Ep #231 – Lennon Lee – 31 Year Old Venezuelan Immigrant w/ a $100 Million Multifamily Portfolio

What you will learn:

General Partners vs Limited Partners
The 3 components the banks look at
A Curated Network of Operators
The Value of Group Meetups
A Framework for Bringing In Investors
What is a “Stabilized” Property?
Why not to use cash flow for Cap Ex
Property Management: Self Managed vs Third Party
Finding Operators to Partner With
Importance of Stress Testing Your Deal
Understanding Exit Capitalization
Importance of Self Awareness
How to Mitigate Your Weaknesses

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Full Transcript Below:

Ep #231 – Lennon Lee – 31 Year Old Venezuelan Immigrant w/ a $100 Million Multifamily Portfolio

Rod Khleif: … thrilled you’re here. Today you’re gonna enjoy our young guest. This guy is 31 years old, and already involved in $ 100 million worth of multifamily properties.

Now, he brings money to deals, rather than operates the deals. We’re gonna dig in to how he does that. Lennon Less is his name, and he’s with BLD Capital Group. Lennon, welcome to the show my friend.

Lennon Lee: Hi, Rod. Nice to be here. Thank you for having me. I’m excited about this.

Rod Khleif: Absolutely, very appreciative of your time. Let’s go back to how you got into the business. You started to tell me before we started recording, tell my listeners how you got into the business and how you got to where you are now.

Lennon Lee: Definitely, for sure. I actually started in real estate in 2009, when my family and I came to this country. I actually moved in 2010 to the United States, from Venezuela but in 2009, we had bought a few condos, and then in 2010, we bought a single-family home.

We built this small portfolio of single-family. I was managing those for, I’ll say, six-seven years, until 2015…[overlap talk]

Rod Khleif: In Miami?

Lennon Lee: In Miami. Yeah, everything in Miami. That’s when I actually started looking into other avenues to move that capital because it wasn’t making sense anymore where I was parked in those houses. So I started looking into multifamily. Then I started studying, reading books, podcast, the whole thing.

I found about this syndication, and I started partnering up with these guys as a passive investor.

Rod Khleif: Partnering up with operators.

Lennon Lee: With operators, yes.

Rod Khleif: People who are syndicating. Okay. And you came in as a passive investor.

Lennon Lee: Yes, sir.

Rod Khleif: Okay, and then how did it progress into where you are now?

Lennon Lee: Well, actually, I started as a limited partner in a multifamily syndication. People in my network, know I started to talk to people, my friends and family, about what I was doing and they got interested.

As that interest grew, also my relationship with the operators started growing. I started building partnerships with them, where I could not only invest as a limited partner on future deals, but also participate on the general partnership with them by bringing value to the table in the form of equity from my investors.

Rod Khleif: Okay. Those of you that are brand new, obviously, in any syndication, there’s a general partnership group and then there’s the limited partners that invest in the syndication.

Most first time operators, they’ll find a sponsor to help them on the general partnership side because there are three requirements that the bank will look at, or your source of debt will look at, and those are experience, net worth; net worth equal to loan amount, and liquidity, 10% of the loan amount in post-closing; liquidity after you close. What’s amazing about this business is that you can satisfy those requirements with one person.

You started as a limited partner, as an investor in someone else’s syndication, then you saw the writing on the wall, and thought, “If I can bring money to deal, I’ll get in as a GP, on the GP side, and be able to share in the general partnership share of the deal.”

Let me ask you this, how did you develop relationships with… Let’s drill in to how you developed relationships with other investors to bring them into operators that you developed partnerships with? Let’s start with the investor side, and then we’ll talk about how you developed the relationships with the operators. But let’s start with investors.

Lennon Lee: Definitely. That’s a great question, Rod, actually, because those are the two main parts of my business. It’s always building relationships. On one hand, it’s with my investors, and growing that investors’ network.

And on the other hand, it’s actually building a, I’d like to call it a curated network of operators. Not only for myself to invest in but also, like I said, to bring my investors in.

On the investor side, initially, like I said, it’s been all friends and family, at the beginning. People in my immediate network, center of influence, I like to call it.

As that started growing, in terms of the relationship with the operators started growing, I had more deals to present, so obviously, I was in more need for more investors and growing that.

The way that I’ve done it is basically focusing on adding value first, and through education, and talking to people about what I’m doing.

Rod Khleif: So like one on one? Or did you have any sort of a group format—webinar, a PowerPoint presentation, meetings…?

Lennon Lee: Yes. Actually, I started a meet-up group about a year ago, here in Miami. It’s called the Multifamily Investing Club. That’s been all about… Honestly, I started the group to scratch my own itch, to talk real estate at least once a month, with people that were obviously more experienced than I were. Bringing industry experts to these meet-ups.

Rod Khleif: Right.

Lennon Lee: I started adding value to people like myself that actually were actively looking to do multifamily deals. The group is not necessarily focused, or the goal of having the group, or the meet-ups is not about actually sourcing investors, passive investors, but just providing value, putting yourself out there.

Rod Khleif: Right. But the reality is, that’s the by-product of it.

Lennon Lee: Exactly.

Rod Khleif: Guys, those of you listening, if you’re not in my big multifamily group, there’s almost 16,000 people in there now. There are meet-ups that are all over the country, and what Lennon’s talking about here is a fantastic way to, first of all, get immersed in this business.

Secondly, be around people that are motivated, want the same thing. You’re immersed in it. You’re learning the nomenclature. And If you’re the one that sets the meet-ups, you’re kind of in the position of authority. You’re deemed as an authority figure.

I’m not surprised at all that, I’m sure you got a lot of investors based on that experience, just adding value, educating them, adding value to them, and then a lot of people will go to those things and just decide, “Maybe it’s easier for me to just to passively invest.” Do you agree with me Lennon?

Lennon Lee: Yes. Definitely.

Rod Khleif: Okay.

Lennon Lee: 100%. That’s been the goal all along, to educate people… ‘Cause my story… And I wanna touch a little bit about this because this is actually, the way that I’ve been approaching the whole business. It’s been actually trying to talk to myself in 2009.

When we got here in 2009 we were looking to invest in US real estate, and the only option that we had in our minds was just to buy a condo, or house and just rent it out. We didn’t know anything else.

Rod Khleif: Right.

Lennon Lee: The way I’ve been going about it in the meet-ups, articles that I write, the conversations that I have with people is just about educating them. Letting them know that there’s options. And that’s not only what we see in the TV shows, fix and flip… There’s a whole realm of options in real estate. That’s what I go about in the meet-ups and [bad audio]

Rod Khleif: Sure. And anytime you add value, and you give back, and you help people grow, it comes back to you exponentially. As evidenced by your success, and in putting deals together, bringing in investors, combining investors with partners.

You educate, okay, which is a fantastic way to do this… Guys, if you’re serious about this business and you’re in a town that doesn’t have any multifamily meet-up, you are crazy not to start your own, and get together even if it’s just five or six people to get started.

I’ve got a bunch of coaching students; I can’t even count them all that have started meet-ups in their town. Typically, within a month, they’re at 50, 60 people because everybody wants to escape the rat race and get financial freedom… Fantastic. I’m really glad you brought that up. That’ll hopefully inspire some of my listeners to do the same thing.

Let’s drill down on when… So you started a relationship, you add value to someone. How do you approach a conversation about investing? Do you have a stock list of questions that you ask a potential investor? Talk about that process, how you bring an investors in. Do you have a sample deal package that you show them? What’s kind of the framework for bringing investors in?

Lennon Lee: Yes. Definitely. The first thing, before anything else, before I actually start asking questions, I try to focus more on listening to them, and actually asking just one question, an open ended question. It’s just to get them talking, and get to know about them.

[00:10:00]

Lennon Lee: What their goals are? What they’re looking for? Because these investments, or any investment really, it’s not for everyone.

Rod Khleif: Right.

Lennon Lee: So I’m trying to understand what are they looking for. Like is this really something that I can offer it to them, that I can provide value to them, or is it like I’m not doing them a good service with it. It’s all about listening. Then the questions, obviously, about structures, returns, numbers, etcetera, start flowing, but in the other direction, so they start asking the questions, that’s the way I like to approach it.

Rod Khleif: Okay. Okay. Instead of a presentation, you just let it flow with questions, which frankly, is the best way.

Lennon Lee: Yeah.

Rod Khleif: No question. No doubt about it.

Lennon Lee: Definitely.

Rod Khleif: Guys, those of you listening, you really need to find out what an investor or potential partner’s idea of success in an investment is, because it can be completely different than what you think.

Lennon Lee: Right.

Rod Khleif: People see about people that invest in high-tech, and pre-IPO, and within a year or two, they make 100% on their money, or more. That’s not real estate. Real estate is more long-term, and so you really wanna make sure you’re aligned with what they want. Would you agree with me Lennon?

Lennon Lee: Definitely. 100%. I actually wanted to jump in and talk exactly about that.

Rod Khleif: Okay.

Lennon Lee: It all starts with alignment of interests. I think that’s the best way to do it because in this industry, what we’re trying to do first and foremost, for our investors and for myself, really, it’s capital preservation before anything else.

Rod Khleif: Sure.

Lennon Lee: So having all these strategies in place, and that the structure is in place to do that. And the investors are sure that everyone’s playing the same game, and going after the same goals. It’s what’s most important. [overlap talk]

Rod Khleif: Right. So no matter what, we don’t lose the money.

Lennon Lee: Yes.

Rod Khleif: We don’t lose the principal.

Lennon Lee: Yes.

Rod Khleif: That’s capital preservation.

Lennon Lee: Definitely.

Rod Khleif: Speak to some of the thing you look for to reassure an investor that you’ve done everything you can to preserve capital. I’d like to hear your take on that.

Lennon Lee: Definitely. The way I approach it, the way we see it… and that’s why I’ve built relationships with very specific type of operators that align, envision, and the strategy with what I am looking for. In our specific deals, we try to go for what… The main thing, would be long-term debt and that’s something that I know you always talk about and especially, this late in the cycle

Rod Khleif: Right.

Lennon Lee: That’s something that we always look for, long-term debt.

Rod Khleif: What is your definition of long-term? What’s the minimum?

Lennon Lee: Seven years.

Rod Khleif: Yeah. Good. Fantastic. Okay. Wanna make sure we’re on the same page. Awesome. Okay…

Lennon Lee: That being said, we have done a couple of deals with some bridge lending, at around five years.

Rod Khleif: Well, yeah. But the idea is to get out of that bridge debt and get agency debt well before the five-year horizon.

Lennon Lee: 100%, yes.

Rod Khleif: Right.

Lennon Lee: I wanted to mention that.

Rod Khleif: Okay, guys, those of you brand new. If you’ve never listened… When you find a property that is not stabilized… There are different definitions of stabilization, that most common one for agency is 90% occupied for the last three months. If you find a property that is not stabilized, and you wanna take it down, you get a bridge financing. It means just what it says. It’s a bridge. It’s a bridge between you buying the property and getting the ultimate non-recourse agency debt, which is the belle of the ball.

Once you stabilize it, or once you reposition it, and you fix it up and you get the occupancy up. That’s the scenario that Lennon’s just talking about.

Lennon Lee: Yeah.

Rod Khleif: Tell me… so you look for great operators, we’re gonna talk about how you do that, in a second, but talk about some of the other things that you do, that you look at in that whole capital preservation- save the principal conversation? What other sorts of things do you look at?

Lennon Lee: The first thing, it’s related to the debt, and obviously, cash flowing properties that are stabilized, just because of that same reason. But then, also, one of the things that we realized, after studying other cycles and with what’s happened in 2008, were two things, people were going into these deals with supposedly a business plan to do a renovations, or add value in some way or another, but they were planning on doing that out of the cash flow out from the property…

Rod Khleif: Oh, god no… I’m really glad you brought that up.

Lennon Lee: Obviously, when the down turn came, occupancy was lowered that cash flow wasn’t coming in, you’re not able to perform on your business plan, and that’s how you get into trouble. We bring all the capital for… [bad audio]

Rod Khleif: All the capex.

Lennon Lee: Yes, at the moment of closing, for all the renovations and all the business plans. If something happens, during the hold of the property, then we’ll still have reserves, we still have the capital there to actually deploy it or not, depending on what happens. That’s the second.

Rod Khleif: So guys, let me stop you there brother. What he is saying basically is… and I have coaching students that ask me, “Hey, I wanna buy this deal and we’re gonna use the cash flow to do the capex.”

“Eeenk! No, you’re not gonna do that.” You’re gonna raise enough money so that all the capex is raised before you close. And some operating capital so that when the market contracts, you’re not the last person standing when the music stops. You have enough money to continue. You’re not struggling to continue to meet your business model, and meet your business plan because you don’t have enough cash.

Lennon Lee: Right.

Rod Khleif: Fantastic. I’m really glad you brought that up ‘cause that doesn’t come up very often on the show.

Lennon Lee: 100%… Then the third thing, it’s third party property management. The way we see it, and I know you’re an advocate for actually managing your own property when you’re…

Rod Khleif: Whoa, let me say something. Let me say something…

Lennon Lee: When you’re after acquisition mode.

Rod Khleif: When you’re in acquisition mode you should not be dealing with toilets.

Lennon Lee: Right. Right.

Rod Khleif: But when you have enough of an infrastructure, enough revenue, where you can hire someone internally, in that capacity, then yes, I’m a proponent for self-management. All the really big operators I know self-manage.

Lennon Lee: Absolutely.

Rod Khleif: But that said, I wholeheartedly agree in partnering with third-party management, so why don’t you speak to that.

Lennon Lee: Definitely, 100%. It’s very simple, at the end of the day, we are in acquisition mode, we’re not this monster companies that are 10,000, 20,000 units. Just like you said, we are trying to grow, so we’re trying to focus on the things that we do best, which is build partnerships and raise the equity, find the deals and put together… [overlap talk]

Rod Khleif: Are you involved in finding deals too?

Lennon Lee: Actually, yes and no, just because of me being involved in the industry for this past two years. Actually, super active in the industry, that I built relationships with brokers, and people in the industry that send deals over, that I look at, and then I send over to my operating partner.

Rod Khleif: To an operator.

Lennon Lee: Yeah. And then if they look at it, if it makes sense, they would probably pursue it, but I’m not actively sourcing deals. What I’m actively, actively sourcing is the actually the best operators out there, for me to start building long term relationships.

Rod Khleif: Let’s talk about that in just a second. I wanna talk about how you find the best operators… And by the way, let me interject something here… I’m opening up a Deal Desk, and so we are going to allow any listener to submit deals to us that they think have merit. We will review them and raise equity for them.

I’m kinda excited about that. We’re just rolling that out right now. You just go to RodsDealDesk.com to get information. If we will partner with you in a deal, we will raise the money. We will sponsor it.

You can’t just send us a LoopNet listing and say, “What do you think about this?” There’s a process you have to go through that we go through on that page. But yeah, we’re gonna start sourcing deals ourselves, and so we’re kind of excited about that.

But let’s talk about how you go and find operators for you to partner with.

Lennon Lee: To me it was like a natural thing just because the first operator that I partnered with was the one that I invested with as a limited partner on the first deal.

Rod Khleif: Of course. It makes sense.

Lennon Lee: But the first thing that I did, was actually to become a client of one of the principals of that company, which they were doing deals. He had a consulting program or a coaching program that I became a member of.

I started working with them, obviously, to learn all the ropes of what they were doing. Eventually, just because of that relationship, we started talking about the potential of me bringing equity to the deals, just because I started mentioning the fact that, “Hey listen, I have people in my network that are interested in … [overlap talk]

Rod Khleif: Sure. It just kind of organically grew… I’m basically doing the same thing. People bring deals to me, they’ll be able to learn, and be involved in my coaching and materials. That’s a fantastic way to get started.

By the way, I wanna circle back to one thing we were talking about, making sure that you’re preserving capital.

[00:20:06]

Rod Khleif: One of the things… Guys, if you’re evaluating a deal right now, with this market the way it is, you must stress test it.

Meaning, you must increase your vacancy factors, and possibly even increase your expense ratios, and see if the deal still makes sense. And I’m assuming you guys, I’m sure, do the same thing, Lennon.

Lennon Lee: Yeah.

Rod Khleif: I’m sure you throw everything through a stress test because when this market contracts, rents are gonna contract some. To think otherwise is naïve. But that doesn’t mean you can’t get into a safe deal and survive it. It just means, but you can’t go in a deal that’s too skinny. Would you agree with me?

Lennon Lee: Yeah, 100%. That’s totally true. We do all the sensitivity analyses that that we have to do, in terms of increasing or decreasing vacancy, just looking at those numbers.

One of the things, that’s actually a question I got from one investor, last week was about the cap rates. Like, why… he was… [overlap talk]

Rod Khleif: Yeah, your exit cap rates.

Lennon Lee: Exactly. The reverse of that cap rate, like he was seeing that the cap rate in the pro forma, the exit was actually higher than what we were going in at, and it wasn’t making much sense to him. He’s not necessarily savvy in the whole thing.

He started wondering why, and I was explaining, it’s all about being conservative. Obviously, if we go at the same cap rate that we went in, or lower, that’s…

Rod Khleif: That’s a win.

Lennon Lee: That’s a win.

Rod Khleif: That’s a win but that’s probably not reality. I mean, all things being equal because interest rates are going up…

Lennon Lee: Yes.

Rod Khleif: If you look at history, every time rates go up, cap rates go up.

Lennon Lee: Yeah.

Rod Khleif: And this is an example of a sensitivity analysis, and a stress test. Your exit cap has got to be higher than where you came in at if you’re being…

Lennon Lee: Definitely.

Rod Khleif: Frankly, I wouldn’t even say conservative. I’d say realistic.

Lennon Lee: Realistic, yeah. This… [overlap talk]

Rod Khleif: Okay, I’m really glad we’re going into some areas that we haven’t talked about a lot on the show. This is adding a lot of value.

Lennon Lee: It’s just the fact that nobody has a crystal ball.

Rod Khleif: Right.

Lennon Lee: So it’s being realistic, is what we try to do. We try to be as conservative as possible, and we try to go to like 10 to 15 bases point per year of the hold. That gives you a good room for… [overlap talk]

Rod Khleif: Yeah. On a five-year-hold, half a percent or a little more than that, and that’s exactly what we do and that’s a great way to do it. Okay, fantastic.

Well, you talked about operators, let me ask you this, you’re 31 years old, which is very impressive, $100 million portfolio. My hat’s off to you my friend.

Lennon Lee: Thank you.

Rod Khleif: If you went back to when you were 21, what would you tell that 21-year-old self? What might you do a little differently?

Lennon Lee: Yeah, I love this question. I’ve been thinking about it for a while ‘cause I’ve listened to that question on your podcast, and I always try to answer it every time I hear it.

Rod Khleif: Nice.

Lennon Lee: Every time, it changes a little bit, but lately, what I’ve been thinking is, I’m in a position right now that I’m continuing to grow and learn, and make good decisions in these investments and I’m just thinking, well I would just say, “Just be patient. Just be patient.” Like we try to compare ourselves but we…

In any industry really, we try to start working at something, and then we see people that are performing at the highest levels, that they have the lives that we wanna have but we just don’t think enough about how much work they’ve put in to it. Like how much patience they have to have to get there.

Just be patient. I wouldn’t change anything, really because everything that I’ve done has gotten me here, and in a position to be successful. Patience, it would be my advice to myself and to everyone.

Rod Khleif: That’s a good one. God’s delays are not God’s denials. That’s a good one. And you’re right. All of the setbacks, all of the seminars, all these things will bring you to where you are today.

Lennon Lee: 100%.

Rod Khleif: That’s very good advice. Now, let me ask you this, if were going to coach someone about this business, what… Actually, you know what, scratch that question. I don’t like that question. I’ve got a couple of questions here that I was planning on asking you but…

Let me ask you this, have you had any seminars? I mean, you’re fairly young, so maybe you haven’t had any big ones like me, but tell me about a time you got your nose bloodied on a deal, and what happened, and why?

Lennon Lee: Well, actually, in real estate I’ve had a couple but not big ones. I would like to share one, the biggest seminar that I’ve had.

Rod Khleif: Okay.

Lennon Lee: It wasn’t in real estate because while I was managing the portfolio for my family… I’m also an engineer so I was working in a day job, in a corporate world.

That was my biggest seminar, because I wasn’t happy. And at the same time, it was my biggest win if you will, because I wasn’t happy. My bosses, they were not happy as well. And understanding what you really are made for, and self-awareness, that’s what I got out of the whole process of not being comfortable on my day to day, doing the things that I didn’t enjoy.

I realized that, “You know what, just go for it.” Like anything, for the young guys out there, again, patience, there’s still a lot of time there to pursue the whole world. Everything we want.

I think that was my main thing, being in the corporate world, and being in on an uncomfortable place, where I was not performing the way I knew I could.

Rod Khleif: You just were unhappy.

Lennon Lee: Yes.

Rod Khleif: Okay. People hear me say on the show, all the time, “The life you want is on the other side of comfort.” And in your case here, you’re talking about really, frankly, being unhappy and unsatisfied.

Lennon Lee: Yeah.

Rod Khleif: This business requires you to push yourself, but that said, you have to love it. That’s what you’re talking about. You love what you’re doing now, right?

Lennon Lee: Yes. Yes. 100%.

Rod Khleif: See, that’s the key.

Lennon Lee: It’s my passion now.

Rod Khleif: Yeah. I mean, if you find your passion, you find your love. Work is play.

Lennon Lee: Yeah.

Rod Khleif: Life’s too short not to do what you love. Guys, if you’re not associating pleasure with multifamily real estate investing, or real estate investing in general, for god’s sakes, go do something else. Don’t do this.

Lennon Lee: Yeah. 100%

Rod Khleif: Right.

Lennon Lee: I wanted to make sure, along the same lines of the self-awareness, I do wanna mention one deal that, it was actually the first apartment that we bought here in Miami. It got destroyed by one of the tenants. Like this guy was crazy.

We really didn’t know much about the whole thing. We didn’t know who to talk to, where to find the guy. Obviously, he left and left the whole place destroyed.

Rod Khleif: Right.

Lennon Lee: It cost us, I don’t know, probably $20,000 to put the apartment back in shape, and re-rent it. The self-awareness thing is it’s because, all the experience of being a landlord and dealing with tenants, and the whole conversation with tenants, honestly, I did that for a few years and I did enjoy that.

Again, self-awareness…

Rod Khleif: Play to your strengths.

Lennon Lee: Yes, exactly, so I started, obviously, it coincided with the fact that the investments were at the biggest point, in the whole life cycle, and that I had to move the investment, so I said, “You know what, best thing that’s ever happened. I’m gonna start moving into a place where I can have a third party property management company, do the things I enjoy doing, and grow in that space.

Rod Khleif: Thank you for sharing that, buddy, because I will tell you, guys, this relates to your whole career in this business. You’ve heard me interview many, many people that have teamed up to play to their own strengths.

Like in your case Lennon, you’re an engineer. You’re very analytical, I’m certain.

Lennon Lee: Yeah.

Rod Khleif: I regularly see, where someone like you pairs up with someone that’s an extrovert, and great in sales… You’re obviously a great communicator as well, so you’re kind of an anomaly. But many people have a strength and a power, and if you can maximize that strength, and play to that strength, you’re gonna get further faster.

That’s why a lot of times, there are a lot of partnerships that get formed in this business and in any business, frankly, where people play to their strengths.

Me, I’m not a numbers person. So I’ve got a Robert. Robert’s my CFO. He’s a CPA. He’s done over $100 million worth of deals… Thank God I have a Robert.

Lennon Lee: [chuckes]

Rod Khleif: I just don’t love math.

Lennon Lee: Yeah.

Rod Khleif: I mean, I love getting checks, and I love making money but the detailed analysis is not me. Either hire for your weaknesses, or partner for your weaknesses, or figure out a way to align with someone else for your weaknesses, and play to your strengths and you’re gonna get much further faster.

Lennon Lee: 100%. That’s what I focus on.

[00:30:01]

Lennon Lee: That’s where I feel my strengths are, and just the partnership building. Whether with my investors, with my operating partners, and it’s always about, “Okay, what’s everyone bringing to the table? Does everyone has skin in the game? Are we aligned? Are we going and pursuing the same goals?”

That’s what I love about our space, is that there’s too many ways to start building those relationships and participating into deals, it doesn’t have to be money. Everyone brings something different to the table, and if it’s real value, then the partnership will come and the big ones will prevail. That’s what we’re all aiming for, I think.

Rod Khleif: No. I couldn’t agree more. What did you have to give up to get to where you are, at your age? Tell me about some sacrifices maybe you had to make that you could share with some of my listeners that want what you have.

Lennon Lee: Wow, that’s a good question. That’s a great question. I would have to say, well, a lot of going out, and the things that we as young guys enjoy a lot.

Rod Khleif: Especially in Miami.

Lennon Lee: Especially in Miami, 100%. Yeah. I mean, I would have to say, that’s one of the things.

Rod Khleif: You had to give up some of that, right?

Lennon Lee: In fact, almost all of it.

Rod Khleif: Right.

Lennon Lee: One thing I truly enjoy, with my wife, is going out and eating. Fine dining, if you wanna call it that way.

Rod Khleif: Sure.

Lennon Lee: When you’re building a business, because the way I jumped full time into real estate work was one of the properties that I had, I was gonna invest it in multifamily, but I got a chunk of money and said, “Well, I’m gonna live off this for a year. And a year from now, I need to start bringing in some money in, because if not, then I guess I’ll have to get a job or something.”

Rod Khleif: Right.

Lennon Lee: So I went all-in. I obviously, with a short budget, had to stop going out or eating out. Doing some sacrifices, well, that for us were sacrifices, now obviously, I realize now that they’re not really a big deal.

Rod Khleif: Right.

Lennon Lee: But we had to give up something, and that’s the thing…

Rod Khleif: Yeah. No, I get it. I remember I had 500 units, probably about 450 houses and a couple of apartments, small apartment things, I lived in a one-bedroom apartment.

Lennon Lee: Yeah.

Rod Khleif: I didn’t have to, but I sucked it up because I was in growth mode and… yeah.

Lennon Lee: Definitely.

Rod Khleif: Okay.

Lennon Lee: Definitely hard. Like the whole lifestyle. It’s about sacrificing a little bit now for the long-term.

Rod Khleif: I got a sign on my wall, we’re videoing this, and I’ll show it to you Lennon, and anybody sees this on. Let’s see there, “Focus. Grind now, play later.” [chuckles]

Lennon Lee: Love it. That’s exactly it. That’s exactly it.

Rod Khleif: That’s right.

Lennon Lee: And the other one, “Comfort kills”…

Rod Khleif: “Comfort kills”

Lennon Lee: I can’t move my computer because it’s big but I have here, written, “There’s no growth in the comfort zone.”

Rod Khleif: That’s right.

Lennon Lee: Yeah.

Rod Khleif: That’s right. We were just talking about that.

Lennon Lee: We were talking about that.

Rod Khleif: The magnificent life you want is on the other side of comfort.

Lennon Lee: Definitely.

Rod Khleif: Alright my friend, well listen, thanks for being on my show buddy. I enjoyed meeting you. Guys, if you want to reach him, he’s at BLDCapitalGroup.com, and you can check him out there.

Thanks for being on the show, my friend.

Lennon Lee: Thank you for having me… [overlap talk]

Rod Khleif: I’ll look you up the next time we’re down on Lincoln Road in Miami. I lived there for a couple of years. I absolutely love going down there, and people watching. I just love it. My wife and I love going down there.

Lennon Lee: Yeah. I’ll look forward to that. Yeah. Thank you. Thank you for the opportunity. [overlap talk]

Rod Khleif: Alright, buddy. Well, take care. We’ll talk again.

Lennon Lee: Talk soon. Bye-bye.

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Thank you for listening to the Lifetime Cash Flow Through Real Estate Investing Podcast. If you’ve enjoyed the show, please take a minute to visit iTunes and leave your comments. For more resources or to connect with us further, please visit our website at rodkhleif.com. Tune in next week for our next show.

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Any investment opportunities mentioned on this podcast are limited to accredited investors. Any investments will only be made with proper disclosure and subscription documentation, and subject to all applicable laws.

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