1 Year & 166 Units Later

Full Transcript Below

Intro
Hi, my name is Rod Khleif, and I’m the host of “The Lifetime Cash Flow Through Real Estate Investing” podcast. And every week, I interview Multifamily Rock Stars and we talk about how they built incredible wealth for themselves and their families through multifamily properties. So hit the “Like” and “Subscribe” buttons to get notified every Monday when a new episode comes out. Let’s get to it.

Rod
Welcome back to Multifamily Rock Stars. Now, as you guys know, this is where we interview people that are absolutely crushing it in this business. And we show you the inside scoop into, you know, how these multifamily investors are creating massive success not just in their businesses, but also in their lives. And, you know, as always, I’ve got my co-host, who is the director of our Massive Action team for my Warrior mentorship program on the line here. Mark, what’s up, Mark?

Mark
We’ve got a coincidence here. Just lately, I think with our podcast, we keep having these people on that are right at about the one-year mark from joining the team here. So I don’t know what it is, but excited to get into another one here, and hear these, well, success stories.

Rod
Love it. So we’ve got David Turner on today. And yeah, he joined in, I think, April of last year, and, you know, he’s got two boys, a four-year-old and a two-year-old, and he’s at 166 units already. And tech sales background. But you know what? I’ll quit stealing his thunder. Welcome to the show, brother.

David
Yeah, thanks a lot, Rod. Thanks, Mark. I appreciate it that you have me on.

Rod
For sure. Well, why don’t you, you know, just give us some background, give us a little bio on who you are, where you come from, and maybe why real estate?

David
Yeah, definitely. My wife and I, we got started in real estate a few years ago, flipping houses. In her family, she had a background in construction management. And, you know, we knew that we wanted to create some passive income streams. And we thought that real estate is going to be the way to go for us. And we got started doing a few fix and flips in Wisconsin where we were living a few years ago. And we really enjoyed it. But it was difficult working a full-time, W-2 job, having young kids, and trying to juggle that with managing projects at the same time. So we were looking for a way to kind of create more of a passive stream and actually scale a lot faster. And I happened to be reading a BiggerPockets interview book and came across someone that started their career in multifamily and reached out to them and ended up finding myself in an LP position on one of their deals and then just decided that that was the path for us going forward. So [inaudible] from there.

Rod
Nice. Now, so you went in as a Limited Partner first, which is, by the way, is a fantastic way to get started, guys, and you know, because you get to see behind the scenes and, you know, we spend time educating our investors and our deals. And by the way, we’ve actually got a deal working right now. You know, if you’re an accredited investor, text the word “partner” to “72345” and register on our portal because we’ll be doing a webinar on it here in a couple of weeks. Well, depending on when this episode airs, you know, might be a few weeks. But the bottom line is, you know, it’s a great way to start because you know, not just see behind the scenes, but, you know, it kind of demystifies it a little bit. And there is some mystery to it, especially when you’re talking syndication and SEC and stuff like that. It’s a little bit intimidating. So tell me again where did you come from, you had some sort of a tech background?

David
Yeah. So I’ve had a job in IT sales since college.

Rod
Okay.

David
So about 12 years out of school, a couple of different organizations, but mostly in the field sales position. So getting really comfortable with networking and able to position value, you know, to help customers or potential investors understand, you know, the pros and cons of a deal or an opportunity.

Rod
Well, that begs my next question. You know, in your GP role as an operator, were you involved in raising equity? Did you play a different role? What roles did you play as a GP?

David
Yeah, I definitely played a role in raising the capital for that deal and being my first GP deal, first role in the General Partnership. Really diving straight into that raising the capital piece was a challenge and I know you talk about sometimes there are some horror stories or war stories. Well, definitely the old adage of build the well before you need water. That definitely came true in that case.

Rod
Okay.

David
So we committed to raising a certain amount and ended up falling a little bit short. But, you know, it got close to the line there, but definitely was a challenge with getting everybody across the line and really learned quickly that you need to line up investors and really build that funnel at the top before you have a deal, before you get your deal that you need to fund.

Rod
Yeah, well, you know, we tell you you should be looking for deals but should also be raising money at the same time and building relationships. And, you know, I’m sure I know you’ve heard me say it, if they’ll hold still long enough, they need to know what it is you’re doing and start generating interest. And if you can find a way to add value, you know, to people through educating them. You know, a lot of my warriors have podcasts. They have meetup groups, they have Facebook groups, they have LinkedIn profiles that they use, they–you know, TikTok. I mean they’re all over the board. They’re building reach and adding value in advance of finding the deal. So there isn’t a fire drill.

David
Absolutely.

Rod
And that’s actually one of the reasons I initially started the podcast was because I hate asking for money and I thought you know, I’m going to do commercial real estate now, I got my ass handed to me in single-family. I’m not going to continue to do that. And of course, it’s done that and then some. But–did you have something to add?

David
Yeah, and you mentioned the meetups, and that’s something that, you know, I really strive to not get out ahead of. So actually, myself and a couple of other warriors in the Dallas area, we’ve started a meetup, and we’ve been trying to grow that presence here in DFW.

Rod
Fantastic. Good for you.

David
Getting out there and building– you know, getting some more credibility in the market here and building that investor base so that when we do have our next deal lined up, we’ll know exactly what our investors are looking for and be able to bring them something that [inaudible]

Rod
For sure. And what you just said is really important as well, is–you know, when you host a meetup like that or, you know, and you’re bringing in experts and you’re interviewing those experts, you’re perceived as an expert, even if, you know, you’re a little wet behind the ears. So it’s just a great way to get started.

David
Yeah, absolutely.

Mark
Yeah. I know you didn’t have any experience when you came into doing this first deal, obviously. No multifamily units. Why do you feel like people actually listened to you and were willing to work with you, even though, again, you were brand new into this business? How do you think that happens?

David
Yeah, we were definitely brand new in multifamily, although we had some very successful projects in the fix and flip space, and all of those were done through private capital. We actually funded all of our projects with investor funds when we were flipping houses. So we leaned on those relationships in the beginning and improved our value on how–we know how to manage projects and really be a steward of other people’s money. You know, that’s– we’re playing with other people’s money in that case. So we want to make sure that we’re responsible for that. So we leverage that and we created trust with our investors and also the team, you know, we leverage the fact that we’re part of a greater general partnership team for that deal that has a lot of experience and there are a few other warriors in that group that have a lot of experiences as well. So it wasn’t just me raising the capital and showing the value. It was our team and it was our project as well.

Mark
What about the warriors? Why do you think they were willing to work with you even though you were new?

David
Yeah, that’s a good question. So I had spent a lot of time, you know, through the warrior events and networking, through the Zoom calls that we have for the program, building relationships with everybody in the warrior community. And I put in a lot of time learning underwriting and learning these systems and putting these other tools in place and building that reputation amongst the warriors that I’d be able to bring some value to a team on a General Partnership.

Rod
With your full-time job and your babies and the whole and your wife and the whole deal.

David
Yes.

Rod
I just want to stress that. I want to stress that because people think, you know, how am I going to find the time to do this? Well, you did. And I’ve got numerous other warriors that have, that have retired even from you know, high-paying W2 jobs. Let me ask you a question, David. You know, there’s a lot of fear out there right now. What have you been doing personally to overcome all that fear that’s out there right now?

David
I try to block it out. I just really dive in and think about it later, you know. Along with over the course of ten years and being in sales, if any sort of hesitation is going to cause [inaudible] you’re really going to miss a beat. So just really putting yourself out there and taking the chance, and going out and meeting people. And I think that’s a big part of it. In terms of fear of getting into the first deal, you really have to understand what your goals are and why you want to do it. And if that’s more important than being scared for a little while, you know, just–you have to push yourself out of that comfort zone or else you’re not going to get anywhere.

Rod
Yeah. I mean, as you know, one of the first things we do in my boot camps is goal setting on steroids because how the hell are you going to get anything if you don’t know what it is? You got to know what it is and you got to know why you want it. So you have that burning desire to push through fear. You know, listen, there’s a lot of fear out there right now with the upcoming recession. We’re definitely going to have a recession.

Mark
Big time.

Rod
Yeah. And so I want to tell you, there is probably no greater opportunity than we are going to have in our lifetimes coming. You know, and then a lot of people are going to be afraid and hunker down and they’re going to miss out like I did in 2008 and ’09, if I hadn’t been hiding under a rock because I just lost $50 million, we’d be doing this on my back of my 300-foot yacht because I would have massively kicked ass. Well, I’m definitely not going to miss this one. And so, you know, if you’re listening, you’re thinking, okay, well, it’s scary, you know. Yeah. Listen, but what you need to understand is with crisis comes opportunity, and there will be exponential freaking opportunities coming on the horizon. So, you know, on that note, if you haven’t come to my Denver– if you don’t have a ticket to my Denver boot camp, your butt needs to be there if you have any interest in this because, you know, there’s going to be no greater opportunity than that to learn this business quick. Because if you’re in the middle of it and you’re trying to learn it, it’s going to be too late. You know, you’ve got to start building those relationships just like we just talked about with raising money. You’ve got to talk to investors and have them lined up and you know, and how to underwrite deals and just, you know, get ahead of this because like I said, there will be exponential opportunities. They’re coming. And we’re in–you know, already seeing a slowdown, a big slowdown. We were about to pull the trigger on a deal for about 44 million, and that price got dropped to 38 million. And we still back down because it didn’t make sense. The numbers didn’t make sense with the debt the way it is now, and that’s going to continue to happen. So, you know, just be aware of that. But anyway–

Mark
I’m excited for it.

Rod
Yeah, right. Right. Get excited. Exactly. Get excited.

David
And we were eventually–

Mark
I was going to say, where do you think you’d be, David, if you had just kept going then with the single-family, fix and flips instead of transitioning into multifamily?

David
Yeah, fix and flip, it’s a very transactional business, obviously. You’re always looking for the next deal and relying on being able to find a deal and turn it very quickly. And obviously, you have the tax implications. I think that I would be kind of stuck in the hamster wheel of constantly looking for that next deal and figuring out how we’re going to fund and find our next opportunity. Not really building anything for the future. We were always just figuring out, you know, what’s the next project going to look like and how we were going to get through it. Now, we really have a vision for where we want to be five or ten years down the line with our family and the sort of portfolio that we want to have built, and what we are going to be able to do at that time. So multifamily is going to open up those doors for us that just going in and flipping houses and constantly looking for the next deal isn’t going to provide.

Mark
In your opinion, if and when the recession does hit here, what do you think is going to happen to those single-family, fix, and flippers?

David
They’re going to need to have their systems down for sure. And they’re going to need to rely on some really good contractors and have really good relationships with their suppliers. Things are going to get tight and maybe deal-finding might be a little bit easier, but funding and, you know, working with contractors is going to get more difficult.

Rod
And selling those deals could become a little more challenging because, you know, finding– yeah, you’ll be able to find the deals. But, you know, if you’re in that space and you’re not going to do multifamily, for God’s sake, you better be buying deals. You can cash flow. I’m going to tell you, you know, the same thing will be there in multifamily. You know, and if you’re a wholesaler, you know, thinking you’ll wholesale some deals. You know, I don’t know if you saw the post we did, I don’t know, probably six to eight months ago where I asked people if they’d wholesaled the deal and made over 100 grand. I don’t know if you saw that in the Warrior Facebook group, David but–

David
I think so, yeah.

Rod
Yeah. Well, we had a dozen people say they’d made over 100 grand wholesaling in a multifamily deal. And so, you know, again, the numbers are bigger, and frankly, it’s safer. You know, the reason I had my butt handed to me in 2008 and ’09, it was the single families that pulled me down. My multifamily did just fine. If I hadn’t cross-collateralized my multifamily apartment complexes with packages of houses to save 50 basis points or half a percent interest, I’d still have those apartment complexes. Yeah, they pulled back, but they would have survived. So, you know, that’s one thing. So, you know, what have you learned about this business in the last year being a warrior and out there beating the bushes, you know, that you’re going to improve on even, you know, or just in general. Answer it in any way you like.

David
Yeah. I think one of the biggest things I’ve learned is practicing patience. You know, a lot of people talk about how many deals they have to underwrite and look at before they find the one that fits their criteria that they can pull the trigger on. You know, I’ve been in the program for just about a year like you mentioned, and finally closing my first deal as a General Partner. You’re going to have to continue to practice a lot of patience. And obviously, with a pending recession, there could be some more deals coming, but you’re not going to want to move on anything too quickly, and we want to be in a position to take advantage of any of those opportunities as they come up. So that’s definitely one of the biggest things I’ve learned that deals are few and far between, but as long as they work, then it’s worth it.

Rod
Yeah. And you’ve been– you know, you’ve collaborated with other warriors to review deals together to make sure you’re not making a mistake. Yes? I mean, I don’t know if that’s the case. Yeah?

David
Absolutely.

Rod
You’re doing your underwriting together. You have meetings, you go through them. That’s such a critical piece of this. You know, by the way, guys, if you are interested in applying to our Warrior program, text the word “crush” to “72345” and we’ll set up a quick call. You will leave that call better than you joined it. I will promise you that, whether it’s a fit or not. But again, text “crush” to “72345” and we’ll look you over and you can look us over and that’s how it works.

David
Yes. And working with, you know, the warrior group and the mentor that I had over the past year, that was really helpful because I learned to refine the underwriting skills, learned to put some systems in place for my business, and really helped me to prioritize what steps I needed to take as a newbie into the industry and figure out, you know, how can I actually grow and build the team around me, what was my value going to be and what approach should I take.

Rod
Yeah. Nice. No, that’s great. I’m really pleased to hear that.

Mark
So what would you recommend them to those listeners who are letting fear control all their decision-making right now?

Rod
And there’s a lot of that right now. Yeah.

David
Yeah. I think you have to consider if where you are today is better or worse than where you want to be and what your goals are. And if you’re willing to sacrifice your goals because of fear.

Rod
Yeah.

David
So if you’re going to just sit in one place and not taking any action, are you going to be happy with where you are today five or ten years from now? And if not, then you need to actually get up and do something about it.

Rod
Yeah, no that’s good. That’s absolutely right. And, I mean, you just–you know, disgust is a very powerful emotion. You know a lot of people haven’t heard me tell this story, but I remember, you know, pre-2008, ’09, I actually had my ass handed to me back when I was in my 20s. And I lived in what’s probably about a $2 million house in Denver at the time. I had a Rolls-Royce, and I had my Maserati. Everybody thought I was a freaking drug dealer. I know my neighbors did because I was always–you know, I was working at home a lot. I was just doing real estate. But I lost it all. The market crashed. Big crash. This is–I don’t remember exactly when, but I remember that I had my house foreclosed on and I remember, you know, actually painting a house to have enough money. And my mom bringing me groceries, so I have enough money. So she was worried that I wouldn’t have groceries. So I went from Rolls-Royce to mom bringing me groceries and I had a little meltdown. And I was like, fuck this. And threw the paintbrush down and had a little epiphany, you know, and a pivotal moment that I was like, you know, and then I bought 500 houses in the next run and some apartment complexes. But let me ask you, have you had any epiphany moments like that? Any defining moments where you’re like– or even just an aha moment? I know I didn’t prepare you for any of this, but does anything like that come to mind?

David
Yeah, and I do it. It’s not exactly multifamily related, but it’s what led to our decision to get into multifamily for sure. We were managing two projects at once, and obviously, we had our own home during the freeze that came through Texas early last year.

Rod
Oh, yeah, that was a big one. Yeah.

David
Fortunately, we only had one pipe burst in all three homes. But we’re dealing not only with that, but a number of other issues at the same time and not really knowing how they were all going to turn out. But that was really the catalyst for us to decide that we needed to transition and to really focus on something that’s going to scale faster and really get us out of that transactional mindset in the hands-on business of flipping and moving into multifamily.

Rod
You know, with flipping and wholesaling, you’re only as good as the last deal. And, you know, yes, you can raise some quick cash, and it’s not a bad way to do that. You could certainly do it on the side, but you need to be buying for your own account. So, you know, at some point, you don’t have to work anymore. I mean, you’ve got those checks coming and you make it till the first. You know, but back to that freeze for a second. We had it hit Shreveport, Louisiana, where I had a nightmare asset, 403 units. I’m sure you’ve heard me bitch about it. We just sold it, by the way, thank God. You know, and we did well on it. But the whole town froze and literally the whole town, the hospitals didn’t have water, I mean it was– because the water lines were so low. Anyway, so I just digressed. But that was quite a crazy, crazy time with a, you know– in fact, I had one of my maintenance guys that work on my compound here in Florida. He drove all the way to Shreveport with a whole trailer full of water bottles to give to the residents there because, you know, there’s this–you couldn’t buy water. I mean, it was bad. It was ugly. But, anyway–

David
Material shortage because of it as well.

Rod
Right? Yeah, that’s right. That’s right.

Mark
Well, it’s interesting that you guys are both saying and I noticed this as well. 99% of people, they only really take action in their life when they feel pain. Right? Everybody is just on the up right now. And so not a lot of people are, you know, you mention that fix and flip. Obviously, there are a lot of different things for you, Rod, which you know, you’ve told many, many times.

Rod
Right.

Mark
But, you know, whether it’s our Denver boot camp or the Warrior program, you know, don’t be that person who looks back and says, well, shit, I wish that I had gone to that. When the recession does hit, instead of being that person, that, oh, I don’t know what to do when it does hit. But on that topic, David, you know, if you could go back, what, three years now, I guess, 2019 when you first started, what do you think you would do differently if anything?

David
If I knew what I know now, after meeting everybody and going through the program, definitely think I would look to scale faster. I’d look to leverage my resources to scale immediately and taking the first opportunity to jump in head first into multifamily, whether that’s starting with small multifamily and maybe a couple of duplexes or fourplexes and growing from there or again, trying to get on a team and take down 100 unit deal, but definitely something that’s going to create longer-term wealth generation and scale.

Rod
Yeah. Let me ask you this, by the way, back to the boot camp for a second. Guys, if you’re listening to this, I’m going to do something I don’t normally do like this, but if you DM me on any social channel, I’ll give you a code so you can come to that boot camp for $197. And it’s three days of training. So it’s kind of a no-brainer and it’s not a sales pitch. You know, I talk about the coaching for about 30 minutes, but then the rest of the time is full-on drinking through a fire hose. So if you’re interested DM me on any social channel. I’ll give you the code so you can come for $197. And, you know, Denver is a United hub. You can fly there non-stopped from anywhere in the country. So don’t miss out on this opportunity that’s coming because it’s going to be incredible. I know it is. It’ll be scary, but you’ve got to look past that and recognize the opportunity. If you can find assets that are cash flowing, there’s no greater hedge against inflation. And it’ll just be extraordinary. I was going to ask you, what’s the driver for you, brother? What motivates you? What’s driving–you know, or even the why? Tell me– I don’t want to assume anything.

David
It’s definitely my boys, my family. I want to be able to create time and freedom to spend with them and travel. You know a passion my wife and I just travel in the US and internationally. And I want to be able to share that with our kids and make sure that I’m able to attend all their baseball games and football games or whatever it is and, you know, show them different cultures and different philosophies as well, expose them to all that. So I want to be in a position within the next ten years or so that, you know, we can travel whenever we want to go wherever we want with the kids.

Rod
Love it. Absolutely love it. Well, listen, last question. Do you have any quotes or anything that you enjoy? Does anybody give you a quote, a parent or a mentor, or anything that you lean on from on occasion?

David
Nothing specific comes to mind right now. But I always remember that you know, with anything in life, with goals or whatever, it’s going to be with creating improvement, it’s going to be small, incremental steps that are going to get you over huge challenges. So just thinking about what can I do every day to make one improvement or get 1% better every day? And you’re going to be that much closer to achieving your goals.

Rod
You take those little micro improvements out over time and they become massive shifts. And one of the gifts you probably got from me in the Warrior program is a book called “The Slight Edge”, which is exactly about what we’re talking about here. And Tony Robbins has something he calls CANI, constant, never-ending improvement. We just make small shifts, and that’s what we try to do in my organization. And we’re always trying to make it a little bit better, like the Warrior program, adding all sorts of new things all the time to try to make it a little bit better and constantly improving. Well, listen, brother, it’s great to see you. Congratulations on the success.

David
Thank you.

Rod
I’m sure I’ll see you in Denver. And I appreciate you coming on and sharing a little wisdom, my friend.

David
Yeah. Thank you very much for having me.

Rod
Yeah, you bet.

Outro
Rod, I know a lot of our listeners are wanting to take their multifamily investing business to the next level. Now, I know you’ve been hard at work helping our warrior students do just that using our “ACT” methodology, which is Awareness, Close, and Transform. Can you explain to the listeners how they can get our help?

Rod
You bet. Guys, we’ve been going nonstop for three years, building an amazing community of like-minded people, and our coaching students which we call our warriors, have had extraordinary results. They’ve purchased thousands and thousands of units and last year we did over 1000 units with our students. And we’re looking to grow this group and take it to the next level. We’re looking for people who want to follow a proven framework that’s really step by step and then leverage our systems and network to raise equity, to find and close deals, and to build partnerships nationwide. Now, our warrior community is finding success in any market cycle. So if you’re interested in finding out more about how you can become more of our incredible network and take advantage of the incredible opportunities that are coming very soon, apply to work with us at “MentorWithRod.com” or text “CRUSH” to “72345” and we’ll set up a call so you can check us out and we can check you out. Again, to apply, text “CRUSH” to “72345”.