Massive Deals Are Coming

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 Star. So this is where we interview people that are crushing it in this business, and we show you guys the inside scoop into how multifamily investors are creating massive success in their businesses and in their lives. And as always, I’ve got my co-host, who’s the director of our massive action team for my Warrior Mentorship group, Mark Nagy on the call. Mark, what’s new, bro?

Mark
Well, I’m pumped for this call because I think, correct me if I’m wrong, this is the first call where we’ve had a guest who’s about the same age as me. So I’m excited for that.

Rod
So we’ve got Levi Weber on the call today, and he’s been involved in real estate for a good bit. I’m going to let him tell you about that. He’s in about 120 doors. Now, what makes that unique is that most of those doors that he owns himself or in Joint Ventures rather than syndicating. So we’re going to dig into all that. Welcome to the show, Levi.

Levi
Thank you. Great to be here. Excited to be here.

Rod
All right. Well, why don’t you take a minute and just give us, you know, a little bit of your history, you know, in real estate, I don’t know if you came right out of school and went into real estate or what that progression looks like if you started with something else, but give us a little background?

Levi
So my first entry into real estate was in high school. My older brother, who’s about 11 years older than me, he was fixing flipping houses so I would go spend the summer with him and I’d be the guy out there swinging the hammer. We’d both be out there and he would sometimes have a hired guy, but usually just be the two of us out there swinging a hammer all summer. And we would take these old dilapidated houses and turn them into something nice. I thought that was such a cool progression to see. I realized that I didn’t want to be a laborer, so I went to college and ended up with a mechanical engineering degree and paid for school by doing door-to-door sales. And so I got a unique set of sales skills and engineering.

Rod
That’s very unusual, by the way. That is very unusual for someone in engineering to go door-to-door. I bet that first door you knocked on was petrifying.

Levi
I was shaking.

Rod
Yeah, I can imagine. But good for you, brother, because I will tell you, and I’m sorry to digress and interrupt here, but, you know, my son is knocking on doors in Denver doing roofing sales right now. There is no greater sales training than knocking on doors because you meet every kind of personality, you get every kind of reaction, you have to become okay with rejection, and the fact that you did it as an engineer just says a lot about your moxie. So very impressive. Please continue.

Levi
Yeah, so I was able to get a really good sales job in the building supplies industry. Ended up being one of the top salespeople there, working my way up through the company. And my wife and I were making way more than we were spending, so it was only logical we start investing somewhere. So we circled around trying to figure out what to invest in. Ended up landing on real estate. It made the most sense because we had control of our assets rather than just dumping money in the stock market to let it do what it does. And so we started out by buying a couple small, like a duplex and a triplex, and then started flipping a couple of houses on the side of that, too.

Rod
And this was in Denver?

Levi
Yes, primarily in Denver. In Denver and then also in Montrose, where I grew up.

Rod
Montrose, okay. Wow.

Levi
Yeah.

Rod
It kills me when you’re talking about duplexes and houses in Denver, because, you know, again, I was there for 30 years. I can still name every street between Kipling and Havana because they’re all alphabetical and easy to remember. But anyway, please continue.

Levi
So, we grew that up. We grew into a portfolio that would support us and support our lifestyle. In early 21, I made the jump off from my W-2 job. I left a really high salary, but I realized the only way to really grow big in multifamily was to be full-time in it and to really dedicate a lot of time to it. That was my–

Rod
Okay, let me stop you. Okay, so you quit your job to go do this with us, and I think I even had some communication with you about that or with somebody that told me about that, but the difference is you already had some income. Yes?

Levi
Yes.

Levi
Yes. You had investment income from your houses that you’d purchased and were renting out in plexus and stuff, right?

Levi
Yeah, exactly.

Rod
Okay, so, guys, do not quit your job to come do this. Okay? I just want to put that out there because I get that question all the time and no, unless you’ve got some source of income like Levi did, don’t do that, you know, because people say, you know, hey, if I do this full-time, I’ll kill it, yeah, well, you could do it on the side. Okay. I can’t tell you how many people have made multi-million dollar portfolios and retired from super high-paying corporate jobs because of their income has eclipsed, you know, what they were making. So I just want to interject that. I’m sorry to interrupt again, yet once again, that’s the only hate I get on my podcast as I interrupt too much, but I want to hammer that point home. Please continue.

Levi
Yeah. So basically at that point in time, we had like 25 doors or something like that. And then over the last year and a half since I jumped off, we ended up growing to a portfolio of 120 units. We recently bought our first hospitality property. Everything else has been primarily commercial multifamily.

Rod
Yeah. So you bought a hotel in the Springs. You told us before we started recording.

Levi
Yeah.

Rod
Fantastic. How many keys?

Levi
48.

Rod
48. So it’s a little one. Okay. Very cool. Was it a flag or is it just like a stand-alone thing? No?

Levi
It’s a standalone thing. We originally went under contract with it with the intent of converting it to multifamily after we’re well down the road there, it was completely off market. It was a broker connection. He had no OM or anything, but after we went through the process, it made a lot of sense to convert to multifamily, but we decided to analyze it as a hospitality deal. I wasn’t really planning on getting into the hospitality industry, but it actually worked even better as a hospitality property, or it seemed to. And we have the fallback plan to be able to convert it to multifamily in the future if things didn’t work out as a hospitality.

Rod
Well, it’ll be a lot of fun. You said you were going to turn it into a boutique hotel. That will be a lot of fun to play around with, I will tell you that. But I got to say this, you know, I’ve been seeing economists saying that really in the next couple of years, yes, we’re going to have a recession and people will stop spending money on stuff, but they’re going to spend money on travel, and hospitality should do quite well through this recession. So, you know, you might be in a really good spot leaving it the way it is like you said. So, well, good for you. So why did you join the Warrior program initially? Where did you need help?

Levi
Yeah, so there are a few reasons for joining the program. The main one was going from being submerged in W-2 job where I had a lot of great connections there, and everybody was working towards the same thing together. Now, whenever I jumped off on my own, at first, it felt a little bit like I was on an island and I wanted to surround myself by like-minded people who were looking to accomplish the same things.

Rod
Right.

Levi
And the Warrior program, after looking through several different similar’ish sort of programs, it seemed to be the one that fit me the best with the mindset side of it and everything. And I joined it to be around like-minded people, to grow way bigger together.

Rod
Yeah. Love it. Love it. So, what’s next? Are you going to continue down the hospitality road? Are you still looking for multifamily? Are you diverse– you know, because that’s quite a jump. What’s the plan? Are you going to be kind of asset class agnostic and just look at anything or what’s–

Levi
I don’t know about completely agnostic there where we’ll look at anything. But I did want to diversify into at least one other commercial real estate sector, especially since hospitality took such a deep dip.

Rod
Yeah.

Levi
It was a great opportunity to buy, so that’s where the opportunity came from. So, I want to continue in the hospitality but primarily multifamily. That’s our core business and we look to continue to grow that.

Rod
No, the deals are coming.

Levi
Yeah, right.

Rod
Deals are coming. And Denver has been insane. So, you know, I mean, I bemoan the fact that I had 500 houses there that would have been free and clear at this point and I’d be netting probably around a million a month net, net, net. But I justify it because I wouldn’t have met my wife and I’d give it all up again for her. But still, it is, you know, life is about meaning. Don’t forget that. You can place a meaning on it. Something that’s positive, even something that was really bad. But anyway–

Mark
Now, I’m curious, are you wanting to jump into bigger syndications in multifamily or do you think you want to stay in the smaller JV realm of what you’re doing right now? What do you want to do there?

Levi
So I’m looking to do both in parallel. We’ve been very successful with the JV side of it, the deals on our own, and then also with, you know, a couple of small JV partners as well. I really enjoy those size of deals, but I think the ultimate scale comes from growing up into syndicating. So I think our next step is to start syndicating as well.

Rod
Talk about some–go ahead.

Mark
Quick follow up because I get asked this question a lot actually from people, which is why would you syndicate when you can just keep control on the smaller deals? What’s your thought process of wanting to syndicate rather than just sticking with those?

Levi
Yeah, so there are a few things– one of the biggest things, we tend to think our systems that we have in place are pretty solid and we’ve been very successful with our JV properties based on the systems and our systems, we can, you know, put a lot more through them and go a lot bigger. Basically, we’re limited by the amount of cash in pocket to go to the next deal or the amount of cash in pocket of our JV partners. So as we syndicate, I tend to think that will open that up a lot more and make it so that we can use our systems that we think we have good in place already and go that much larger with it.

Rod
Yeah, love it. So talk about some setbacks or some seminars, you know, I call them seminars or hurdles that you faced. Give us an example of a doozy and what happened and how you got through it.

Levi
Yeah, so our very first multifamily deal was a triplex in a great part of Denver. It was actually when we bought it, it was a duplex, and our idea was to convert it to a triplex.

Rod
Where in Denver? Just for my own satisfaction. Where in Denver was it?

Levi
It was off of, like, Florida and Santa Fe.

Rod
Okay, got it. Got it.

Levi
South Broadway [inaudible]

Rod
Yeah, 15,000 south or 100, I don’t remember. Anyway, got it. Yeah, no, wherever it is.

Levi
Perfect. So we bought it, we acquired it successfully, and it came time to start the renovations. And so, you know, I’m looking to save money, and I think that makes the most logical sense. So I reached out to as many contractors I could find who looked like they did small renovation projects. Out of probably a dozen I reached out to about I think three of them showed up to bid the project, the rest of them were just no-shows and disappeared. And so out of those three, got bids from each of them, and one guy was about 30% lower price than everybody else. So I thought, well, this makes a lot of sense. We’ll go with the low-price guy because we’re looking to save money here. So we went forward with him, and I remember being down in the bottom of the basement and the unit we were adding there, it was a cabinet that was crooked and everything down to the bottom. And I remember counting out $10,000 in $100 bills there on the table because he told me that he’d give a cash discount of 5%.

Rod
Oh, good, God. Oh, I’m cringing.

Levi
So, I’m looking to save money. Here we go. This makes sense, right? So counted out $10,000 in cash on the cabinet down there. He said he has a whole crew ready to start tomorrow. And believe it or not, he didn’t show up, and $10,000 disappeared.

Rod
Oh, that hurts, man. It stings, man. The minute you started counting out cash, I knew what was coming. Okay, well, that’s a seminar. You won’t do that one again. Yeah.

Levi
And, you know, that was our first entry in the multifamily. It’s like, wait a second. Is this really for us? Does this actually make sense? And so, you know, we looked into it, and I realized really quickly my stupidity. We ended up finding another contractor who came in, did their job great, and went over our perceived budget by $10,000. The project ended up being great. It was like, three or four times, actually, multiple in a couple of years for us. So it does help. The Denver market went crazy, too.

Rod
Yeah. No, I mean, listen, again, I lost 50 million, so 10,000, you’ll get over it. Trust me. You’re already over it. But– you know, go ahead, Mark. Go ahead. I lost what I was going to say.

Mark
Well, let’s talk about that. We coach about mindset a lot. We talk about that a lot. What’s your mindset right now, moving forward as a lot of people are very scared to even take action because of a potential recession or market crash? What’s your mindset going into all of this right now?

Levi
I’m excited because I think there’s going to be a little bit of opportunity out there. So I’ve noticed in our market, our primary market we work in, nobody’s sending out offers. So we’re sending out more offers than we’ve ever sent because everybody else is terrified to put anything out there. So I’m really excited about it. I think that there are going to be opportunities presented.

Rod
Yes. No question. No question. I’m quasi jealous because it would be so much fun to be playing in that market in Denver with what’s coming because I know what’s coming and I know the opportunity that’s coming, and it would be such a treat to be there. But I don’t like the cold anymore. I like where I’m at. So let me ask you this. What’s your driver brother? I’m not that it gets that cold up there. Hell, it’s sunshine most of the time, but it does snow, and I don’t want to do snow anymore. But what’s your driver buddy? What’s your why? What’s pushing you?

Levi
So, my family is my big why. I mean, being able to–

Rod
Do you have kids?

Levi
Yeah, got two kids. And to be able to give them the opportunity to go out and pursue whatever path they want to pursue and to be able to help the people we want to help, just to be able to be in control of our life is a big part of our why.

Rod
Yeah. Sorry. One more, Mark. What’s your definition of success? Your definition.

Levi
My definition of success is, I think, to be able to improve the world around us. I think that’s a big part of it. And to be a good person, to improve other people’s lives around you.

Rod
That’s beautiful, man. And I tell you, we tracked that mindset in our group. It’s incredible how many Warriors are doing amazing things worldwide, not just in the United States.

Mark
Now, I know you mentioned Levi, you went full-time, quit your job last year. You just mentioned you have kids, so that’s an extra responsibility on top of all this, when you did that, were you nervous? Were you questioning yourself? Did you question if you made the right decision? I know you had a little bit of cash flow or was it just, hey, easy, this is the right thing for me to do, and I’m very confident. What was that process like?

Levi
It was a really easy decision. Well, it started out as a very difficult decision. As soon as I made the decision, though, I didn’t regret it once. I knew we had strong cash flow coming in as is, and I left the employer that I worked for, I left on the best terms possible. I did the opposite of burn the ships. And I knew the second that I wanted a job back, I’d be hired the next day because I really helped that company out. I improved everything.

Rod
That’s really good. And then I will tell you, as an employer, an employer of probably over a thousand people so far in my lifetime, you know, I can remember the handful of people that did it the way you did it. Okay. One has become an incredible friend of mine, a guy named Kevin Bupp that has his own podcast and teaches mobile home parks. And he did leasing for me. And I just remember when he left, he took the time to train and hire and make sure that we didn’t skip a beat. And so, that’s huge. And that’s really good that you did that.

Mark
Quick follow-up on that. Just for my own curiosity. You don’t have to share the numbers if you don’t want to, but was your passive income equal to your active income, or did you have less than it and you felt it was just still enough to be okay? Just out of curiosity.

Levi
Basically, our cash flow– first off, we had reserves in the bank that we could get by for a year, first off. We’ve always kept at least one year of reserves in our bank account. So if the passive income stops and it completely froze up, we’d still survive a year, no problem. But the passive income we had coming in was enough to live off of and sustain our lifestyle as it was. But it was about a quarter or a fifth of what my active income was. So in the upper, it’s like a six-figure range in my corporate job. But I knew that wasn’t my forever thing.

Rod
Yeah, well, I know you’ve killed it. Since you’ve been a warrior, you’ve got 100 doors. I know quite a few of those you’ve done with other Warriors. Oh, by the way, guys, if you are interested in the Warrior program, text the word “Crush” to “72345” to apply. So like I said, to apply, you just text the word “Crush” to “72345”, we’ll set up a call and you can check us out, we’ll check you out and see if it’s a fit. But like me, you’re getting excited about what’s coming up as far as opportunity, and I think there’ll be a lot of opportunity in multifamily. I’m not sure about hospitality anymore. That ship may have sailed now. I don’t know. Maybe there are still some deals that are recovering. But definitely in multifamily, there’s going to be deals just because there are so many screw-ups with people doing bridge debt that they shouldn’t have done and, you know, just crazy underwriting. Skinny, skinny deals that we’re like scratching our head that these things traded for. You know, when we’ve been in best and final and they end up trading for, you know, a couple of million more than we are at we’re like, what the hell? How could they possibly hit their returns? And so, anyway, I agree with you. There are a lot of opportunities coming.

Mark
What do you think Levi, is the most common reason for people failing in this business or giving up on real estate?

Rod
Good question.

Levi
Great question. I think that– the primary thing is not taking action. I think you know that’s common knowledge. Everybody hears it all the time. You have to take action but I think there are still a lot of people who get stuck in analysis, paralysis, or wherever else in that system, and it really comes down to taking action. You have to go out there and do something, and that could be as simple as just learning or listening to a podcast, but at the end of the day, you have to start either making offers or get around the right people to go bigger.

Rod
Let me ask you a question. Would you consider yourself an introvert or an extrovert? Do you get energy from being around people or being alone?

Levi
I think that I’m probably an extrovert, but I don’t think I’m like a way-out-there extrovert. I think I’m probably somewhere in between.

Rod
Okay. Very interesting. Which is why you were able to do the door-to-door because that would literally terrify 99.9% of the engineers out there.

Levi
I was one of them.

Rod
Yeah. Okay, well, but still, I mean, most of them are introverted, and so, you know, and you were able to push through. So, let me ask you this, Levi. There are a lot of people that are listening to or watching the show, and they know they want to be doing this. They know they want more for their family. They’re not happy with their W-2, they consider themselves in the rat race, and out of fear or limiting beliefs or maybe comfort, maybe they’re comfortable, they haven’t taken action yet. What would you say to those people, knowing what you know now?

Levi
I think it really– you have to start by surrounding yourself with the right people.

Rod
Yeah.

Levi
It makes it a lot easier if everybody’s running this way and you’re also running that way.

Rod
Yeah.

Levi
So to surround yourself with the right people, it really makes it a lot easier. But at the end of the day, they still have to take action. They still have to bite the bullet and go for it.

Rod
Yeah.

Levi
So I think the instruction and learning the business and being around the right people can really help progress.

Rod
That’s it. That’s it. Do you have a favorite quote or a favorite author that you really enjoy?

Levi
I don’t necessarily– I have an interesting quote that I thought was interesting from Tony Robbins. “The only impossible journey is the one you never begin”. So it’s kind of along the lines of take me out.

Rod
That’s Tony. I’m surprised. I’ve spent 20 years with Tony. I’ve not heard that one, but that’s a great one. The only impossible journey is the one you don’t take. I love it. I freaking love it. That’s awesome. Well, listen, brother, I appreciate you coming on and sharing some time with us and hopefully, inspiring some people to take action. I don’t care if it’s with us. But, guys, the opportunity is freaking coming, okay? Get up to speed in this business, like, as fast as you can. I’ve got a virtual boot camp coming up in October. You know, text my name “Rod” to “72345”, but by God, get up to speed as fast as you can, because it could be the greatest transfer of wealth in our lifetimes, you know. And people are saying it’s going to be a pretty good size crash. So, we’ll see.

Mark
So, for listeners, go on– today is July, and this probably come out in August or September.

Rod
Right.

Mark
Go on Zillow right now in your local market, and I guarantee you probably just start clicking random properties, multi, single, you will see price cuts all over the place because I’m seeing them right now and I guarantee a month from now and this comes out, it’s going to be even worse. So if you don’t believe us, just pull up the Internet and [inaudible]

Rod
Even better, even better. Even better. Alright, thanks for coming on, Levi. I appreciate it, brother. And we’ll see you soon.

Levi
Thanks for having me.

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 non-stop 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 the word “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”.