Baran, originally from Turkey, has lived in the U.S. for 23 years. With a background in engineering and over a decade of experience in car manufacturing, Baran transitioned into entrepreneurship in 2014, starting businesses in retail. For the past five years, he has been actively investing in real estate. After attending Rod’s Bootcamp and becoming a Warrior, Baran has been involved in 12 units and has partnered with other Warriors to secure deals, collaborating on multiple projects.

Here’s some of the topics we covered:

  • From Immigrant Dream to Real Estate Success
  • How Baran Closed on a 12-Unit Multifamily Property in Knoxville
  • Baran’s Key Role in Making the Knoxville Deal Happen
  • Where This Knoxville Property Is Headed and What’s Next
  • CapEx Demystified
  • Game-Changing Impact of Cost Segregation in Multifamily Real Estate
  • Expert Tips Every Real Estate Beginner Needs to Know
  • Leveling Up To Bigger Deals

If you’d like to apply to the warrior program and do deals with other rockstars in this business: Text crush to 72345 and we’ll be speaking soon.

For more about Rod and his real estate investing journey go to www.rodkhleif.com

Full Transcript Below

00;00;00;00 – 00;00;17;04
Rod
Welcome back to Multifamily Rockstars. So as you guys know, these are the episodes where we kind of do a deep dive into our guest deals and, you know, give you some practical and actionable items for getting started and doing your first deal, especially if you’re brand new to multifamily. And I’ve got my co-host, Mark Nagy, with me here as usual.

00;00;17;08 – 00;00;18;00
Rod
Hey, Mark.

00;00;18;02 – 00;00;21;13
Mark
Going on rod, we get to hang out next weekend in person. Finally. It’s been a while.

00;00;21;13 – 00;00;42;25
Rod
That’s right, that’s right, that’s right, it’s coming. We’ve got our Orlando bootcamp coming up. And it’s going to be a lot of fun. You know, a lot of warriors there, like, like who were interviewing today and certainly a lot of brand new people as well. So it’s going to be incredible networking, incredible event. Everybody always leaves just coming out of their skin after one of these events.

00;00;42;25 – 00;01;00;06
Rod
It’s the only live one I do each year. So today we’ve got Warrior Barron, and I’m not going to attempt to pronounce his last name. I can just tell you it’s complicated and I can. I’m pretty good with vocabulary, so I’m just leaving it alone. But, Baron’s from Turkey. I was just in Turkey, by the way. And I need.

00;01;00;06 – 00;01;13;07
Rod
Yeah, I need to remember the name of the place I was at. I’ll look it up while we’re talking, but, Yeah, I stopped there on a cruise just a couple of weeks ago. But anyway, welcome to the show, my friend.

00;01;13;09 – 00;01;16;21
Baran
Oh, thank you, rod. Thank you. Mark. Thanks for hosting me.

00;01;16;23 – 00;01;24;27
Rod
Absolutely. So why don’t you take a minute and give us a little background on you? You know, you know, a little bit of your story, if you don’t mind.

00;01;25;00 – 00;01;51;01
Baran
Sure. Absolutely. So, I’m originally Turkish, and, I came to us, 23 years ago, and, my background is in engineering. I used to work in car manufacturing and, back in 2014, I start my own small retail businesses and opened locations in Myrtle Beach, South Carolina, Pigeon Forge, Tennessee, and Panama City Beach, Florida.

00;01;51;04 – 00;02;11;20
Baran
And then, I hit, three kids and it was too much, traveling. And I scaled back to Pigeon Forge and, settled down in Knoxville, Tennessee. And I start my real estate journey about five years ago. And, and it has been an awesome journey since then.

00;02;11;22 – 00;02;19;11
Mark
And how it started. What sort of properties did you get into? Single. Did you jump right into multifamily? What did that journey look like? A little bit, actually.

00;02;19;11 – 00;02;42;00
Baran
Mine was little different. So I had been looking for a, various spaces for my retail operations and e-commerce business, and I couldn’t find any warehouse spaces. So I bought a mixed commercial property, and it was a blessing at the end of the day, because there’s a daycare, office and apartment, they pretty much cover more than the mortage payments, and the warehouse came free with it.

00;02;42;02 – 00;02;49;22
Baran
And then I really kind of like it. And, I dig into it a little bit and then, I start investing in multifamily.

00;02;49;26 – 00;02;57;08
Rod
Very nice. Well, I know that, you, you just closed on what is it, a 12 unit in Knoxville.

00;02;57;11 – 00;02;58;12
Baran
Correct.

00;02;58;14 – 00;03;03;03
Rod
Oh, why don’t you tell us about that deal, starting with how you found it?

00;03;03;05 – 00;03;26;02
Baran
Absolutely. So if I had roll back a little bit. I have a buddy in New York, so he works in one of the investment banking as a vice president, and he has a single family portfolio, and he has been keeping asking me about multifamily all the time. I said, buddy, you need to join to what’s program. So we joined together and it has been an awesome journey.

00;03;26;07 – 00;03;37;12
Baran
And after we joined the program, he did his little bit training and, after nine months, we closed our first year.

00;03;37;14 – 00;03;46;17
Rod
Fantastic, fantastic. I guess you you, found out about me at a boot camp as well, just like we’ve got coming up in a couple weeks.

00;03;46;19 – 00;04;08;03
Baran
Oh, that’s correct. I mean, like, I hear it in other mentorship before, but I came to your boot camp, and I like your stuff. I mean, you’re very down to earth guy. And, there were a lot of students and they were reacting and there were a little partnerships forming, and I liked it. So right at the spot, I said, I need to join this program.

00;04;08;06 – 00;04;17;11
Rod
Thank you, thank you. So tell us about this deal. So you, you, where you find it and, describe it a little bit, if you would.

00;04;17;14 – 00;04;40;13
Baran
Sure. So it wasn’t crazy and. Correct. Yes. Correct. And, I’m also a commercial broker. So if there’s a deal I find in MLS or crazy or from looking at anything or markets, I try to look at the deal same day and make the offer same day. I don’t lose time. I don’t, submit letter of intent.

00;04;40;16 – 00;05;03;10
Baran
I don’t waste my time. I don’t waste other parties time. So I look at this property, it was, I made an offer same day. And, one week they call me back. They said, hey, we can work it out. So, it was, nice, property, but the closing was little bumpy house.

00;05;03;10 – 00;05;08;25
Rod
Okay, we’ll talk about why it was a nice property first, and then let’s talk about the speed bumps.

00;05;08;28 – 00;05;35;10
Baran
Sure. Or the first of all, if I, roll back the one of the reasons I, buy multifamily also for the tax advantages, we do, cost segregation, which is the accelerated depreciation. And, this property was sitting on our buy box criteria that we usually do. I usually buy things by myself or is achieved deals.

00;05;35;12 – 00;05;59;25
Baran
And this was small enough, that not too many hands in cookie jar. And the property was only eight minutes from Knoxville downtown. And also five minutes from University of Tennessee. And it was feeding all my five bucks criterias. And, we made the offer and they accept it. And, it was pretty good closing. Okay. We’ll to closing.

00;05;59;25 – 00;06;00;25
Baran
Take.

00;06;00;28 – 00;06;16;28
Rod
Okay. We’ll talk about, so how what sort of financing did you get on it. And, and, and again, if I missed it, did you say that you’re just doing this one by yourself? You did it as a JV or how did what what about the liquid capital, the equity brought into the deal. Who had that how that happen.

00;06;16;28 – 00;06;18;18
Rod
So financing and equity.

00;06;18;20 – 00;06;43;13
Baran
Yes. Sure. Also we bought it as a two partners. The buddy of mine, he joined the program together. But okay. I previously I purchased, seven other properties and they were the ones I did all by myself. And, last couple years, I’ve been using street, credit unions. I mean, they are kind of like semi government to me to deal with them.

00;06;43;15 – 00;07;06;19
Baran
The term sheet, it’s very standard. So and it they’re not very difficult to work with them and their financing is, very good. So I got the 80% LTV and our interest rate was 675. Okay. And, we closed in 40 days.

00;07;06;21 – 00;07;14;01
Rod
Wow. That’s quick. Okay. All right. So. So what’s what speed bumps happened, at closing.

00;07;14;03 – 00;07;17;06
Baran
Oh, man. Now, I’ve, My hair. Yeah.

00;07;17;09 – 00;07;31;21
Rod
My, by the way. Yeah. By the way, this is a question that I asked my panelists at my bootcamps. Every time I say talk, tell me about a time you had a seminar. You had a you had your your nose bloodied and, because there’s so many I mean, there’s, you know, and they’re like, where do I start?

00;07;31;21 – 00;07;44;08
Rod
You know, I’ve got a whole menu of those, but, so, so this is always good to, always good to bring up, you know, some because everybody thinks it’s just a smooth coasting thing. No, you’re going to have things happen. So anyway what that pre frame. What happened.

00;07;44;11 – 00;07;55;06
Baran
Absolutely. So what happened is like you know when you go to the title company you expect they do all your promotions and everything with the security deposit and everything.

00;07;55;08 – 00;07;58;17
Rod
And taxes insurance. Yeah. All that, all that.

00;07;58;17 – 00;08;24;17
Baran
And we were driving to title company to closing day and, and my partner said he meant, what do you want, the security deposit? I said, I’m sure the title company pro-rated. We called and they said, oh, no, we did not, because they are doing 10 to 31 and everything has to be in 1031. The funds needs to pass through and they cannot do the security deposit.

00;08;24;25 – 00;08;49;10
Baran
Proration. So they give you a the closing, their office at 3 p.m., they call them. And they said they told us we need to call the property management company, and we need to go there, pick up the funds from them. And I said, we are one. Are they from the property management company? And by the time it was 5 p.m. Friday nights, and we are going back and forward, back and forward.

00;08;49;10 – 00;09;16;01
Baran
And they said, you do, don’t you trust us? I said, no, this is not a trust. This is doing the right thing the right way. And so what happened is, I gave my, our, LLC bank information. They supposed to wire it to tie, the project management company be prepared to management company. They tried to ach it and they screw it up, and it took about three weeks to get our security deposit.

00;09;16;01 – 00;09;32;21
Baran
And we were not sure because that was the holiday weekend and we couldn’t reach the stellar the other property management company, I mean, title company was very helpful, but we were up in the air if you were able to get close to $15,000 funds.

00;09;32;23 – 00;09;43;21
Rod
Wow. Wow. Well, that’s no fun, but at least you got it. What are your plans for this asset. What are the existing rents. And you know where do you plan to to take it.

00;09;43;23 – 00;10;15;13
Baran
Sure. So it’s a mixture of well one bedrooms and two bedrooms and one bedrooms. Rent. It’s nine hundreds and the market rent is around 1202 bedrooms. They rent it for 1100 and market rent is 1600. So we have an average 3 to 400. Rent bump. And there are a couple problem tenants. And we would like to vet them out, but we are super careful because, you know, this is the very slow time of the year.

00;10;15;15 – 00;10;33;03
Baran
And, so we slowly we, we are going to, change the tenant base. We just would like to have a safe, secure place for the tenants. And the upgrades, we are going to do basic upgrades, paint, flooring and changing to co repeal.

00;10;33;05 – 00;10;36;19
Mark
Do you know how big your CapEx budget is for this as a property?

00;10;36;19 – 00;11;01;10
Baran
Roughly, our CapEx budget for end of this year, it’s going to be around $60,000. This is the number we gave to cost the guys because they are doing the cost. Like right now. We want to do our cost segregation before everyone else because, you know, people are waiting to end of the year. And to me it’s a couple experience before it’s just, you know, so many costs on the schedule at the same time.

00;11;01;13 – 00;11;12;06
Baran
So after nine years of we are not sure because normally we usually get LTC, from credit unions, we couldn’t get this one.

00;11;12;08 – 00;11;16;24
Rod
And because okay, that means loan to cost, that means loan to cost guys okay. Keep going.

00;11;16;26 – 00;11;43;01
Baran
Yep. Yeah. So, it’s going to be coming out of pockets. And you know right now rents are nationwide is stagnated. Some markets are dropping and Knoxville is still holding up. And it’s one of the, nice markets because we still rent growth I think around 3%. But the number of applications drop, and, we just want to be super careful.

00;11;43;01 – 00;11;47;23
Baran
And we also want to wait to election and how things go.

00;11;47;26 – 00;12;04;07
Rod
Yeah. Yeah. Well, that’s that’s that’s that’s up in the air. Hang on one second. I want to just, clarify a couple things that you guys talked about. So, guys, if you don’t know what CapEx means, that’s the amount of money you’re going to spend fixing the place up. It’s capital. It stands for capital expenditures. So they’re not expense items that you expense on the spot.

00;12;04;07 – 00;12;29;10
Rod
They’re things that you capitalize, you know, putting in new roofs, paint, you know, more, more, more extensive type repairs to improve the value of the property. So that’s CapEx cost segregation is a tax strategy where you accelerate the depreciation. And, you know, a typical 20 year straight line depreciation takes 20 years. Well, with a cost segregation. And you you, speed that up by taking each individual component.

00;12;29;13 – 00;12;47;22
Rod
And an engineer looks at it and comes up with its remaining life. And so you’re massively accelerating your first year’s depreciation. And we’ve also still got 60% bonus depreciation. So you know, all of those things make it, make it very attractive to do a cost seg. Anyway. Mark, did you have another question you were about to ask me?

00;12;47;25 – 00;13;06;22
Mark
No, I was just going to say five, you know, 60 K for CapEx on a 12 units, only 5KA unit to get 3 to $400 rent bumps for five K unit. I could see why it’s, a fantastic deal for you there. Now, I know you mentioned, Barron that you’ve done, you know, some stuff by yourself and some JVs, so those might be smaller sorts of deals.

00;13;06;22 – 00;13;19;00
Mark
What what’s your what’s your management style buying these smaller deals. Do you do it yourself. Do you have a property management team a virtual assistant. How do you how do you manage these different smaller properties that you bought?

00;13;19;03 – 00;13;44;20
Baran
This is an excellent question. So, since, I quit my engineering job, I try to technics, everything I do. So, like, I quit 2014 and, VR in 2024 and my, you know, net income per year. It’s ten times what I was making as an engineer. Enough. So I would like to, accelerate this.

00;13;44;21 – 00;13;59;10
Baran
And using the velocity of money 8 to 10 in five years, in order to do that, I tried to set up a system, which I did on my other businesses. The traction system, on my retail and e-commerce business, it’s.

00;13;59;10 – 00;14;09;06
Rod
Actually called it’s called the entrepreneur’s Operating System. And it’s in the book traction. Just to give some, some precision to it. It’s by a guy named Gino Wickman. Sorry to interrupt you, buddy.

00;14;09;08 – 00;14;35;23
Baran
You’re perfectly fine. So, yeah, the thing I like about this concept, it’s I. I need to be nobody because I’m sometimes, you know, like we said, is stealing by ourself, you know, like versus, your team is doing much more, creative, things to do or setting up more for different goals. So, I would like to do the same thing with my real estate business.

00;14;35;23 – 00;14;56;22
Baran
So right now I have a team, all my real estate to manage them with a team. I have a project manager. He’s kind of project manager slash asset manager. And I think also is an advice to other investors. I think. I think they’re a lot of people are leaving money on the table on the asset management side of it.

00;14;56;22 – 00;15;11;18
Baran
It can be hired out. And so I want to implement your system on my real estate business. And eventually, down the road, I would like to be nobody.

00;15;11;20 – 00;15;28;10
Rod
Love it. Love it. So let me ask you this. You know, you, you know, you started out in someone else’s program is actually one of them is actually a friend of mine, but, we won’t name names, but, you know, there are a lot of people listening to this show that haven’t taken action yet. They know it.

00;15;28;10 – 00;15;38;19
Rod
They know they need to go do something. What suggestions would you have for someone that wants to start out in real estate, or just getting started out in real estate? Any any thoughts on that question?

00;15;38;21 – 00;16;12;26
Baran
So first of all, if I put myself in my shoes in 25 years ago, today’s day I would start is a, you know, young person. Not save too much money. I would start with is a house hacking and then I would spend as much as time, money and efforts on training and, the return of investment on, programs like yours is unbelievable because any single you make, it’s much more higher than the cost of this training at.

00;16;12;28 – 00;16;34;16
Baran
So it is so, and also the other thing, I mean, it’s you all this talk about the boot camps, it’s a lot of mindset. Part of it too, because you are pulling the trigger for millions of dollars or like whatever the property you are taking. So you need to be mentally and educationally ready to pull the trigger.

00;16;34;18 – 00;16;41;06
Rod
Yeah. Oh, that’s good advice. As has your experience of the warrior program been to your satisfaction?

00;16;41;09 – 00;16;52;10
Baran
Absolutely. Is the matter of fact. I was in, real estate conference and there were five warriors there, so you get together nice.

00;16;52;10 – 00;17;10;08
Rod
Nice. Yeah, we’ve got to, I don’t know, I think close to 1700 around the country all over. In fact, all over the world. I’ve got other people in Turkey, by the way. Listen, if you’re interested in applying to the warrior program, text the word crush to seven, two, three, four, or five. My warrior is on somewhere between 210 and 220,000 units.

00;17;10;08 – 00;17;12;13
Rod
We believe at this point we can’t even keep track anymore.

00;17;12;13 – 00;17;13;18
Mark
Probably more.

00;17;13;20 – 00;17;30;21
Rod
Yeah, probably I, I but I’ve been, you know, I, I’ve only been teaching what a little over six years. Not even quite seven years yet. So something I’m very, very proud of. But again, text the word crush to seven, two, three, 4 or 5. And, we’d love to help you crush it in this business as well.

00;17;30;23 – 00;17;53;01
Baran
So congrats. I would like to so the, the the guy on the previous coaching program, he was a fantastic guy, just like you. And, anytime I hated you, I gave him a call and run through the numbers. When I joined your program and my phone ring, we were in dinner table. It said Radcliff. I said, man, why is he calling me?

00;17;53;03 – 00;18;05;27
Baran
And you call me wanting to join the program into a couple encouragements, a verse. And they were very, encouraging to hear somebody running the coaching program call you personally.

00;18;05;29 – 00;18;16;21
Rod
Hey, I every, every warrior has my cell phone and and, you know, nobody abuses it. But if they’ve got something, even if I’m out of the country, they’re able to reach me. I talk to warriors every day, but, Well, thank you for that. I appreciate that, right.

00;18;16;23 – 00;18;32;26
Baran
One more thing. Every single book you make, I read it. And, actually, we went to Italy with my wife, and on our way, we read the Five Languages of Love with my wife. It was a fantastic book, and I’m expecting more books. And they stop coming.

00;18;32;28 – 00;18;52;11
Rod
Well, you know, I, I will say this, okay. I charge a fraction of what anybody else charges anymore, and and I’ve never raised my pricing. And, you know, there’s a limit to how many, how many books I can send at this point, but, yeah, but you know, the five love languages. I will tell you guys if you’re listening, you haven’t read that book.

00;18;52;11 – 00;19;07;02
Rod
I’ve given away thousands of copies of that book, and I actually interviewed the author on the show, which was a real treat because he doesn’t do a lot of interviews. He’s a he’s in his 80s. But, yeah, if you love anybody, you need to you need to read that book. You know, I’ve got a I’ve got another question here.

00;19;07;05 – 00;19;26;05
Rod
As you are going through your real estate journey, you know, from just getting started, even pre warrior doesn’t matter when, when, when, when at what stage in time you answer this question. But did you have any epiphanies. You know you were an engineer you know and you and you, you retired from engineering which is a not a low paying position.

00;19;26;07 – 00;19;30;15
Rod
Did you have any moments or epiphanies that you could share?

00;19;30;18 – 00;19;53;02
Baran
Absolutely. So it was more or like is a mindset because what happened is, you know what you don’t know. You don’t know. And there are a lot of things we, we don’t, discover because we don’t know things. So do they. I see real estate. It’s like a gigantic book and everybody’s starts from different chapters. Maybe some people start from the beginning.

00;19;53;02 – 00;20;17;10
Baran
Some people start from second or first or fifth chapter. Because at the end of the day, also, I need to advise to other investors, you know, this is a business and if you do not have it in business experience, you need to get the education, otherwise you are going to fail miserably. That’s the fact. So so since I had some business experience, it’s helped me a lot.

00;20;17;10 – 00;20;34;26
Baran
So I started maybe not from the beginning, maybe chapter one. So that’s the thing. I would recommend to recommend and, the to me, real estate was a fantastic to, to shift my mind because it gives you more freedom to think.

00;20;34;29 – 00;20;35;29
Rod
Yeah. Interesting. Yeah.

00;20;36;03 – 00;20;55;14
Mark
So what’s your mindset moving moving forward here, Brian I know you’ve done the 12 units, some smaller ones I know. Obviously people like Rob do these big syndications do you have any desire to move into bigger deals and do syndications things like that, or do you just prefer to stay in the smaller space and that’s what you’re good at and what you like?

00;20;55;14 – 00;20;59;10
Mark
What’s what’s your kind of what’s your goal moving forward here in multifamily?

00;20;59;12 – 00;21;18;05
Baran
Absolutely. I would like to go to bigger deals, do syndications, but I would like to do it as a, you know, not out of, well, you know, must do, but it’s a burning desire. And I see a lot of, you know, capital raisers call them and they just try to sell things. I don’t want to be a seller.

00;21;18;05 – 00;21;34;20
Baran
I want to be a magnet. And it takes time and it takes accountability, and it takes, some deals, to do. So I would like to make it to the organic, but it’s like it’s using the velocity of money, velocity of partnership.

00;21;34;23 – 00;21;39;24
Rod
Yeah. The velocity of money is is a very powerful thing for sure. Yeah.

00;21;39;26 – 00;21;56;27
Mark
I wanted to share real quick. You mentioned being a magnet. That’s that’s actually exactly what happened to me. I have never raised money except for one deal recently that I did. And it was only because I had people reaching out to me saying, hey, Mark, we’ve seen you do real estate, we’ve seen your success, all these sorts of things.

00;21;56;27 – 00;22;12;20
Mark
How can we get into deals with you? And a deal came across, and that’s why I went out and raised money. It wasn’t something that I did. It sounds like you, you kind of have the same the same mindset, right? Get people to come to you instead of, you know, doing something where you have to go out and force the issue to try and raise money on a deal that you have.

00;22;12;20 – 00;22;13;24
Mark
Correct?

00;22;13;26 – 00;22;23;27
Baran
Absolutely. And also, you know, I do want to create myself in job. I mean, there are a lot of capital raisers. They are on phone call all day long. This is to meet another W-2. I don’t.

00;22;23;29 – 00;22;34;24
Rod
Yeah, I love it I love it. Look through look at life through a lifestyle filter. That’s that’s, so important. Well, listen, are you okay with listeners reaching out to you? If they’d like to do that?

00;22;34;26 – 00;22;37;03
Baran
Absolutely. I will be delighted.

00;22;37;06 – 00;22;49;28
Rod
Okay. I know you’ve got, Byron Investment group.com. Is that correct Byron Investment group.com. That’s the website. It’s fantastic. Perfect perfect perfect. Mark did you have anything else to. Yeah.

00;22;50;04 – 00;23;07;28
Mark
Before we end on that topic for people that do want to reach out to you, how would you describe yourself, Brian? Because you mentioned you’re an engineer. You’ve done a lot of deals yourself. How would you describe your personality and your kind of superpower? So maybe people listening that reach out, they might say, oh, I relate to that.

00;23;07;28 – 00;23;11;20
Mark
Or I, I’m like, Brian, what would you how would you describe yourself?

00;23;11;23 – 00;23;12;08
Rod
Good idea.

00;23;12;09 – 00;23;34;09
Baran
Of. Absolutely. So, mom, is it you know, super superpower. So I know my market is very vast, which is East Tennessee and mainly in Knoxville and also, you know, all the on the real estate side, if anybody wants to reach out and, ask you about the journey, is it, investors or is with the Warriors program?

00;23;34;11 – 00;23;37;13
Baran
I would be happy to give my $0.02 on it.

00;23;37;16 – 00;23;45;29
Rod
No. Awesome. Love it, love it. Pleasure is a pleasure to see you, Baron. And, and, and I appreciate you coming on the show, my friend.

00;23;46;01 – 00;23;48;03
Baran
Good to see you. My pleasure. You, too. All right.