Maintaining A W-2 Job While Investing In Multifamily

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 button 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 just flat out crushing it in this business. And we show you the inside scoop and you know, how they’ve created massive success in their business and hopefully inspire you to do the same. And as always, I’ve got my co-host, Mark Nagy. He’s the director of my massive action team on the call. Mark, what’s up, brother?

Mark

Hey, Rod, not too much. I know it’s been a few weeks since we’ve done one of these since we had our boot camp back in December. But man, one of the cool things is that I know our warriors are now approaching almost 50,000 doors. Looking back from you know, a couple of months ago, a few thousand more than what it was. And we’ve got a great guy here who’s contributed to that. So excited here and learn.

Rod

Right. You know what’s funny is I just did a podcast episode last week, and in my head, I thought we were still at 45,000. I forgot we’re at almost 50,000. It’s like you know, over 1000 a month that we’re adding. In fact, I think in December it might have even been 2,000. So, you know, it’s just crazy. But listen, we’ve got an awesome guy on the show today. His name is Chris Freeman, and Chris, his company is High-Tech Freedom Capital. He also has a podcast called “High-Tech Freedom”. So you want to check that out, but you know, we’re excited to have him on. He’s really killed it in the less than a year that he’s been a warrior. He’s now a general partner in 333 doors. He’s got 80 under contract, another 30 under accepted LOI. So I don’t know what that adds up to, but it’s over 500 in less than a year. So really excited to drill down. Chris, welcome to the show, brother.

Chris

Yeah. Thank you, Rod. Thank you, Mark. I’m really excited and honored to be here.

Rod

Thank you. So why don’t you start by just giving us a little background on you? Because I know you did this with a W-2. Correct me if I’m wrong. So why don’t you just give us you know, a little bit of your story?

Chris

Yeah. So I started initially in real estate way back in 1999, but when I say started, I bought a Duplex, moved into half of it, worked in high tech sales, and doing really well. And you know, over that time, I was building up a nice stock portfolio, using my commissions to continue to invest in the market. But at that time, you know, I’m in the industry of technology. And so where did I put all my investments? Technology. And so when the dot-com bubble hit or burst, you know, I watched my portfolio crater. My 401K crater. And at the same time, I had my future partner that was local. He’d been already doing multifamily for 30 years in the Portland, Oregon, market. And it’s interesting to watch him just continue to have cash flow coming in and not change his lifestyle in any way. While a lot of his really well-to-do friends were starting to dial back the international travel, the dining out, going to the College football bowl games, all the things that they really enjoyed doing in life. And so that was really where I was like, you know what, I need to shift. And so that was when I started a journey of just slowly investing locally in smaller, multifamily assets. So fast forward, we built up 110 doors locally, but self-managing it. Doing everything. And at some point, I realized, wow, you know, it took as much work on a four-unit as it did a 20 unit. Why don’t I look at scaling up to something bigger? And that’s when I started to kind of slow down, kind of backtrack a little bit to figure out what don’t I know about syndicating, doing bigger deals, working with partners because I was always very much a mindset of you know, I just have to go do this myself and don’t share with anybody. And so that’s actually when I first got exposed to you and the warrior program, and you know, I was very interested in figuring out how do I– if I’m going to go do something bigger, how do I learn what I don’t know and really be you know, a little bit cautious to make sure that I’m not miss stepping as we start adding those zeros to the deals.

Rod

So you joined, like, in February of this last year, right?

Chris

Yeah. It’s hard to believe. Yeah. 2021.

Rod

Crazy. Crazy. Now, were you in Orlando at our boot camp? I don’t recall.

Chris

The one that just happened.

Rod

Yes.

Chris

I was. Yeah.

Rod

Okay. Okay. Forgive me. You know, thousands of people a year, I lose track.

Chris

That’s great.

Rod

Okay. Yeah. And the reason I ask is I asked you about this before we start recording. You’ve got your vision board behind you on the wall, which is freaking awesome. And guys, I’m telling you are going oh, that’s foofy. Yeah, well, it may be foofy, but it freaking works. Okay. Chris is a great example of this. Well, that’s absolutely awesome. So talk about your first larger deal that you did as a warrior, as a GP, you know, talk about how it came together. You know, I don’t know if a lot of the warriors do the deals with other warriors. I don’t know if it was done with other warriors involved. But can you speak to that a little bit?

Chris

It was.

Rod

Oh, it was.

Chris

It was actually, you know,  can I answer that in a slightly different way? Because the first deal was really also the challenge of finding my first partner. And you know, when I first joined, I think I knew what a lot of people do is they try to get good at everything. And I was running around trying to get great at underwriting, trying to get great at working with brokers, trying to get smart on all these different markets, trying to get good at capital raising. And you know, what was happening was I wasn’t really getting great at any of those. And I was having calls every week. And so what I decided to do was, who do I see as the one or two people I really want to work with you know, as a potential partner? And so I started to put all my energy and focus into figuring out what challenges are they having and then try to solve those. And so I identified a person who had a lot of deal flow, and he seemed to be really busy. And you know, what I found was that you know, he’s going to need some help at some point. And so I just started you know, pinging him every once in a while, just letting him know that, hey, I just had another person in my network that is interested in investing 50K, hey had another person here 100K. Hey, by the way, would you mind sharing you know, what is the latest deal that you’re working on so I can continue to warm up my network for what might be coming down the road. And so my thought was kind of more of a rifle type of approach is you know, if I can solve his problems and show that there’s some potential there, maybe he’ll look to me as somebody that can help him out along the way. And it’s funny, because, right– I mean, visually, I remember this the day I was starting to get frustrated and thinking that, hey, it’s not working. My whole game plan is not working. I need to just go try something different. He called me. He said, hey, do you want to join us on this deal out in North Carolina? So then you know, fast forward, we ended up doing it.

Rod

So this is a warrior.

Chris

This was a warrior.

Rod

And so you brought– so how you approached him. And what’s interesting is you said you need to learn underwriting and you know, deal flow and so on and so forth. But it sounds like you honed in on investor relations.

Chris

I did.

Rod

And, guys, that’s how this works. Okay. You figure out where you can add value. If it’s finding deals, finding the money investors as Chris did here. You know, certainly, and Chris, you do other things, obviously besides, just raising the money on a deal, you have to, by the way, that’s the law. But the bottom line is you know, you look at where you can add the most value. And so you focused on adding value and it materialized. So no, I love that example, brother. Awesome.

Chris

You know, the other thing that I learned from that was you know, it was exciting to be in that first GP. But really, the work was all right now that I’m in it, how do I continue to demonstrate value? And so that’s where I was, like, all right, I really need to step up how I add value. So every opportunity along the way, I was really looking for things that I could do to offload from other team members to help them out. So maybe it was helping create a better email campaign for the webinar. They were struggling a little bit with the investor presentation, just simple things, like the graphics. You know, they weren’t working the map, it just wouldn’t work. And so I said, I got it. Let me go work on that. Or even creating, like, in the investor portal, just creating a video of how the investor needs to go create their profile, go do their subscription, and just kind of walking them all through the steps just to make it a little bit easier for everybody. And you know, the way I looked at it was, besides that one partner, there were other partners on the GP. Those could have been future partners down the road. So to me, you get one opportunity to provide a really good first impression. And so I felt like you had to over-deliver on that first deal.

Rod

That is a recipe for success. I just want to hammer that home. I got to steal all the conversation here, but I want to hammer that home that what you did is an absolute recipe for success. How can I add the most value? How can I continue to add value? How can I over-deliver? And obviously, I mean, it’s obviously working. You’re going to be over 500 doors here in the next couple of months, you know,  in a year. That’s awesome. Awesome. Awesome. Love it.

Mark

I’d love to even go a step further back than that for the people listening to where it’s not blatantly obvious as it is to us because I know you have sales experience and so you know, raising money influence that might be a part of it. But how did you even decide before that? What value do you want to add to a team? How did you even decide hey, this is my skill set. This is what I want to do to add value to somebody else.

Chris

Well, you know, I’ve heard Rod talk many times about you know find the things that you’re good at or you like to do. Don’t go do something if you don’t like to do it because you’re not going to do well at it. And after having some smaller multifamily units, I knew I really didn’t like managing them. I didn’t like asset management. I didn’t like the maintenance piece. I love the business side of it. I am a salesperson, so it just felt natural for me to focus on some of the capital raising pieces, some of the marketing, the branding, creating the email templates, it’s within my wheelhouse so why not leverage what I’ve been doing in my W-2 for 25 years.

Rod

Love it, love it. So are you still with your W-2? Are you still doing this on the side?

Chris

I am. Yes.

Rod

Okay. So let’s talk about that for a minute. Okay. Do you have a family? Do you have kids?

Chris

I do. 16 and 18.

Rod

Okay. So you’ve got a W2, full-time. You’ve got family, you’ve got kids. How do you balance that and still deliver in every area of your life? You’ve heard me talk about my greatest regret in life with my kids and not you know, being distracted and everything else. I know you’ve heard that conversation. So talk about how you manage that?

Chris

Yeah, you know, a big part of it comes down to focusing on outcomes that deliver results, right? There are so many things you could be doing, but I’ve learned over the years just being in really a high-performance sales leadership type of role. There’s always plenty of things to do to keep you busy, but a lot of them just don’t matter. I mean, you could just put them on the list, forget about them and come back 30 days from now and they’re not going to deliver revenue. They’re not going to deliver results. I try to focus on the highest priority tasks. The other thing I would say is somebody’s out there with a W-2 job, you have to put your W-2 job first, you owe it to the employer. If they’re writing you a check, you have to deliver and you owe it to them. It’s just the right thing to do. So I’ve always kept that as a priority. But then how do I take a few hours each night, a few hours on the weekend to maximize my multifamily time? And so I do the time blocking. Carve out time for the kids, carve out time for you know, we’re not doing dinners every night, but you know, one or two a night just trying to be realistic and being very intentional. And I use actually a paper planner, and I map out my quarter, my month, my week, and try to be very intentional about some of those big things that need to get done.

Rod

I love it. Hey, those of you listening. January 1st, New Year’s Day, I did a goal-setting workshop on my Rod Khleif official Facebook page, and at the tail end of that, I did my weekly planning process, and a lot of the things that Chris just mentioned are part of that process. You know, prioritizing, focusing on you know, in my case, income-generating activity was one thing I struggled with you know, instead of the busy work, but also blocking time and you know, utilizing the Pareto principle to do the 20% that gets you 80% further. And so if you want to see that, just DM me on any social channel, I’m on every single one of them, and I’ll get you the link so that you can watch that. It comes with a downloadable guide that’s free, and it’s just a really powerful way to start off the year since here we are on January 4th recording this. This will go live, probably this week. So you know, get in there and do your goals. How are you going to get anything if you don’t know what the heck it is? So get in there and do it. It’s free. I’m not trying to upsell you. I don’t even capture your email address. Just get in there and download the guide and do it. But again, stay for that planning process. It’s the last 15 minutes of that goal-setting process because it’s so freaking powerful.

Mark

Beautiful.

Rod

Yeah.

Mark

I totally agree with that. And even on what Chris just said, the goal-setting. Yeah. I mean, that’s probably one of the things that makes it easy to time block and put time into multifamily when you’re working at a W-2 job. But I know you have a unique kind of story here and that you did some doors on your own before you became a warrior. I guess with that trajectory, a lot of people would listen to that and say, Chris, you were doing great on your own. You were making a good income. Everything was doing great, I guess. Why did you even decide to join a group like ours and become a warrior, to begin with?

Chris

Yeah, it’s a good question. So you know, when you have– most of our buildings are ten units, 20 unit buildings, an eight-unit, you know, nine-unit.

Mark

It’s a bunch of small ones put together then. Correct?

Chris

Yeah. Just to make up a portfolio. And early on, I just envisioned that I’ll retire and I’ll spend 20 hours a week driving around working on my properties. You know, after doing it for 20 years, I was like, I don’t want to do that. That’s not what I want. I had different goals. You know, originally, the goal was I want with the family, 300 units totally paid off. And this is before I knew there’s different ways to do anything. But the idea was that would create all the freedom to do what we wanted to do, to give back the way we wanted to give back. And what I learned was that it’s not so much owning a unit outright. It’s just the cash flow. And so how can I scale up and create a better quality of life? I do it with other partners because I’ve always been part of teams. And what I’ve learned was I had one great partner here locally. He was older than I was, and he’s sort of aging out of the business. And I was sort of a man on an island, and you know, it wasn’t fun. And I’ve had so much fun since joining the Warrior program and going to the boot camp and networking with people. You know, when I walk away from an event like that and it’s like going to a sales conference in my W-2 job. You’re jazz. You just had all these great ideas. You go back, you start writing them down. And you know, it was less about just wanting to go bigger and just wanting to go bigger with people.

Mark

How long did it take you then? Real quick, just for some context. How long did it take you to build that portfolio on your own? Just using your own money?

Chris

Yeah, 20 years, 20 years. And what we did was we would buy, I think, bought my first duplex, 1031 that into a 15 unit building. But one thing that we did, which I just couldn’t recommend more, was we never took any cash out. We left it in the account, just kept working the W-2 job, then you know, build it up, throw a little bit more cash in there from savings and then go buy the next one. So now we started to get compounding on top of compounding and you know, it started to scale. We were able to go from the four to an eight-unit building to the 22 to 26 unit building. And that’s when I said, alright, well, how do I go from 26 to 100? Well, that’s a different ballgame.

Rod

Yeah. Let me tell you, I had 800 single families and small multis, and that you can imagine the brain damage. Of course, I had my own management company and everything else, but it’s brain damage and it’s unnecessary brain damage because you can accomplish that and more with larger multifamily. You know, and obviously, that’s why you joined our program. By the way, guys, if you’re interested in applying to join the Warrior program, text the word “CRUSH” to “72345” and we’ll have a call with you to see if you’re a fit for us and we’re a fit for you again. Text “CRUSH” to “72345”. And as Mark said, we’re around 50,000 units owned and I’ve only been teaching for four years. So I’m super freaking proud of that. And I think that’s my greatest accomplishment besides my kids. But anyway, so let me ask you this. What actions would you tell a listener to take, Chris, if they’re thinking about you know, getting out of flipping or wholesaling or single-family properties? This is not a plug for the warriors, but please don’t answer it that way. What would you recommend to someone that’s you know, on the fence about getting into this business? You know, maybe has a high-paying W-2 job like you do, you know, and wondering how to balance all that and still go about doing what you’ve done so successfully.

Chris

Yeah. I mean, I would definitely start by just getting surrounding yourself with some other people that are doing it, whether it’s a meet-up or some virtual calls, and just start to get more exposed to the environment. And you know, if you’re more comfortable starting small of you know, maybe do an LP passive investment. I mean, I work with a lot of technology professionals that are interested in real estate, but they have no time. They’re like doctors, lawyers, they just have no time, but they want that exposure. So you know, maybe do a passive investment and then watch and learn along the way. I did that and you know, it definitely exposed me to the processes and the systems and the legal piece of it, which you know, saved me a lot of time as I was progressing down the journey of doing bigger deals.

Rod

And there really are a lot of you know, even very well-paid people in the tech industry that aren’t making what they really want to make or have the ability to retire you know, just from that work, to have the lifestyle that they really want. Would you agree with that statement?

Chris

Totally. And if I could just tell a quick story, what really kind of spurred me on. So I’ve been doing– I’ve been working on scaling up, but this idea of kind of niching down and focusing on the high tech sales professional. It’s a person that I know. That’s what I do. And I remember years ago, I was up in one of our remote offices when I was working for a company. I was looking at a guy there who I knew as a sales rep. He’s in the office. He’s you know, a little bit older. I won’t say age, but I’ve been questioning, why is this guy still grinding it out as a sales rep? When I know he’s crushed it, he’s hit his quota. He’s exceeded his quota, fully funded his 401K. Well, what I learned over time was his lifestyle continued to creep up with you know, the earnings. And then when it came time for maybe that time to retire, his 401K couldn’t fund that lifestyle. And that’s when I was like, you know, I don’t ever want to be in that position. And I also want to create an additional stream of income, which is why I really focus on real estate.

Rod

Yeah. Let me just one thing before your next question, Mark. You know, you said something else about your lifestyle and wanting to give back and contribute. And guys, you know, I will tell you, I seem to attract people that want to do that and just know this. Power moves to those who serve. So when you give back, you get back ten-fold, a 100 fold, a 1000 fold. So I just wanted to draw attention to that comment. Go ahead, Mark.

Mark

Yeah. Well, in every way. I mean, Chris was telling about his first-team experience as a deal. And what was the first thing he said? He said, I went and found somebody and I figured out, how can I add value to them and give to them? Right. He didn’t think going into the warrior group hey, how can these warriors add value to me? He thought, how can I add value to them? And those are always the most. I’ve seen that over Rod, obviously, you have as well, but we see that over and over again. But for someone brand new, Chris, if you were coaching a brand new student, obviously, you’ve been in this 20 years. What do you think you would make sure that they learned education-wise in the first 30 days? First one or two things.

Chris

Yeah. It’s an interesting question. I would start with, why are they interested in the first place. Let’s start with you know, why even look at real estate? What are you trying to achieve? And then from there, I would focus on some fundamental basics, you know. I think confidence comes with competence. And so when you start learning some of the basic terminologies, learning some of the lingoes and you focus on that every day for 30 days, man, after 30 days, you’ll be surprised at how much more comfortable you are just having a conversation about the business.

Rod

That’s a really good answer. So what are some lessons you’ve learned? Maybe some mistakes you’ve made and how those mistakes or failures have set you up for you know, future success. Can you speak to that? Answer that any way you like.

Chris

Yeah, you know, I’ve definitely had some challenges. I’m in one right now, and I had one earlier in my career, but you know, we had one deal where back in the day, I was not paying attention to the details, not paying attention to you know,  as close to the finances as I wanted to. And we had this fourplex. And Oregon is really unique in a way that they don’t raise property taxes more than 3% in a given year. It’s capital. Okay. And so I had a fourplex that went across two tax slots. One tax slot had no assessed value. The other one had everything. Well, my partner was paying the bills at the time, and we got the tax bill. They went in and reassessed or kind of re-swizzled the tax slot and spread the value across both tax slots more evenly. But when they did that, they raised the price on both tax slots. And when you only have a fourplex and the taxes go up by two grand, that’s a big impact on the NOI.

Rod

Sure is.

Chris

So, I missed it. And so then the next year, I’m looking at going, why is this higher? You know, this doesn’t make sense. And so I looked into it. I went through the appeal process, went to the volunteer board for the county, and they said, we totally agree with your case. You got screwed. But you missed the window. And that was just an example of not having– and you know, it was also all paper backed. And so we didn’t have the SAS systems to track everything. But it was a good early lesson on a small deal. Pay attention to the details, pay attention to the numbers, don’t let things go too long, address it head-on, and just deal with it.

Rod

No, I love it. So let me ask you this. And it’s kind of a two-part question that again, you can pick one part of it or just answer it any way you like. So what are some important questions that you think someone should ask themselves before they get into this business? And then the second part of the question is, what do you think it takes to become a multifamily investor? You know, so the questions you might ask yourself and then what do you think you know,  it could be qualities just answer it any way you like. I don’t want to preframe it.

Chris

Well, I think those two questions, I’d probably lump them together. If you’re going to get into it, I really think you need to get into it with a long-term deal. Right? You just need to be thinking, all right. I’m going to do this. And I’m going to do this with a goal of 20 years. Because it’s not a get rich, quick business, as you all know. And sometimes you don’t see these huge results on day one. In fact, you know, if you did, you probably got lucky. But it’s the consistency over time doing it day in, day out, month in, month out. In fact, I’ve had this conversation with people that were thinking about leaving their W-2 job, to want to go jump into real estate. And the first question I asked them is, hey, are you jumping into real estate because you’re totally committed, or are you running from something? If you’re running from something, you need to get your mind straight first before you jump in, because the reality is you’re going to have to work as hard if not harder, and really work as hard as you’ve ever worked for the first five years to create the next 15 years of kind of what you’re looking for in terms of a dream.

Rod

Yeah, people have done it in less, but yes, five years is absolutely doable. I’ve seen people do it in three, but you know, completely build the life they want, but great answer. And actually, now I’m hem hawing because that kind of ties it. Yeah. Go ahead, Mark.

Mark

What’s the next thing for you then, Chris? Obviously, you did 110 on your own. I think you said 333 now, and I think not 30. I think you said you have 130 under contract now, correct.

Chris

LOI. And then 80 in-contract.

Rod

Yeah. He’s got another 210. That you know, probably close in the next couple of months.

Chris

It’s a good question.

Mark

Is it a retirement vision? Is it a scale? What’s the vision for you?

Chris

Yeah. So I’m actually having a lot of fun. So we just launched our podcast, “High-Tech Freedom” on January 1st. And it’s not a real estate podcast.

Rod

What is it all about?

Chris

It’s a podcast for tech salespeople where I bring on other high-tech sales professionals that have crushed it. Entrepreneurs thought leaders to share insight. Best practice. Because the general theme of the podcast is you first need to learn from the best in order to earn like the best. And then you know, once you do earn it, how do you take those dollars and reinvest it to build additional income streams to create that freedom that we’re looking for?

Rod

Sure, guys, just so that you understand how brilliant that strategy is. There are obviously a lot of high-tech professionals that don’t want to do this as an operator, and they would rather invest passively. Chris is creating reach by adding value again, adding value to that community, which you can do in any niche community. In fact, I can’t tell you how many Warriors I’ve got that have podcasts. There are dozens, literally or have meetup groups or have LinkedIn groups or have large Facebook groups with sometimes ten to 20,000 people or you know, all of these things to create reach, so that when they have a deal, it’s easy to find the money for it because they’ve already added value and built relationships. So I love the fact that you did that, my friend. And you know, good luck with your podcast.

Chris

Also, I just wanted to thank you because we did have a call and you gave me some resources and some guidance, and some tips. I really appreciate that.

Rod

Of course, I completely forgot. So thank you for reminding me.

Chris

It’s alright.

Mark

Well, I was going to say real quick. It’s creative for some of these people that are listening that are maybe in the tech industry or whatever, and they’re not outgoing. They’re not sales, maybe they’re behind the desk, engineers, whatever. And they’re like, I don’t want to go out and talk to people, build relationships. That’s a great idea. Start a podcast to where it’s just you in your house talking about something that you enjoy. Add value to others.

Rod

Or interviewing experts and you’re perceived as the expert just by being the host. You don’t even have to have that incredible knowledge base to host a show and you know, just have to be, you know, asked the right questions. So, you know, you can be faking it till you make it honestly by hosting a podcast or a meet-up where you bring in you know, outside experts. That’s a very, very sound strategy. Obviously, you are an expert, Chris, but again, you don’t have to be to create reach in any number of ways. Well, listen, brother, I really appreciate you coming on the show, Chris. It’s been a hoot, and it’s great to see you. And I appreciate you and am excited to see what– I know you’re going to crush it in 2022. So really excited to circle back with you in a year and see where you’re at then.

Chris

Well, thank you, Rod. Thank you, Mark. I really enjoyed it.

Mark

Thanks, Chris.

Rod

Thanks, buddy. All right. Take care.

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. That’s MentorWithRod.com or text “CRUSH” to “72345”.