Ep #1,095 - This Real Estate Strategy Replaced His Income and Cut His Taxes to $0

[00:00:00] Welcome! Now, I hope you're having a fantastic day and I know if you're listening to me, you want financial success and prosperity. You want to create that freedom and prosperity for yourself and your family and you want that joy and happiness on a consistent basis that comes because you're doing what you love with the people that you love. You have the freedom to do that. Now, prosperity is the topic of this week's Own Your Power clip and I really hope you enjoy it. Now, as you know, my love is multifamily real estate. I love buying it and I love teaching other people how to do it. Now, we just recently discovered that my students, my

[00:00:30] Warrior Mentorship students now own over 260,000 units. It just blows my mind. It's something I'm very proud of. I love seeing our students achieve financial prosperity. Now, if you'd like to look into my Warrior program to see if we're a fit for each other, we have you set up a quick call with one of the people on my team. Now, on the call, we'll go through things like your goals, your dreams and what you're committed to. Now, there's no obligation with the call and I promise that you'll leave that call a better person than you were before you came on the call. Now, that's because you'll be motivated and inspired and have a better

[00:01:00] much more clarity around your life and your goals. Now, it doesn't matter if you work with us but what does matter is that you're not in the same place you are right now a year or two from now unless you freaking love where you are right now. Don't stay stuck in fear or worse in comfort. You know, get on a quick call with us. Text the word CRUSH to 72345 or go to workwithrod.com and let's talk. And if it's a fit, not only will you learn what you need to know to buy apartment complexes but you'll also learn what it takes to take massive freaking action with that knowledge.

[00:01:30] Text the word CRUSH to 72345 right now or go to workwithrod.com and I look forward to speaking with you. All right, let's get to it. Welcome. This is the Lifetime Cashflow Through Real Estate Investing Podcast. This is where you'll learn strategies to help you achieve lifetime financial freedom through real estate investment. Your host, Rod Khleif, has owned over 2,000 homes and apartments.

[00:01:55] And he brings experts in all aspects of real estate investment and management onto the show. Now, here's your host, Rod Khleif. Welcome back to Lifetime Cashflow Through Real Estate Investing. I'm Rod Khleif and I am thrilled that you're here. And I know you're going to get tremendous value from the gentleman I'm interviewing today. His name is Tony Stephan and Tony's from Detroit and he's got a lot of assets himself in his own portfolio.

[00:02:19] And he also has a telehealth business. So we're going to talk about health for sure because that's something I love talking about. Hey, brother. Welcome. Rod, thank you so much for having me, man. Appreciate it. Absolutely. And he's got his own podcast as well, which I'll be interviewing on here at some point, the Tony Stephan Show. But yeah, so what's your story, man? Tell me who you are. I would say there's a long story and then the short version. So I'll give you the short version. I'm happy to expand into it a little bit. Like you said, my background is in telehealth as a registered dietitian.

[00:02:48] I actually got started in an interesting way. So I was 14 years old. My mother had left home. She was battling with a drug addiction. So my father sat me down. We were months behind on our mortgage. Going to file Chapter 7 bankruptcy. We're going to lose our home. We were on food stamps. So we were in financial struggle. He taught me, though, as a young man going through a lot of adversity, a lot of struggle, a lot of pain. He taught me fitness as an outlet. I don't know if you ever remember those old school Joe Weider weight benches.

[00:03:15] Sure. Yeah. Yeah. Because I can tell you're in shape. You know, I know you. You see my gym downstairs? I was definitely admiring it. All right. It was beautiful. Yeah. But he taught me fitness as an outlet and as an outlet to deal with adversity, pain, struggles. Yeah. Yeah. Stress management is the ceiling to our potential in life. Right. And I loved it so much. I said, wow, I want to dedicate my life to help other people who are going through stress adversity.

[00:03:38] So I became a certified personal trainer at age 18, went to school, became a registered dietitian and started off working in the health clubs, helping clients, all those great things. I felt a bigger call to help more people. So at 26, I emptied my savings account, charged up my credit card, hired a mentor actually out in California. So flew out there to learn how to build a business online. Instead of just seeing people one-to-one, face-to-face in an office, built an online telehealth business as a registered dietitian.

[00:04:05] And that was the start. It was a struggle at first, you know, like most new businesses. We emptied everything we had. We put, you know, money on credit cards. First couple of years was a struggle. But then as the years went on, something you always preach is, you know, real estate's a long-term game. Business is a long-term game. Social media is a long-term game. I was blessed to say it took off. We had thousands of customers, 21 different countries. And then that became the seed capital we used to start to invest in real estate. Wow. Wow. Wow. You have thousands of customers in your telehealth business.

[00:04:35] Yeah. 21 different countries. That's amazing. Yeah. So, so talk about your real estate journey. So we're going to go back to the telehealth. 100%. But, you know, this is a real estate show, so we should definitely spend some time there. Absolutely. Yeah. You know, business is not an avoidance of problems. It's new levels, new devils. And we always say you start off with like first world problems, right? Like how do I make money? How do I get a customer? How do I get my first rental property? For me, it was after a while, our business was doing a lot of revenue, right?

[00:05:03] It's telehealth, so I don't have many write-offs. You know, everything's online. I have a computer. You pay a lot of taxes. You pay a lot of taxes. By the way, let me interject something here. The key in life is to have better quality problems. Agreed. Like right now I need more coaches. Yeah. You know, that's a quality problem. Right. So please continue. No, I agree. I think freedom is choosing the problems you want to solve. Yeah. Right. So, yeah, I remember, I think it was 2019, we wrote a $400,000 check to the IRS. And right, I said, never again. Wow.

[00:05:33] Yeah. Yeah. And I started- That's so funny. I had the same exact thing happen to me about you when I was about that age. Yeah. It was half a million, but you know, who's counting? Yeah. Yeah. Okay. Yeah. And I started researching like, okay, how do you, because I always heard the wealthy don't pay taxes. Well, how do the wealthy not pay taxes, right? You start to research, okay, real estate, real estate professional status, depreciation. I realized we were crap. We were cash rich, but asset poor. We had no assets. The only asset my wife and I had was a

[00:05:59] home we lived in. So we made a decision like, hey, the 401k route doesn't make sense for us. Stock market, I feel like it was designed to make Wall Street wealthy. Well, that's been crazy the last few months and a half. Right. Right. So we said, you know, let's go all in on real estate and started with one house. And now today it's 258 units. 258. And you told me you've got, you've got a hundred unit, you've got a small stuff like in 16 unit range. You probably got some single family as well. We sold all the, a single family. Oh, did you? Good. 1031 into 56.

[00:06:27] Smart, smart, smart. Yeah. It took me 2000 houses to get that memo, but yeah. That's crazy. Yeah. But, uh, wow, that's awesome. And so, um, you've done some cash out refis. You want to talk about that? Cause you know, we all, you guys have all heard about the BRRRR method, right? You know, buy, renovate, refinance, repeat. Um, well you've done it with some multi, right? Yeah. So have I, but, but talk about yours. You know, it, like you said, uh, I think everyone starts with single family because you, you feel like this is where I have to start, right? Like for us,

[00:06:55] about everybody. I met, I met one person, I think that started with a hundred unit. He was, he was a unicorn, but that's smart. Right. Yeah. Yeah. Um, just houses made sense to us. So we started with that, but I realized it was a really slow way to wealth, right? We were buying these houses, put a tenant in it. They pay it off. You're like, okay, whatever. Right. I bought a seven unit and the seven unit was in a great area. Something you always talk about, like don't compromise location. Couldn't agree more. Right. Bought this seven unit. It was business debt. So

[00:07:23] that was the first really interesting thing, right? It wasn't going on my credit report. It wasn't going on my credit score. They weren't looking at my debt to income ratio. The rents were about 750 bucks. We knew the market rents could be $1,100. Wow. And something you always talk about too is NOI, right? We love multifamily because it's valued based on a business, right? The more profit my business produces, the more valuable it is. So as an entrepreneur with a business background, that just made sense to us. Right. So we took it over, uh, there were month to month leases,

[00:07:51] lightly outdated units. So we just started doing light upgrades. It was back when debt was 3.9%. So we had a lot of cashflow to just kind of pump right back into the deal. You got fixed rate. Yes. 10 years, 10 years. Yeah. Um, and then we took the NOI the first year was 30,000. We took it to 60,000 that building. So I paid six 60 for it building reappraised for a million bucks. I was able to do a cash out refinance, take $250,000 out tax free, which was more than I put down. Once we saw that rod, it was like the matrix. Do you remember that movie where it's

[00:08:20] like red pill, blue pill? We took that red pill. We can never look back at single family. Sure. No, no, that's fantastic. It's a little harder to do now with the interest rates where they are and stuff like that. Uh, you know, that was, there was a golden era back then, but you know, let's hope it comes back. I mean, uh, Trump's trying to get rid of the head of the federal reserve and cause he wants to drop interest rates. So it's kind of a balancing act because, um, you know, that'll probably trigger inflation again. So it's like, it's going to be, we're in

[00:08:48] crazy times right now with these 245% tariffs on China. It's like, Holy crap. Um, but you know, this country's in deep shit. So thank God he came and came on board and he's, he's not settled. You know, I was, I was, I was, I saw an interview this morning with Mr. Wonderful talking about, I'm sorry, I'm digressing a little bit, but so I interview Mr. Wonderful, you know, the, the, um, I forgot the show. Oh, Shark Tank. Shark Tank. Thank you. And, and, and he does a lot of

[00:09:14] business in China. He says they have been screwing us for years, stealing, stealing inventions and knockoffs and, and, uh, not allowing us companies to invent, to, to, to get big footholds in China without Chinese involvement. And so, so, and I'm, I'm really glad it's happening, but, uh, you know, I, I did a, I did a Facebook live on this, uh, this last weekend and, uh, oh my God, I got so much hate from, from people about, uh, Oh, Trump's going to ruin the relationship and blah,

[00:09:43] blah, blah. No, Trump's playing chess, not checkers. That's right. Yeah. But, um, so, so, um, you're, you're basically vertically integrated. You have your own real estate brokerage, you have your own construction component, maintenance people, whatever you do your own terms and, and, um, uh, you have your own management. Yes. Yeah. Which is great when you're in a single geographic area like you are, you know, that's a fantastic way to do it. I had it that I still have a management company actually, but, but, uh, you know, I, I get a lot of, uh,

[00:10:12] you know, one thing I've discovered, uh, just as an aside, just to, to teach a little bit for a second, you know, in, in the last year I had to take over 23 of our assets that my partner was running that he ran into the ground and, uh, in seven States. And I'm gonna tell you, that's not the way to do it. Um, you, you, you're much better off the most successful entrepreneurs that I see in this business are the ones that are geographically specific. They stick with one market. Uh, and that's, uh, that's what I, you know, try to suggest to my

[00:10:41] students anymore. Um, and let me brag for a moment. I just found out literally five days ago that my students now own 260,000 units. We heard you're listening on the way. Yeah. That's impressive. Holy crap. You know, it's just, uh, just really, really proud of that. That's that, that we know of it's probably pushing 300 at this point. Cause a lot of people don't respond, but anyway, so, so, um, you've done these, these complete cash out refis, which is fantastic. Are you going to continue to buy for your own account? Are you thinking about maybe

[00:11:11] syndicating at some point? What are your thoughts for your future? That's a great question. So for us, Rod, it's very much. So we, we keep the main thing, the main thing, right? We, we build our businesses, we build our enterprises. So every year I kind of joke, it's like, we're in the mafia. We have to buy till we die. Right. Because we need those tax write-offs. Right. My wife qualifies as a real estate professional, which I know you talk about, right? We can cost segregate our buildings and take all that depreciation. So she's the pro instead of you. She is the pro.

[00:11:38] Well, we know she is anyway, but I mean, as far as real estate, she's the real estate professional. Yeah. That's kind of how the real estate brokerage all came about. Like you said, it was all kind of vertically integrated. Yeah. We created, we started with third party management. We created a management company because we had to. Oh, cause they suck. Yeah. Yeah. Exactly. It's very rare to find a good property management company. And it's really more property specific. Cause I noticed this when I took over the asset management of these 23 assets, about 2000 units that, you know, there were different management companies, but the assets

[00:12:05] that were doing good were the ones that had great onsite staff. It really didn't matter what the management company was. Yep. So anyway, I don't know if your experience was different. So you started it out of need, out of need. Yeah. Same thing with the brokers. People then started contacting us, like seeing what we're doing on social media, which you're a huge proponent of, right? People don't know you, they can't flow you. And the more hands you shake, the more, you know, money you can make. So, uh, they started seeing that. They're like, Hey, can, can we work with you? And so we're like, why are we paying Keller Williams? Let's just create our own brokerage. Right. Yeah. So that's how it all came about. I love how you said vertically integrated.

[00:12:35] It's something we talk about a lot. Yeah. Well, that's, that's that. Yeah. When you have, when you control every aspect of the business, um, you know, it, it, it, that control really, uh, cost savings. It equates to a better quality, you know, run the business runs better. Uh, so love it. So, um, talk about some good decisions you've made and maybe some not so good decisions you've made in this journey of yours just to, you know, and, and, and I want to, you know,

[00:13:04] talk about some pain, talk about, you know, I call them seminars. Talk about some seminars you've had maybe. Yeah. You know? Yeah. I mean, there, there's so many and just, right. Right. It's easy to pick. Yeah. Right. Now I love what do you, what do you say all the time? You're like, ask me how I know. Ask me. That's right. We have t-shirts hashtag. Ask me how I know what student got for me. Yeah. I love that. Yeah. I mean, there, there's been so many, I think one of the biggest mistakes I made was just thinking I had to start small, right? Like I had to start, I had, it had to be linear, right? It had to be a house, then a duplex, then a fourplex.

[00:13:34] And if I could have wasted a lot of time, a lot of energy, not forcing, we were able to sell those and take the money out 1031 exchange, which is wasted a lot of time with that. You know, on a very, very slow kind of painful path with the third party management, managing those two, you know, they just killed us on duplexes. We had 15,000, 20,000 unit turns. Oh yeah. You know? Yeah. By the way, I'm really glad you said that guys, when you, sorry to interrupt, but this is an important teaching point. When you hire a property management company, find out,

[00:14:03] especially if you've got a, if you've got an asset that's under say 40 units or 50 units, because you're going to rely on their maintenance infrastructure and maintenance is a huge profit center for, for management companies. You know, they'll hire some kid at 15, 16 bucks an hour and bill them out at 75. So be really dig into that because you will get screwed. Like he's talking about here. I've, I've had it happen to me numerous times and, you know, and find out if they upcharge contractors or if they, if they do a dollar for dollar, sometimes they'll upcharge, you know,

[00:14:31] contracting bids, um, for the supervision quote unquote. So really dig into the maintenance when you're hiring a management company. And by the way, I've got a great book on this. That's free on how to hire a third party property management company. It's on rods links.com. It's in the free book section. I think it's the best book out there on the topic and it's free. So the price is right. So check that out. If you are thinking about hiring a property management company, cause it's got all the questions you should ask and things you should think about. Anyway, I hope I didn't completely derail your thought process.

[00:15:01] That's exactly correct though. There was like a 35% markup and everything. Right. Right. The, the maintenance hourly rate was a hundred bucks an hour and they were always finding things to do. Oh, sure. It wasn't ever fixed something. It was just completely replace it. Right. It's for more billable hours. So, you know, thinking, thinking like real estate wasn't like any other business to where you make your money in the, in the management and the operations. Right. And we just kind of built 87 units at that time, gave it away and said, all right, well, they'll have our best interest in mind.

[00:15:28] No, they had their best interest. Right. Well, it lost a lot of money and time on that. So, you know, I've got a lot of listeners that have a job, have a W2. Um, they may even be call it the rat race. Some of them may like what they do, but they know they need more. They want freedom. They want time, freedom, money, freedom, freedom to go do whatever they want, whenever they want with whoever they want. Uh, and, uh, but they haven't taken action yet and speak to them.

[00:15:55] Yeah. Just give them some advice if you would. Yeah. Yeah. If you feel called to be an entrepreneur, it's not for everybody. Right. But if you feel called to be an entrepreneur, you have to answer that call of the conscious, right? Something I always talk about is conscious congruency. Like what the voice inside of you, the voice of God, the voice of universe, whatever you believe in, like you have to answer that call. Right. And imperfect action always beats standing still and proximity is power. So if you feel called to do something, you just don't know how to do it. I mean, you have to get around people who are doing it. That's why you do all the bootcamps,

[00:16:25] webinars and all those things. You have to live, you have to live like that because, you know, something I just learned early on from losing my mother at a young age is man, life is finite. Right. And at the end of your time, you have to answer for your life. And did you live in fear or did you live in faith? Faith is even if this happens, I'm going to move forward. I'm going to progress fears. What if, right? Well, what if I quit my job and we lose all our money? Well, or what if I buy this rental property and everything can go wrong? Just which one do

[00:16:53] you want to operate from? Right. At the end of your life, you have to answer for that. Did I operate in faith? Do I operate in fear? Yeah. And do I have regret? Yeah. You know, uh, there's that nurse in Australia that wrote a book about this. She was a hospice nurse and she asked people that were dying if they had any regrets. And, um, I think the book is the five regrets of dying or something like that. Her name is Bronnie Ware. And, uh, the number one regret was not living the life I could have lived, living someone else's life, not doing what I know I'm

[00:17:21] capable of. Christ, I can't think of anything worse than that. So don't fear failure. You know, I've started 29 businesses, um, several worth tens of millions of dollars, most spectacular flaming seminars, but we fail our way to success. Right? So on this journey of yours, talk about any epiphanies that you had, any aha moments. Yeah. I love, I love what you said earlier. Let regret be your guide, right? That's something like we, we don't get to choose our regrets. You know, sometimes people

[00:17:48] think a lot, Oh, I can choose to regret this. Like, no, that's the, that's an internal message from above. Right. So a lot, a lot of different regrets and a lot of different epiphanies. I think one of the first epiphanies was though, I was crap. I was in my late twenties. We had just made our first million dollars profits. We had over a million dollars in the bank, right? Which I'm, you know, don't say to impress anyone, but to impress upon them, we were crap. COVID then was right around the corner. What do you say you were crap? Cash rich asset poor. Oh, Oh, gotcha. Gotcha. Gotcha. Okay. I was wondering what the hell you mean by that.

[00:18:17] Yeah. No, I guess I should have explained that. Right. Just keep saying that. But COVID came around the corner. I saw so many businesses get decimated, right? Get told you shut down. They're never coming back. I was in telehealth. So our business was booming, but I right away saw if anything ever changed in my business and in like a COVID hit like telehealth or what we were doing, you know, I'm susceptible to that. So I also learned in another big epiphany, the worst number in business is one, one way to make money, one revenue stream, one way to get

[00:18:46] customers like single family home. You have one customer there, a hundred unit apartment. You have a hundred. My wife and I talk about this all the time. Two people move out on an eight unit. You feel it. Four people move out of an eight unit. You're distressed. Four people move out of our hundred unit. You don't even feel it. You just keep, you keep it moving. Right. So, uh, the epiphany of, I wish I would have invested sooner. I was saving out of scarcity, not realizing my money was losing money every day due to inflation and devaluation of the dollar. And, uh, just the more customers

[00:19:15] or the more revenue streams you have, the more secure you are. And that could just be in a business that could be in life. And that's definitely in real estate. That's why the multifamily, the more doors you have, the more protected that business is too. As long as it's a good asset, obviously. Agreed. Agreed. We're going to take a break from this great episode for a word from our sponsor, which is the multifamily bootcamp. So if you know, real estate is the vehicle for you, you're crazy not to spend a couple of days with me at one of my bootcamps. I've always got one

[00:19:42] right around the corner. Thousands and thousands of people have taken action on their journeys to creating generational cashflow for themselves and their families from attending my events. I don't sell anything at this event. So it's basically 16 to 18 hours of training with nothing being sold. Kind of a no brainer. If you're serious about this to check it out, text the word links to seven, two, three, four, five, or go to rods links.com again, text links to seven, two, three, four, five, or go to rods links.com. I promise you'll be glad you came. Let's get back

[00:20:09] to it. I think we're heading into a golden time for investment. Certainly in the multifamily space, there's a meltdown happening. There's one and a half trillion dollars in debt coming due by the end of this year. And those people either have to refinance, which is very, very difficult right now because the rates are up and they can't meet debt service coverage requirements, or they have to sell and sales are down 90%. So it's, we're going to see some pain. And I will tell you, I think we're going to see some regional banks collapse as well. I really believe that. And,

[00:20:39] you know, and, and I've got my money in bank, uh, that gets spread out over 80 banks with no more than 250 in each bank. So I'm covered by the FDIC. And, and, and the reason I believe that is there is a ton of commercial debt in trouble right now. I mean, listen to office, I'm in office. I mean, 50, 60% occupied and Doge is going to be eliminating a lot of, a lot of, uh, organizations, uh, government organizations and the government's the largest landlord. I mean, the largest tenant

[00:21:05] in the country. So, um, you know, I think we're, we're headed for some pain. Um, but with prices comes opportunity, right? There's going to be great deals in multifamily. I'm already seeing a ton of deals being sold for the debt, debt plus fees, but they're, they're trying to be sold, but they don't even pencil out at the debt right now. And so you're going to see banks taking haircuts. You're going to see auctions. The other thing is I wish there was two of me because I'd love to buy businesses, right? There's 80 million baby boomers getting old. And I like to say getting old and

[00:21:33] getting cold, which doesn't serve you in Detroit, but it definitely does in Florida here. And, you know, uh, but, uh, you know, I'm getting into senior housing. I'm going to be raising money for a senior housing deal probably in the next week or two. Love that, love that, uh, that asset class. Uh, I was going to do it years ago and I, I got sidetracked, but, um, and, and, but I would love to buy businesses as well. Like I said, so many baby boomers have businesses that, you know, they're going to have a difficult time selling. So it's just lots of opportunity. So if you're

[00:22:02] listening, freaking get up to speed on something. Okay. If it's multifamily, get your ass to my boot camp. If it's businesses, learn how to buy businesses, whatever it is, get up to speed now. Don't wait. Okay. So, you know, I'm big into mindset. I mean, that's like, you know, 80 to 90% of your success. And I can tell you are too. You've, you've even said a couple of Tony Robbins quotes while, while you're sitting here. So, you know, I spent 20 years with him. So I reckon, you know, proximity is power for example. Um, but, uh, so what's the drive, man? What's, what's the why?

[00:22:31] What's, what gets you to jump out of bed every morning? You're very dynamic. You're very passionate. Where's that come from? Yeah. I appreciate that. It all started with adversity. And something I love to say to people is adversity is your advantage. You know, growing up was tough, man. Uh, I said, my mother struggled with drugs. So I saw that my, my first lesson in real estate was chapter seven bankruptcy, right? Learning, learning what that meant and learning what happens when you don't pay a mortgage. Right. Uh, so just very motivated. How old were you then? It's 14. Wow. Yeah. That's, that's impactful at that age. 14.

[00:22:57] Okay. Yeah. Uh, very motivated to my family and my future children to never experience that, but then also to use my message and you know, the pain to turn it into a process and to help other people. Right. I know you're big on social media too. And you know, I think people, I think people who go through things and don't share on social media are selfish. Right. Uh, because our message can really help people. So it's also just showing people like, Hey, look, I started with absolutely nothing, you know, and we've built, you know, a pretty great life for

[00:23:25] ourselves. So if we can do, we always say, Hey, we're not special. How old are you now? 34. Wow. Fantastic. Thank you. So we're, you know, we're not special. We can do it. You can do it. So it's also about motivating and helping others. I think that's where I, you know, I have an affinity with you because you don't have to be doing all this stuff, but you do it to help people. And that's, that's to me is the true definition of success when I've created the life I want, but now I help other people go out and get it. That's absolutely the truth. And I, you know, people, they'll ask me what motivates me and,

[00:23:53] and I tell them and they're like, Oh yeah, bullshit. That's just you being a guru talk. But no, I get, I've got a walled in my office and my other building here with hundreds and hundreds of thank you cards. You know, I was the thing I was just bragging about was my student success. I mean, that truly gives me joy. And so, you know, it's not hyperbole. I mean, I've had all this stuff, the Lamborghinis and the roles and all this stupid shit I thought was important. You know, I'm past all that now, but so, so let's talk about health. Okay. Cause that's,

[00:24:19] that's, that's, that's your, that's your, uh, that's really, uh, your, your baseline. And, and I'm like, I was just telling you, I did NAD plus for three hours yesterday with an IV. Yeah. And I felt pretty, I slept really, really good last night. It was kind of, the sleep was fantastic. I was just drinking my methylene blue, you know, and I take more supplements than you've ever seen. Maybe not you, but damn near anybody else. Yeah. But,

[00:24:43] uh, um, so in your dietitian related conversations, um, is there a particular diet that you like? Yeah. Okay. Well, let's talk about it. Well, it's like, it's just like investing, right? In fact, hold on, hold on guys. You may not think this is freaking important, but if you've got children, you've got a W2 job and you want to do a side hustle. Do you think

[00:25:10] energy is important? Do you think, you know, having enough energy to freaking come home from eight or nine hours of work, be there present for your kids and then spend time on your side hustle requires energy. You better freaking believe it. So this may be more important than any of the other conversations I've had in a long time. So listen up. All right. I wanted to pre-frame it. No, I love that. And I agree. Hey, $30 million can't buy you 30 more minutes on God's green earth. That's true too. Right. So what is wealth without, without health? Right. The best diet rods is the

[00:25:37] one you can stick to and the one you enjoy. Same thing with investing, right? Like the best investing strategies is one you can stick to and one you can enjoy. And, uh, the, the, one of the biggest epiphanies I had as a registered dietitian is you can't separate the physiology from the psychology. Food, nutrition, health is very psychological for people. You know what I mean? So it's very interrelated. It's not just, Hey, follow this perfect diet. It's really like finding what motivates people, what they're, what they're driving forces and getting them on something they can stick to for the rest of their life. Same thing with investing, right? Yeah. You always

[00:26:06] say you have to be investing for the long haul. Same thing with health. You have to do something that you can stick to for the long haul. Okay. Well, fair enough. But that was very macro. Sure. Macro squared. I, I, I mean, you know, like here's some of my opinions about health. Okay. Number one, sugar is poison. Okay. No, and that's, and maybe you disagree, but I think sugar is absolute poison. Sure. Um, I know whenever I get sick, it's always when I've had some dessert and or alcohol.

[00:26:31] And, and that's when I, that's the only time I ever get sick. Um, you know, I think, uh, I think carbs aren't good. I, I mean, I, I think anytime I've done the ketogenic thing, I feel better. I lose weight. I, my, my, my cognitive function improves. Sure. My ex, who's my best friend, Tiffy has done that carnivore diet thing. And she has, her blood work has gone, gotten perfect. I mean, and, and, but it's hard to stick with that meat and eggs and cheese and all that. But is there, is there

[00:26:58] like a program that you teach more than another? Sure. I mean, I'd love your opinions. If you disagree with anything I just said, I'd love to hear it. No, no. I mean, you're saying things that are on a high level, very true. You know, like, like sugars are an organic compound, like, like naturally there. And there's different types of sugar. Well, of course, right. I agree with you on that. Um, but here's the thing, like you said, Hey, she was able to start this, but then it's hard to stick to you. Like you have to be able to stick to it. So always like lean proteins, energy, energy focused,

[00:27:26] right? Right. So lean proteins, fruits, vegetables, complex carbohydrates, healthy fats, but consider, we always say the compliance is in the science, right? Like you have to be able to stick to the program for it to work out. You know, you said that at the start and that's a very, very good point because she hasn't been able to stick to it. So it doesn't matter if you start it and reverse out of it and then lose the benefits of it. So it's like, what can I stick to long-term? But I love what you said earlier too. It's like energy, like you, you know, back to let regret be your guide. If you eat

[00:27:54] that sugary food, you eat that out, you have that alcohol and you immediately regret it afterwards. The next morning you get that anxiety, that hunger. I had a sinus infection for like almost three weeks, uh, uh, two weeks ago because I, I went to, I went to Nashville. Okay. I didn't have my vitamins and I'm like, Oh, I'm by myself. You know what? I'm going to treat myself. And I had, I had dessert and I had a drink and I was fucked. I mean, I was sick for three weeks because of that. Yeah. Yeah. But you got to let those regrets be your guidance. So you get that regret the morning

[00:28:24] after do cut it out. Yeah. Right. You know what I mean? Success is subtractive, Rod, especially with health. It's not about what I add into it to what I eliminate and what I get rid of. Yeah. So your body's going to tell you, your body's going to give you those cues. You have to listen to it. Yeah, for sure. Yeah. Bread screws me up too. I'll be honest. I have keto bread. Uh, that that's not so bad. You tried to Ezekiel bread. Oh, I love that, but you gotta, it's gotta keep it frozen. Frozen. Yeah. All that stuff. And it's real dense. Yeah. Yeah. I should get back to that. You know, Tiffy just bought some more of that stuff. I bought her a toaster the other day for that,

[00:28:54] just for that very reason in, in that coaching that you do with the telehealth stuff, you, uh, you, I'm sure, sure you do like a, like a, a dive into what they're doing and what they want. And you know, what their outcome, what they're, what they're, what they believe their outcome is, whether it's weight loss, whether it's energy, whatever it is. And then, and then you discover what they like and you figure out what the best plan for them is. Is that the hundred percent? It's all individualized, right? You know what I mean?

[00:29:20] And especially as registered dietitians, we're able to look at lab work too. This is medical credential. Okay. Right. So you let the physiology kind of be a guideline, right? It's kind of like looking at pro forma for the human body though. Right. Um, but then as I progressed that business, we actually started offering education and continuing education credits for other registered dietitians. So I don't, I don't do like direct to patient. Oh, you don't anymore. No, it's more like B2B. Oh, right. So like certifications and, uh, continuing education credits for other registered

[00:29:47] dietitians. Interesting. So that's how the business evolved. Oh, gotcha. Okay. Okay. Well, I was going to help do a plug if you wanted some clients on the, on the, on the B2C component business to customer. Okay. Well, fair enough. What do you love the most about the role you play in what you do and, and, and, and maybe even what don't you love the most? Um, think about that for a minute. Is there, is there an area of the business that you really enjoy more than another? Absolutely. I think for most people, right, it's, it's fine to deal negotiating the

[00:30:17] deal. It's the treasure hunt, the acquisition. Okay. Right. And then, you know, when you're able to do the refinance, right. Or an exit, that's always fun, but the money's made in the management and the operations. And now where we're at is we manage our team and manage our managers, right? Uh, but that's the hard part. I don't know if you've ever felt that way. Like leading people is tough. Managing people is tough. Oh, sure. You know what I mean? Every business is nothing but people and systems. You've got to hire the right people and you've got to have the right system, especially the property management business. A hundred percent. Yeah. So just really

[00:30:44] building that from the ground up that that's where we took a lot of lessons, you know, cause it started with just my, my wife was the manager. She was doing it, you know, managing 87 units. But then as we've expanded, like you said, those protocols and processes, we had to create all that from scratch. Yeah. You know what I mean? Like here's what to do if a tenant wants a refund on a overpayment. Here's what to do when they want to break their lease early. So, uh, that's the least fun part about owning real estate, but that's where all the money is made. Yeah. Yeah. No, I mean, I'm, I'm surprised you didn't get burned out. She's sitting over here.

[00:31:13] You guys can't see her out of that picture here, but, uh, cause that, that, you know, I've had lots of property managers burn out because you don't get a phone call when somebody is happy. Right. Right. And so there's a lot of negativity, uh, very rare, let's put it that way. But, uh, a lot of negativity there. Um, yeah, it's very, it's very thankless profession. You know what I mean? But it would be like, would you agree? Could it, could you have built to where you're at today without having that management? No, no, no. I, I still own a management company just

[00:31:39] for the few handful of small stuff I have around here. But, uh, no, no. And, and I, my intention, I'm, I'm in two markets that I really like in my intention is a vertically integrate in those two markets. Uh, and so that's the focus and, uh, it'll be a while yet. Uh, because again, the banks are there, their, um, their catchphrases extend and pretend. Uh, and so, you know, at some point they're going to be like, okay, you know, we, we need to do something and then we're going to start

[00:32:06] seeing deals. Um, yeah. That's what I was curious to your take on that because, you know, we've heard that for a while, like this. Oh yeah. I've been talking about it for three years. I thought COVID was going to do it, but you know, who, you know, my kids love to tell me you're tired of being wrong. Yeah. Yeah. But, but, um, it's, it's for sure. Now there's no question. I mean, we got, unless the, unless the rates come back to 3%. Okay. Uh, that's, I think that's the only thing that could possibly save the commercial real estate environment. And I still don't think it's

[00:32:32] going to save office off. People like to work at home now. The zoom has changed everything. And, and, and so, you know, there's going to be a reckoning in the commercial real estate space. No questioning. And from a macroeconomic standpoint, um, you know, unless these tariffs really impact our national debt and really turn things around, I think it's going to take time. And I think we're going to, if we're not already in a recession, we're going to be in one. Yeah. And I think it's inevitable. And, you know, uh, I don't know if you're aware of this,

[00:32:58] but I had somebody sit in that chair and tell me that 80% of the currency in circulation was created in the last four years. Yeah. It's crazy. And we wonder why there's inflation. Right. I mean, hello. Right. Right. Uh, so, you know, I, I, listen, I, I got crushed in 08 and nine. I'm not getting crushed this time. I'm ready for it. I've got a lot of cash. I'm ready to go in and buy some assets and, and, uh, you know, there will be incredible opportunity. And I think there'll be

[00:33:23] an opportunity to buy every asset class, um, stay away from office. That's my two cents on that, but everything else is exciting. I'm, I love senior housing. I love mobile home parks, self storage. Um, I wouldn't do student housing either student housing. I'm worried about because the, the, the student demographic is decreasing. Yeah. The baby boomers had the big boom of students. And now that's, that's changing. So I'd be careful with student housing, but the other asset classes, I'd love industrial flex space. Um, are you thinking any other asset classes you're going to

[00:33:52] stick with residential? We love senior housing too. We've made a couple offers on those. Oh yeah. I mean, yeah, yeah. But I know I love that model. The key is the key is the operator. Yeah. The key is the operator. Uh, you know, you've got to find somebody that really loves elderly, has great systems, has great culture for their employees because they're low paid. And so you've got to have a great culture. You've got to validate them, praise them and encourage them, you know, motivate them. And, and, and that's, you know, when you've got somebody that's able to

[00:34:19] do that in a senior housing component, uh, you know, that's, that's the recipe for success. But now I think we're going to do it in a big way, um, and, uh, figure out a way to scale it and, and really do some big things. And so I'm very excited about that. And I love the elderly and I, you know, I love kids as well, but I have an affinity for the elderly too. So is there a book that you like to gift more than another? I love that. Uh, you mentioned Tony Robbins earlier, the unlimited power is one that truly like, that's the first one I read too. Yeah. Yeah. Yeah. It

[00:34:48] changed my life. So I've gifted that a lot, uh, on the business side, it's influenced by Robert Cialdini. Have you read that one? I've, I've met Robert. I spent time with Robert. Yeah. That one and pre-suasion. Cause I heard you say pre-frame. So I've, I mean, those are like fundamental things with sales. Yeah. Right. And I know, I know you're big on, uh, helping people syndicate like, man, you have to be able to sell the story, right? You have to be able to sell yourself. Right. And, uh, the pre-frame and like the setting of all that. I mean, that was what

[00:35:15] understanding that book. I always Robert, uh, reference, uh, influenced by Robert Cialdini. If you understand those core things, well, there's reciprocity, reciprocity, social proof, social proof, which you're, you're, you're huge on. You go on your website, it's just video and case study, video and case study as we do the same thing too. But you can like just master those very simple things there. I mean, dude, that's, that's the core. We just recently started doing that for the, I mean, really pushing it. Uh, cause I was like, ah, big deal, you know, but, but Matt on the team and the other people on the team are like,

[00:35:44] shit, we need to put more of the, the, the, you know, what people have accomplished. Cause pretty extraordinary. And, uh, and, uh, that's how people make a decision, right? Right. What is the pack? What's everybody doing? What's everyone else doing? Right. And, and, and even the, the, what is the, the, I forgot what they call it. The limitation thing, like the velvet rope thing, you know, like the scarcity. Yes. Uh, it was also very powerful. Huge. Um, but, uh, yeah, no, all those strategies work. Um, and you, I learned a lot of that stuff from Tony, you know, I used to, I was on his team for eight years and he, you know, hell he'd make

[00:36:13] $20 million in about an hour. Uh, from stage. That's crazy. He's the best in the world at it. Um, but, uh, I didn't know you were on his team. Yeah. Yeah. Yeah. Yeah. I was on his team for eight years and I've followed him around the planet for 20 and finally his head of security is like, dude, why don't you just jump on the team here and then you have to don't pay to come anymore and all that. You know, I, I'd, I'd go to his premier event date with destiny. I went every year for 11 years in a row because every year I'm working on something new. I want, I want to continue

[00:36:41] to improve. If you're not improving, you're dying. If you're not growing, you're dying. If you're working on my health or my business or my relationships with my kids or my ex at the time and, and, um, yeah, yeah. But, uh, yeah, that was a lot of fun. I was, I, in fact, had I not, uh, gotten in a bad car accident, I probably would have been more than micing him up on that movie. He did. Um, um, I'm not your guru. Oh yeah. Yeah. That's the kind of stuff I was doing back then.

[00:37:09] Wow. Yeah. So listening to this episode with you, what, what would you recommend someone that's listening do immediately to maybe implement some of these strategies? Yeah. Just get started, right. Imperfect action beats standing still, you know, I'm big fan of, like I said, if you could skip the small stuff, the ones, the twos, the threes, the fours, it's great. It's a great place to get started with, man. If you can start with a 15, 20, 25 unit, you know, even an eight, even an eight.

[00:37:35] Yeah. Cause it's the, it's the multifamily strategy, right? It's the NOI game versus the comparable sale game. Right. I've never had an appraiser ask me on a cash out refinance. What did the neighbor here sell for? What's the neighbor there? It's what's your NOI. So learn the NOI game, right? And something we're a big proponent is just go drive deals, go walk deals. Like you, you will learn so much looking at a P and L statement from a deal. You know what I mean? Just really starting to learn like, Oh wow. What, what's, what is a normal repair and maintenance expense? What is a normal payroll expense? Wow. Their landscape is high here. Wow.

[00:38:05] They're, they're, they're trash and water utilities. Right? What happened this month? What's going on? Why is that so high? You know, looking for anomalies, things like that. That's a big thing. I've noticed a lot of new multifamily investors. They want to be the podcast junkie or the YouTube junkie, which is great. You got to start there like a bootcamp. Those are great, but it's like sooner or later you got to start just looking at deals. We got to take action. Yep. Okay. Massive freaking action. I tell you, my most successful students aren't the smartest. They're not the ones with the most money. They're not the ones that live in a big, big city. They're the ones that just freaking go do it. Yeah. Which is why I spend so much

[00:38:35] time on mindset because that's 80 to 90% of it. Yeah. You know, the, the, the mechanics is the smallest piece. It's just, you just got to go do it. And I love what you said. Imperfect action always beats standing still. Hell yes. No question. So you have any favorite quotes? Yeah. Hypothetical is hypocritical, right? Hypothetical is hypocritical. I don't even understand what that means. So like if you say, if you say, Hey, okay, I want you should invest in real estate, but you don't invest in real estate or you say, Hey, health is important, but you're not.

[00:39:03] Oh, gotcha. Right. Gotcha. What you got to walk. It's not what you say is what you freaking do. Yes. Okay. Okay. You know, just be about it. And I think that's a big thing too, with social media. A lot of people talk about it, but who's actually out there doing it or they, they take, they take staged pictures, you know, in front of the vehicles and the, I've seen some real funny shit there, but I'll tell you as far as social media, I think we live in the greatest time on earth to create reach. I mean, good God. I mean, this is the largest podcast in the world by far for what I do. And all I did was be consistent

[00:39:32] and add value. I love that. You know, I have the largest multifamily Facebook group, same thing, just be consistent to weed out the trash. And that was it. Just, you know, it kind of built itself. And, and, and so, you know, if there was ever in an, and, and if there was ever a time to create reach, to raise money, to find deals, to build an infrastructure, to build anything, we live in the greatest time ever to do that. A hundred percent. My first business was solely built off of social media. Really?

[00:40:02] It's when you like get in the doom scroll, you start just consuming, but when you create, that becomes business media, right? That's how you can then get your message out there to help people and bring in customers, bring in clients, all those things. So are social media being used on you or are you creating and creating business media out there to grow? Well, for me, unfortunately it's both. Cause I've been sucked into TikTok. Oh, we all get me started. Jesus. I mean, literally I can get started on TikTok and five hours later,

[00:40:29] I'm like, are you kidding? You just sat here watching this stupid shit for five hours. No, I get it. You know, I used to go on vacation. I used to read a book a day. I'm a very fast. You saw my books downstairs. I've got thousands and, and, and, uh, I sit on fricking TikTok, but I enjoy it. It's relaxing, but, uh, it's, it doesn't certainly doesn't, you know, there's no growth involved. Well, like you said, it's got, it's gotta be a combination of both. You have to, you know, we say infotainment, right? You have to be informative, but there's gotta be a level of entertainment because people do go to social media to be entertained.

[00:40:57] Yeah. Very true. Very true. Yeah. You know, I, I tell people the two most important things with social media and I've got a course that I give my warriors, uh, called crushing it in social media. And the whole premise is be consistent and add value. A hundred percent. If you put crap out there, you're crap. That's it. You know? And I mean, with chat GPT, you can do a lot more now. Um, you know, it'd be interesting to see how that affects all of that. But, uh, well, one thing I wanted to ask you, cause you know, you're very healthy and, and like I say, passionate about what you do.

[00:41:27] One of the gifts that I give my warriors is the miracle morning by Hal Elrod about, you know, how you start your day. Do you have a typical morning routine yourself? Yeah, absolutely. So wake up, uh, first thing is hydration, you know, got to get your body rehydrated. So electrolytes, uh, branched chain amino acids. Then I go and I journal, but back to, I journal my regrets. I'm really big on let your regrets be your guide, right? So like, Hey, what in the last day did I regret? When the last week did I regret? It could be business, could be personal. It could be health, could be something,

[00:41:56] again, something I ate. You know, I really, I really, uh, align with what you said. Sometimes we eat something and you wake up the next day and you're like, man, you know, I don't feel good with that. So, uh, cutting that out. And then I go into my MIT's most important task, right? To move the money needle forward in my business. So I tried my first hour of every day. So easy as an entrepreneur to get into the busy work, right? Let me answer emails. Let me check social media, but how do I move the money needle forward in my business? Right? So, so whatever that needs to be. And then again,

[00:42:22] get into movement, right? Back to Tony Robbins, change your physiology to change your psychology. It's called the triad. Yeah. Right. So get moving. And then, you know, it's 9am and start the day. I love the MIT thing. The most important task. Um, you know, it's the 80, 20 rule, the Pareto principle. You know, one of the things I teach at my bootcamps, um, is, uh, my weekly planning process. And part of that process includes, you know, looking at your entire to-do list on, and, and looking at what's going to move the needle, you know, and I'll have, I'll have,

[00:42:52] and I, I warn my students about this, my warriors. I said, don't send me your freaking logo. Yeah. Ask me what I think. Yeah. Tell me how many brokers you've called. Tell me, you know, how many deals you've underwritten, you know, don't get caught up in moving stuff from this side of your desk to that side of your desk. Okay. You know, and I'm, everybody's guilty of it, but you want to minimize that as much as you can. Big difference between being busy and productive. Right. Right. And that's, what's tough about being an entrepreneur. We can be very busy all day long, but you didn't move the money needle forward. And there's no one checking you out. Like you said,

[00:43:20] you could spend all day tweaking with a logo, but that's not going to actually grow your business. Correct. I love what you said. Very, very outcome and very production focused. What did you do to grow the business? I had a coach when I was losing everything in 2009. Well, actually the second time. So I lost everything in 2008, I lost $50 million. And then I built a litigation support company that almost bankrupted in the end of 2010. I hired a business coach and he helped me focus on income

[00:43:45] generating activity. Hello. Yeah. You know, and, and turned into a, you know, big company with 60 employees after that. But, uh, you know, just, and that's what a coach can do. They can look at it from the outside and give you some nudges and just change everything. They see what we can't, right? Because we're, we're so myopically focused on like, well, we're inside the business instead of looking outside, you know, looking at it. And, you know, I've had coaches my whole life. I've got coaches now I've got a relationship coach, you know, I want to be better in relationship. And, and I show this, um,

[00:44:15] of, of, I didn't go to college, but it's me with my arms out and I've got hundreds of lanyards around my neck and all my arms from my bootcamps, masterminds, workshops, all the stuff that I went to, you know, specific, uh, and coaching that I've had. Yeah. But, um, no, I love that your, your income will never exceed your level of personal development. That's it. That's it. And if you're not growing, you're dying. A hundred percent. Yeah. Yeah. Well, listen, brother, this has been a lot of fun. I appreciate you coming on the show. It's a pleasure to meet you and your lovely bride. And I'm excited to see where you're at another year or two. I'm sure it's going to be

[00:44:45] extraordinary. Thank you, Rod. Appreciate it, man. Thank you. So one other quick thing we encounter so many people that are frankly frustrated, you know, they're looking in the mirror and they're frustrated that they haven't been able to escape the rat race. They haven't been able to build cash flow to the point where they're able to have financial and time freedom with their families, you know, and maybe they see other people buying real estate and creating, you know, incredible cash flow. And they think, well, it's just scary. You know, buying apartments is intimidating and I get it.

[00:45:12] See, that's why we created our warrior mentorship program. They're our coaching students and they've had extraordinary results. My students, I've been teaching about five years and they own upwards of 140,000 units now that we know of, right? And we feel like it's just getting going. Now we're looking to grow this group and really take it to the next level and honestly believe that the greatest transfer of wealth could be upon us right now with this current economic environment. Everything's going on

[00:45:38] sale. So we're looking for people who want to follow a proven framework, really like a blueprint or a map, literally step-by-step. And then they're able to leverage our systems and our incredible network to raise money and equity, to find deals and close those deals and build partnerships really nationwide. So if you're interested in finding out more about how you can become more in our incredible network and take advantage of the unbelievable opportunities that are upon us, you can apply to my warrior mentorship

[00:46:04] program by texting the word CRUSH to 72345. Or you can go to mentorwithrod.com. And what we'll do is we'll set up a call so you can check us out and we can check you out and see if it's a fit. Now, again, you can go to mentorwithrod.com or text the word CRUSH to 72345 to apply and we will speak soon. Thank you for listening to the Lifetime Cashflow Through Real Estate Investing Podcast. If you've enjoyed the show, please take a minute to visit iTunes and leave your comments.

[00:46:34] For more resources or to connect with us further, please visit our website at rodkleef.com. Tune in next week for our next show.