Wealth Formula by Buck Joffrey 549: You’re Successful… Until You’re Not — with Rod Khleif
I recently had a long conversation with a very successful professional. He’s 58 years old. Highly educated. Respected in his field.
Financially sophisticated — in fact, his job depends on understanding money.
If you looked at his résumé, you would assume he was completely set for life.
He wasn’t.
A couple of bad investments. Some concentration risk. A few decisions that looked reasonable at the time. And suddenly he’s essentially back at ground zero — trying to start a new business at 58.
This story is far more common than people realize.
The Dangerous Assumption is that many successful professionals assume they’ll be fine.
Doctors. Lawyers. Executives. Entrepreneurs.
They make high incomes. They understand finance. They know about markets and interest rates and diversification.
They focus on their career.
They focus on income.
They even focus on investing.
What they don’t focus on is their own financial future with the same intensity they focus on their profession. There’s a difference.
Being financially literate is not the same thing as being financially intentional. Especially when you assume you always have more time.
The Good News at 58 is that he still has time. A lot of time.
For entrepreneurs especially, it doesn’t take 25 years to rebuild. It can take five.
There’s a quote often attributed to Bill Gates:
“Most people overestimate what they can accomplish in one year and underestimate what they can accomplish in five.”
That quote is brutally accurate. In one year, starting a business feels overwhelming. Progress feels slow. Revenue is inconsistent. Doubt creeps in.
But five years? Five years of focused effort, smart strategy, capital discipline, and experience compounded?
That can change your entire financial trajectory.
I’ve Seen This Movie Before.
I have a very good friend who was worth over $40 million in his early 30s during the real estate boom.
Then 2008 happened. The real estate debacle didn’t just dent him — it wiped him out.
For years, he struggled. Pride gone. Lifestyle reset. Just trying to survive.
Most people would have mentally retired at that point. They would have blamed the market, blamed the system, blamed bad luck.
But about six or seven years ago, he found his rhythm again. New strategy. New focus. New discipline. Today, he’s worth over $60 million. I get that’s not normal. But it proves something important.
It Doesn’t Take a Lifetime. The examples I just gave are extreme. Most people don’t lose $40 million. Most people aren’t rebuilding at 58.
But the principle is universal: It doesn’t take a lifetime to secure your future. It takes a focused season.
A defined period where you are intensely clear about your objective.
A stretch where:
• You work harder than you’re comfortable with • You manage risk better than you used to • You stop assuming income equals security • You align your decisions with a specific financial target for the future
There’s another quote I love:
“The harder you work, the luckier you get.”
Luck isn’t random. It compounds around preparation, visibility, and persistence.
When you are laser-focused on a financial goal, you start seeing opportunities others miss. You make better introductions. You ask sharper questions. You move faster when something makes sense. And over time, it looks like “luck.”
The story of the 58-year-old professional isn’t a warning about markets. It’s a warning about complacency.
Success in your profession does not automatically translate into security in your future.
Income is not wealth. Financial literacy is not financial strategy. And intelligence does not eliminate risk.
But here’s the good news.
If you’re in your 40s or 50s and feel behind — you’re not done. If you made a bad investment — you’re not finished. If you took a hit — that’s not your final chapter.
You may just be at the beginning of your five-year season. The key is focus. Direct yourself to a destination you can visualize. That’s the only way you will get there.
Because in the end, securing your future rarely requires a lifetime of perfection. It requires a concentrated period of intensity.
And the sooner you decide to enter that season — the sooner your next five years will start compounding in your favor.
There is no one who knows this reality more than this week’s guest on Wealth Formula, Rod Khleif .
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Transcript
Disclaimer: This transcript was generated by AI and may not be 100% accurate. If you notice any errors or corrections, please email us at phil@wealthformula.com.
welcome everybody. This is Buck Joffrey with Dwell Formula Podcast. Coming to you from Montecito, California, I wanna remind you that there is a website associated with this podcast called wealthformula.com. That’s where you go if you wanna. Become, uh, more, uh, involved with this community, including our accredited investor club, AKA investor club, uh, very easy to join.
It’s free. All you do is you get onboarded and you see lots of, uh, potential deal flow that you wouldn’t otherwise see again, that is wealthformula.com. Simply click on investor club and get onboarded.
Now, as for today’s show,
I had a, uh, a long conversation with a very successful professional, recently 58, highly educated, respected, financially sophisticated, in fact, in the money business.
Uh, and if you look at his resume, you would assume he was completely set for life, but he wasn’t. A couple of bad investments, some concentration risk. A few decisions that looked reasonable at the time, and suddenly he’s back pretty much to ground zero trying to figure out what to do, and he’s thinking about starting a new business or maybe buying a business.
Well, that got me thinking because the reality is this story is far more common than people realize, and I actually hear it fair amount. Right? Many successful professionals assume they’re gonna be fine. Doctors, lawyers, executives, entrepreneurs, making high incomes. Maybe they understand finance, they know about markets, interest rates and diversification in theory.
But here’s the trap. You focus on your career. You focus on income. What they don’t focus on is their own financial future with the same intensity. They focus on the profession, and that’s. The difference, right? The issue is that being financially
literate is not the same thing as being financially intentional.
Now, I actually hate that word because it’s a very, uh, uh, neo agey word intentional. But in this case, I will use it because that it’s very, it’s very appropriate. But here’s the good news, even at 58, right, you still have time. You have a lot of time for, especially for entrepreneurs, it doesn’t take 25 years to rebuild.
It can take five. And there’s this quote, um, it’s often attributed to Bill Gates, who, who’s been in the news lately for a lot of other stuff, but this is a good quote. He says, most people overestimate what they can accomplish in one year and underestimate what they can accomplish in five. And that quote is so true.
I will, it’s incredibly powerful and it’s very, very useful to think about and. Put in the back of your mind because in a year, like you’re saying, you’re starting a business, it’s gonna feel overwhelming. You may lose money, you know, slow progress, revenue, inconsistent five years, you know, with focused effort and you know, good strategy and discipline.
The financial trajectory of your life could completely change over that five years. In fact, I will say that with my first business that I ever started, that is absolutely what happened. I was just pretty much outta residency, didn’t have any money, and within five years I was rocking and rolling. You know, it was a, it was, you know, it wasn’t worth, you know, hundreds of millions of dollars.
But I, I, I was, I was doing way better. If you look over five years, it’s an incredible trajectory. And it’s not just me. I mean, there’s guys who’ve done it more extreme ways. I talk about this friend, a lot of times he was worth like 30 or $40 million in his early thirties, and then 2008 happened. It didn’t just kinda dent him, it wiped him out, and for years he struggled.
Lifestyle kind of reset a little bit, just trying to survive. You know, there’s this saying in business that the key to su success in business is to stick around long enough until you get lucky again. Well, sometimes that’s true. And a lot of people might have, uh, kind of mentally retired at that point.
But the reality is he stuck with it. He rebuilt about six or seven years. He was kind of sideways, then another six or seven years, new focus, new discipline, and today worth 60 million bucks. Now, that’s not normal, right? But it does provide, uh, it does, it does kind of provide an important point. It doesn’t take a lifetime always.
Now most people don’t lose $40 million, and most people aren’t rebuilding necessarily from zero at 58, but the principle really is universal. It doesn’t take a lifetime to secure your future. It takes a focus season to find period where you’re intensely clear about your objective. It’s a stretch where you work harder than you’re comfortable with, and maybe it’s not fun to do that in your fifties or sixties.
You manage risk better than you used to. You stop assuming income equals security. You align your decisions with a specific financial target. You know what, there’s a another line I love, another quote, and I don’t know where this one comes. I, I, I think it was some hockey coach of mine way back. It’s that the harder you work, the luckier you get.
The thing is that luck isn’t random, right? It compounds. Around preparation and visibility and persistence. And when you’re laser focused on a financial goal, you’re gonna start seeing opportunities that are out there that others might miss. You’re gonna make, you know, better introductions, ask sharp questions.
You move faster when something makes sense, and over time it starts to look like luck. I think the real lesson, um, about the situation that people get into, like this person I was talking about is. That it, it’s not a warning about markets per se, although markets have a lot to do with it. It’s a warning about complacency.
You know, success in your profession does not automatically translate into security in your future. You know, income as you know, is not really wealth and financial literacy is not financial strategy. Although literacy is really, really important. You gotta have a strategy. And you can be really, really smart and not eliminate, you know, or mitigate risk enough.
So if you’re in your forties or fifties and feel behind, you’re not done. Okay? You made a bad investment, you’re not finished. If you took a hit, I’ve taken plenty of heads, especially the last few years. It’s not your final chapter. You may just be looking at the beginning of your next five year season.
And the key is focus clear goals, define targets, discipline, action. The sooner you decide to enter that season, the sooner your next five years will start compounding in your favor. Man, I gotta tell you, this is a, an ongoing story I hear a lot about, so again, think about that Bill Gates quote, you, you know, people tend to way overestimate what they can do in a year.
Grossly underestimate what they could do in five. Anyway. There’s no one who knows this better than my guest on this week’s Wealth Formula podcast. Rod Cleef. Many of you already know him. We’ll have that conversation right after these messages.
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Welcome back to the show everyone. Today my guest on Wealth Formula podcast is Rod Thief. He’s a real estate investor, author, and mentor with decades of experience in multifamily investing. Uh, he’s built and sold hundreds of millions, uh, in, in apartment assets and teaches thousands of investors through coaching masterclasses and his life.
Uh, lifetime Cash Flow Academy. Uh, rod, how you doing?
Good, brother. Good to see you, my friend.
Let’s review, but you know a little bit about you, your background.
Sure.
You know, uh, sure. We have an interesting story.
Okay, well I’m a Dutch immigrant, you know, think wooden shoes and windmills. I immigrated to this country, uh, when I was six years old with my brother Albert, my mother’s cia.
Um, and we ended up in Denver, Colorado. Uh, struggled initially. Really struggled actually. And, and I remember, uh, wearing hand me down clothes all the way through junior high school until I finally lied about my age when I was 14 ’cause I was tall and said I was 15 so I could flip burgers at Burger King.
You know, and I’m sure you’ve got listeners that had it harder than I did, but I knew I wanted more. And luckily my mom had an incredible work ethic and so she babysat kids so we’d have enough money to eat. And with her babysitting money, she was an entrepreneur and invested in real estate. Um, and her first real estate acquisition was the house right across the street from us.
When I was 14, she paid about $30,000. And then when I was 17, she told me she’d made $20,000 in her sleep. It had gone up in value. And I’m like, what? Forget college. I’m getting into real estate. So I. Went and got my real estate broker’s license right when I turned 18, which you could do back then with education.
Now they got, they got smart you, they need some, you need some experience. But, uh, I was a broker. I was smart enough to go work for a broker. But, um, you know, my first year in real estate I made about eight grand. My second year, maybe 10 grand, but my third year I made over a hundred thousand dollars, which back in 1980 was some pretty decent money.
And so what happened between year two and year three? Uh, the 10 x my income was what? What happens? I met a, a guy, he was a broker. I was working for actually, it 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 psychology.
So fast forward to today, I’ve, I’ve owned over 2000 houses that I’ve rented long term. I own thousands of apartments now, and I’m also buying senior housing now, which I’m excited about. And you know, in 2006, my net worth went up $17 million while I slept. And you might say, wow. I said, wow, I got a head so big I could barely fit it through a door.
And I thought I was a real estate God. And you know, when that happens, God of the universe will give you a nice little SmackDown. Well, that was 2008. I conservatively lost $50 million in 2008 and nine. What I’m known for talking about on my podcast, which I’m blessed to say at this point’s, the largest, uh, commercial real estate podcast really in the world at this point is, and, and the reason being is I spend time talking about mindset.
You know, people don’t remember what you said, but they remember how you make him feel. And I do little clips every week called Own Your Power, their motivational clips. And, and I think that’s the reason it’s been so well received. But, uh, you know, I’m known for talking about the. Mindset it took to have 50 million to lose in the first place.
And you know, maybe more importantly, the mindset it took to recover from losing it. But, uh, you know, I’d love to, we can chat about that if you like, or I’d love to talk about the state. Yeah. Whatever you
It’s
a,
it’s, I think it’s appropriate to talk about that right now, rod. I mean, I think Okay. You know, in this, in this market with what we had, you know, um, you know, there’s been a, there’s been a lot of pain in multifamily and
Yeah.
You know, it’s, you know, you and I have talked about this before where. Part of success is, is trying to recognize particular situations. Um, you know, you talk about Warren Buffet and how Warren Buffet says be greedy, when others are fearful and all that, that’s great, but it’s really hard to do. Right? And so help us understand like, sure.
You know, uh, how, how do you, how do you do that? Sure. How did you go and how bad did it get?
Well, I lost 50 million. I lost $50 million, so it got pretty freaking bad. Okay. I call ’em seminars. That was an expensive seminar. Yeah. Yeah. And very little, uh, so it was, it was ugly. It was ugly, but. It was, it’s, I, I’ll be, I’ll be candid.
The strategies I’ll share very briefly here, the strategies, I’ll share the same strategies you would use to get started. Okay. You know, if, if you know you need to do something, and we talked about this, uh, uh, before we started recording, you know, the. With ai, a lot of jobs are going away. You know, if you heard of Elon Musk on, on Joe Rogan’s last epi episode, or the last interview he did with Joe Rogan, you know, he said any job in front of a computer is pretty much gonna be gone like lightning, like a year or two.
I mean that fast. It’s crazy. And so, you know, and even, you know, surgeons are, are, are, are gonna be replaced by robotics and, and on and on and you know, and I think there’s gonna be it professionals, uh, you know, there’s gonna be a lot of. Pain for the people that don’t proactively, you know, reinvent themselves, start thinking about what they’re gonna do to reinvent themselves.
Maybe it’s an ai, maybe you’ll learn ai, but, but you better think about it now or if you’re in one of these positions. So when the shoe drops, you’re ready because. Uh, there’s a lot of opportunity. I mean, there’s 10,000 people a day turning 65 in this country. You could buy businesses, um, you know, uh, I’m in, I’m, I’m excited about senior housing.
They need beds, you know, and, and there’s a huge shortage of beds, but, so there’s a lot of opportunity, but you better pick something if you’re in one of these fields and get busy starting to study it and learn it, and do it on the side so that when the shoe drops, you’re ready. That’s, I don’t wanna scare you, but I just wanna open your eyes.
To that fact. But so how, how I recovered from losing $50 million again, is the same strategy I would tell you to use to get started. And it’s first thing, it starts with goals. You gotta figure out what it is you want. ’cause how do you get anything if you don’t know what it is? Because with the goals you create a burning desire or a hunger and you’ve gotta have that to push through fear and limiting beliefs and so on and so forth.
And, um. You know, I, I, that’s, if you come to one of my bootcamps, I do a virtual bootcamp every couple of months. It’s two days. I don’t sell anything there. And I’ll tell you later how you can come for 47 bucks. So it’s no excuse. But, but the first thing we do is goal setting on steroids, uh, because you’ve got, again, you’ve gotta create that hunger.
Now, I’ll, I’ll say this to you, if you have no interest in, in, uh, learning what I teach. At my link tree, I did my goal setting workshop. It’s an hour. There’s a guide you can download if you go to rodslinks.com or text the word links if you’re driving, uh, to 7, 2, 3, 4, 5 at the bottom. My, is my goal setting workshop.
And you know, here’s the thing, buck, people spend more time planning a freaking birthday party than they do designing their lives. Doing your goals is designing your life. So you know, if, if, uh, if you haven’t done ’em in a while, go to Rods, links, go at the bottom. There’s my workshop, there’s a guide. You can download ’em.
Not gonna try to sell you anything. Spend an hour with me. Have your spouse do it. Have your kids do it if they’re over 10 years old, and design their lives. So again, it starts with goals. So that’s the first thing I did was reassociate with my goals. Then the second piece is you gotta 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, you decide it’s done. Okay. The Latin root for the word decision means to cut off. If you’re gonna attack the island, you burn your ships ’cause you’re taking their ships home. That’s a decision. And, and that’s what I did. I said, okay, enough, quit feeling sorry for yourself.
Pick yourself up and go make something happen. And that’s, that’s what I did back then when I lost everything. But it’s the same thing again. If you’re, if you’re in a job and you’re. You’re just not where you want to be. So we make that decision and then you gotta take the first step, uh, you know, buck. And that’s, that’s pretty much it.
You know, Dr. Martin Luther King said, you take that first step in faith, the next step will be revealed. And you know, LA Sue said the journey of a thousand miles begins with a single step. But, you know, in our business and, and, and the investors that we deal with and, and the, you know. Uh, active investors and, and, and passive both, as many of ’em are very analytical and you know who you are.
If that’s you and I love you, you’re some of the most successful students that I have and successful people in our businesses. However, I also know how you have to check off every single box before you make a move, and you can’t do that here. Okay? You’ve got to, you’ve got to recognize that you’ve gotta have enough faith.
To get started, you know, you can go all the way across the United States at night with your headlight only seeing 50 feet in front of you. And, you know, you can make it, you know, other people have done it before you, you know, there’s a, there’s a, there’s a, a road. And, uh, it’s the same way. You may have some obstacles, but, uh, it’s the same way with this business or really any business.
But you, you, you’ve got to take that first step. And, you know, a, a lot of people fear failure, and I’m gonna tell you, don’t fear failure. Fear being in the same place you are right now, a year or two from now, unless you absolutely freak. Love where you are right now. Fear, fear, regret. That’s what I would fear if I were you.
I, I, there was this nurse in Australia, a hospice nurse, uh, and her name was Bronny Ware. She asked patients when, who were about to die, if they had any regrets, and she wrote a book about it as a national bestseller. Something like The Five Regrets of Dying. You know what the number on regret was? It was Living the, not Living the Life I could have lived living someone else’s life, not doing what I know.
I’m capable of fear that don’t fear failure, you know? Well, the next piece is fear and limiting beliefs. So fear, you know, every successful person have has fear. Now we, we, we, entrepreneurs call it stress, but it’s fear. And, you know, action mitigates fear. You wanna mitigate fear, take action. Go do something.
If I’m, if I’m laying in bed at night, it’s three in the clock in the freaking morning and something stresses me out again, stress is fear. That’s what we achievers call stress. Uh, it’s fear. Uh, and, and, um. If something wakes me up and I’m stressed about it, I literally will get outta bed and just go write down some notes.
I used to have a pen with an electrical pen that drove my ex-wife crazy and I’d, I’d write notes sometimes fill up pages of notes in bed so that I’m taking some action so I can go back to sleep. So there’s a, there’s a very simple example of it, but anytime that I am fearful about something, I take massive action towards it.
Just, just taking steps, doing things. That will mitigate it. And it’s just how it works. So, I mean, it’s, it’s, it’s as simple as that buck. I mean, you just have to do some things. Towards that fear now. Now, the other thing is, if you don’t take action, the fear expands. So that’s the, uh, uh, that’s the antithesis there.
So, so you, you need to take action because that’ll, that’ll mitigate it. The, the next piece really is limiting beliefs. You know, when I immigrated this country, I didn’t speak English. I got thrown into school, found out what bullies were for the first time. So I got my butt kicked occasionally, hadn’t learned how to fight back, and then my mom, this is the prop, sent me to school in these wooden shoes.
And these are the actual wooden shoes. We found them. When we put her in senior house, senior living in, and these leather shorts, the Germans wear for October Fest, I had to wear that to school. And of course that was crack cocaine for the fricking bully. So I got my ass kicked again. And
don’t wooden shoes, rod Or, or those,
yeah.
Yeah. Wooden shoes. Wooden shoes. Yeah. These are from Holland, man. That’s where I was born. Yeah. My mom. Proud Dutch woman. Yeah. This is, they’re wood. They’re real wood. The farmers still wear these things, uh, ’cause they’re good to go through mud, but they’re crack cocaine for bullies. Okay? And so, yeah, you know, uh, I, I, I got my butt kicked again and, and I came up with this belief system that I wasn’t good enough.
I used to ask myself, how can I show them I’m good enough? And a lot of people have these limiting belief systems. I’m not good enough. I’m not courageous enough. I’m not strong enough. I’m not old enough. I’m not young enough. Here’s the thing to remember. There’s a reason the acronym for Belief Systems is BS because 99% of them are bs, but we believe they’re real.
I mean, I used to be afraid to raise my hand in front of 10 kids in a classroom, and because of fear of rejection, now I speak in front of thousands of people a year, usually in flip-flops. Okay, so you know, you can mitigate this. So if you’re aware of one of these. Limiting beliefs, BS belief systems, drag it out into the daylight.
Look at it with your adult rational mind. You’ll recognize that it’s BS and it will dissipate. But you gotta, you gotta think about it consciously and it’ll, it’ll go away. Um, the, the next piece is focus. Um, you know, focus really is power and whatever we focus on gets bigger, both positive or negative.
Okay? So it’s very important that you focus on what you want, not what you don’t want. I’ll get, people call me and say, how do I get outta my student loan debt? I’m like, wrong question. How do you make so much money? The debt’s irrelevant, is the question you need to be asking. They asked Mother Theresa if she was anti-war.
She said, no, I’m pro peace. I mean, you get it, right? And, and so, and in fact, I’ll give you another example. So I, I, my podcast is over, I believe, over 30 million downloads, which doesn’t sound like a lot in our social media world, but in, in the podcasting space, it’s not bad. But I listened to two podcasts, Joe Rogan and Tim Ferris.
I try to get both sides of the aisle. I’m definitely on, on one side. Uh, but, but, um. They get, and the reason I bring that up is they get about 30 million a week, you know, but that big podcast. But, but, um, on, on Tim Ferriss’ show, he interviews the best of the best in the world. You know, the best athletes like Michael Phelps, NFL players and NFL players, NBA players, actors like Hugh Jackman, ed Norton, Jamie Fox, Arnold billionaires like Ray Dalio, heads of the biggest companies on the planet like Zuckerberg.
And he deconstructs their success. It’s very intelligent conversation. I mean, I, I love listening to it. I started to hear a pattern, uh, they almost all meditate. What does meditation enhance? Focus, right? So focus is a really important piece of, of, of success. And just a couple more. One is playing, the next one is playing to your strengths.
You know, when, when you, when you go to reinvent yourself or if you’re struggling, you know, or, or gonna start something. Play to your strengths and hire a align or partner for your weaknesses. Like in our world, you know, there’s lots of different hats you can wear. It’s a team sport. You could be the person that finds the deals and analyzes them.
If you’re analytical, you could be the mouthpiece like me or you, and you’re, you know, raising money, talking to brokers and, and getting the word out. You could be the. You know, the um, asset manager, if you’ve got some project management experience, construction experience, there’s lots of different hats you can wear, but you wanna play to your strengths.
Your strengths are your greatest assets. Don’t try to maximize your fears. You’re gonna get much further. Like I said, if you hire aligner partner for your weaknesses, you know, some of the most successful. Um, partnerships I see in the business are an analytical, introverted person with an extroverted, outgoing person.
I mean, that’s a match made in heaven in our business. ’cause our business is primarily empirical. You ask the right questions, uh, and, and you get the numbers right. You know, it’s kind of hard to make a big mistake. Um, and so. You know, just make sure you’re playing to your strengths and when you’re playing to your strengths, you’re gonna have passion and passion’s required to influence people.
Right? ’cause you love what you do, so you’re passionate about it. So again, real heavy duty argument to play to your strengths. Yeah, I think the last piece, the last piece is, is peer group. Um, you know, who you hang out with is who you become. You’ve heard it, you’ve heard it before. So if you’re gonna get into something, get around people that are doing it.
Like my Warrior Coaching program, I’m, I’m gonna brag. I, I, like I said, they own 300,000 multifamily units that we know of. I’m, I, it’s, we’re counting, uh, we know it’s close to 300,000. We’re at like 275,000 or something. I know there’s a lot we’re missing. And, you know, tons of senior housing, tons of self storage, tons of industrial flex space, um, retail mixed use, you name it.
Uh, mobile home parks, and. Almost all of those deals were done between warriors, between my students. So you know, ha, who you hang out with is who you become. You know, if you show me your three best friends, I’ll show you who you are in your relationships, your happiness, your health, and definitely your finances.
But see, so many people default to a peer group they went to school with or they work with, and those people with their own fears or limiting beliefs might hold you back, you know, afraid of losing you, afraid of feeling less than if you succeed. And sometimes it’s family. I’m gonna tell you, love your family, but proactively choose your peers.
Right? You know, and when I was losing everything in 2008 and oh nine, I was in Tony Robbins Platinum Partnership and there were people there that were killing it in that crash, uh, you know, thriving. And they’re like, get up, you puss. 50 million Schmill. Go make something happen. That’s who you wanna be around, not only while you’re building, but certainly when the proverbial stuff hits the fan, right?
Uh, so anyway. I, that those are, those are some of the big pieces.
Yeah. Well, that, I mean, that’s, let, let’s talk a little bit about the, the business that you’re in. Um, you know, you’re, you’re heavily involved with real estate. Obviously these, uh, mindset things are a great place to start. Now you go out there, let’s talk about where the market actually is and what you’re seeing in this market right now.
Does your represent opportunity to you?
There’s a ton of opportunity because there’s a ton of people in trouble, sadly. Right. Okay. A lot, a lot of people got adjustable bridge debt. You know, these rates have gone through the moon. I’ll give you a small example. We were looking at a small asset in San Antonio where I’ve got some assets and I.
And there, the lender reserve payment that this guy had to pay to prepare for a refinance went from 8,000 a month to 80,000 a month. Do you think that’s painful? Right. And you know, and, and when you’ve got a multi tens of millions of dollar loan on a property and the interest rates adjust several points, you’re done.
And, and so that’s just on the interest rate piece. Uh, mentioning my SEC attorney had six foreclosures in one day, apartment complexes, uh, clients, new clients that came to him, he told me like three weeks ago. So who knows how many since then. But you know, there’s a lot of deals and trouble and it’s sad.
It’s very sad. But, uh, that’s just one piece is the loans. Uh, the expenses have gone through the thick and roof. I mean, I’ve got maintenance supervisor that’s making $40 an hour at this point, which is crazy. Uh, you know, I, I teach at my bootcamps. Uh, I used to teach a 50% expense ratio. That’s what you want to have.
Now I teach 60% ’cause they’ve gone up that much. And so, you know, there’s a lot of pain in the market. But with crisis comes opportunity. There’s incredible deals. I’ve got a a, a 200 unit asset in San Antonio. Um. That is on a lake, and right next door is a 300 unit, 300 plus unit asset. Um, it’s sold the 300 units sold for 43 million in 21 or 22.
It’s, it’s with the bank, it’s down to 28 million now. And I’m not even interested unless it gets to 24, unless the rates drop significantly. And so 43 to 24. So that’s what’s out there right now. And di I think you just bought a, a deal at like a 40% discount, didn’t you?
Yeah. Yeah. Yeah. And here’s the thing, which is what I wanted to get into as well, and I I just bring, bring people’s attention to it, is that these times in history don’t happen that frequently.
Right? Right. And it, and it’s interesting what the, the last multiple, uh, opportunities we’ve, we’ve, we’ve capitalized on, they have been all these situations where it’s a debt problem, right? It’s, it’s an asset that’s performing fine. But someone’s got a month, uh, to go and they just need to get out. They’re gonna lose all their equity,
their debts due.
Um, yeah, their debts do, there’s like this, this wall of debt, like, I think it’s like a trillion dollars of debt due by the end of this year.
So what we’re seeing is, you know, the last several opportunities, 30 to 40% discounts on basis, uh, compared to just two or three years ago. And I think the challenges for investors is that like.
In the background, those of us who’ve been through the pain are still feeling the pain and you feel very gun shy about it, right?
Yeah. Yeah.
Um, and you also start thinking, well, 30 to 40% discounts. Uh, you know, this, this is, this sounds very scary, but in, in reality, I, I’m trying to get people to understand that, that those discounts only last for so long, right?
I mean, that if you look at like the, the debt. That’s out there. Most of that really bad debt washes away at the end of this year. At 2026. Yeah. After that, like those 30 to 40% discounts that like people are hearing so often, they’re not gonna be there anymore.
No, that’s,
and what I, and what I hate to see is people wait two or three years from now and all of a sudden there’s a frothy market and everybody’s jumping on the bwa.
’cause that’s what they always do. That’s not, you wanna be a net seller in that market.
That’s right. And, and you know, it’s like you mentioned Warren Buffet’s famous quote, be greedy when others are fearful and fearful when they’re greedy. And, and so right now they’re fearful, which is making harder to raise money.
And I’m, I’m having the same conversations. It’s like, Hey, if there was ever a time, it’s right now and now. Now the key, now the key. Differentiator or key factor is it’s all about cash flow. You know, like I said, that that deal at 43 is down to 28. 28 still doesn’t make sense for me. So it’s all about cash flow.
And so, you know, I wrote a bestselling book. I’ll brag about, hang on, I’ll show it here. It’s called How to Create Lifetime Cash Flow through Multifamily Properties. The reason I bring this up is the subtitle is The New Rules of Real Estate Investing IE The new rules is it’s all about cash flow. I don’t, you know, I can brag about what you, you know, the discounts you can buy a property for, but it, it’s all about the numbers.
It’s got a pencil, it, so cash flow is king. Um, so would you agree with that?
Oh, a hundred percent. No. The interesting thing is though, that like, that’s a, that’s actually in real estate. That’s a principle I think a lot of people had, and I think what ends up happening is when the market gets frothy, you kind of skip that step, right?
Because then what you’re, then what happens is that the market becomes so competitive that you’re trying to project, okay, I can get this from here to here and I can make it cash flow pretty quickly. And that’s when it gets dangerous, right?
Yeah, yeah.
Because listen, when Mark, when, when, when rates were, were as low as they were, you could do that.
Now what? As soon as they started accelerating, well then you just got behind and, and you, you couldn’t catch up. And that’s kind of what happened.
No, that’s it.
And the expenses. Yeah. Yeah. They, the business about this market though, and maybe you can get some perspective on this, is what happens. You’ve experienced multiple real estate cycles and one of the opportunities that real estate investors have had throughout the decades is investing in a market where interest rates start to fall.
What happens?
Well, what happens is, is, is, is, is values As values go up, you know, and here’s the other thing, you know, uh, uh, with inflation, inflation’s not going away. And when you buy a property, the debt’s locked unless you do the adjustable rate thing. But if, if you get a normal, a normal mortgage. The, the rent, the debt is locked, but your, your interest, your rents are gonna continue to climb here.
They’re going up, they’re gonna keep going up. And, you know, and, and of course the value of, of what we do is based on a multiple of the net income, the NOI, the net operating income. So any increase of the rents is gonna go to the bottom line. And, and so your values are gonna go up. So again, incredible opportunity to get into this real estate now.
With the debasement of the US currency, with with, with all the money they’re printing and everything else, you’re, you’re seeing incredible rises in, in hard assets like gold, silver, of course, we saw a crash in Bitcoin ’cause it’s ethereal, it’s air, but, but real estate, uh, is, is you look at it over, over, you know, 50 years and, and it only goes one direction.
It has some dips, but it continues to go one direction. And, and so, you know, I, I love real estate. I always have and. And, and always will. And so, you know, that’s why I teach it, you know, I do, I teach multi and I now teach multiple asset classes. I just taught multifamily for a long time, but now I teach pretty much every asset class and I’m, yeah.
So what’s, uh,
housing too?
Yeah. Tell us a little bit about senior housing and um, yeah, what you’re doing there.
I, I, I’ve only purchased one assisted living facility so far, but my students, my God, I can’t even count how many assisted living facilities and memory care units they have. But I, I’m, I’m gearing up.
I have a whole team doing it. Uh, we’re cold calling and, and, and the, the, the out, the goal is. Is, uh, uh, 12 units in the next 18, I’m sorry, 12 separate facilities in the next 18 months. And we’re growing up to do that. Uh, we’ve got a ton of interest. And here’s the, here’s the reason why they call it the silver tsunami.
There’s, there’s six, 10,000 people a day turning 65, and it goes forever. And it seems like forever. I mean like literally a over a decade and. And again, um, you know, those people. Uh, so there’s a lot of opportunity with that. There’s an opportunity to buy businesses as well. A lot of ’em wanna retire and own businesses, so there’s an opportunity there.
But, but, um, in senior housing, there’s, there’s a huge shortage of beds. And, and I’m quite candidly, I’m not sure we’re gonna be able to match the need in the shortage of beds, but there’s a huge shortage of beds and, and so, um, you know, and to build new. The about the least you can build a place for is $200,000 a bed.
Well, there are facilities that got crushed by COVID where you can buy. Facilities for sub a hundred dollars a bed. So there’s, there’s a, there’s an opportunity there that we’re capitalizing on. It’s very exciting. Uh, that won’t be around there
a lot of, is there a lot of competition from, you know, big money institutions, that kind of thing in this space that are sort of pushing prices up?
Because I would
think if they would have to, yeah.
Yeah. I would think they would have the same sort of thesis overall. So
the larger facilities, yes. The, you know, I, I’m not doing the, the 200 bed facilities, you know, I’m in the 50 to a hundred range, you know, uh, kind of the mom and pop range as it were. Uh, and.
So, at least to start, I mean, at some point I’ll compete with the larger ones, but we’re starting there and, and there’s just an incredible opportunity to, to get to, and the returns are fantastic. I mean, we’re seeing 15% cash on cash, 25% IRR, realistically not BS returns. And so, you know, it’s very exciting, honestly.
And, and, and, and, and again, it’s got legs. It’s not going anywhere. It’s not like one of these things that’s cyclical. There’s, there’s the, these people are retiring. They’ve impacted everything from Pampers diapers to suburbia, and they’re gonna impact, you know, senior housing in a big way. So, um, you know, it’s, it’s that, that’s exciting.
Yeah. I got crushed by that wave in 2008. I got crushed by that wave. I’m surfing this wave.
Yeah, yeah. Yeah.
Good for you. So tell us, you know, a little bit more about how people can get involved. It sounds like you got a lot going on there. So tell us about
Well, I, I, I teach, you know, I teach this stuff. I have, I’ve had, I dunno, upwards of 20,000 people attend my bootcamps by the way.
Really never had a complaint except that the breaks are too short. ’cause I, I packed three days into two days, but I teach this business and soup to nuts, how to find deals, how to pick a market, how to pick a team, how to underwrite them, how to finance them, how to raise all the money for them, on and on.
And so if you go to Rods. links.com. That’s my link tree. That’s where my goal setting workshop is. If you want to do your goals, do it there. But, uh, if you come to my bootcamp, that’s the first thing we do. Uh, ’cause I, I need to have you get very focused on what you want. But, um, you know, it’s two days of training.
I don’t sell anything and you can come for $47. So tell me your excuse. Okay? And the bonus, the bonuses are thousands of dollars. You get my deal evaluator software, my document library. You get all this stuff. And you know, and candidly, if you come to the bootcamp and. On Monday, you decide it wasn’t worth it, you didn’t love it.
I don’t mean like it, I mean, love it. I’ll give you your 47 bucks back. It’s never happened, but it’s first time for everything. So, yeah, no, I, I, I love what I do. It comes out and what I do, and I, I spend time on mindset too, because again, that’s 80 to 90% of it. That’s why my students are so freaking successful.
They actually do it. Um, and so. I, I, I really love it, and that’s where I’ll continue to do it. So I’m, I’m doing one of these virtual events pretty much every month and a half. I’ve got one coming up, I don’t know when this’ll air. I’ve got one coming up in March, March 7th and eighth, and there’ll be one, you know, 60, 45, 60 days after that.
So, yeah.
Fantastic. Rod, thanks so much for being on the show today.
Oh, I appreciate it. I appreciate it. Uh, thank you. And, and again, it’s Rod’s links or text links to 7 2 3 4 5. Matt, thanks. Thanks for having me on. Buck, it’s great to see you again.
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Welcome back to the show everyone. Hope you enjoyed it. We talked about a lot of things, but I think the mindset step is really important. So if you’re one of those people. Who is worried about, you know, a time in your life right now, or that that things aren’t going well?
Things can turn around really quickly. You just gotta have some, you know, you gotta have the right mindset. You gotta have the right goals. That’s it for me this week on Wealth Formula Podcast. This is Buck Joffrey sign now. If you wanna learn more, you can now get free access to our in-depth personal finance course featuring industry leaders like Tom Wheel Wright and Ken McElroy.
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