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SHOW NOTES FOR EPISODE 043 WITH ROD KHLEIF – SINGLE FAMILY VS. MULTIFAMILY RESIDENTIAL INVESTING
Although he has owned more than 2,000 single family homes, Rod Khleif shares why he feels multifamily properties are the better real estate investment. In this episode, Rod shares his story of how he quickly grew a real estate empire only to have it nearly collapse in 2007-2008 and how he not only survived but thrived.
What You Will Learn
- Why Rod feels multifamily investing is better than single family residence investing
- Which properties fared best during difficult economic times
- How real estate investing is the best hedge against a bad economy
- How you can purchase multiple properties without any of your own money
- The best time to invest
- How to get started as a real estate investor
- The importance of giving back
About Our Guest
Rod Khlief
Rod Khleif is the Director of Investments at REM Real Estate and Management, where he uses his expertise to guide the firm in identifying and acquiring undervalued apartment complexes and mobile home parks. Rod has personally owned more than 2,000 single family homes, and multiple apartment communities. Before being named as a director at REM Real Estate and Management, he was president of Gulf Coast Management Inc., a real estate property management company in the Sarasota, FL area. He is also the host of the top ranked Lifetime Cash Flow Through Real Estate Investing Podcast. Rod has also built several multi-million dollar businesses and has dedicated himself as a community philanthropist, forming and leading the Tiny Hands Foundation, which has benefited more than 40,000 underprivileged children.
More About Rod
- Immigrated from Holland at age six with his family
- Grew up in Denver with a poor family with very little
- Mom had babysitting business, able to save enough to buy family’s first house
- Rod saw how house grew and value over time
- Inspired him to become a real estate agent at 18
- Didn’t make much as agent but then started to buy homes – that’s when he really started to make significant earnings
How He Grew His Real Estate Portfolio
- Realized he loved real estate and pursued with a vengeance
- Established systems to locate and purchase many homes at once
- Bought over 500 homes in Denver area
- Went to Memphis and bought a couple of hundred there (a decision he regrets)
- Bought over 1,300 in Florida
Why he Now Prefers Multifamily
- When 2007-2008 hit he was devastated with his houses
- Values plummeted
- Had sold Denver houses to buy in Florida. If he had held on to those houses, they would have done better than some of the other homes he purchased – it does matter where you buy
- Didn’t cash flow that great to begin with
- He called the hard lessons “seminars”
- But the multifamily apartments did well
Single Family vs. Multi Family
-
Single family homes
- More management intensive
- Scheduling maintenance difficult with so many, even though he has his own maintenance company (he also has his own property management company)
- Each repair issue is a big production for each house
- When you have no tenant, you are 100% vacant
- Very stressful to track many houses
-
Multifamily
- Maintenance issues are similar at each apartment, therefore easier to address (can maintain stocks of commonly used items, etc.) and better estimate time required on repairs
- Property management is much easier
- When you have a vacancy, it is only a percentage
- Can sustain with vacancies
- Takes less time to buy multifamily
- Longevity is better
- Can be a truly “passive” investment
- Incredible vehicle to build retirement
Difficult Economic Times Ahead
- Many economists have predicted another severe economic downturn
- Because of what happened in 2007-2008, he wants to be better prepared this time
- Others impacted: flippers (because tough to sell houses)
-
Real Estate Investing Best Way to Survive Tough Times
- Rents are high right now and continue to go up
- People will always need a place to live
- Great vehicle to build a good retirement
-
How to get started
- Immerse yourself in it
- Start looking at properties
- Talk with brokers
- Start evaluating deals
- Two pronged approach
- Educate yourself
- Podcasts
- Books
- Rei Meetings and other meetups
- Seminars
- Look at deals, analyze and play with numbers
- Educate yourself
- Great legacy for your kids and grand kids
- Advice for Those Looking to Start
- Don’t be intimated
- Take action
- Use 401K or IRA funds and start buying
- Get tax benefits
- Should get secure return of 10% or more
- If willing to live in one of your units, can get FHA financing
- Need to put in the time to get educated
- Larger deals – partner with someone who is experienced
Giving Back
- Rod learned through Tony Robbins the importance of giving back
- Imitated something Tony does called the “basket brigade”
- Called a church and picked 5 needy families and purchased everything for a big Thanksgiving meal
- Now does 1,600 families
- Formed the Tiny Hands Foundation
- Has feed over 40,000 kids for Thanksgiving and Christmas
- Also does backpacks with school supplies (1,500 in August)
- Donates thousands of Teddy bears to police departments to give to kids who have experienced trauma
Rap-It-Up
- We ask a series of quick questions of our guest:
- Favorite real estate book: Make it Big by Frank McKinney
- Favorite business book: Think & Grow Rich by Napoleon Hill, Good to Great by Jim Collins
- Most valuable web site for success (other than your own): loopnet.com
- If you had to start all over, knowing what you know, and you only had $1,000, what would you do to launch your real estate investing business? Build up his confidence, immerse himself in the business, start buying properties, don’t get lost up in the losses and the fear – don’t look in the rear view mirror. Find partners to fund purchases. But to do “no money down” deals you need education, confidence, and ability to influence
How to reach Rod
Get Rod’s New Book for Free
- Has new 220 page book coming out on multifamily investing “soup to nuts” titled; “The New Rules of Real Estate Investing, a Comprehensive Guide to Multifamily Investing” and is willing to give it to Old Dawg listeners for free
- Coming out in next 30 days
- Text rod to 41411 to get on the list
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