The $50M Crash: How I Lost It All & Bounced Back | Rod Khleif DSH #548

There was this nurse in Australia.

She was a hospice nurse and so she took care of patients when they were about to die.

Question was, do you have any regrets?

And she even wrote a book about something like the five regrets of dying.

The number one regret was not living the life I could have lived.

If you feel fear of failure, fear regret much more.

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And here's the episode.

All right, got a crazy story for you guys today.

I got Rod Clef here.

We're going to talk about how you lost $50 million and made it all back.

Yes, sir.

And more.

Yes, sir.

I love that, man.

Thanks for coming on.

Oh, thanks for having me, Sean.

This will be a lot of fun.

Yeah, so the 08 crash, man, it got you good.

It got me good.

Yeah.

So, yeah, so let me back up a little bit if you don't mind.

So, so I'm a Dutch immigrant, you know, wooden shoes, windmills, immigrated when I was about six with my brother, Albert, my mother's Vansha, vantcha, ended up in Denver, Colorado.

And we didn't have much growing up.

I remember we shopped at an expired food store, believe it or not.

Yeah, they had a food store that was expired food.

And we drank powdered milk with our cereal in the morning because it was cheaper than real milk.

And I wore clothes from the Goodwill and the Salvation Army literally all the way through junior high school until I finally got disgusted, lied about my age when I was 14 because I was tall and got a job at Burger King so I could buy my own.

own clothes.

And, you know, I'm sure you've got listeners had it harder than I did, but I knew I wanted more.

And luckily, my mom 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 a bit of an entrepreneur.

She invested in the stock market successfully in IPOs, but she also invested in real estate.

And her first real estate acquisition was a house right across the street from us when I was about 14.

She paid about 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 $20,000.

I'm like, what?

You made 20 grand?

You didn't do anything?

I'm like, screw college.

I'm getting into real estate.

So I went and got into real estate and still living at home.

My first year, I made maybe eight grand.

My second year, maybe 10 grand.

But my third year, I made over $100,000, which back in 1980 was pretty decent change.

So what happened between year two and year three that caused me to 10x my income?

Well, what happened was I met a guy that taught me about the importance of mindset and psychology and how really 80 to 90% of your success in anything really is your mindset.

You know, and fast forward to today, I've owned over 2,000 houses that I've rented long term.

In 2006, my net worth went up $17 million while I I slept.

Whoa.

Yeah.

Yeah.

And I said, whoa, too.

And I thought I was a freaking real estate god.

My head got so big I could barely fit it through the door.

And, you know, when that happens, God will give you a nice little

kick in the you know what's.

Well, that was 2008.

Yeah, I lost $50 million conservatively really in 2008.

Jeez.

So, you know, what I'm known for talking about on my podcast and

at my events and things like that is the mindset it took to have to lose that in the first place.

But probably more importantly, the mindset I had to pick up to recover from losing everything because I thought I was set for life.

So, you know, and I will tell you, as I was mentioning before we started recording, I think the proverbial is about to hit the fan.

I really do.

And I brought some headlines here because I wanted to make sure I didn't misquote.

But if you don't mind, I'll rattle off a couple of things here because they're pretty sobering.

So Jamie Diamond, head of JP Morgan Chase, arguably the largest bank in the world.

The only banks that are larger are Chinese state-owned banks.

And he said that the U.S.

is driving towards a cliff as debt snowballs.

He said, brace yourself for an economic hurricane.

That's a direct quote.

A gentleman named Rubin, last name Rubini, who was Clinton's chief economist, who predicted the 2008-9 crash, says, warns of a coming greater depression.

This is in Fortune magazine.

The head of city, the citibank's chief economist, Andrew Hollenshorst, told Bloomberg that the U.S.

is headed for a hard landing.

Even Trump, love him or hate him, said the U.S.

economy could reach levels of the Great Depression.

Here's the thing.

What's crazy

right now we are paying a trillion a year on our national debt.

And if you want to be blown away, go on Google and Google the difference between a million, a billion, and a trillion.

It'll blow your mind how much a trillion really is.

And right now, we are paying, our national debt is going up a trillion every hundred days.

Whoa.

Yeah, I mean, it's insane.

And so, you know, what else is crazy is

up until 2020, 20% of the world of the U.S.

currency had been printed.

In the last four years, we have printed an additional 80% of the currency.

So 80% of all the currency right now has been printed basically in the last four years.

Oh, my God.

So we're wondering why we have inflation, right?

And

so literally,

80% of every dollar that's ever existed got printed in the last four years.

It's crazy.

That's insane.

Yeah.

And so, you know, I got some other quick headlines, just some sobering headlines.

This was actually about eight months ago.

20 million households in the U.S.

are behind in their utility bills.

This is in CNN.

Elon Musk, pretty smart guy, said they're lying to you.

The crash is going to be much bigger than they say.

So I'm not trying to scare everybody here.

I'm frankly.

getting excited, okay?

You know, I got my butt handed me in 2008 and 2009.

I was hiding under a rock.

You know, I got crushed by that wave.

You know, but I was around people that killed it in that crash because they were aware that it was possibly coming.

They prepared for it.

And so that's what, you know, I'm kind of shouting from the rooftops because

if there was ever a time to get up to speed on a side hustle, maybe you're listening and

you've got a W-2 job, you're not thrilled with it, you know you and your family deserve more, pick a freaking vehicle right now because I believe everything's going on sale.

I wish there were two of me.

One would be buying business.

I think there'd be a great opportunity to buy businesses from baby boomers that are

reaching retirement age and they won't be able to sell if there's some economic uncertainty.

So there's great opportunity there.

You know, real estate, every asset class of real estate, I teach people how to buy apartment complexes.

You know, I own thousands of apartments now myself.

And I'll brag for a minute.

My students now own upwards of 200,000 units that we know of.

It's crazy.

Yeah.

And I've only been teaching a little over five years.

So I'm super proud of that.

And so,

you know, but the message here is decide how you're going to capitalize on what's coming.

And don't be fearful.

And, you know, I'd love to spend a little time talking about, you know, the psychological components of this because I think they're relevant because there'll be a lot of fear.

There's always a lot of fear.

We're already seeing it.

It's much harder.

In my world, we raise money for our deals.

These multifamily properties, these 100, 200, 300 unit complexes take money, but it doesn't have to be your own money.

And I teach people in my boot camps how to raise that money.

But

it's harder now because there's a lot of trepidation with...

you know, investors that, you know, that

there's a lot of money out there that's scared of the stock market.

And I will tell you, if you've got money in the stock market, be very careful right now because that's the first thing to go

when the switch gets flipped here.

And I remember in 2008, man, there was a huge crash in the stock market.

First, Lehman went down and other banks went down.

And I anticipate we're going to see something like that.

And the reason

that I'm very excited, even if it's not as bad as I think it could be, multifamily my world, there's a lot of

debt that's adjustable rate.

And so these guys, you know, these guys bought these things at 3% and now they're 8% interest, which on a multi-million dollar property is a big deal.

And so I'll give you an example.

On a very small deal we were looking at in San Antonio, this guy had adjustable rate and

his reserve payment went from $8,000 a month to $80,000 a month.

Holy crap.

Yeah, and I mean, people can't afford that.

Because of the 3% to 8%?

Yeah, because the bank was projecting how much he'd need to have to refinance the property.

This is very common.

So there's already been some foreclosures.

I mean, we just bought a 200-unit asset, call them assets, this apartment complex in San Antonio for about a 40% discount.

So we're already starting to see the deals coming in.

So again, if you're listening, pick a freaking vehicle.

Learn it right now because, you know, if you're trying to learn it in the thick of it, it's going to be too late.

You know, you need to build relationships.

You need to get connected.

If it's multifamily, I've got a virtual boot camp coming up here July 13th and 14th.

I don't sell anything there.

And if you use the code Sean, you can come for $97.

Amazing.

We'll leave it below.

Yeah, yeah,

it's 16 hours of training for,

tell me your excuse, okay?

It's $97 freaking dollars.

So, you know, if you're serious about wanting to learn real estate, it's kind of a no-brainer because I don't sell anything there.

But regardless,

there are other asset classes in real estate that I think will do great.

I wouldn't do office.

Office is commercial right now.

Yeah, but other, you know, there's other commercial assets like

self-storage, there's mobile home parks, there's some industrial that's doing really well, even retail.

I mean, there's a whole Amazon dynamic, but even retail is doing pretty well.

But you know what?

I'd love to do.

So, again, pick a vehicle, get up to speed on it.

If it's multifamily, come see me.

But if it's something else, go learn it and get up to speed.

But what I'd love to talk about more, and the reason, you know, I've got a podcast as well.

I've been at it quite a bit longer than you have, and you're killing it with this one.

Holy crap.

But, you know, I'm at about 22 million downloads online.

And yeah, for my little niche and multifamily, I'm pretty proud of it.

But, you know, the reason it's been so successful is I spent so much time talking about mindset and psychology.

And so, you know, I'd love to talk about the mindset it takes to actually take action with something, which is the same thing I had to do when I lost everything.

It's pretty much the same sequence of events.

So if you mind if I chat, I would love to, because you were probably at rock bottom, I forgot.

Yeah, yeah.

No, I mean, I thought I was set for life, you know, and I had 800 houses.

I had multiple apartment complexes, and I was only at a 30% loan loan to value, only owed 30 cents on the dollar, and I still crashed.

Yeah.

So the first thing I did when I lost everything and the first thing you need to do if you're thinking about getting into something is you got to create a hunger.

You got to create a burning desire because everybody's got fear.

You know, everybody's got limiting beliefs.

And I'll talk about that more in a minute.

Or maybe you're comfortable, you know, and the comfort zone is a nice warm place.

And we all know nothing freaking grows there, right?

So you've got to actually push yourself.

yourself out of comfort to go do something and do this.

And so, you know, the first thing you do is you do your goals, okay?

And if you come to my boot camp, the one I was just mentioning, that's the first thing we do, goal setting on steroids, because how do you get anything if you don't know what it is, right?

You've got to have some clarity on what it is you want.

And more importantly, you've got to know why you want it.

And so, by the way, if you're not interested in multifamily, In my link tree, I've got my goal setting workshop.

I'm not going to try to sell you anything.

It's rodslinks.com.

If you're driving, just text links to 72345.

And in that link tree at the bottom is my goal setting workshop.

There's a guide you can download.

You know, Sean, people spend more time planning a freaking Christmas or birthday party than they do designing their lives, okay?

This is designing your life.

So if you're listening and you haven't done your goals, you know, grab your spouse, do it with them.

If you've got a kid that's over 10 years old, have them sit and do it.

Do it as a family.

You know, set them up to start looking towards what they want.

And

yeah, so again, it's there regardless of whether you're interested in real estate or not.

But it starts with goals because you got to create that hunger to actually take action.

Otherwise, you're just going to, it's just, you know, you're just excited about stuff, but you never move forward.

So the next piece after, and that's what I had to do back then, I had to realign with my goals because it was very easy for me to focus on losing everything I had, which is what happened.

Instead, I had to pivot and focus on what I wanted again.

So I reassociated with my goals.

Then the next piece is you got to make a decision.

And I don't mean dip your toe in the water.

I don't mean one foot in, one foot out.

I mean, it's freaking done when you make a decision.

In fact, a great,

well, the the Latin root for the word decision is to cut off.

If you're going to attack the island, you burn your ships because you're taking their damn ships home.

That's a decision.

It's done, right?

And so,

and sometimes that's the hardest decision of your life to actually take action on improving your life.

And for me, back then when I lost everything, it was just a decision to stop my pity party and focus on what I was going to do to pull myself out, which I did.

And so you make that decision, and then you've got to take the first step.

And,

you know, Dr.

Martin Luther King said, you take that first step in faith and the next step will be revealed.

You know, Lao Tzu said the journey of a thousand miles begins with a single step.

And, you know, the problem is a lot of people fear failure.

In fact, in my world, in the, you know, buying apartment complexes,

a lot of people are analytical.

They're very successful.

I've got a lot of super successful students that are very analytical.

But if you're analytical, I love you, and you know who you are, and you know how you have to check off every single box before before you make a move.

Well, you can't do that here.

You actually got to take action.

You know, there's this great analogy for this.

You know, you can drive all the way across the United States at night with your headlight seeing 50 feet in front of you, and you know, you'll make it.

You know, other people have made it before you, but you may have some obstacles.

It's the same way with really any move you're going to make to improve your life.

And certainly in multifamily real estate, the same thing.

And so, you know, the thing I will tell you is if you feel fear of failure, fear regret much more.

Okay.

There was this nurse in Australia.

She was a hospice nurse.

And so she took care of patients when they were about to die.

And she asked him a question, Sean, and the question was, do you have any regrets?

And she even wrote a book about something like the five regrets of dying or something like that.

And her name was Bronnie Ware.

And the number one regret was not living the life I could have lived, you know, living someone else's life, not doing what I know I'm capable of.

I can't think of anything worse than that.

You know, so don't fear failure.

Fear that.

And

while we're talking about fear,

I said you really have to get clear on what you want so that you push through that.

Everybody has fear, even the super successful people on the planet,

but they push through in spite of it and because their vision for their future is more compelling than sitting stagnant.

And there's also

limiting beliefs.

When I immigrated this country, I didn't speak English and I found out what bullies were for the first time.

Okay, so I got my butt kicked occasionally.

In high school, or uh, no, this is in elementary school, oh, that early, oh, yeah, oh, yeah, yeah, chased home, kicked, punched, yeah.

But then my mom, God bless her, proud Dutch woman that she was, thought it'd be a great idea to send me to school in wooden shoes and those leather shorts the Germans wear for Oktoberfest.

So, another ass kicking, you know, and that, and you know, and then, you know, and then the stupid stuff we all have, you know, embarrassment on the playground.

I had this crush on this girl named Carolyn, and

I made the mistake of telling a friend of mine, and I see her, Carolyn, with like what seemed like half the school is probably about 10 kids coming towards me.

She comes up to me, she says, do you like mustard?

And I'd have said yes to anything.

I'd never even spoken to her.

I said, yeah, I like mustard.

She said, well, I hate mustard and I hate you.

And all the kids laughed.

And I'm like, yeah, and I was crushed, you know, of course.

And, you know, stuff like, we all have had stuff like that happen.

And,

but what it did for me was it created this limiting belief that I wasn't good enough.

In fact, I used to ask myself, how can I show them I'm good enough?

Which, of course, presupposed that I wasn't.

And so a lot of people have these limiting belief systems.

You know, I'm not good enough.

I'm not smart enough.

I'm not old enough.

Another one of mine was I'm not analytical enough or, you know, I'm not young enough, whatever.

And there's a reason the acronym for belief systems is BS because 99% of them are BS, but we believe they're real.

You know, I used to be afraid to raise my hand in front of, you know, 15 kids in a classroom.

And now I speak in front of literally thousands and thousands of people a year.

And so if you've got one of these limiting belief systems, I would just tell you to drag it out into the daylight.

Look at what, if you're consciously aware of it, sometimes you're not consciously aware of it, but if you're aware of it, look at it through your adult rational mind.

Recognize that it's BS and it will diminish and go away ultimately.

And so, you know, that's super important.

The next piece I want to talk about really is focus.

You know,

the most, I think the most successful people on the planet have the highest degree of focus.

You know, we were just talking, you were mentioning somebody who was on Joe Rogan's podcast.

I listened to two podcasts for the most part, Joe Rogan and Tim Ferriss.

I try to get both sides of the aisle.

I'm definitely on one side more than the other.

But on Tim Ferris's show,

you know, he interviews the best of the best in the world.

You know this.

And I get excited about my 22 million downloads.

I think he gets that a week.

But anyway, so both of them.

But he interviews the best of the best.

The best athletes, Michael Phelps, the swimmer, NFL, NBA players,

actors like Ed Norton, Hugh Jackman,

Arnold, and billionaires like Ray Dalio and the heads of the biggest CEOs in the country like Zuckerberg.

And he deconstructs their success.

And it's really, obviously, a very intellectual, intelligent conversation.

I'm sure you've checked it out.

And, and, um, and I started to hear a pattern, Sean.

They almost all meditate.

Wow.

And what does meditation enhance, right?

Focus.

And so, you know, focus really is power.

And I get people that, you know, it's so easy.

And here's the thing that you got to remember, whatever you focus on gets bigger, right?

And so, you know, I'll get people say, How do I get out of student loan debt?

And I'm like, wrong question.

How do you make so much money that debt's irrelevant is the right question.

I love that.

You know, they asked Mother Teresa if she was anti-war.

She said, no, I'm pro-peace.

You know, I mean, it's a a play on words, but you know what I'm saying.

And so focus is super important that you pay attention.

You know, it would have been really easy for me to focus on losing everything, but I focused on what I wanted and the goals.

The next piece is peer group.

Who you hang out with is who you become.

When I was losing everything, I was in Tony Robbins' platinum partnership, which is his mastermind.

And I was around people that were killing it in that crash.

They'd prepared, like I said.

And they're like, get up, you puss, 50 million, chimillion, go make something happen.

You know, that's who you want to be around when the stuff hits the fan, right?

You You know, so many people default to a peer group they went to school with or they work with, and those people may have their own fears and limiting beliefs and things that'll hold you back.

So you got to be really careful.

And sometimes it's family.

You know, I'm telling you, love your family, but proactively choose your peers.

And really the last thing I'll mention is playing to your strengths.

You know, a lot of people think they need to build their weaknesses.

No, your strengths are your greatest assets.

In my business, in multifamily, there's lots of different hats you can wear.

And, you know, if you play to your strengths and you hire a line or partner for your weaknesses, success is inevitable.

I mean, because first of all, you're doing what you love, okay?

You're in the zone or the quan, like Jerry McGuire called it.

You know, you're doing what you love.

You never work another day in your life.

And

you'll be passionate about it.

And passion is required to influence people.

You know, maybe you can feel a little my passion.

I know your last guest was really passionate as well.

And when you love what you do, you're passionate, right?

And so, you know, passion's that fuel.

Passion, you know, breeds innovation and creativity and helps you get over speed bumps.

So again,

I'd tell you to focus on what you love and

don't fear failure.

You know, I got to meet Sarah Blakely, the billionaire owner of Spanks at a mastermind that I was in, her and Jesse, her husband, and beautiful human being.

But she told me at this mastermind that her dad used to ask her and her brother on a weekly basis, what have you failed at this week?

Wow.

And I thought, what a great question to ask your kids, you know, so they don't fear failure.

Because, you know, I call them seminars.

You know, that's not a failure.

I call it a seminar.

I was a $50 million seminar.

It was an expensive freaking seminar, but, you know, but I've built about 27 businesses, I think I counted.

I was shocked there were that many.

And several worth tens of millions of dollars, and three of them right now are, but most were spectacular, flaming seminars.

We really fail our way to success.

And so, again, those of you that are analytical, remember that.

And I guess I'll talk about one more thing.

You know, and this will be a little foofy for for some of you, but talk about gratitude for a second.

Gratitude's the most important foundational emotion we have to us.

It strengthens our immune system.

It makes our heart stronger.

It lowers our blood pressure.

It brings us closer to our spirituality.

And it's how you manifest everything you want in life.

You know, most mornings I'll sit in my recliner and I'll do gratitude for the beautiful people in my life, the things that I love, my students, my.

Are you interested in coming on the Digital Social Hour podcast as a guest?

Well, click the application link below in the description of this video.

We are always looking for cool stories, cool entrepreneurs to talk to you about business and life.

Click the application link below, and here's the episode, guys.

Foundation, so on and so forth.

And then I'll do gratitude for the things that I want as if I already have them.

And sometimes I'll get emotional being grateful for things I don't even have yet.

And I know I lost a few of you on that one, but ignore it at your peril.

This is how I had 50 million to lose and how I got it back.

Okay.

So it absolutely works.

And, you know, I'll leave you with one story.

I, you know, when I lived in Denver, I always knew I wanted to live on the beach.

And there's no beach in Denver, but I would visualize that.

You know, I'd visualize the palm trees and the sand and the surf.

And

20 years later, I built this, what's now probably a $25, $30 million home on the beach.

I had the beach on one side.

I had my boats on the back side.

It was a gulf to bay.

It was like a slice through an island.

I mean, big spiral staircase up through the middle, big waterfall from the second floor balcony into the pool, pools and magazines.

It was spectacular.

I'll land the plane with this on the second floor.

I had aquariums around the staircase that cost me almost $200,000.

So that gives you an idea of the house.

Well, I worked for it for 20 years.

Two months after I moved in, I'm floating in the pool at night.

I'm looking up at this testament to my ego, which is really what it was.

It was to prove the freaking world I was good enough, okay?

You know, I'm just like, if this doesn't prove it, forget it.

So, you know, I'm looking up at this thing and pool's changing colors.

It's got fiber optic lighting.

And my family's inside sleeping.

I got depressed.

And I don't mean a little depressed.

I mean, I got really depressed.

I'm like, what the hell?

I've just achieved success like times a thousand.

How could I feel bad right now?

There's several things, three things that were going on.

And I want to leave you with this.

So the first thing was, you never achieve a big goal without having other goals lined up behind it, right?

It's 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.

And the second thing is, it's never about the goals.

You got to have them to create that hunger.

But happiness comes from progress and growth.

And so, if you go to Rod's links and you watch my goal setting, at the end, I do a planning process, a weekly planning process to help you stay organized, how I manage two very large companies at the same time.

And part of that process is acknowledging your progress, no matter how small it is, patting yourself on the back, consciously acknowledging it, so that you're happy if you've got a setback or a delay.

Right?

And, but the big thing that was happening was I was totally focused on myself.

You know, rod, rod, rod.

Show the world I'm good enough.

And that's the year I met Tony Robbins, okay?

And I went and saw him in Fort Lauderdale.

And this is 24 years ago.

And I'm like, and I found out that he fed families for the holidays.

And I'm like, you know, what a concept.

You know, do something for someone else, right?

I'm embarrassed.

It's sad to be 40 to get that memo.

And I went home, I called my brother, who I was going to go visit for Thanksgiving in Denver.

I said, hey, bro, let's feed five families.

So he called his church and he found five families that really needed help.

And we bought food.

It was a lot of fun.

We bought toys for the kids, frozen turkeys.

And the third family changed my life, man.

We go up to this house.

There was was this woman, a Hispanic woman with five kids in a one-bedroom shack.

Whoa.

And she comes out on the porch and she sees all this stuff on the porch.

She starts crying.

Her kids come out.

You know, a couple of the older ones start crying.

I start crying and I'm hooked.

And I'm blessed to say, and please know this is not ego.

There's a message in this.

I'm blessed to say in the last 24 years, I've fed over 150,000 children in my area in Sarasota with, you know, for the holidays, at-risk kids.

And I've provided tens of thousands of backpacks filled with school supplies to local at-risk kids.

So we're doing 2,000 here in August, and thousands and thousands of teddy bears to local police departments for officers to keep in their vehicles if they encounter a child that's been in, you know, a traumatic situation.

And the reason I bring this up is we've been taught to achieve to be happy, right?

Like we shouldn't be happy until we've achieved.

That's a very common dynamic here in the United States.

I'm going to tell you, if you give back in any fashion, you're happily achieving.

And I know it's a play on words, but

Tony Robbins calls it the science of achievement versus the art of fulfillment.

Achievement's a science.

If you want to learn multifamily, get your ass to my boot camp, okay?

It's $97.

Tell me your excuse.

But it's a science.

I'll give you the blueprint.

You just got to do it.

Okay.

But fulfillment's an art.

You know, you got to figure out what juices you.

For me, it's kids.

You know, maybe for you, it's animals or the environment or the elderly, whatever it is, give back right now.

Don't say to yourself, well, you had money.

That's why you do it.

You want money?

Give back right now.

That's how you get the money.

That's the way it works.

So

I would encourage you to pick your passion, give back right now, and you'll be happily achieving.

I love that because some people wait their whole lives until they die to give back.

But you should be giving back the whole way up.

Yeah, I had to be 40.

I'm embarrassed that it lasted that, it took that long.

You'll make up for it with the volume now.

That's it.

That's what you got to do.

And, you know, like I said, I think there's incredible opportunity coming if you're not caught up in fear.

So, you know, if you're listening, if it's real estate, please check out my boot camp.

It's Rod's Links and

you can text links to 72345 if you're driving and just remember to use the code Sean when you check out for that $97 price because it's more than that now but you know it I love what I'm doing like you love what you're doing which is you know why we're both you know very successful and and

you know I really appreciate you having me on brother no I love that you just gave so much value can I ask a few more questions please

please I rolled really fast because I know you've got a short window no you're good so if real estate crashes 40 50 again like oh wait will you be all right this time oh yeah yeah yeah yeah because because see that's the thing.

The reason I crashed and burned is I was in single family.

Okay.

And houses don't cash flow well.

They just don't, because each one has their own taxes, their own insurance, and multifamily.

When I, my houses pulled me down in 08, okay.

My multifamily only pulled back about 11%.

Oh, wow.

But see, I had cross-collateralized, meaning I'd borrowed money against packages of houses plus the apartment complexes.

So the whole thing imploded.

I lost it all.

But, and that's why I started my podcast to tell people.

And in fact, at Rod's Links is my free book.

You pay six bucks bucks and you get it but there's a bunch of other free books there as well tons of free resources but the point is i wrote it to tell people if you're going to buy and hold real estate for god's sakes do multifamily don't do single family because it's much safer in a downturn you can have you know in a you know depending on how many units you can have you can have a whole bunch of units empty and still break even right and and see people need a place to live i mean there's a huge housing shortage right now and there's a huge disparity between buying a house and what the payment on that house is versus what you can rent for.

So we're becoming a renter nation, like it or not.

And that's happening.

And so, no, I, single, I mean, multifamily will do just fine.

You know, and so, yeah.

Yeah, you could take an 11% hit, but a 40% hit is judgmental.

Let me tell you something crazy.

Okay, I only owed 30 cents on the dollar.

By the end of 2009, I was upside down.

That's how much the real estate values dropped then.

Yeah, and it happened here, too.

So it's over 30%.

Oh, yeah.

Oh, yeah.

No, 70%.

It dropped more than 70%.

And I was on Ryan's podcast yesterday.

He had the same thing happen to him.

It dropped here like that.

California dropped like that.

Florida, you know, those three states got hit the hardest.

I'm keeping an eye on the market, and it seems like Miami's dropping a lot right now.

Oh, yeah.

Which is usually a sign that the other cities will follow.

That's exactly right.

Yeah, because Vegas is starting too.

Oh, yeah, no, no.

You know, he told me that prices are dropping, and yeah, it's already happening.

So, you know, I will tell you, in 08, 9, it was like a light switch, though.

No time to prepare.

No, it was like a freaking switch.

That's why I'm saying, if you're thinking about this, for God's sakes, you know, go learn it now.

Don't wait because, you know, you can cap.

It could be the greatest transfer of wealth we've seen in our lifetimes.

I mean, seriously, and there'll be exponential opportunities.

Like I said, I just bought this $20 million asset, 200 units, at 40% less than the one right next door sold recently.

I mean, that's

insane.

Yeah.

And what's your philosophy on how much you put down percentage-wise?

Well, see, the thing of it is, it's different in my world where you buy, you know, commercial multifamily because the commercial multifamily requires money, but there's so much money out there looking for a home.

I raised $12 million for that deal I just closed on.

Yeah.

And so, you know, and I teach my students, you'll learn that if you come to my boot camp.

I'll teach you how to raise money for these deals, how to, you know, pick a market and underwrite these things and evaluate them and finance them and raise money for them.

That's, you know, there's a lot to it, but, you know, it's,

like I said, my students are killing it.

And,

you know, you just get, you can't do it all.

In my world, it's a lot like flipping and wholesaling where you're going to do it all by yourself.

You're going to join a team and, you know, and do it with other people that are good in different aspects of it.

Like you need somebody that's good at numbers and analysis, because my business is primarily empirical.

You get the numbers right and you ask all the right questions, very hard to make a big mistake.

So you need somebody that one of these people you can throw in a room with a spreadsheet and throw raw meat in once in a while and they're happy.

You need one of those people.

And then you need a mouthpiece like Rod.

And then

maybe somebody that's got management experience to manage the asset after you buy it.

So there's a lot of different hats you can wear.

And that's why I say play to your strengths.

Do what you love.

Hire a line or partner for those other pieces.

Success is inevitable.

Do you stay within the U.S.?

Because you probably get pressed.

Oh, yeah, no.

I get asked all the time.

I've got students all over the world.

I mean, I've got students in the Netherlands, Africa, all over Latin America,

Canada, Israel, Turkey.

Yes, it does.

But a lot of them come here to invest, believe it or not.

You know, a lot of them will, they'll partner with Warriors.

That's my coaching students called Warriors.

They'll partner with Warriors here domestically to buy here.

Now, some of them buy in their own countries as well.

The strategies are the same.

The only difference is that the financing might be different there.

The entity structure might be different there.

But the basic strategies are buy based on cash flow or universal anywhere.

That's awesome, man.

How long did it take you to recover after that $50 million loss?

It took a bit.

It took a bit.

Yeah, I mean, it took probably, I mean, to get back to where I was.

I'm just now getting back to where I was.

20

years?

15 years, yeah, yeah, to get back.

You know, because there was a meteoric rise back then, you know, in the values.

And we've seen it here too, but I was very conservative.

And so I didn't go in full bore.

I'm like, that deal I just bought is the only deal I bought in the last 18 months.

Damn.

And I own thousands and thousands of apartments, but that's the only one I didn't like, because it was frothing.

It's reminded me of 2006.

You know, irrational exuberance, you know, where they're out there buying anything.

And we're seeing the pain of that because a lot of these people that bought these apartment complexes did adjustable rate debt, thinking the gravy train was going to last forever, like we all did in 2006.

And I knew it wasn't.

And so, you know, I know there's going to be a correction in multifamily, even if there's not a significant economic correction.

I do believe there's going to be a significant correction.

You can't keep kicking this can down the road.

I mean, it's, I mean, when you're talking the debt's going up a trillion every hundred days.

Crazy.

I mean, and we're paying a trillion in interest.

I mean, you know,

the Fed's going to try to stop inflation.

I don't know how they can when you've printed 80% of the money in the last four years.

I mean,

you know, it devalues everything.

But now the good thing, though, is if you can buy real estate estate right now, rents are going to keep going up.

Inflation is going to keep driving rents up.

If you buy something now, you're locked in at whatever that debt is on that property.

That debt's not going to go up in

amount.

So, you know, real estate's probably the best hedge ever against inflation because when you buy, you're locking in the purchase price and the debt amount.

So, you know, any increase, by the way, in my world, the value is based on a multiple of the income, the multiple of the net income.

And so any increase in that net income, you know, this is for a a commercial multifamily, five units are higher.

Two to four units is residential, the values based on comparable sales.

But five units are higher, it's valued on the net income.

Let me give you an example.

I have a property a mile away from that 200 unit I just bought.

It's 296 units in San Antonio.

It's literally a mile away.

And we painted numbers in the parking spaces, okay?

And because it was kind of scattered and people had to park a ways away to have their own, you know, be in front of their parking unit.

But we allowed them to pay 25 bucks a month to have a parking spot reserved just for them right by their unit.

We had 100 people take it.

Wow.

That was a $750,000 instant increase in value.

Holy crap.

Yeah, now here's why.

And I get hate for this all the time.

You can't do math, you're full of shit.

But here's how the math works in my world.

Okay.

You annualize that number.

So you take that 25 times the 100 people that took it, and I think it's 18,000 for the year, if I'm doing my math right.

But then you divide that by what's called a capitalization rate, which is how commercial real estate is valued.

And you do a 4%,

divide that 18% or 18,000 by 4%, it's 750 grand.

Whoa.

And that's the value increase.

I'll give you another example.

I had an asset, call them assets, and that's the nomenclature, but a hundred unit, 101-unit apartment complex in Dayton, Ohio got destroyed by a tornado.

Thank God nobody died.

A couple people had to have surgery.

No kids got hurt, thank God.

But I got there the next, and I'll tell you a quick story.

I got there the next day, and there was this woman, all 101 families had to move.

They shut the power off, water off, everything.

She's pulling clothes out.

and I said, Were you here when it happened?

She said, Yeah.

And she said, My son was upstairs in his bedroom, and thank God his phone went off with the early alert system.

By the time he got down and woke me up, his bedroom was gone.

And she pointed, and it was freaking gone.

I'm going to show you a picture after we're done here.

Yeah, it was crazy.

And so, thank God nobody died.

But anyway, the point here is we rebuilt that place, and we got a $600

per month increase in rents.

That was a 10, depending on what cap rate you use, a $10 to $12 12 million dollar increase in value on 101 units.

Holy crap.

Yeah, so yeah, I mean, it's exponential.

And that's why we love this freaking business because you buy one of these and you increase, you do what's called a value add play where you fix it up.

Like we're spending about $4 million on that 200 unit we bought.

We're getting big rent bumps and

it exponentially increases the value.

And then you could take a loan out against it.

It's that Burr method.

You've heard that Burr method.

You buy, renovate, refinance, repeat.

It's just that on a much bigger scale.

wow and at that volume yeah eight-figure volume yeah you can make

yeah it's coming i mean i'm telling you that that

you know the last couple of years the deals have been hard to find and which is why i backed off for the last 18 months but they're already starting to come and you're patient and discipline man because a lot of people would want to a lot of people didn't a lot of people did it and they're in trouble right now because interest rate was too high yeah and and they've got these high interest rates and they can't sell because sales are down 90 right now so the people yeah 90 so the people that are selling if you see something up for sale right now in the multifamily space, they have to sell.

Wow.

I mean, there's just no problem.

Nobody's going to sell right now unless they have to sell.

So there's something going on.

And they can't refinance either.

Okay.

So

if you've got debt coming due, by the way, that adjustable redebt is short-term.

So it's like typically one to three years.

And so the debt comes due.

You've got to sell or refinance.

To refinance, you've got to meet what's called debt service coverage requirements.

You know, in my world, they look at the property's ability to service the debt.

They don't care what your income is.

They want to make sure there's enough income on that property to take care of the debt.

So with the interest rates going up, they can't satisfy those requirements.

So refinancing is pretty much off the table as well.

So it's

proverbial shits about this.

That's scary.

I just bought down my interest rate because eight was too much.

Yeah, did you good for it?

I'm at 6.5%, which is still pretty high.

Yeah.

8%.

But no big deal.

You're in this house, right?

I'm writing off most of it because I'm building a studio.

Oh, perfect.

Smart backyard I'm using for masterminds.

Oh, perfect, perfect, perfect.

But, you know, you can refi when the rates come down.

And

God help us if they don't come down because this debt we're paying on this, on this, this debt that we have.

Oh, yeah, it's hard.

I mean, at some point, you know, it's just going to, something's going to happen.

You think this election is pretty big for the real estate?

Oh, it's huge.

Oh, it's huge.

Yeah, I think so with crypto, too.

I think it's huge.

Trump is really pro-crypto.

I think it's huge.

And

God help us if there's not a change.

That's all I can tell you.

God help us.

I mean,

we can go down that political rabbit hole, but I am definitely about as red as it gets.

And I will tell you, if we don't change, I think we're in really deep shape.

Does that impact your fundraising when you're so heavily on that side?

Yeah, I get some hate.

I get some hate, but honestly,

if you can't see what's going on, if you can't see what's happened the last four years in this country,

and

I mean, please do some homework.

Do some research.

If you're listening and got irritated by what I just said, please do some research to get your head out of CNN and actually look and see what's going on.

Because, I mean, it's sobering what's happening and and and they're still and and we're sending all this money to you ukraine and and yeah don't get me started i mean it it's uh it's people are so emotional but they should be more objective and just look at the data that's it the data says it all it's right there you can't argue in numbers no you can't i mean look at where we were back then and where we are now you know and and i was never political until very recently same yeah i i didn't i used to say i don't vote it just encourages them but that was my line and and and now i you know these last eight years it's been like holy crap.

Yeah.

I used to not care at all.

Yeah.

I, I, I, um,

yeah.

But being in business, it actually affects us at a pretty huge level.

It's huge, man.

It's huge.

I mean, certainly in my world, it's, it's huge.

And there's a lot of carnage going on right now.

And it's going to continue.

And I think it's going to...

It's going to hit all everything.

I think, you know, there's a lot of layoffs they're not telling you about either, by the way.

Definitely in the tech sector.

Lots of layoffs happening.

Yeah.

In fact, I had a quote, I don't know if I brought it with me, that like in 51% of the companies

are expecting layoffs.

Holy crap.

Yeah.

51%.

That's insane.

We're paying $2 billion a day on interest right now.

$2 billion a day.

Yeah.

Inflation

was 1.4%

at the beginning of 2021.

And now it's, you know, you know what it is.

And company valuations are tanking right now.

You used to be able to sell your company for 20X multiple.

Real estate as well.

Okay.

And so there's going to be deals and they're coming.

It's inevitable.

And so, you know, what's but but here's the thing.

In a crisis, cash is king.

Now, it doesn't have to be your own cash, but your ability to raise cash.

And that's why, you know, learn how to do that.

I mean, you and I have a great platform where we can do it easily.

I can just talk about it on my podcast, you as well.

But, you know, if you're listening, you know, I'll teach you all this stuff.

I'll teach you how to go out and do this

if you want to learn from me, but learn how to raise the money because if you have the ability to raise money, man, you're going to be able to.

clean up powerful stuff clean up man i mean if you can buy this stuff at 20 30 40 cents on the dollar

you're golden.

I mean, listen, if I hadn't been hiding under a rock in 2009, I'd be on the back of a 300-foot yacht right now because there were that kind of opportunities back then.

But I was, you know, I was shell-shocked.

Spot it happening again, though.

Well, that's it.

Well, listen, I got crushed by that wave.

I'm surfing this one.

This could take you to billionaire status.

No, I think it can.

I can take a lot of people to billionaire status and certainly multi-millionaire status, but you got to push through the fear.

That's why I said start with the goals, make a decision, take the first step, go learn.

If the first step step is learning from me or somebody like me, go do it.

Do it immediately.

And

you could capitalize on what's going on.

Don't be afraid to throw all low balls.

No, no, no.

Not right now, because if it's for sale, something's going on.

Yeah.

Period.

Period.

Nobody is selling real estate right now unless there's a problem of some sort because nobody's like, well, I just decided to sell.

Now, yeah, BS.

No.

I love that.

Rod, it's been fun.

Where can people find out your sites?

Yeah, no.

Go to Rod's links or text links to 72345.

That's my link tree.

There's just a ton of free resources there.

I've got a number one best-selling book.

You just pay the shipping.

You can get that one for like six bucks.

But I've got a dozen or more free PDF books that are really, I'm best in class, 200, 300-page books.

They're fantastic.

And my boot camp site is there.

Remember, when you check out, if you decide to come to my virtual boot camp,

use the word Sean on the checkout so that

you get that $97 price.

We'll link it out below.

Thanks so much for coming on, man.

Thanks, bro.

It's a pleasure to meet you, man.

Absolutely.

Thanks for watching, guys.

As always, hopefully, you learned something cool.

See you tomorrow.