
Well you’ve got to learn it. Don’t dabble, especially if you’re going to take other people’s money. The beautiful thing about multifamily investing is you can raise money for these deals. But you’ve got to learn it first. So, come spend three days with me at the event in Orlando, or listen to my podcast. I also create tons of videos, articles and have written books about every aspect of this business. I give books away for free on social posts.
But just learn. Dabblers get crushed. If you’re going to do this, learn to love it. I have so many students that retired from incredibly high paying W-2 jobs. I mean multiple six figure jobs, because of the income they’ve created through multifamily investing, both passively and actively.
Do you see that a lot? I do. I know people who have W-2 jobs and make good money. But they become addicted to that money, yet they’re not necessarily happy doing what they do. How do they start in real estate? Do they quit their job cold turkey and start from there?
No… I get that call all the time, “Should I quit my job and jump into real estate?” Absolutely not. If you don’t have income coming in, fear could pop up. And fear paralyzes. Most successful people in real estate have, in fact, quit their jobs. But they did it after they built income up, usually doing real estate on the side. So absolutely do not quit your job.
Well, we’re out of time. I’m going to give you a chance to plug anything you want. How best can someone get in touch with you?
If you want to come to the event in December, text Rod In Orlando to 72-345, or go to realestatewithrod.com. That’s the direct link to my website, and I have a lot of great, free resources there. And my podcast is Lifetime Cash Flow Through Real Estate Investing. If you type “real estate” in the Podcast application on your iPhone, it usually comes up in the top three results. I’m blessed to say that I have the largest commercial real estate podcast out there, and it’s because I love what I do. If you’re going to do something, love it and success is inevitable.
Great, we’ll link to all of that in the show notes. Thanks for being on the show, Rod. Really appreciate your insight and passion. And thank you to everyone who tuned into today’s episode. Don’t forget to follow The Agent of Wealth on the platform you listen from and leave us a review of the show. We are currently accepting new clients, if you’d like to schedule a 1-on-1 consultation with our advisors, please do so below.
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